The tax deadline extension means you have another month to contribute to an IRA or HSA for 2020

If you haven't yet maxed out your Health Savings Account (HSA) or IRA for the 2020 tax year, you have some extra time this year.

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The IRS extended the 2020 tax deadline through May 17, 2021. This extension gives Americans an extra month to file their taxes. And, it extends the deadline for contributing towards your 2020 limits on HSAs and IRAs. 

It's possible to contribute to your IRA or HSA up until the tax-filing deadline, usually April 15. The IRS confirmed that the deadline for HSA and IRA contributions is extended along with the filing deadline in a statement on March 29. 

In 2020, Roth and traditional IRA contributions were capped at $6,000 per year, or $7,000 for those age 50 or older. HSAs max at $3,600 per year for individuals and $7,200 for families in 2020, with an additional catch-up contribution of $1,000 for those age 55 or older. 

If you haven't met these limits yet and have extra cash, you have a unique chance this year.

Contributing to an HSA or IRA for the previous tax will allow you to save more

It's not every year that you get an extra month to contribute to your IRA or HSA, and any extra money you have now could be helpful in the long run as these accounts grow. 

Your HSA isn't just for healthcare costs now — it can also help you save more for healthcare costs in retirement. The funds don't expire, and can be invested to grow long-term. If you don't already have an HSA, however, you can't just open one — you'll need to have a high-deductible healthcare plan to be eligible. 

An IRA, however, is available to anyone who's eligible. You can open and contribute to an IRA up until the tax deadline, as long as it's funded with money earned in 2020. While traditional IRA contributions are tax deductible, Roth IRA contributions are not, since they offer tax-free income in retirement. 

Contributing towards your 2020 limit can free up the amount you'll be able to contribute in 2021, and help you save more overall.