Tax day is near: Last-minute moves that could save you money

The April 15 tax deadline is coming soon, but experts say it is not too late to save money on taxes. Many Americans think last-minute savings are impossible, but tax experts say there are still options available. New tax changes passed last summer give extra tax breaks that apply to 2025 returns. These changes can help people save, reinvest money, and grow small businesses.

Experts say people just need to know where to look for these savings. You can still put money into retirement accounts like a 401(k) or IRA before April 15 to lower taxable income. The 2025 401(k) contribution limit is $23,500, which is higher than last year, as per the USA Today. Only pre-tax contributions to a 401(k) give an immediate tax deduction. Roth 401(k) contributions are taxed now, but withdrawals later are usually tax-free.

Retirement tax savings

People aged 50-59 or 64+ can add an extra $7,500 to their 401(k). People aged 60-63 can contribute up to $11,250 extra as catch-up contributions. The IRA contribution limit is $7,000 for people under age 50. People age 50 or older can add another $1,000 to an IRA. IRA deductions begin to phase out at $79,000 income for singles and $126,000 for couples with workplace plans. People with high-deductible health plans can still add money to Health Savings Accounts before April 15.

HSA tax benefits

The 2025 HSA limit is $4,300 for individuals and $8,550 for families. People age 55 or older can add an extra $1,000 to an HSA. HSAs offer triple tax benefits: tax-deductible contributions, tax-free growth, and tax-free withdrawals for medical costs, as stated by USA Today. HSAs can act like a savings piggy bank for future medical expenses. More Americans became eligible for HSAs due to last year’s tax bill.

Education savings tax breaks

Over 30 states offer tax breaks for contributions to 529 education savings plans. Some states still allow contributions after the calendar year for 2025 tax benefits. These states include Georgia, Indiana, Kansas, Mississippi, Oklahoma, South Carolina, and Wisconsin with April deadlines. Iowa allows contributions until April 30. Self-employed workers can open a SEP IRA to increase deductions.

A SEP IRA allows contributions up to 25% of self-employment income. The 2025 SEP IRA contribution cap is $70,000, as noted by USA Today. SEP IRA contributions made before the filing deadline are tax deductible for the previous year. People can have both a SEP IRA and a workplace 401(k). About 90% of Americans take the standard deduction, but itemizing may be better this year. The SALT deduction cap increased to $40,000 for some taxpayers.

Missed tax credits

This change may benefit people in high property tax areas. The SALT deduction is only available if you itemize deductions. The new tax bill also added benefits even without itemizing. Tips up to $25,000 may be tax-free. Overtime income up to $12,500, or $25,000 for couples, may be tax-free. Seniors age 65+ may get extra deductions of $6,000 single or $12,000 for couples. Car loan interest up to $10,000 may be tax-free if the car meets U.S. assembly rules.

Missed tax credits to claim before deadline

The IRS says many people miss valuable tax credits each year. About 20% of eligible taxpayers do not claim the Earned Income Tax Credit. The average Earned Income Tax Credit was $2,916 in 2024. The American Opportunity Tax Credit offers up to $2,500 per student. Up to $1,000 of that education credit can be refundable, as cited by USA Today. The Premium Tax Credit helps people who buy insurance through the marketplace. The Child and Dependent Care Credit covers 20%–35% of childcare costs.

The childcare credit is capped at $3,000 for one dependent or $6,000 for two or more. The maximum childcare credit ranges from $1,050 to $2,100 depending on income. The Fuel Tax Credit may apply to fuel used for off-highway business or farming. Some Fuel Tax Credit uses are refundable. Experts say reviewing all these options before April 15 could help taxpayers save money.

FAQs

Q1. Can I still reduce my taxes before April 15?

Yes, you can still save by adding money to retirement accounts, HSAs, or claiming missed tax credits before the deadline.

Q2. What tax credits do people often miss?

Many people miss credits like Earned Income, education, childcare, health insurance, and fuel tax credits.