As tax season approaches, it’s a great moment to review your financial plans and make sure you’re taking full advantage of tax-advantaged savings opportunities. Your IRAs and HSAs can offer meaningful benefits, but you must contribute before the federal filing deadline to apply them to the 2025 tax year.
Below is a clearer look at the key guidelines, contribution limits, and income rules that can help you make the most of these accounts before April 15.
Why Paying Attention to IRA Contributions Matters
If you’re hoping to build long-term retirement savings while potentially lowering your tax bill, adding funds to an IRA before the tax deadline can be a smart move. These contributions may give you both immediate tax benefits and future financial security.
For the 2025 tax year, individuals under age 50 can contribute up to $7,000 to their IRA accounts. Those aged 50 and older qualify for a higher limit of $8,000, which is designed to help individuals nearing retirement save additional funds.
Remember that these limits apply across all your IRAs combined, whether they are Traditional IRAs, Roth IRAs, or a mix of both. You also cannot contribute more than the income you earned during the year. If you didn’t earn wages but your spouse did, you may still be eligible to contribute through a spousal IRA based on their income.
How Income Influences Traditional IRA Deductions
You’re always allowed to contribute to a Traditional IRA, but whether those contributions are tax-deductible depends on your income and whether you or your spouse has access to a workplace retirement plan.
For individuals who are single and covered by an employer retirement plan, full deductibility is available if your income is $79,000 or less. Partial deductions apply if you earn between $79,001 and $88,999, and deduction eligibility disappears entirely at $89,000 or above.
If you’re married and both spouses have workplace retirement plans, you can deduct the full amount if your combined income is $126,000 or below. Partial deductions apply between $126,001 and $145,999, while no deductions are available at $146,000 or higher.
Even if you’re unable to deduct your contribution, your IRA savings can still grow tax-deferred, providing long-term value once you begin withdrawing funds in retirement.
Understanding Roth IRA Contribution Rules
Roth IRAs operate differently from Traditional IRAs because your eligibility to contribute is directly tied to your income. If your income is low enough, you can contribute the full amount available for the tax year. Middle-range earnings may reduce your allowed contribution, while incomes above certain thresholds eliminate your ability to contribute altogether.
These income ranges adjust each year, so it’s important to confirm your status before adding funds to a Roth IRA.
How HSAs Can Help You Save on Healthcare Costs
Those enrolled in a high-deductible health plan (HDHP) may qualify to open and fund a Health Savings Account (HSA). These accounts provide tax advantages that can help you set money aside for medical expenses in a cost-efficient way.
You may continue making HSA contributions for the 2025 tax year until April 15, 2026. If your HDHP covers only yourself, the maximum contribution is $4,300. If your coverage includes your family, the limit rises to $8,550. Individuals aged 55 or older may add an extra $1,000 as a catch-up contribution.
HSAs are often praised for their unique triple tax advantages. Contributions may be tax-deductible, invested savings can grow tax-free, and withdrawals used for qualified medical expenses are also free from taxes.
Be sure to account for any contributions your employer has made, as those amounts count toward your annual limit. If you were covered only part of the year, your allowable contribution may need to be prorated unless the “last-month rule” applies—which allows you to contribute the full annual limit if you were eligible in December. However, failing to maintain eligibility in the following year could result in taxes and penalties.
Avoiding Excess Contributions
Depositing more into an IRA or HSA than the IRS allows can lead to financial consequences. Excess contributions that aren’t corrected may incur a 6% penalty for every year the extra amount remains in the account.
To prevent this, double-check your total contributions and consider employer deposits when calculating your remaining room. If you discover you’ve added too much, you can remove the excess before the tax deadline to avoid additional penalties.
Take Action Now to Maximize Your Benefits
IRAs and HSAs offer valuable tax advantages that can support both your retirement plans and your healthcare budget. But to apply those benefits to the 2025 tax year, your contributions must be completed before April 15, 2026.
If you’re uncertain about how much to contribute or which type of account best aligns with your financial goals, speaking with a financial professional can provide helpful clarity. The right guidance can ensure you understand the rules, avoid costly errors, and make the most of the tax benefits available to you.
There’s still plenty of time to contribute—but don’t wait too long. Acting now can help strengthen your savings strategy and potentially reduce your tax burden. If you’d like support reviewing your choices, reach out soon so you’re fully prepared before the deadline arrives.