As tax season draws closer, it’s an ideal moment to take another look at your financial plans—especially your IRA and HSA contributions. These accounts come with valuable tax advantages, and to apply them to your 2025 tax return, you need to make sure your contributions are completed before the federal deadline arrives.
Below is a clear breakdown of what to review so you can fully leverage these benefits before April 15.
Why Contributing to an IRA Matters Now
If you’re hoping to strengthen your retirement savings while also lowering your taxable income, contributing to an IRA before the cutoff date can be a powerful move. The IRS sets yearly limits, and staying within those limits ensures you maximize what the account can offer.
For 2025, individuals under age 50 can contribute up to $7,000. Those age 50 and over qualify for a higher limit of $8,000. These larger limits help older adults boost savings as they near retirement.
These contribution caps apply across all IRAs you may have—Traditional, Roth, or a combination of both. Additionally, the amount you contribute can’t exceed your earned income for the year. If you didn’t earn income but your spouse did, a spousal IRA may allow you to contribute based on your partner’s earnings.
How Income Influences Traditional IRA Deductions
Anyone can put money into a Traditional IRA, but whether your contributions are tax-deductible depends on two factors: your income level and whether you or your spouse has access to a retirement plan through work.
For instance, if you file as a single individual and participate in a workplace retirement plan, you can deduct the full amount if your income is $79,000 or below. Partial deductions are allowed for incomes between $79,001 and $88,999. Once your income reaches $89,000 or higher, deductions are no longer available.
Married couples who both have retirement plans at work can take the full deduction if their combined income is $126,000 or less. A partial deduction applies to incomes between $126,001 and $145,999. No deduction is available once income reaches $146,000.
Even without a deduction, Traditional IRAs still offer tax-deferred growth, giving your money time to grow without being taxed until you begin withdrawing funds in retirement.
Roth IRA Eligibility Operates Differently
Roth IRAs follow a separate set of rules. Instead of determining whether contributions are deductible, income affects whether you can contribute at all. Lower incomes allow full contributions, midrange incomes may limit how much you can add, and higher incomes might prevent contributions entirely.
Because these thresholds shift from year to year, double-checking your eligibility before you deposit funds is always a good idea.
HSAs: A Smart Way to Save for Medical Expenses
If you’re enrolled in a high-deductible health plan (HDHP), you may qualify for a Health Savings Account, or HSA. These accounts are designed to help you manage healthcare costs and come with several notable tax perks.
For the 2025 tax year, you can continue contributing to an HSA until April 15, 2026. Individuals with self-only coverage can contribute up to $4,300. Those with family coverage can contribute as much as $8,550. If you’re 55 or older, you’re allowed to contribute an additional $1,000 as a catch-up amount.
HSAs are unique because they provide three layers of tax benefits. First, your contributions reduce your taxable income. Second, any investment growth in the account is tax-free. Lastly, withdrawals for qualified medical expenses are also tax-free.
If your employer also contributes to your HSA, those funds count toward your annual limit. And if you were covered by an HDHP for only part of the year, you may need to adjust your contribution amount—unless you qualify for the “last-month rule,” which allows a full-year contribution if you were eligible in December. If you use this rule but don’t remain eligible the following year, you could owe taxes and a penalty.
Avoiding Excess Contributions
Going beyond the IRS contribution limits for either IRAs or HSAs can create complications. Excess contributions that aren’t corrected could result in a 6% penalty for each year the extra funds remain in the account.
To steer clear of this issue, confirm your annual limits and monitor how much you—and your employer, if applicable—have contributed. If you discover you’ve overcontributed, you can remove the excess before the tax deadline to avoid penalties.
Take Action Now to Maximize Your Benefits
IRAs and HSAs offer valuable tax advantages that can strengthen both your retirement outlook and your approach to healthcare expenses. But to apply those benefits to the 2025 tax year, you must make your contributions before April 15, 2026.
If you’re unsure how much you should contribute or which account options are best suited for your situation, consider speaking with a financial professional. They can walk you through contribution rules, help you avoid missteps, and ensure you’re making the most of every available opportunity.
There’s still time to contribute—don’t miss the chance to enhance your savings and potentially lower your tax bill. If you need support in reviewing your options, reach out soon so you’re prepared well before the deadline.
