Maximize Your IRA and HSA Contributions Before Tax Day

As tax season gets closer, it’s a great time to revisit your financial plans—especially the contributions you’re making to your IRAs and HSAs. These accounts can offer meaningful tax advantages, but to use them for the 2025 tax year, you’ll need to make your contributions before the federal tax deadline.

Below is a refreshed guide to help you understand how these accounts work and how to take full advantage of them before April 15.

Why IRA Contributions Are Especially Valuable Right Now

If you’re looking to build up your retirement savings while potentially lowering your tax bill, contributing to an IRA before the deadline can be a smart move. These accounts offer tax perks that make them a popular choice for long-term planning.

For 2025, the contribution limit for IRAs is $7,000 for individuals under age 50. Those who are 50 or older can contribute up to $8,000 thanks to a catch-up provision designed to help boost retirement savings later in life.

These limits apply across all your IRAs combined—whether they’re Traditional IRAs, Roth IRAs, or both. You’re also restricted by the amount of income you earned for the year. If you didn’t earn income personally but your spouse did, a spousal IRA might still allow you to contribute based on your spouse’s eligible earnings.

How Income Influences Traditional IRA Deductions

Anyone can contribute to a Traditional IRA, regardless of income level. However, your ability to deduct those contributions on your tax return depends on whether you or your spouse is covered by a workplace retirement plan and how much you earn.

For example, if you’re single and have an employer-sponsored retirement plan, you can deduct your entire contribution if your income is $79,000 or below. Partial deductions are available if you fall between $79,001 and $88,999. Once your income reaches $89,000, you no longer qualify for a tax deduction.

Married couples face a different set of thresholds. When both spouses are covered by retirement plans at work, the full deduction is available if your combined income is $126,000 or lower. Partial deductions are allowed between $126,001 and $145,999, and deductions disappear entirely once your income reaches $146,000.

Even if your contributions aren’t deductible, the money in a Traditional IRA can still grow tax-deferred until retirement, offering long-term savings potential.

Roth IRA Contribution Rules Work Differently

Roth IRAs come with their own income-based eligibility rules. If your income is within a certain lower range, you can contribute the full allowable amount. Middle-range earners may only be eligible for a reduced contribution. Higher-income individuals may not be allowed to contribute at all.

Because these limits shift from year to year, it’s helpful to confirm your eligibility before making your contribution.

HSAs: A Smart, Tax-Advantaged Way to Prepare for Healthcare Costs

If you're covered by a high-deductible health plan (HDHP), you may qualify for a Health Savings Account, or HSA. These accounts can help you manage medical expenses and come with unique tax benefits.

For the 2025 tax year, you can make HSA contributions until April 15, 2026. Individuals with self-only HDHP coverage can contribute up to $4,300, while those with family coverage can contribute up to $8,550. If you're 55 or older, you’re eligible to contribute an additional $1,000 as a catch-up amount.

HSAs stand out because they provide three significant tax advantages: contributions can reduce your taxable income, growth is tax-free, and qualified withdrawals for medical costs aren’t taxed either.

Remember that employer contributions count toward your annual limit. And if you were eligible for only part of the year, you may need to reduce your contribution amount. The “last-month rule” might allow you to contribute the full amount if you were HSA-eligible in December, but you must stay eligible the following year to avoid penalties.

Be Careful Not to Exceed Contribution Limits

Exceeding the IRS contribution limits for IRAs or HSAs can lead to costly consequences. If excess contributions remain in your account, the IRS may impose a 6% penalty for every year the additional funds stay put.

To steer clear of this issue, make sure you’re tracking how much you’ve contributed and factor in employer deposits as well. If you discover that you’ve gone over the limit, you can typically remove the excess before the tax deadline to avoid penalties.

Take Action Now to Make the Most of Your Accounts

IRAs and HSAs offer powerful tax advantages that can help support your retirement goals and medical savings. But to benefit from them for the 2025 tax year, you must contribute before April 15, 2026.

If you’re unsure how much to contribute or which account best fits your situation, a financial professional can help you sort through the rules and make informed decisions. Getting personal guidance can help you avoid mistakes and take advantage of all the benefits available to you.

There’s still time to make an impact on your savings. Don’t miss your chance to strengthen your financial foundation and potentially lower your tax bill. If you’d like help reviewing your options, reach out soon so there's plenty of time before the deadline.