Even though the tax year has ended, you still have some tax-savings strategies available.
If you have a high deductible health plan (HDHP) consider contributing to a health savings account (HSA). For 2020, you can contribute $3,550 for self-only coverage or $7,100 for family coverage. If you are age 55 or older, you can contribute an additional $1,000 a year. You can contribute up until the due date of your return. You can contribute to an HSA if your qualifying HDHP has a minimum annual deductible of $1,400 for self-only coverage or $2,800 for family coverage.
Contribute to your IRA up to $6,000 ($7,000 if you are older than 50). However, your eligibility to take a deduction will be affected if you are covered by a retirement plan at work and your income exceeds certain thresholds.
Another strategy, while not reducing taxable income, is to make Roth IRA contributions. The benefit of the Roth IRA is that the earnings on the IRA will not be taxable to you upon distribution (assuming distributed after reaching age 591/2). The ability to make a Roth IRA contribution continues even if you are participating in an employer savings plan like a 401(k), so it’s not subject to the “active participant” rules that may prevent employees who participate in an employer plan from making deductible contributions to traditional IRAs. Your ability to make a Roth IRA contribution in 2020 will be reduced if your adjusted gross income (AGI) in 2020 exceeds $196,000 and you file married filing jointly (MFJ), or $124,000 if you file as a single taxpayer. You will not be able to contribute to a Roth IRA in 2020 if you are MFJ and your 2020 AGI equals or exceeds $206,000. The AGI cutoff for single filers is $139,000 or more. Married filing separate (MFS) taxpayers who live together lose the Roth option once AGI hits $10,000.
For 2020 and later, there is no longer an age limit on making regular contributions to a traditional or Roth IRA. The sum of all traditional and Roth IRA contributions for 2020 is limited to $6,000, rising to $7,000 if you are age 50 or older by the end of 2020.