Tax season is upon us, and while April 15 may seem like it’s right around the corner, you still have time to make some strategic moves that could lower your 2025 tax bill. Whether you’re looking to reduce your taxable income or set yourself up for a more secure financial future, these options are worth considering.
Contribute to an IRA. One of the most popular tax-smart moves is contributing to an Individual Retirement Account. You have until the April 15 filing deadline to contribute to an IRA for the 2025 tax year. You can contribute up to $7,000, or $8,000 if you’re 50 or older.
If you choose a traditional IRA, your contributions may be tax-deductible depending on your income level and whether you participate in an employer-sponsored retirement plan. Your earnings grow tax-deferred until you withdraw them in retirement. With a Roth IRA, you won’t get an immediate tax deduction, but your earnings can grow tax-free if you follow the withdrawal rules.
Max out your Health Savings Account (HSA). If you’re enrolled in a high-deductible health plan, a Health Savings Account offers triple tax advantages. You can still make HSA contributions for 2025 until April 15. The limits are $4,300 for individual coverage and $8,550 for family coverage. If you’re 55 or older, you can contribute an additional $1,000.
HSA contributions reduce your taxable income, the money grows tax-free, and withdrawals for qualified medical expenses are never taxed. Plus, HSAs have no “use it or lose it” rule. Your savings roll over year after year, making an HSA a valuable tool for building resources to cover healthcare costs in retirement.
Self-employed? Consider a SEP IRA. Business owners and self-employed individuals have another powerful option: the SEP IRA. You can make contributions for 2025 up until your business tax return deadline, including extensions. For 2025, you can contribute up to 25% of your compensation, with a maximum of $70,000. This can significantly reduce your taxable income while building your retirement nest egg.
Don’t forget required minimum distributions. If you turned 73 in 2025, make sure you’ve taken your Required Minimum Distribution from your traditional IRA or 401(k) for 2025. Missing this deadline can result in a steep penalty, so it’s important to verify that if your 73rd birthday was in 2025, your RMD has been withdrawn before April 1, 2026.
Consult a professional. While these moves can help reduce your tax burden, everyone’s financial situation is unique. Before making any major financial decisions, it’s wise to consult with a tax advisor or financial advisor who can provide guidance tailored to your specific circumstances.
The April 15 deadline is fast approaching, but you still have opportunities to make smart choices that could benefit both your current tax return and your long-term financial health. Don’t let this window of opportunity close without considering your options.
This article was written by Edward Jones for use by Joe Oliver, your local Edward Jones Financial Advisor.
Edward Jones, Member SIPC
Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.
Joe Oliver is a lifelong Oxfordian, husband, father, and financial advisor with Edward Joes Investments. Joe services business owners and individual investors by helping them accomplish their financial goals. For a complimentary financial consultation, connect with Joe at Joe.Oliver@Edwardjones.com.
Joe Oliver, CFP®,AAMS™
Financial Advisor
2250 Baltimore Pike
Oxford, PA 19363
484-702-9311
www.edwardjones.com/joe-oliver
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