As tax season draws closer, it’s the perfect moment to take another look at your savings strategy—especially when it comes to your IRA and HSA contributions. These accounts can offer meaningful tax advantages, but to apply those benefits to the 2025 tax year, your contributions need to be completed before the federal filing cutoff.

Below is a clear breakdown of what you should know so you can use these opportunities to your advantage before April 15.

Why It’s a Good Time to Focus on IRA Contributions

If you’re hoping to build up your retirement savings while also reducing your taxable income, making an IRA contribution before the deadline can be a smart financial move.

For the 2025 tax year, the maximum IRA contribution is $7,000 for individuals under age 50. Once you turn 50, you’re eligible for a higher limit—up to $8,000—to help boost your nest egg as retirement gets closer.

These contribution caps apply across all the IRAs you may have, whether they’re Traditional, Roth, or a combination. However, you can’t contribute more than your total earned income for the year. If you didn’t earn income personally but your spouse did, a spousal IRA may still allow you to contribute using your spouse’s earnings as the basis.

How Your Income Influences Traditional IRA Deduction Eligibility

Anyone with earned income can contribute to a Traditional IRA, but whether you can deduct your contributions depends on your income level and whether you or your spouse participates in an employer-sponsored retirement plan.

Here’s how the deduction works for the 2025 tax year:

• For single filers with a workplace retirement plan: Full deductions are available if your income is $79,000 or below. Partial deductions apply up to $88,999. Once your income reaches $89,000, deductions are no longer allowed.
• For married couples filing jointly with both spouses covered: A full deduction is allowed with combined income up to $126,000. Partial deductions apply through $145,999. At $146,000 or higher, no deduction is available.

Even if the contribution isn’t deductible, the money inside a Traditional IRA still benefits from tax-deferred growth until you withdraw it in retirement.

Roth IRA Contribution Rules Are Based on Income

Roth IRAs operate differently. Your ability to contribute—and how much you’re allowed to add—depends entirely on your income. If your income is within certain ranges, you may be eligible for the full contribution, a reduced contribution, or no contribution at all.

These income thresholds shift slightly each year, so it’s wise to check your current numbers before making a Roth IRA contribution.

HSAs: A Tax-Efficient Tool for Medical Expenses

If you’re enrolled in a high-deductible health plan (HDHP), you’re likely eligible to contribute to a Health Savings Account, or HSA. These accounts are designed to help you save for medical expenses while offering unique tax advantages.

You can still make HSA contributions for the 2025 tax year up until April 15, 2026. The contribution limits are as follows:

• Self-only coverage: Up to $4,300
• Family coverage: Up to $8,550
• Catch-up for age 55+: An additional $1,000 is allowed

HSAs come with what many refer to as a “triple tax benefit”: your contributions may reduce your taxable income, your funds grow tax-free, and withdrawals for qualified medical costs are also tax-free.

One thing to keep in mind: employer-funded HSA contributions count toward your annual limit. If your eligibility changed during the year, you may need to prorate your contribution—unless you qualify for the “last-month rule,” which allows you to contribute the full annual amount if you were eligible on December 1. However, if you don’t maintain eligibility the following year, taxes and penalties may apply.

Avoid Exceeding Contribution Limits

Contributing more than the IRS allows to either an IRA or HSA can create problems. Excess contributions that aren’t corrected can be hit with a 6% penalty for every year the extra funds remain in the account.

To stay within the rules, confirm the annual limits and double-check what you—and in the case of HSAs, your employer—have already contributed. If you discover that you’ve exceeded the limit, you can withdraw the excess amount before the tax deadline to avoid penalties.

Take Action Now to Maximize Your Savings

IRA and HSA accounts provide valuable tax benefits that can help strengthen your long-term financial strategy, whether you’re planning for retirement, medical expenses, or both. But to apply these advantages to the 2025 tax year, you’ll need to act before April 15, 2026.

If you're unsure about how much to contribute or which type of account is best for your situation, consider consulting with a financial professional. They can help you interpret the rules, avoid common pitfalls, and make sure you’re optimizing every opportunity available to you.

There’s still time to make a meaningful impact on your savings—and potentially reduce your tax burden. If you’d like help evaluating your options, don’t hesitate to reach out. We can work with you to ensure you’re prepared well before the deadline arrives.