Retirement account contributions offer significant tax advantages in 2025. Traditional IRA contributions are deductible up to $7,000 ($8,000 if age 50+), subject to income limits. 401(k) contribution limits increased to $23,000 ($30,500 for age 50+).
Key considerations include:
- Contributions reduce your taxable income for the year
- Self-employed individuals can contribute to SEP IRAs up to 25% of compensation
- SIMPLE IRA limits increased to $15,500 ($19,000 if age 50+)
Remember that Roth IRA contributions are not tax-deductible but offer tax-free growth and withdrawals in retirement. Consider your current and future tax brackets when choosing between traditional and Roth options.