Maximize Your Tax Savings with 2024 Retirement Contributions in 2025

When it comes to tax planning, timing is everything. Even though 2024 is over, there’s still a powerful way to lower your tax bill—by making retirement contributions in 2025 that count for 2024! Whether you’re an individual or a small business owner, contributing to a retirement plan now can both reduce your taxes and grow your future savings.

IRA Contributions: Still an Option Until April 15, 2025

If you have earned income (or a spouse who does), you can contribute to an IRA by April 15, 2025, for the 2024 tax year. The limits are:

• $7,000 for individuals under 50

• $8,000 for those 50+

Depending on your income and whether you have a workplace retirement plan, you may be able to deduct contributions to a Traditional IRA or make a Roth IRA contribution for tax-free withdrawals in retirement. If your income is too high, consider a nondeductible IRA or a backdoor Roth IRA strategy for tax-advantaged growth.

Retirement Plan Options for Small Business Owners

If you’re self-employed or run a small business, you still have time to set up a retirement plan and make contributions for 2024. Three key options are:

1. SEP IRA – Simple setup, high limits (up to $69,000), and flexible contributions.

2. Profit-Sharing Plan – Higher contributions than a SEP IRA and can be combined with a 401(k).

3. Defined Benefit Plan – Ideal for high-income earners looking for substantial tax-deferred contributions.

Deadlines to Keep in Mind

• March 17, 2025 – Pass-through businesses (LLCs, partnerships, S-corps) tax deadline; extended to Sept. 15 if filed.

• April 15, 2025 – C-corps and sole proprietors tax deadline; extended to Oct. 15 if filed.

Act Now and Save

Making last-minute retirement contributions can be a strategic way to cut your tax bill while boosting your future security. The clock is ticking—contact Verity CPAs at info@verity.cpa or 808.546.5026 to ensure you make the best decision before your deadline passes.