Tax Season Tips: Maximizing Deductions and Retirement Contributions

Tax season is more than a deadline; it’s an opportunity to enhance your retirement strategy and reduce your taxable income. Pre-retirees can especially benefit from a focused approach during this time of year. Here are some tips to make the most of tax season while preparing for a confident retirement.

Tip 1: Maximize Your Retirement Contributions

Take full advantage of tax-advantaged accounts like IRAs and 401(k)s. For 2025, individuals over 50 can contribute up to $7,500 to an IRA and $30,000 to a 401(k), including catch-up contributions. These contributions not only boost your retirement savings but may also lower your taxable income.

Tip 2: Review Health Savings Account (HSA) Opportunities

If you have a high-deductible health plan, contributing to an HSA can be a smart move. HSA contributions are tax-deductible, grow tax-free1, and can be used for qualified medical expenses at any time. In retirement, they can also serve as a supplemental savings vehicle.

Tip 3: Don’t Overlook Deductions

> Explore deductions that can directly impact your bottom line:

> Medical expenses exceeding 7.5% of your adjusted gross income.

> Charitable donations, including cash and non-cash contributions.

> Mortgage interest and property taxes, where applicable.

Tip 4: Optimize Your RMD Strategy

If you’ve started taking required minimum distributions (RMDs) or are approaching the age where they’re required, consider strategies to minimize their tax impact. For instance, qualified charitable distributions (QCDs) can satisfy your RMD while also reducing your taxable income.

Tip 5: Consider a Roth IRA Conversion2

For those in a lower tax bracket, a Roth conversion might be a savvy move. Converting now allows your investments to grow tax-free, offering long-term tax savings and flexibility in retirement.

Tip 6: Check for Tax Credits

Tax credits directly reduce the amount of taxes you owe. The Saver’s Credit, for example, rewards contributions to retirement accounts for eligible individuals.

Tip 7: Consult a Professional

Tax laws can be complex, and missing key opportunities could cost you. A financial advisor can work with your tax professional to ensure your tax and retirement strategies are aligned.

Tax season is the perfect time to better position your retirement savings and minimize your tax bill. Our financial planning tool makes it easy to evaluate your options, and our team is here to guide you every step of the way. Contact us today to discuss your tax strategy and retirement goals.

1 HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-deductible with very few exceptions. Please consult a tax advisor regarding your state’s specific rules.

2 Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

LPL ART # 691347-01