Maximize Your IRA and HSA Contributions Before Tax Day

As tax season gets closer, it’s a great opportunity to take another look at your savings strategy—especially when it comes to your IRA and HSA contributions. Both accounts offer valuable tax perks, but you’ll need to make your contributions before the federal filing deadline if you want them to count for the 2025 tax year.

Here’s a detailed breakdown to help you make the most of these options before April 15.

Why IRA Contributions Deserve Your Attention

Adding funds to an IRA before the tax deadline can be a smart way to give your retirement savings a boost and potentially lower your tax bill at the same time. For 2025, the maximum contribution limit for those under age 50 is $7,000. If you’re 50 or older, you can take advantage of the catch-up allowance and contribute up to $8,000.

These limits apply to the total amount you put into all your IRAs combined—whether you contribute to a Traditional IRA, Roth IRA, or both. Keep in mind that you can’t contribute more than you earned in taxable income for the year. If you didn’t have earned income but your spouse did, you may still be eligible to contribute through a spousal IRA based on their earnings.

How Your Income Determines Traditional IRA Deductions

You can contribute to a Traditional IRA regardless of your income level, but your ability to deduct those contributions on your taxes depends on your household income and whether you or your spouse is covered by a workplace retirement plan.

If you’re single and have access to a retirement plan at work, you can claim the full deduction as long as your income is $79,000 or less. A partial deduction is available if your income falls between $79,001 and $88,999. Once your income reaches $89,000, the deduction disappears altogether.

For married couples where both spouses are covered by retirement plans at work, the rules differ slightly. You’ll receive the full deduction if your combined income is $126,000 or below. If your income is between $126,001 and $145,999, only a partial deduction is available. At $146,000 or higher, the deduction is no longer allowed.

Even if you don’t qualify for a deduction, contributing to a Traditional IRA can still be beneficial. Your investments can grow tax-deferred until you withdraw them during retirement.

Roth IRA Contribution Limits Work Differently

Roth IRAs operate under a separate set of rules. With a Roth IRA, your income determines whether you can contribute—and if so, how much. Those with lower income can usually add the full permitted amount. Individuals in a mid-range income bracket may only be eligible to contribute a reduced amount. High earners might not be able to contribute at all.

Since these income thresholds shift a little each year, reviewing your eligibility before making contributions is a good idea. This helps ensure you stay within the allowed limits and avoid unexpected issues at tax time.

How HSAs Offer Tax-Friendly Health Savings

If you’re enrolled in a high-deductible health plan (HDHP), contributing to a Health Savings Account (HSA) can be an excellent way to set aside money for medical expenses while enjoying meaningful tax benefits.

The deadline for HSA contributions for the 2025 tax year is April 15, 2026. The contribution limit for individuals with self-only coverage is $4,300. For those with family coverage, the limit rises to $8,550. If you’re 55 or older, you can add an extra $1,000 as a catch-up contribution.

HSAs are appealing because they deliver three different tax advantages:

• Your contributions can reduce your taxable income.
• Your HSA balance grows tax-free over time.
• Withdrawals used for qualifying medical expenses aren’t taxed.

If your employer contributes to your HSA, those amounts count toward your total annual limit. Also, if you only qualified for an HSA part of the year, your contribution limit may need adjusting—unless you were eligible in December and apply the “last-month rule.” However, if you don’t maintain eligibility for the following year, you may face taxes and penalties on excess contributions.

Why Staying Within Contribution Limits Matters

Exceeding the IRS contribution limits for either IRAs or HSAs can create headaches. Any amount over the limit that isn’t corrected can trigger a 6% penalty each year the excess funds remain in the account.

To avoid this, keep an eye on both your personal contributions and any employer contributions. If you discover an overage, you can remove the extra amount before the tax filing deadline to avoid penalties.

Take Action Now to Strengthen Your Savings

Both IRAs and HSAs offer meaningful tax benefits that can enhance your long-term financial stability—whether you’re preparing for retirement or planning ahead for healthcare costs. But to tap into those advantages for the 2025 tax year, you’ll need to make eligible contributions before April 15, 2026.

If you’re uncertain about how much you should contribute or which type of account fits your goals, a financial professional can help walk you through the details. They can review your situation, help you avoid common pitfalls, and ensure you’re leveraging every available tax benefit.

There’s still time to contribute. Don’t miss the opportunity to improve your financial outlook and potentially reduce your tax bill. If you’d like assistance reviewing your options, reach out soon so you’re prepared well before the deadline arrives.