Tax Day is fast approaching, and it’s the perfect time to take stock of opportunities to reduce your tax burden while growing your savings. Two often-overlooked tools—the Individual Retirement Account (IRA) and the Health Savings Account (HSA)—offer unique tax advantages that can significantly impact your financial health. Whether planning for retirement or managing healthcare costs, maximizing your contributions to these accounts before April 15, 2025, is a step worth taking.
Maximize Your IRA Contributions
The deadline for making contributions to your IRA for the 2024 tax year is April 15, 2025. The annual contribution limits are set at $7,000 for individuals under age 50, and $8,000 for those who are 50 and older. These contributions not only bolster your retirement savings but also potentially reduce your taxable income. Depending on your income and filing status, contributions to a traditional IRA might be tax-deductible. Ensure you verify your eligibility between a Roth IRA and a traditional IRA to make the most informed decision.
Contribute to Your HSA
HSAs come with triple tax benefits: contributions are tax-deductible, withdrawals for medical expenses are tax-free, and the account grows tax-free. For the 2024 tax year, the contribution limits are $4,150 for individuals and $8,300 for families, with a catch-up contribution of $1,000 for those aged 55 and older. The deadline to make these contributions is also April 15, 2025. An HSA is versatile as it can be used for immediate medical expenses or saved for long-term healthcare needs. Consider consulting a financial advisor or tax professional to determine eligibility and contribution limits.
Before the approaching April deadline, double-check your account balances and make contributions to avoid the last-minute rush. Both accounts offer substantial benefits, improving savings and providing future financial security. Take the initiative today to optimize these strategies, securing both your short-term and long-term fiscal health.
