3 ways you can still lower your 2024 taxable bill

With the holidays in the rearview mirror, there’s another festive season on the horizon: tax season. If you’re already worried about your next bill or are hoping to Maximize your tax refundThere are still some steps you can take.

Here are three ways you can lower your tax bill in 2024.

1. Contribute to a traditional IRA

You have until April 15 to fund an individual retirement account for the prior tax year, regardless of whether it is a traditional IRA or a Roth IRA. In other words, the deadline to reach your IRA contribution limit for 2024 is April 15, 2025.

But since a traditional IRA is funded with pre-tax dollars while a Roth IRA is funded with after-tax dollars, you’ll need to choose a traditional IRA if you want to lower your taxable income for the year.

You may be able to deduct your full traditional IRA contribution, depending on your income and whether you or your spouse has it Access to a workplace retirement plan. The table below shows the deduction rules for 2024 and 2025.

Traditional IRA deduction rules for 2024 and 2025

Tax filing status	2024	2025
Any tax filing status if you or your spouse are not covered by a workplace plan	The contribution is fully deductible	The contribution is fully deductible
Single (covered by workplace plan)	The contribution is fully deductible if income is $77,000 or less; The phase-out applies if income is between $77,000 and $87,000; Not deductible if income is above $87,000	The contribution is fully deductible if income is $79,000 or less; The phase-out applies if income is between $79,000 and $89,000; Not deductible if income is above $89,000
Joint marriage (if you are covered by a workplace plan)	The contribution is fully deductible if combined income is $123,000 or less; The phase-out applies if income is between $123,000 and $143,000; Not deductible if income is above $143,000	The contribution is fully deductible if combined income is $126,000 or less; The phase-out applies if income is between $126,000 and $146,000; Not deductible if income is above $146,000
Marital joint registration (if you are not covered by the workplace plan but your spouse is)	The contribution is fully deductible if combined income is $230,000 or less; The phase-out applies if income is between $230,000 and $240,000; Not deductible if income is above $240,000	The contribution is fully deductible if combined income is $236,000 or less; The phase-out applies if income is between $236,000 and $246,000; Not deductible if income is above $246,000
Separate marriage registration (if one of the spouses is according to the workplace plan)	The contribution is partially deductible if your income is less than $10,000; There is no deduction if income is above $10,000	The contribution is partially deductible if your income is less than $10,000; There is no deduction if income is above $10,000

If you’re under 50, you can contribute up to $7,000 to a traditional IRA, a Roth IRA, or a combination of the two in both 2024 and 2025. You can make an additional contribution of $1,000 in both tax years if you’re 50 or older, bringing your maximum contribution to $8,000.

2. Fund your HSA

A Health savings account Allows you to save and invest pre-tax money. If you use your HSA funds for IRS-approved qualified medical expenses, your withdrawals are tax- and penalty-free, too. Like IRAs, HSAs let you contribute up to tax day for any given year, so you can fund your HSA for 2024 through April 15, 2025.

Unused HSA funds roll over from year to year, even if you change jobs or health insurance. You can also use your HSA funds for non-medical expenses without penalty when you turn 65, although withdrawals will be considered taxable income if the funds are not used for health costs.

HSA limits for 2024 and 2025

Type of coverage	Limit 2024	Limit 2025
Self only	$4,150	$4300
family	$8300	$8,550

If you’re 55 or older, you can make an additional $1,000 contribution in 2024 and 2025.

Note that to fund a health savings account, you’ll need to have what’s known as a high-deductible health plan. This means you will typically pay more money for many health services before your insurance kicks in.

3. Use a SEP IRA or Solo 401(k) for self-employment income

If you have income from self-employment, you can use a SEP IRA or a Solo 401(k) to save for retirement. However, you do not need to be a full-time business owner to take advantage of this benefit. You can save in these accounts if you earn money freelancing or do gig work, like driving for Uber or delivering groceries on Instacart, on the side.

SEP IRA Rules

You can contribute up to $69,000 to a SEP IRA in 2024 and up to $70,000 in 2025, or up to 25% of your self-employment income—whichever is less. You can fund a SEP IRA even if you are covered by a workplace retirement plan at a regular job. However, if you own a business with employees, you will need to contribute the same percentage for each eligible employee.

You have until your company’s tax filing date to open and fund a SEP IRA. This means you can generally contribute to a SEP IRA for 2024 through April 15, 2025 — or October 15 if you file for a tax extension.

Solo 401(k) rules.

A solo 401(k) is sometimes referred to as a one-person 401(k), which is essentially a 401(k) you set up for yourself.

You can contribute up to the standard 401(k) limits of $23,000 in 2024 and $23,500 in 2025 as an employer, plus an additional 25% of your compensation as an employer — but total contributions cannot exceed $69,000 in 2024 Or $70,000 in 2024. 2025. If you are 50 years old or more, you can make up to $7,500 in catch-up contributions for both tax years.

The deadline to make your contributions as an employee has already passed, but you can still make contributions until the tax deadline as an employer. This means you have until April 15, 2025, to make employer contributions, or October 15, 2025, if you file for an extension.