Maximize IRAs and HSAs Before Tax Day

Tax Day is fast approaching — a perfect time to take stock of opportunities to reduce your tax burden and grow your savings. Among the numerous financial strategies available, two often-overlooked tools stand out: the Individual Retirement Account (IRA) and the Health Savings Account (HSA). These accounts offer unique tax advantages that can make a significant impact on 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 moving forward with.

Maximize Your IRA Contributions

As the 2024 deadline of April 15, 2025, approaches, consider how maximizing your IRA contributions can benefit your financial health. For the tax year 2024, the contribution limits are $7,000 for those under 50 and $8,000 for those 50 and older. By contributing to an IRA, you can potentially take advantage of tax deductions depending on your income and filing status. These contributions not only bolster your retirement savings but also reduce your taxable income, offering a dual benefit. It's essential to verify your eligibility for a Roth IRA or traditional IRA to ensure effective decision-making regarding your retirement savings strategy.

Contribute to Your HSA

A Health Savings Account (HSA) presents a rare triple tax advantage: tax-deductible contributions, tax-free withdrawals for qualified medical expenses, and tax-free growth. As we near the 2024 contribution deadline of April 15, 2025, it is crucial to consider maximizing contributions to your HSA. The contribution limits for the 2024 tax year are $4,150 for individual coverage and $8,300 for family coverage, with an additional catch-up contribution of $1,000 for those aged 55 or older. HSAs are not only beneficial for short-term medical cost savings but are also valuable for long-term healthcare needs. For example, funds in an HSA can grow over time, significantly aiding long-term medical expenses if not immediately spent.

We strongly encourage consulting a financial advisor or tax professional to determine your eligibility and appropriate contribution limits. Acting before the April 15, 2025 deadline allows you to fully maximize these savings strategies. It's wise to double-check your account balances and make any necessary contributions today to avoid the last-minute rush.