The $17,300 Tax Break You Can Still Claim Before April 15—Here's How

Taxpayers seeking last-minute deductions still have an opportunity to reduce their 2024 tax burden through retirement and health savings contributions before the April filing deadline.

Combined maximum contributions to Individual Retirement Accounts and Health Savings Accounts could reduce taxable income by up to $17,300 for certain taxpayers, tax experts say.

“There are certain times after the fact that you can still reduce your taxable income for the prior year,” Ryan Losi, certified public accountant and executive vice president with Piascik, recently  told CNBC. “If you make contributions to your IRA or HSA, you have until April 15 to have it treated as a prior year contribution.”

Don't Miss:

• How do billionaires pay less in income tax than you? Tax deferring is their number one strategy.
• Many are surprised by Mark Cuban's advice for lotto winners: Cash or annuity?

For 2024, taxpayers can contribute up to $7,000 to traditional IRAs, with those 50 and older eligible for an additional $1,000 catch-up contribution. The pre-tax contributions directly reduce taxable income, though contribution deductions may be limited for taxpayers with workplace retirement plans.

Health Savings Accounts offer even greater tax advantages. These accounts, available to those with high-deductible health plans, provide triple tax benefits—tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.

“Obviously it’s a great privilege to have several thousand dollars laying around, but it’s one of the only things you can take action on within this tax season that will help you on this year’s taxes,” Courtney Alev, head of tax at Credit Karma, told CNBC.

Trending: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $100.

HSA contribution limits for 2024 reach $4,150 for individual coverage and $8,300 for family coverage. Account holders 55 and older can add $1,000 more.

A 55-year-old taxpayer with family health coverage who hadn’t previously contributed could potentially reduce taxable income by $17,300 through maximum contributions to both accounts: $8,000 to an IRA and $9,300 to an HSA.

Financial planners often recommend HSAs as powerful retirement planning tools beyond their immediate tax benefits. Unlike Flexible Spending Accounts, HSA funds roll over year to year and can be invested for long-term growth.

See Also: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.80 per share today.

Traditional IRA contributions do come with future tax implications. Withdrawals in retirement count as taxable income, and early withdrawals before age 59½ typically trigger additional penalties.

Taxpayers considering these strategies should verify their eligibility based on income levels, health plan status, and existing retirement contributions before making retroactive contributions.

Read Next:

• Are you rich? Here’s what Americans think you need to be considered wealthy.
• If You're Age 35, 50, or 60: Here’s How Much You Should Have Saved Vs. Invested By Now