Technology runs almost everything now. With a few taps on the screen, we all use it to manage our lives and connect with each other. For many seniors, it’s basically a true lifeline. But, it comes with a downside with scammers looking to exploit any moment of uncertainty.

Recently, I discovered that one of my clients started receiving alarming text messages warning her that her iPhone storage was almost full. Without any family nearby to turn to – and given her general lack of tech skills – she innocently clicked on the links in the texts. One tap led to another and another, and she was soon subscribed to dozens of nefarious apps. Each of these apps promised to “clean” her phone or “protect” her treasured photos and contacts. Sickeningly, each app came with a big weekly-recurring charge.

Appallingly, these apps were available on Apple’s App Store with the weekly financial transactions facilitated by Apple itself. This scam turned into a quiet siphon, draining her bank account week after week and month after month. The work to help her recover her money is ongoing, but not guaranteed.

It’s becoming nearly impossible for me not to blame both Apple and the bank for refusing to build some safeguards for situations like this. A flurry of new, recurring charges from the same device should trigger a warning and an offer of support, if not a freeze on the charges. I understand it’s hard for them to manage, but I’m quite confident they’ve got the financial resources and the tech prowess to better protect their most vulnerable customers. As we all know, technology is becoming incredibly difficult for our seniors to navigate on their own.

My earlier advice from past columns on cybersecurity still stands. You simply must create a layer of defense. The most basic layers are to use unique and hard-to-guess passwords, set up two-factor authentication for all of your financial accounts, freeze your credit files and identify a trusted contact to call whenever things get confusing. I cannot recommend strongly enough that you need someone to call when you have even an ounce of concern.

I am now adding another layer to the mix. Make it a habit to review your iPhone or iPad’s app subscriptions. Yes, that means you’ll need to dig into your phone’s settings. And, yes, you also need to closely review your bank and credit card statements for odd-looking, recurring charges.

The reality is clear. The scams are evolving fast. The coming wave of AI-enabled fraud will make today’s tricks look downright quaint. Without any help from Congress to mandate accountability from our tech companies and banks – in fact, the exact opposite is happening – more sad stories are on the horizon. I encourage you to at least take the most basic steps to not become one of them.

Q: Over the last few years, I’ve gotten used to using my IRA checkbook for my donations. My advisor told me these IRA donations helped lower my taxable income. Now, with the new tax law, I heard I can just use my regular checkbook again and still get a tax break? Is that true?

A: Congress has, in fact, brought back the idea of a small deduction for charitable donations, even if you don’t itemize. Beginning next year, non-itemizing taxpayers can deduct cash donations of up to $1,000 (single) or $2,000 (married.)

If you remember, during COVID we had a similar special add-on charitable deduction in the tax law. But that feature expired after just a couple years. This new one is “permanent”, unless Congress changes its mind, of course.

The new deduction limit is pretty small, though. So, I’d say donating from your IRA directly is still the better approach. Your IRA donations don’t show up on your tax return at all and they help to satisfy your required minimum distribution (RMD.) Using your IRA is still the cleanest, most efficient way to donate money.

In my view, the best part about this new feature is, starting next year, you’ll at least enjoy a tax break even when you accidentally grab the wrong checkbook to make that donation. From my experience, this mistake happens all the time!

Q: I’m a business owner and have been using Michigan’s Flow-Through Entity Tax (FTET) to get around the $10,000 federal SALT deduction cap. With the SALT cap now set at $40,000, does it impact business owners like me who use the FTET?

A: As you know, back in 2018 when Congress set a $10,000 cap on the deduction of state and local taxes (SALT), a lot of states scrambled to find “workarounds.” They came up with the Flow-Through Entity Tax (FTET.) 

The FTET move allowed business owners of pass-through entities (LLCs and S-Corps) to pay a portion of their personal state income taxes through their business. This turned those taxes into a business expense and it effectively lowered their federal tax bill. For high-earning business owners, this move allowed them to bypass the low $10,000 SALT cap.

Under the new tax law, Congress boosted the SALT cap to $40,000. As a result, some worried that the FTET workaround would disappear. Surprisingly, the new tax bill left this workaround untouched. So, your move to route your state income tax liability through your business is still a sound strategy.

For those who have not been using the FTET workaround, the higher $40,000 SALT cap might help some. But, maybe not as much as you’d think. Why is that? Remember, the standard deduction is pretty big already. For example, for married filers, the standard deduction in 2025 is already set at $31,500. 

