As tax season draws near, it’s a great opportunity to revisit your financial plans and make sure you’re taking advantage of every available tax break. Two of the most effective tools—IRAs and HSAs—allow you to make prior-year contributions up until the federal filing deadline, giving you extra time to enhance your retirement and healthcare savings.
Below is a refreshed look at how these accounts work and what to consider before the April 15 deadline for the 2025 tax year.
Why Contributing to an IRA Matters as Tax Day Approaches
Adding funds to an IRA before the deadline is an effective way to strengthen your long-term savings and potentially lower what you owe in taxes. For 2025, the contribution limit is $7,000 for those under age 50. Anyone 50 or older can contribute up to $8,000 to help boost retirement savings in the final stretch before retirement.
These limits apply across all IRAs you own collectively—Traditional, Roth, or a mix of both. Your contribution amount also can’t exceed your earned income for the year. If you didn’t earn income but your spouse did, a spousal IRA may still allow you to contribute based on their compensation.
How Income Shapes Traditional IRA Deduction Eligibility
Anyone can add money to a Traditional IRA, but whether that contribution is tax-deductible depends on your income and whether you or your spouse participates in a workplace retirement plan.
For individuals with an employer-sponsored plan, full deductions are available if income is $79,000 or below. Partial deductions are possible for income between $79,001 and $88,999, while earnings of $89,000 or more eliminate the deduction entirely.
For married couples where both spouses are covered by work-based retirement plans, full deductions apply to combined income of $126,000 or less. Partial deductions are granted from $126,001 to $145,999, and deductions disappear at $146,000 or higher.
Even when you’re not eligible for a deduction, contributions to a Traditional IRA still grow tax-deferred, helping your savings compound until retirement withdrawals begin.
Understanding the Different Rules for Roth IRAs
Roth IRAs use income thresholds to determine your contribution eligibility. Lower incomes qualify for full contributions, middle-range incomes may allow only partial contributions, and higher incomes may prohibit contributions altogether.
Because these income ranges shift regularly, it’s wise to check the current limits before finalizing a Roth IRA contribution.
Using an HSA to Build Tax-Efficient Healthcare Savings
If you’re enrolled in a high-deductible health plan (HDHP), a Health Savings Account (HSA) can be a highly tax-efficient way to prepare for medical expenses. You have until April 15, 2026, to contribute for the 2025 tax year.
Contribution limits for 2025 are $4,300 for self-only HDHP coverage and $8,550 for family coverage. Those 55 or older can contribute an additional $1,000 as a catch-up amount.
HSAs are unique because they offer three different tax benefits: contributions reduce taxable income, investment growth is tax-free, and withdrawals used for qualified medical expenses are also tax-free.
Be sure to include any employer contributions when calculating your total annual amount. If you were eligible for only part of the year, your contribution limit may be prorated unless you meet the “last-month rule,” which allows full-year contributions if you were eligible in December. However, losing eligibility the following year can trigger taxes and penalties.
Avoiding Excess IRA and HSA Contributions
Going over the allowed contribution limits for IRAs or HSAs can create complications. Excess amounts that aren’t corrected can result in a 6% IRS penalty for every year the additional funds remain in the account.
Monitoring your contributions—and confirming any employer HSA deposits—can help you avoid unintentionally exceeding the limits. If you discover you’ve contributed too much, you can withdraw the excess before the tax deadline to prevent being penalized.
Take Action Now to Strengthen Your Financial Future
IRAs and HSAs offer powerful tax advantages that can enhance your retirement and healthcare savings, but timing matters. To count contributions toward the 2025 tax year, everything must be completed by April 15, 2026.
If you’re unsure about how much to contribute or which accounts fit your situation best, partnering with a knowledgeable financial professional can make the process easier. Guidance can help you understand the rules, avoid missteps, and ensure you’re making the most of these opportunities.
There’s still time to boost your savings and reduce your tax burden—just don’t wait too long. Reviewing your options now can help you step into the new tax year feeling confident and prepared.