How 2025 Contributions to IRA & 401(k) Can Reduce 2024 Taxes
Did you know you can still make IRA and 401(k) contributions in 2025 that will lower your 2024 tax bill? Here’s how to take advantage of last-minute retirement contributions to reduce taxable income and maximize deductions.
1. Traditional IRA Contributions (Until April 15, 2025)
✅ Contributions made by April 15, 2025 can be applied to your 2024 taxes.
✅ Deductible contributions lower your Adjusted Gross Income (AGI).
✅ Maximum contribution: $7,000 ($8,000 if 50+).
🔗 Related: Traditional vs. Roth IRA: Which One Lowers Your Taxes More?
2. Self-Employed Retirement Contributions (Extended Until Tax Filing Deadline)
✅ Solo 401(k), SEP IRA, and SIMPLE IRA contributions can be made up to your tax filing deadline (including extensions).
✅ SEP IRA contributions: Up to 25% of net earnings, max $69,000.
✅ Solo 401(k) employee contributions: Must be made by Dec 31, 2024, but employer contributions can be extended.
🔗 Related: Self-Employed Retirement Plans: SEP IRA, Solo 401(k), & More
3. Employer 401(k) Contributions (Deadline: Dec 31, 2024)
✅ Employee 401(k) contributions must be made by the end of 2024.
✅ Max employee contribution: $23,000 ($30,500 if 50+).
✅ If eligible, check if your employer allows after-tax 401(k) contributions for tax-free Roth conversions.
🔗 Related: How Retirement Contributions Can Reduce Your 1040 Taxes
4. Can You Still Contribute to a Roth IRA for 2024?
✅ Yes! Roth IRA contributions for 2024 can be made until April 15, 2025.
✅ Roth contributions don’t lower your current-year taxes, but they provide tax-free withdrawals in retirement.
🔗 Related: The Saver’s Credit: How to Get a Tax Break for Retirement Contributions
5. HSA Contributions for 2024 (Tax Deductible Until April 15, 2025)
✅ Health Savings Account (HSA) contributions are tax-deductible, reducing taxable income.
✅ Max contributions: $4,150 (self-only), $8,300 (family), plus $1,000 catch-up for 55+.
🔗 Related: The Health Savings Account (HSA): A Triple Tax Advantage
Final Thoughts
Don’t miss out on last-minute IRA, 401(k), and HSA contributions that can still lower your 2024 tax bill.
🚀 Next Steps:
- Contribute to a Traditional IRA by April 15, 2025.
- Max out self-employed retirement plans before filing.
- Consider an HSA contribution for additional tax savings.
🔗 Need more tax-saving strategies? Visit our Retirement Tax Savings Guide.