Maximize Your IRA and HSA Contributions Before the Tax Deadline

As tax season approaches each year, it becomes especially important to revisit your financial strategy—particularly your contributions to IRAs and HSAs. These accounts can offer meaningful tax advantages, but you must contribute before the federal filing deadline to apply them to the 2025 tax year.

Below is a refreshed look at what you need to know so you can make the most of these valuable opportunities ahead of April 15.

Why Boosting IRA Contributions Matters Right Now

If you’re looking to strengthen your retirement savings while also potentially lowering your tax bill, adding funds to an IRA before the deadline can be an effective strategy. IRAs continue to be a cornerstone of long-term financial planning, offering both flexibility and tax benefits.

For the 2025 tax year, the contribution limit for an IRA is $7,000 if you’re under age 50. Anyone age 50 or older can contribute up to $8,000 thanks to the IRS “catch-up” provision designed to support those nearing retirement.

These limits include the total amount contributed across any IRAs you hold, whether they are Traditional, Roth, or both. However, you can’t contribute more than your earned income for the year. Even so, if you personally didn’t earn income but your spouse did, you may still be eligible to contribute through a spousal IRA based on your partner’s earnings.

How Your Income Influences Traditional IRA Deductions

Anyone can contribute to a Traditional IRA, but whether those contributions are deductible depends on a combination of your income and whether you or your spouse has access to a workplace retirement plan.

For example, if you are single and participate in a retirement plan at work, you may take the full deduction if your income is $79,000 or less. If you earn between $79,001 and $88,999, you can deduct a portion of the contribution. Once your income reaches $89,000 or more, the deduction is no longer available.

Married couples in which both spouses are covered by workplace plans face slightly different thresholds. Full deductions are permitted for a combined income of $126,000 or below. Partial deductions apply for income between $126,001 and $145,999. At $146,000 or higher, contributions are nondeductible.

Even if your contributions aren’t deductible, your investment earnings in a Traditional IRA still grow tax-deferred until you withdraw them in retirement.

Roth IRA Eligibility Depends on Income

Roth IRAs operate differently from Traditional IRAs. Instead of affecting deductibility, income determines whether you’re eligible to contribute at all. If your income is under the IRS maximum, you can contribute the full amount. Moderate income levels may allow for partial contributions, while higher-income earners may be unable to contribute directly.

Because these limits shift slightly each year, checking the current guidelines before contributing to a Roth IRA is a smart step.

HSAs: A Tax-Smart Tool for Healthcare Savings

If you’re enrolled in a high-deductible health plan (HDHP), you may qualify to open a Health Savings Account—or HSA. This type of account serves as a powerful tool to set aside money for medical expenses while enjoying unique tax advantages.

For the 2025 tax year, you can continue contributing to your HSA until April 15, 2026. Individuals with self-only coverage can contribute up to $4,300, while those with family coverage may contribute as much as $8,550. Anyone age 55 or older can add an extra $1,000 to their account as a catch-up contribution.

One of the biggest benefits of HSAs is that they provide three layers of tax savings: contributions reduce your taxable income, growth inside the account is tax-free, and withdrawals for qualified healthcare expenses are also tax-free.

Keep in mind that any funds your employer adds to your HSA count toward your annual limit. If you were only eligible for an HSA during part of the year, you might need to prorate your contribution unless you qualify for the "last-month rule," which allows you to contribute the full amount if you were eligible in December. However, if you don’t maintain eligibility the following year, you could face taxes and penalties.

Be Careful Not to Exceed Contribution Limits

Going over the IRS contribution limits for either IRAs or HSAs can create complications. Excess contributions that remain uncorrected may trigger a 6% penalty for every year the excess amount stays in your account.

To avoid this, monitor how much you’ve contributed and factor in any employer contributions. If you discover that you've exceeded the limit, you can remove the extra funds before the tax deadline to steer clear of penalties.

Take Action Now to Maximize Your Savings

IRA and HSA accounts offer meaningful tax benefits that can help you build long-term savings for both retirement and healthcare. But to take advantage of those perks for the 2025 tax year, you’ll need to contribute before April 15, 2026.

If you’re unsure how much you should put away or which account type aligns best with your financial goals, a financial professional can help you navigate the rules and make informed choices. They can also ensure you’re avoiding common pitfalls and making the most of every available advantage.

There’s still time to contribute—don’t miss your chance to strengthen your savings and lighten your tax burden. If you’d like guidance on reviewing your options, now is the perfect time to reach out and prepare well before the deadline arrives.