Maximize Your Tax Savings: HSA & IRA Contributions Due by April 15, 2025Tax season is here, and one of the smartest financial moves you can make is contributing to your Health Savings Account (HSA) or Individual Retirement Account (IRA) before the April 15, 2025, deadline. These contributions not only help you save for the future but can also reduce your taxable income for 2024, potentially lowering your tax bill or increasing your refund. Here’s what you need to know:
Health Savings Account (HSA) Contributions
If you have a High Deductible Health Plan (HDHP), contributing to an HSA can provide significant tax advantages:- Tax Deductible Contributions – Contributions reduce your taxable income, even if you don’t itemize deductions.
- Tax-Free Growth – Any interest or investment gains in your HSA grow tax-free.
- Tax-Free Withdrawals – When used for qualified medical expenses, withdrawals are not subject to income tax.
- Carry Over Unused Funds – Unlike Flexible Spending Accounts (FSAs), your HSA funds roll over indefinitely.
- Individuals: Up to $4,150
- Families: Up to $8,300
- Catch-up Contribution (age 55+): Additional $1,000
Individual Retirement Account (IRA) Contributions
Whether you contribute to a Traditional or Roth IRA, making contributions before the deadline can be beneficial:- Traditional IRA: Contributions may be tax-deductible, reducing your taxable income. Withdrawals in retirement are taxed as ordinary income.
- Roth IRA: While contributions are not tax-deductible, your earnings grow tax-free, and withdrawals in retirement are tax-free if certain conditions are met.
- Up to $7,000 ($8,000 if age 50+)
Why You Should Contribute Now
- Lower Your Taxable Income – Reducing taxable income can help you owe less or qualify for a larger refund.
- Boost Your Retirement Savings – Contributing consistently over time leads to greater retirement security.
- Take Advantage of Tax-Free Growth – The earlier you contribute, the more time your money has to grow tax-free.
How to Contribute
You can make contributions through your bank, brokerage firm, or directly with your HSA or IRA provider. If mailing a check, ensure it is postmarked by April 15, 2025.If you have questions about your eligibility or how contributions will impact your tax return, our team is here to help. Contact us today to ensure you’re maximizing your tax benefits before the deadline!