Apr. 06, 2023 at 7:00 pm

Tax Day 2023 is nearing but you can still get deductions. Here’s how.

April 6, 2023no commentNo tags

The April 18 tax deadline is quickly approaching.
There are still some last-minute contributions you can make though to score a tax deduction.
They include contributions to IRAs, HSAs and educational savings plans.

The April 18 tax deadline is just around the corner, but there’s still time to find some last-minute tax deductions to save you money.

Fidelity, the mutual fund giant, says it typically sees a surge in the percentage of investors contributing to their traditional individual retirement accounts (IRAs) in the three weeks leading up to the tax deadline.

Any money you contribute to IRAs or health savings accounts (HSAs) through April 18 this year counts as a deduction on your tax return if you haven’t already hit your contribution limits and still qualify. If you can take a deduction and how much you’ll be able to deduct hinges on your participation in workplace retirement plans and income, which we’ll explain here.

What are the maximum contribution limits for an IRA, HSA?

The 2022 total IRA contribution limits are $6,000 for people under 50, and $7,000 for people 50 and older.

Only contributions to traditional IRAs are tax deductible since they’re made with pre-tax money and taxed when withdrawn. Roth IRA contributions are made with after-tax dollars and generally, withdrawals are tax-free.

Contribution limits for HSAs, or money put aside to pay for certain medical expenses if you have a high-deductible health plan, are $3,650 for individual coverage and $7,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

Important information:Are you ready to file your taxes? Here’s everything you need to know to file taxes in 2023.

Untangling the complication:Millions have filed taxes early. What’s your delay? If it’s complex work situations, here’s help.

Filing your own taxes? Here is the best tax software

What can I deduct from my taxes?

IRAs:

If you and your spouse don’t participate in a company retirement plan, you likely can deduct the full contribution.

If you have a 401(k) and are taxed as an individual and earn more than $73,000, you won’t be able to deduct the entire IRA contribution. In this case, there is a phase-out range that caps at $78,000. If you earn $78,000 or more, you won’t be able to make a tax-deductible IRA contribution.

For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is between $109,000 and $129,000. If you earn $129,000 or more as a joint filer with a 401(k), you can’t deduct your IRA contribution.

HSAs:

You can deduct the full amount of a direct contribution made by you or someone else.

However, contributions paid through your employer are already excluded from your income on your W-2. So, the HSA deduction rules don’t allow an additional deduction for those contributions.

If your employer contributes to the HSA, the amount is usually excluded from your gross income so those also can’t be deducted again.

Invest with taxes in mind:Tax diversification can help you save. Here’s what to consider with your retirement funds.

Procrastinated too long?:If you can’t make the April 18 tax deadline, file an extension now. Here’s what to know.

Are there any other contributions I can still make and get a deduction for?

Yes.

If you’re socking away money for your kid’s education in a 529 plan, there are a half-dozen states that allow you to contribute into April and take the deduction on your 2022 state tax return.

The states, according to education research, calculators and tools platform Saving for College, are:

Georgia

Iowa

Mississippi

Oklahoma

South Carolina

Wisconsin

More of your 2022 tax season questions answered

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

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Tax Day 2023 is nearing but you can still get deductions. Here’s how.

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