Ask Tim: A Little Green, A Little Giving, and A Few Tax Wins

I hope everyone had a great St. Patrick’s Day and isn’t feeling too rough this week. Personally, I’ve always loved the holiday, mostly for the food. Give me a warm plate of corned beef and cabbage, a Guinness, and I’m a happy man. And in Chicago, St. Patrick’s Day is a spectacle. The river goes green, everywhere is packed, and the whole city seems to finally awaken after a long winter.

Anyway, on to the questions. This week, we have two very different questions, but they all circle the same idea: how do you keep more of what matters and put it to good use? So grab the soda bread, leave the guesswork behind, and let’s get into it.

I want to give more as I get older. Can I do that in a tax-smart way before RMDs become a headache?

Dear Tim,

I am 70, I have eight children and twenty grandchildren, and somewhere along the way birthdays turned into catered events. I feel deeply lucky, and I want to give back while I am here to enjoy it. I also have a healthy IRA, and I keep hearing that required distributions can push people into a higher bracket, bump up Medicare costs, and create a mess that feels avoidable with better planning. I do plenty of check-writing already, though I have a feeling there is a cleaner way to do this.

- Blessed and a Bit Busy

Dear Blessed and a Bit Busy,

Yes, there is a cleaner way, and you are asking at exactly the right time. For many people, charitable planning works best before the tax pressure arrives in full force because it lets you line up giving with future IRA distribution strategy instead of reacting later.

Here is the key timing point. IRA owners generally begin RMDs at age 73 under current rules, yet qualified charitable distributions can begin at age 70½. A QCD moves money directly from an IRA to a qualified charity, and when the rules are followed, that amount can stay out of taxable income. Once RMDs begin, a QCD can also satisfy part or all of that year’s RMD. The annual QCD limit for 2026 is $111,000, up from the $108,000 limit for 2025.

A quick example makes this easier. Let us say your IRA reaches $1.2 million by age 73. A first-year RMD could land around $45,000, give or take, depending on the year-end balance and IRS life-expectancy factor. If you were already planning to give $15,000 to charity, sending that amount through a QCD instead of taking the full distribution into your bank account can reduce your tax bill. That can help with bracket management and, in many cases, planning around the IRMAA impact to Medicare premium adjustments, too.

This week, I would make a giving map. List the charities you support every year, the amount each receives, and whether that support is likely to continue. Then ask your IRA custodian how it handles QCD processing, because timing and payee details matter, as the QCD itself must go directly to a qualified charity.

A common miss: people assume a charitable gift automatically creates a second tax win. With a QCD, the main tax value usually comes from keeping the distribution out of income in the first place rather than stacking a separate charitable deduction on top. That distinction matters.

My view is simple. If giving is already part of your life, weaving it into IRA planning can be one of the cleanest, kindest moves on the board. It helps the causes you love, and it can help keep your tax picture from drifting into heavier waters later.

Is SALT actually a deduction, and what else should I be using as a single dad in Westchester?

Dear Tim,

I am 40, I work in medicine, and I am raising my son on my own in Westchester, which means the cost of almost everything feels like it belongs in a museum behind glass. I keep hearing about SALT from friends, accountants, and every other person with a mortgage in this county, and I honestly just want the plain-English version. Is SALT a real deduction, does it actually help, and are there any newer tax breaks or planning moves I should care about before I file and before I plan the rest of this year?

- Paying Plenty in Purchase, Plus Property

Dear Paying Plenty in Purchase, Plus Property,

SALT is a real deduction. It is the federal itemized deduction for state and local taxes (SALT) paid, which includes state income taxes, sales taxes, and property taxes. The reason for all of the SALT chatter amongst your network is likely due to the passage of the OBBBA Act last year, which lifted the previous 2025 cap of $10,000 to $40,000, with a phase-down beginning above modified adjusted gross income (MAGI) of $500,000.

That said, SALT only helps if itemizing beats your standard deduction. For 2025, the federal standard deduction is $23,625 for head of household and $15,750 for single filers. So in Westchester, the real question is usually this: after SALT, mortgage interest, charitable gifts, and medical expenses above the threshold, do you clear that standard-deduction bar enough to matter?

Here is a rough example. Say you file as head of household, pay $18,000 in New York state income tax, $17,000 in property tax, and $9,000 in mortgage interest. If your full SALT figure is $35,000, and you add the mortgage interest, your itemized total reaches $44,000 before any charity or medical deduction enters the chat. Against a $23,625 standard deduction, itemizing would likely be the better lane. If your income climbs high enough for the SALT phase-down, that edge can shrink, so the details matter.

Since you asked about extra deductions, here are the live ones I would actually review. First, HSA contributions can still be very valuable if your health plan qualifies, and for 2026 the limits rise to $4,400 for self-only coverage and $8,750 for family coverage. Second, beginning January 1, 2026, bronze and catastrophic plans are treated as HSA-compatible under the recent IRS guidance, which could open the door for some families who previously lacked access. Third, if you are saving for your child’s future through the New York 529 plan, New York taxpayers can deduct up to $5,000 per year on the state return if filing single.

My action list for you this week would be pretty straightforward. Pull last year’s Schedule A or last year’s tax organizer. Estimate your 2025 state income tax, property tax, mortgage interest, and charitable gifts. Then confirm your filing status, review whether your medical plan opens the HSA door, and ask your CPA if there are other tax strategies you should be looking for on a federal or state level. Then take those notes and action items to your Wealth Manager to incorporate into your financial plan and execute through the remainder of the year.

One thing people miss: a bigger deduction is great, though withholding and estimated-tax planning still matter. The IRS guidance regarding withholding due to these law changes may mean the 2025 return can look better while paycheck math still needs adjusting for 2026.

Here is my take. SALT absolutely counts, especially in a high-tax county. Yet the best result usually comes from seeing SALT as part of a wider system rather than the entire parade.

Send your questions my way anytime. If a planning issue has been circling your kitchen table, there is a good chance it belongs here, and we would be glad to talk it through with you.