Smart Tax Moves You Can Still Make Before the April 15 Deadline

For many taxpayers, especially W-2 employees, tax-saving opportunities become scarce after December 31. Once the calendar year ends, it’s generally too late to adjust 401(k) contributions, make charitable donations, or engage in tax-loss harvesting. However, there are still a few proactive steps you can take before the April 15 tax deadline to reduce your previous year’s tax liability. Here are three valuable options to consider:

1. Contribute to Your Health Savings Account (HSA)

If you’re enrolled in a high-deductible health plan (HDHP), you may still have time to make contributions to your health savings account (HSA) for the prior tax year. Contributions to an HSA are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are also tax-free.

For 2024, the contribution limits are $3,850 for individuals and $7,750 for families, with an additional $1,000 catch-up contribution allowed if you’re 55 or older.

Why It Matters

• Immediate Tax Savings: Contributions reduce your taxable income dollar-for-dollar.
• Long-Term Benefits: Funds in an HSA roll over year to year, making it an excellent tool for future medical expenses or even retirement planning.

What to Do

• Confirm eligibility for an HSA contribution.
• Make your deposit by the April 15 tax deadline.

2. Make a Pre-Tax IRA Contribution

If you haven’t maxed out your contributions to a traditional IRA, you can still do so before the tax deadline. For 2024, the contribution limit is $6,500 (or $7,500 if you’re 50 or older). Contributions may be tax-deductible, depending on your income and whether you or your spouse are covered by a retirement plan at work.

Why It Matters

• Tax Deduction: Pre-tax contributions reduce your taxable income, potentially lowering your overall tax bill.
• Retirement Savings: You’re boosting your long-term financial security while saving on taxes.

What to Do

• Check if your income qualifies you for a full or partial deduction.
• Open or add to your traditional IRA by the April 15 deadline.

3. Leverage a Spousal IRA

If your spouse has little to no income, you may still be able to contribute to a traditional or Roth IRA on their behalf. This is known as a spousal IRA, and it can help boost retirement savings for both partners.

For 2024, the contribution limits are the same: $6,500 (or $7,500 if the spouse is 50 or older). Eligibility for a tax deduction will depend on your income and whether you’re covered by a workplace retirement plan.

Why It Matters

• Increased Retirement Savings: A spousal IRA allows non-working or low-income spouses to benefit from tax-advantaged retirement savings.
• Tax Deduction Potential: Contributions to a spousal traditional IRA may also be deductible, reducing your overall tax liability.

What to Do

• Verify eligibility based on your household income.
• Make the contribution by the April 15 tax deadline.

While your tax-planning options may be limited after December 31, these strategies provide meaningful ways to reduce your taxable income and strengthen your financial future. Take the time to review your eligibility for HSA contributions, IRA deposits, and spousal IRA opportunities before the April 15 deadline. Consulting with a tax professional can ensure you maximize your available deductions and credits.