As tax season gets closer, it’s a great moment to revisit your overall financial plan—especially when it comes to your IRA and HSA contributions. Both accounts offer valuable tax advantages, but to apply them to the 2025 tax year, your contributions must be completed before the federal filing deadline.

Below is a refreshed look at what to keep in mind as April 15 approaches.

Why IRA Contributions Are Important Now

If you’re hoping to boost your retirement savings and potentially reduce your taxable income, making an IRA contribution before the tax deadline can be a smart move. These contributions can play a meaningful role in long-term planning and help you take advantage of tax benefits you may otherwise miss.

For 2025, individuals under 50 can contribute up to $7,000 to their IRA. Those who are 50 or older are eligible for a higher limit of $8,000 to help them accelerate their retirement savings as they near retirement age.

It’s important to remember that these limits apply across all IRAs you own, whether Traditional, Roth, or a combination of both. In addition, you cannot contribute more than the amount of income you earned during the year. If you personally didn’t earn income but your spouse did, you may still be able to make a contribution through a spousal IRA based on their earnings.

How Income Impacts Traditional IRA Deductions

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

For example, a single filer covered by a workplace retirement plan can deduct the full contribution if their income is $79,000 or less. Partial deductions are available for those earning between $79,001 and $88,999, while no deduction is allowed for incomes of $89,000 or more.

If you're married and both partners are covered by employer plans, you can take the full deduction if your combined income is $126,000 or below. A partial deduction applies between $126,001 and $145,999, and once your income reaches $146,000, you can’t deduct the contribution.

Even if your contribution isn’t deductible, the money can still grow tax-deferred until you take withdrawals during retirement.

Understanding Roth IRA Contribution Limits

Roth IRAs work differently because your eligibility to contribute is determined by your income level. Those with lower incomes can contribute the full amount, while individuals in the middle range may qualify only for a reduced contribution. High earners may be phased out entirely from contributing.

Because these limits shift slightly each year, it’s always wise to verify your eligibility before adding funds to a Roth IRA.

HSAs: A Tax-Savvy Way to Manage Healthcare Costs

If you’re enrolled in a high-deductible health plan (HDHP), you may qualify to open a Health Savings Account (HSA). These accounts are designed to help you save for medical expenses while offering some of the strongest tax benefits available.

For the 2025 tax year, you can contribute to an HSA until April 15, 2026. If you have self-only coverage, your contribution limit is $4,300. Those with family coverage can contribute up to $8,550. Individuals age 55 or older can contribute an additional $1,000.

HSAs are unique because they provide three layers of tax advantages: contributions reduce your taxable income, investment growth is tax-free, and withdrawals used for qualified medical expenses are also tax-free.

If your employer makes contributions on your behalf, those amounts count toward your annual limit. And if you were not eligible for the full year, your contribution maximum may be prorated unless you qualify for the “last-month rule,” which allows a full contribution if you were eligible in December. However, losing eligibility the following year may result in taxes and penalties.

Avoid Exceeding Contribution Limits

Contributing more than the IRS allows for IRAs or HSAs can lead to ongoing penalties. Excess contributions that aren’t corrected can result in a 6% penalty for every year the excess remains in the account.

To prevent this, track your contributions carefully and include any employer deposits when calculating your total. If you find that you’ve contributed too much, removing the excess before the tax deadline can help you avoid penalties.

Take Action to Strengthen Your Financial Future

IRAs and HSAs offer meaningful tax advantages that can help you save more effectively for retirement and healthcare expenses. But to use these benefits for the 2025 tax year, contributions must be completed by April 15, 2026.

If you're unsure how much to contribute or which type of account best fits your situation, consulting a financial professional can provide clarity. They can help you navigate the rules, understand your options, and ensure you're making the most of available opportunities.

There’s still time to act. Don’t miss the chance to enhance your savings and potentially reduce your tax bill. If you’d like support reviewing your choices, reach out soon so you’re prepared well before the deadline.