Business owners can now calculate estimated tax savings in seconds using Gelt’s AI-powered calculator
Business owners can now calculate estimated tax savings in seconds using Gelt’s AI-powered calculator
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With less than two weeks until the April 15 tax deadline, many Americans are probably thinking it’s too late to save more. But they’re wrong, tax experts say.
The wait-and-see tactic of filling your retirement or health savings account (HSA) is always recommended, but it may be even more so this year. President Donald Trump’s signature tax and spending plan, passed last summer, provides Americans with a number of tax cuts retroactive to 2025.
“This year’s expansion of the tax bracket and the tax reforms passed last year, including the 2017 tax cuts and making permanent key provisions of the One Big Beautiful Act, are freeing up capital for millions of filers and opening new opportunities for savings, reinvestment and small business growth,” said Keith Hall, president and CEO of the National Self-Employed Association, a nonprofit organization that supports self-employed people and small businesses.
Experts say they just need to know where to look. Here are some top tax-saving tips.
Make the most of your retirement savings
Taxpayers can make contributions to traditional retirement funds, such as 401(k)s and individual retirement accounts (IRAs), until April 15 and receive a tax deduction in 2025 to lower their taxable income.
The 401(k) employee contribution limit in 2025 will be $23,500 (pre-tax and Roth), up from $23,000 in 2024. Only pre-tax contributions are eligible for advance tax deductions. Roth contributions are made after-tax amounts, but retirement withdrawals are generally tax-free.
Workers ages 50-59 or 64 and older can receive an additional $7,500, and those ages 60-63 can contribute up to $11,250.
The IRA contribution limit is $7,000 for individuals under age 50. People age 50 and older can donate an additional $1,000.
Note: If your workplace has a retirement plan, the IRA deduction phaseout starts at $79,000 for single filers and $126,000 for joint filers.
fill out an HSA
If you enroll in a high-deductible health plan throughout the year, you have until April 15 to make tax-deductible contributions to your HSA. HSA contribution limits for 2025 are $4,300 for individuals and $8,550 for families, plus an additional $1,000 contribution if you’re 55 or older.
Even better, there are three tax benefits to contributing to an HSA. Not only do contributions lower your taxable income, but invested HSA funds grow tax-free, and withdrawals for qualified medical expenses are also tax-free.
“The combined benefits of pre-tax contributions, tax-free income, and tax-free withdrawals for qualified medical expenses can lead to significant savings over a lifetime if your family is healthy and can accumulate funds,” said Richard Pong, a certified public accountant in San Francisco. “In short, think of your HSA as a piggy bank for medical expenses that can grow, similar to an individual retirement account.”
Thanks to the tax and spending bill passed last summer, millions more Americans will be eligible for an HSA in 2025.
Check state 529 deadlines
More than 30 states and the District of Columbia offer state tax deductions or deductions for contributions to 529 education savings funds. Most of the mandatory contributions will be made by the end of the calendar year to count toward 2025, but there are eight with deadlines set after April 15.
Their states are:
- georgia
- Indiana
- Iowa (April 30)
- Kansas
- mississippi
- oklahoma
- south carolina
- wisconsin
Self-employed people can receive additional tax benefits
If you had a side job or did some freelance work last year, consider opening a SEP IRA based on that income to increase your tax deductions and boost your retirement savings. A SEP IRA allows you to contribute up to 25% of your net self-employment income, with a limit of $70,000 in 2025. If you contribute to a SEP IRA by the filing deadline, your taxes for the previous year will be deducted, including any extensions.
You can get a SEP IRA as your own source of income, or you can get a 401(k) through your employer.
Could you please make a bullet point?
About 90% of Americans take the standard deduction, but it might be worth checking to see if you can itemize this year.
In 2025, the state and local tax (SALT) deduction limit for taxpayers with adjusted adjusted gross income of less than $500,000 will increase from $10,000 to $40,000, making itemization more advantageous, especially for those living in areas with high property taxes. SALT deductions can only be made by the statement preparer.
Leverage OBBB for tax benefits
OBBB provided many benefits to everyday taxpayers without itemizing it. Therefore, it is important to double check that you are taking everything you are eligible for. Some of them are:
- Tips are tax-free up to $25,000
- Overtime income is tax-free, up to $12,500 or $25,000 for married couples filing jointly.
- Additional tax credits for seniors age 65 and older. Single taxpayers get a $6,000 credit, and married couples filing jointly get a $12,000 credit if both qualify.
- If you purchase your vehicle in 2024 or later and have final assembly in the U.S., you can exempt up to $10,000 in taxes on your auto loan interest.
IRS warns of loss of these tax benefits
The IRS says millions of Americans miss out on these credits each year.
- Earned Income Tax Credit: According to the IRS, 20% of eligible taxpayers do not claim this tax credit, which will amount to an average of $2,916 in 2024. It is primarily designed for low- to moderate-income households.
- American Opportunity Tax Credit: Up to $2,500 in grants per student per year will be provided to students with modified adjusted gross incomes of $90,000 or less ($180,000 or less for married couples filing jointly), of which up to $1,000 will be refunded.
- Premium tax credit: When you purchase health insurance through the Health Insurance Marketplace, you may be eligible to receive a refundable credit based on your income and health plan costs.
- Child and Dependent Care Credit: Working parents can claim between 20% and 35% of eligible child care expenses. The maximum deduction is $3,000 per person and $6,000 for two or more people, with a maximum deduction of $1,050 to $2,100. Eligible dependents must be under the age of 13 or incapacitated. The amount of deduction depends on your income and childcare fee payment rate.
- Fuel tax deduction: You may be able to claim this credit if you purchase fuel used for off-highway business or agricultural purposes. This credit is reimbursed for specific uses.
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
