Reduce 2023 Income Taxes by Doing These Five Tips Now

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Susan Alefi

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SAN DIEGO – In an effort to empower individuals and business owners to optimize their financial strategies, Serenity Financial Planning is sharing invaluable insights on tax reduction.

Wealth Management Advisor Susan Alefi, AAMS®, ChFC® explained, “Since we still have a few months left in 2023, now is a good time to review your tax liability and ways you can reduce your tax burden. Below are five proactive tips for minimizing tax bills but there are many other strategies. It is a good idea to consult with a professional advisor this time of year to make sure you are planning and preparing for tax season.”

1. Contribute to a Retirement Plan

For individuals, contributing to their 401(k) plan at work can help reduce their taxable income. For many people, they can contribute up to $22,500 in 2023 but there are some limits in the deduction amount that are based upon income.

For business owners, establishing a retirement plan like a 401(k) can be a strategic tax-saving move. This is a tax-deductible plan meaning the money the business contributes to this plan is deducted from taxable income. It is therefore important to act promptly to maximize the benefits. October 1st marks the deadline to set up a 2023 start-up Safe Harbor 401(k) plan (for calendar year-end plans), with a submission deadline of September 15, 2023 to allow for preparation time. Alefi highlights two of the options that come highly recommended by Serenity Financial Planning:
• 3 percent Non-Elective Safe Harbor: Provide a 3 percent profit-sharing contribution to all eligible, non-highly compensated employees (which may also include highly compensated individuals). According to Alefi, this 3 percent can potentially serve as an offset for new comparability profit-sharing plans.
• 4 percent Matching Safe Harbor which offer all eligible employees a dollar-for-dollar match, covering up to 4 percent of income.
Additionally, businesses can benefit from the Startup Plan Tax Credit, which can offset the costs of creating a new retirement plan by up to 100 percent. This credit has now been raised to a maximum of $5,000 for the first three years of creating a retirement plan, with a total credit of $15,000.

2. Donate Stocks to a Donor Advised Fund

“Donating stocks to a Donor Advised Fund (DAF) can help you maximize the impact of your charitable gifts,” says Alefi. “This clever action not only provides an instant tax benefit, lowering the tax obligation, but also allows you to allocate grants to the selected charity organizations over time.”

People can also easily prefund years of philanthropic giving with a single high-income event.

3. Tax Loss Harvesting

Consider selling underperforming stocks in a taxable account to take advantage of tax losses. This method can offset capital gains and reduce tax burden, thereby improving the performance of the total portfolio.

4. IRA to Roth Conversion

For those looking for longer term tax benefits, they may want to look into the advantages of converting a regular IRA to a Roth IRA. This permits tax-free withdrawals in retirement, thus lowering future tax burdens.

5. Tax-Efficient Asset Allocation

Some investments are more tax-efficient and, therefore, people can make adjustments to their portfolio which are more tax advantageous. ETFs (exchange traded funds) and tax-managed funds are a few examples of stock funds that can be more tax-efficient. Tax effects can be minimized while financial development is maximized with strategic allocation.

Serenity Financial Planning is committed to helping individuals and businesses make informed financial decisions. To learn more about these tax reduction strategies or to schedule a consultation with Susan Alefi, please visit or contact her directly at 858.251.4545 or Susan.Alefi ( @ ) lpl dot com dot

About Susan Alefi, AAMS®, ChFC® ? Susan Alefi is the founder and principal wealth management advisor of Serenity Financial Planning. She is a licensed Representative with LPL Financial, a licensed financial advisor and provides advisory services through them. Her expertise lies in guiding clients through their financial journeys, with a focus on wealth preservation, tax efficiency, and retirement planning. To schedule a consultation with Susan Alefi, please visit or contact her directly at 858.251.4545 or Susan.Alefi ( @ ) lpl dot com dot

About Serenity Financial Planning ? Serenity Financial Planning is a premier financial advising firm that provides the one-on-one, personalized financial services clients expect from a small firm while also providing the resources and assistance that only a top nationwide firm can provide. Their in-house team and the backing of LPL Financial enable them to personalize financial plans and give the precise financial services clients want to reach their financial objectives, whether as an individual, a family or a business to individuals. For more information, please visit

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.