Every piece of legislation is about making choices. This one did, in spades. The One Big Beautiful Bill Act spans almost as many pages as War and Peace and it covered way more than taxes. Viewed from 30,000 feet, it really represents a large set of choices that ultimately result in big cost shifts for all of us.

On the tax front, it almost goes without saying that higher-income households and small business owners made out the best. The special deduction given to pass-through business owners was made even more generous and is now permanent. And, the cap on the deduction of state taxes and property taxes was also raised significantly. These two changes, among others tax items, exclusively help high earners.

For moderate-income households, the tax picture also improved for some. New deductions were added for tips and overtime pay. And, seniors also got an added deduction that’s designed to offset taxes paid on Social Security benefits. Those were Trump’s campaign promises, after all, so they weren’t a big surprise to see.

Now, for lower-income households this bill was disappointing. For example, the child tax credit was increased by $200 per child. But, for the millions of households with little or no federal tax bill – due to the fact that they don’t earn enough money – they won’t see any of that extra $200. Given the tax cuts others will receive, that policy choice is hard to understand.

Added to that small insult for the poor is some real injury. The bill imposes some impactful changes to both Medicaid and the SNAP food program. There are added work requirements for some people and some new administrative hurdles to leap just to stay eligible. For some, they will even face added out-of-pocket costs.

These changes are expected to affect millions of households over the next decade. Importantly, states will now be responsible for covering a portion of the costs of both programs – expenses they don’t currently have budgeted. Almost certainly, states will trim both Medicaid and SNAP benefits to close the gaps. Ironically, this will likely hurt “red” states the most, even though the bill was passed exclusively by Republicans.

Climate policy took a hit, too. The bill eliminated a lot of energy efficiency incentives that were introduced only a few years ago. The tax credits provided for installing energy-efficient upgrades to homes will be gone by the end of the year and the tax credit provided for buying an electric vehicle will be gone by October.

Overall, it’s safe to say that this bill widens the gap between households with means and those without. It’s also fair to say that when budget discipline was imposed, support for low-income families was the first item on the chopping block.

Let’s not fool ourselves, however. There is no free lunch. The true cost of losing federal support for the poor will increasingly land at our feet in our local community. Unsolved problems don’t just magically disappear, they simply shift to others to solve.

Q: I recently inherited a regular IRA and a Roth IRA from my mother. I’ve heard something about a 10-year rule for my future distributions. But, I’m confused about how it all works from a tax standpoint for these two inherited accounts. Can you explain it?

A: The fact that your mom had already started taking her RMDs makes the rules a bit more complex. But, overall, it’s not too bad.

For your Inherited IRA, you will have to take annual distributions based on your age, not your mom’s age. In addition, you also have to fully distribute the entire account by the end of the 10th year, starting with the year following your mom’s passing. And, remember, your Inherited IRA distribution will be taxable income.

Things are treated a little differently with your Inherited Roth IRA. First, there’s no requirement to do annual distributions. But, the 10-year rule still exists. You just have to empty out your Inherited Roth by the end of that 10th year. Finally, assuming your mom’s Roth IRA was started at least five years ago, your Inherited Roth distributions will be tax-free.

The difference in tax treatment between these two inherited accounts is important to understand. Your Inherited IRA distributions will increase your taxable income. Your Inherited Roth IRA distributions won’t.

Depending on the size of your inheritance, you might want to spread out your Inherited IRA distributions to manage your tax picture. Of course, for your Inherited Roth IRA, you should let that account grow tax-free for the full 10 years.

Q: I’ve always made cash donations, but a friend of mine recently told me I could donate some of my appreciated stocks instead. Why is that a better way?

A: Donating appreciated securities, like individual stocks or even mutual fund shares, has a couple of advantages over just donating cash.

To start, when you donate appreciated shares, you still get to deduct the current value of those gifted shares. If you donate $10,000 worth of stock, you can deduct that $10,000, just like you do with your cash gifts (assuming you itemize your deductions, that is.)

But, here’s the added tax benefit. When you give away appreciated shares, you get to avoid paying tax on any of those built-up capital gains. Let’s say you originally paid $3,000 for a stock that’s now worth $10,000. If you sold that stock and donated cash, you’d owe tax on that realized gain of $7,000. Donating those shares “in-kind” directly to the charity and letting them sell it as a non-profit results in no tax at all. It’s a win-win.

Before moving forward, be sure to call the charity to make sure they are able to accept donated shares. Most can. It’s a pretty easy process.