As the April 15 tax deadline approaches, many individuals are evaluating last-minute strategies to reduce their tax bill. In this week’s Financial Flash, we outline several tax moves that may still be available, including IRA contributions, Roth strategies, Health Savings Account (HSA) funding, and opportunities for business owners.
More importantly, we address a critical question: Are these last-minute tax strategies actually beneficial? While some actions may reduce taxes today, they can create unintended consequences in the future if not aligned with a long-term plan. This episode highlights the importance of tax planning over tax preparation and encourages a more thoughtful, forward-looking approach to financial decision-making.
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FFR 281 – Last Minute tax strategies before April 15th
Welcome to this week’s Financial Flash.
As we approach the April 15 tax deadline, a common question we hear is: what tax moves can I still make before filing—and are they actually a good idea?
I’m Bradford Aylin, Financial Advisor here at Stiles Financial Services, and today, I want to cover two things. First, we’ll walk through several tax strategies that may still be available. Second, and more importantly, we’ll talk about why not every tax-saving move is beneficial in the long run.
What tax strategies can you still use before April 15?
Depending on your situation, there are a few options that may still be available.
You may be able to make a contribution to a Traditional IRA or Roth IRA for the prior tax year. A Traditional IRA may provide a current-year tax deduction, while a Roth IRA does not offer a deduction today but allows for tax-free growth in the future.
For higher-income individuals, a backdoor Roth contribution may be an option. However, it’s important to understand how the pro-rata rule applies, especially if you already have existing IRA balances.
You may also be eligible to contribute to a Health Savings Account, or HSA, if you are enrolled in a qualifying high-deductible health plan. HSAs offer a combination of tax benefits, including potential deductions, tax-deferred growth, and tax-free withdrawals for qualified medical expenses.
For business owners, there may be additional opportunities, such as a SEP IRA contribution or funding the employer portion of a Solo 401(k), both of which can often be completed before the tax filing deadline.
Are last-minute tax deductions always a good idea?
This is where it’s important to pause. Just because a strategy reduces your tax bill today does not necessarily mean it improves your long-term financial outcome.
One of the most common mistakes we see is focusing only on short-term tax savings without considering future implications.
For example, contributing to a Traditional IRA may reduce your taxable income today. But if you are already building significant tax-deferred savings, this could lead to higher Required Minimum Distributions, or RMDs, later in life. That may result in higher taxable income, increased taxation of Social Security benefits, and potentially higher Medicare premiums due to IRMAA adjustments.
What is the difference between tax planning and tax preparation?
Tax preparation focuses on the past—filing your return and identifying deductions based on what has already happened. Tax planning, on the other hand, looks forward. It considers how decisions today may impact your taxes over time.
Your tax strategy should be coordinated with your investment strategy, your retirement income plan, your Social Security decisions, and your overall financial goals.
As you consider any last-minute moves before April 15, take a moment to think beyond the current year. A thoughtful, coordinated approach to tax planning can often provide more value than reacting to short-term opportunities.
If you have questions about your situation or want to ensure your tax strategy aligns with your long-term plan, we’re here to help.
Thank you for joining me, and we’ll see you in the next Financial Flash.
Have a great weekend and we’ll see you in the next Financial Flash
