Maximize Your IRA and HSA Contributions Before the Tax Deadline
As Tax Day approaches, it’s a great moment to revisit your financial plans—especially when it comes to your IRA and HSA contributions. Both types of accounts come with meaningful tax perks, but you must make your deposits before the filing deadline to have them count for the 2025 tax year.
Below is a detailed breakdown to help you take full advantage of these opportunities before April 15.
Why IRA Contributions Are Especially Important Right Now
Adding money to an IRA before the tax deadline is one of the simplest ways to boost your retirement savings and possibly lower what you owe in taxes. Whether you’re just getting started or looking to build on past contributions, these accounts can make a real difference in your long‑term financial picture.
For 2025, the contribution limits are straightforward. If you’re under age 50, you may contribute up to $7,000 across all your IRAs combined. Individuals age 50 and older can contribute up to $8,000 thanks to a catch‑up provision designed to help people nearing retirement increase their savings.
These limits apply to your total contributions across both Traditional and Roth IRAs. Keep in mind that your earned income also plays a role—you can’t contribute more than you earned for the year. If you personally had no income but your spouse did, you may still qualify to contribute through a spousal IRA based on their earnings.
How Income Determines Traditional IRA Deductibility
Anyone with earned income can put money into a Traditional IRA, regardless of how much they make. However, whether those contributions are deductible on your tax return depends on your income level and whether you or your spouse participates in a workplace retirement plan.
If you’re single and covered by a retirement plan at work, you can deduct the full amount of your Traditional IRA contribution if your income is $79,000 or less. Partial deductions are available for incomes between $79,001 and $88,999. Once your income reaches $89,000 or more, the deduction is no longer available.
For married couples where both spouses are covered by employer retirement plans, the full deduction applies if your combined income is $126,000 or less. A partial deduction is available up to $145,999. At $146,000 or higher, you won’t be able to deduct your contribution.
Even if you fall above these thresholds and cannot deduct your contribution, your savings can still grow tax‑deferred, providing important long‑term benefits.
Roth IRA Contribution Rules Are Based on Income
Roth IRAs operate differently from Traditional IRAs. With a Roth, your ability to contribute depends entirely on your income. If your earnings fall within the lower range, you may be eligible to contribute the full amount. Middle-range earners may be allowed to contribute a reduced amount. If your income is too high, you won’t be able to contribute directly to a Roth IRA at all.
These income limits can shift each year, so it’s wise to confirm where you fall before making your contribution.
HSAs: A Smart and Tax‑Efficient Choice for Healthcare Savings
If you’re enrolled in a high‑deductible health plan (HDHP), you have the option to open a Health Savings Account, or HSA. HSAs are unique financial tools that allow you to set aside money for medical expenses while enjoying significant tax benefits.
You have until April 15, 2026, to make contributions that count toward the 2025 tax year. For individuals with self-only HDHP coverage, the limit is $4,300. If your plan covers your family, you can contribute up to $8,550. Individuals age 55 and older may add an extra $1,000 as a catch‑up contribution.
HSAs are especially valuable because they offer three tax advantages in one:
Your contributions may reduce your taxable income.
Your savings grow tax‑free while in the account.
Withdrawals used for qualified medical expenses are also tax‑free.
Be sure to include any employer contributions in your total, as these count toward the annual limit. If you were eligible for only part of the year, your contribution limit may need to be reduced unless you qualify under the “last‑month rule,” which allows full contributions if you were eligible in December. However, you must remain eligible the following year to avoid taxes and penalties.
Avoid the Costs of Overcontributing
Going beyond the IRS contribution limits for either IRAs or HSAs can lead to unwanted consequences. Excess contributions that remain in your account past the tax deadline may trigger a 6% penalty for every year the extra funds stay put.
To prevent this, keep a close eye on the official limits and track how much you’ve contributed—especially if your employer contributes to your HSA. If you realize you’ve contributed too much, you can withdraw the excess before the filing deadline and avoid the penalty.
Take Action and Strengthen Your Financial Future
IRAs and HSAs offer powerful tax‑related advantages that can help strengthen your retirement plans and healthcare savings. But those benefits only apply if you make your contributions on time. For 2025, that means acting before April 15, 2026.
If you’re unsure how much to contribute or whether a Traditional IRA, Roth IRA, or HSA best supports your financial goals, speaking with a financial professional can be extremely helpful. They can assist you in understanding the rules, maximizing available benefits, and avoiding costly missteps.
The window is still open, but it won’t stay that way for long. Now is an ideal time to double‑check your accounts, make any remaining contributions, and put yourself in the best financial position before the deadline arrives.