Maximize IRA & HSA Contributions Before Tax Day

Tax Day is fast approaching, and it's time to take stock of opportunities to reduce your tax burden and grow your savings. In the rush to check off all the tax-prep must-dos, be sure not to overlook two powerful tools — the Individual Retirement Account (IRA) and the Health Savings Account (HSA). Each offers unique tax advantages that can have a profound impact on your financial health. Whether you're planning for retirement or managing healthcare costs, maximizing contributions to these accounts before April 15, 2025, is a smart move you don't want to miss.

 

Maximize Your IRA Contributions

The deadline to contribute for the 2024 tax year is April 15, 2025. For those under the age of 50, the annual contribution limit is $7,000, while individuals 50 or older can contribute up to $8,000. Depending on your income and filing status, you might be eligible for significant tax deductions. These contributions not only bolster your retirement savings but also help reduce your taxable income. It's important to verify your eligibility for either a Roth IRA or a traditional IRA to make a choice that best fits your financial situation.

 

Contribute to Your HSA

HSAs offer a trifecta of tax benefits: tax-deductible contributions, tax-free withdrawals for qualified medical expenses, and tax-free growth. Just like IRAs, the contribution deadline for the 2024 tax year is April 15, 2025. The contribution limits for 2024 are $4,150 for individuals and $8,300 for families, with a catch-up contribution of $1,000 available for those aged 55 or older. HSAs are not only ideal for covering immediate healthcare costs but are also a prudent way to save for future medical expenses. Funds in your HSA can accumulate and grow over time if not immediately used, offering a buffer for long-term health planning.

To ensure you're making the most of these accounts, it's wise to consult with a financial advisor or tax professional to confirm your eligibility and contribution limits. Be proactive and make your contributions before April 15, 2025, to maximize these superb savings strategies. Avoid the last-minute rush by double-checking your account balances and making contributions today. Taking these steps not only reduces your tax liability but also fortifies your financial future.