There’s still time to help your clients lower their 2025 taxes
The 2025 tax filing deadline is quickly approaching and although most tax-related activities need to be completed by year-end, the window for helping clients optimize their taxes does not close on December 31st.
There are several “above‑the‑line” deductions that remain available until the filing deadline on April 15, 2026—and apply whether your clients itemize deductions or take the standard deduction.
1. IRA contribution—Your clients can contribute up to $7,0001 ($8,000 if age 50 or older) to a traditional IRA for the 2025 tax year. And depending on their income and if they (or their spouse) are covered by a retirement plan at work, they may also be able to deduct some (or all) of the amount of their contribution.
2. Spousal IRA contribution—Generally, you must have earned income to contribute to an IRA, but a powerful and often overlooked tactic for married couples filing a joint tax return is the spousal IRA. If one spouse has little or no earned income, they can still contribute to their own IRA based on the working spouse’s compensation. While the combined IRA contributions can’t exceed their combined income, this could potentially double the amount of their deduction depending on the income limits for traditional IRA deductibility.
Tax year 2025 income limits for traditional IRA deductibility
| Filing status2 | Covered by retirement plan at work | Deductibility based on modified adjusted gross income |
|---|---|---|
| Single/Head of household | No | Full |
| Yes | Full: $79,000 or less Phased out: >$79,000 to <$89,000 None: >$89,000 |
|
| Married filing jointly | Neither spouse is covered by retirement plan at work | Full |
| One spouse is covered by retirement plan at work and the other is not | Full: $236,000 or less Phased out: >$236,000 to <$246,000 None: >$246,000 |
|
| Both spouses are covered by retirement plan at work | Full: $126,000 or less Phased out: >$126,000 to <$146.000 None: >$146,000 |
3. SEP-IRA contributions—Talk to your small business owner and self-employed clients about considering a simplified employee pension (SEP) plan, which allows employer-funded contributions to individual SEP-IRAs. For 2025, the contribution limits are quite generous at 25% of compensation, up to $70,000. The contributions are tax-deductible for the employer and can significantly reduce tax liability, even for high-income earners. Contributions can be made by the due date of the business’s tax return, including extensions.
4. HSA contribution—Clients who participate in a high-deductible health plan (HDHP) can still make contributions to a health savings account (HSA) for tax year 2025–up to $4,300 for individuals or $8,550 for family coverage (and an additional $1,000 for those 55 and older). HSAs can be used to cover immediate, out-of-pocket health care costs, but they are also a good way to invest for the long-term, providing fully tax-deductible contributions, tax-deferred growth, and tax-free qualified distributions to offset future health care expenses in retirement.
5. Saver’s Credit—Depending on income levels, certain households making contributions to an IRA or workplace retirement plan may also benefit from a tax credit of $1,000 ($2,000 if married filing jointly). While many of your clients won’t qualify for the Saver’s Credit due to income levels, understanding the Saver’s Credit can be valuable when working with:
- Younger clients early in their careers, like recent graduates or entry-level professionals.
- Clients in a low-income year due to career transitions or part-time work.
- Small business owners with variable income.
- Your client’s family members who may be just starting to save for retirement.
You can play a key role in helping your clients take advantage of the available tax deductions before the upcoming tax filing deadline on April 15, 2026. Educating your clients about these opportunities can enable them to reduce their tax burden, thereby helping to meet their financial goals and improving their overall financial wellbeing.
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1 Contributions to a Roth IRA are subject to income limitations and are not tax-deductible.
2 Consult IRS rules or a tax professional if your status is married filing separately or qualifying widow(er).
This material is provided for general and educational purposes only and is not intended to provide legal, tax, or investment advice. This material does not provide recommendations concerning investments, investment strategies, or account types. It is not individualized to the needs of any specific investor and is not intended to suggest that any particular investment action is appropriate for you, nor is it intended to serve as the primary basis for investment decision-making. T. Rowe Price Investment Services, Inc., its affiliates, and its associates do not provide legal or tax advice. Any tax-related discussion contained in this material is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding any tax penalties or (ii) promoting, marketing, or recommending to any other party any transaction or matter addressed herein. Please consult your independent legal counsel and/or tax professional regarding any legal or tax issues raised in this material.
Risk Considerations: Past performance is not a guarantee or a reliable indicator of future results. All investments are subject to market risk, including the possible loss of principal. A tax-efficient approach to investing could cause a fund to underperform similar funds that do not make tax efficiency a primary focus.
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