Better use of money being put aside for yearly taxes

I don’t have that money put aside. I just take it out of my monthly wage in the month I have to pay one of the rates. I’m not yet sure if I’ll invest in ETF monthly (different amount in tax months) or quarterly (less difference). But as you can’t time the market what does it matter when you invest anyways?

This means that you either have a massive monthly wage or very cheap taxes :wink: My taxes account for around 2-3 monthly wages as I live in a tax hell canton so for me it’s not possible to pay the full amount of my yearly taxes with one single monthly salary.

To be fair he did mention “one of the rates”.
Not sure if these are well defined.
I suppose one pays as much as one wants; as long as the full due amount is covered by the “deadline”?

In canton Bern it‘s three rates; 40%, 30%, 30%. I pay about 2 months wages and savings rate (I include taxes as expenses btw) is 50%, so I can do it my way

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Hi All

i was just about to open the exact same thread. glad i used the search engine
Seems quite inconclusive atm though

What i got was go for an ETF like VT and if it goes south pay from your emergency fund.
It just this year doesnt look like its going to be a great year for the stock exchange starting from a crazy ATH.

Iam paying yearly something around 12K in taxes so i was interested if there was any short term investments with 5-6% interest and as low risk as possible.
I live in Zurich

Also someone commented on “Vermögensteuer” which i have completely no clue , if anyone was kind to explain it a bit.

Thanks!
Nik

Anything >0% is a pretty good return for short term + low risk.

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Hi @Nik,

Finally I decided beginning of this year to invest the money required to pay my taxes in a what I believe to be a low-risk bond ETF. To be precise that is Vanguard’s US treasury bond (VUTY) which I buy at no cost on DEGIRO as it is on the list of their free or charge ETFs.

If that is a good solution in terms of profit, I can clearly say no, as the price has even lately been dropping due to probably the currency appreciation of the USD. But I did not want to invest in any bonds in Europe, Switzerland or emerging markets so what’s left? US… US bonds still enjoy from positive interests rates as far as I know and it’s always better than my bank account.

You mention looking for 5-6% interest with low risk, which on top of that has to be short-term as you will need to money latest 1 year later to pay your taxes… let me tell you that will be very difficult, and if you find, please do let us know, we would all be interested to invest there :wink: and no, unfortunately P2P is not the way to go to achieve that (I just saw your post in the P2P thread).

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But hasn’t the value in CHF increased exactly due to the CHF depreciation?

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@mabi thank you very much for the thorough update. I dont understand bonds yet ,unfortunately the only market i know is the crypto market. for me a swing of 5-6% percent up or down is sometimes literally the few seconds it takes to refresh a price.

So far the ETF approach with with the emergency fund backing that seems quite reasonable and i will see if the swiss p2p lending platforms make any sense .

in any case if i do act on anything i will share it here for others to see learn from my mistakes

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That’s right, the CHF seems to have depreciated for example in regards to the USD (CHF/USD currency pair) since around mid of February which means it gets more expensive to buy US treasury bonds for us living in Switzerland and being paid in CHF but on the other hand if we sell now our US treasury bond we would get more money as logically the USD has appreciated in regards to the CHF (USD/CHF currency pair).

So now back to the price of our US treasury bonds ETF it looks like the appreciation of the USD is one factor among others which brings the price down.

Confirmed. All debt positions reduce your fortune as of 31.12. → due taxes based on calculations, mortages, unpaid creditcard bills …

On contrary; too high advanced tax payments have to be listet as fortune

Yes, in my canton they even send you a letter to trll you how much you paid too much.

I then deduct as debts what I‘ll have to pay on that based on the current tax form for the last year that wasn‘t covered yet (e.g. with salary rise).

Thanks @HammerOnFire.

Thinking out loud a bit here, but instead of based on “Steuerrechner” values, between 1.1.2021 & now / March 2021, I’ve gotten these bills for:

  • Direkte Bundessteuer 2019 (definitiv, rektifikat)
  • Kantonal Steuer 2019 (definitiv, Valuta 31.5.2020)

I’ll use these values for debt from Taxes 2019. That’ll be the exact numbers.

For tax debt from 2020, even though only due on 31.5.2021, I will add up,

  • Kantonale Steuer netto (Verrechnungssteueranspruch & Steuerrückbehalt USA has been subtracted in this value)
  • Gemeindesteuer
  • Bundessteuer

All together called “Voraussichtlicher Gesamtbetrag ordentliche Steuern 2020”

These 2020 numbers I obtain from the Steuerkalkulator at the end of doing the 2020 Steuererklärung.

This value minus the Akonto-Zahlung 2020 I already did for Kant. Steuer before end 2020 = Debt from 2020

Basis:
"Die am Stichtag (31. Dezember) nicht bezahlten Steuern des laufenden Jahres und früherer Jahre können als Schulden abgezogen werden. Dies gilt auch für die direkte Bundessteuer, obschon die Steuer für das vorangegangene Jahr erst Ende Februar fällig wird.

Zu erwartende Steuerforderungen früherer Jahre können ebenfalls abgezogen werden (Einkommens-, Vermögens- und Grundstückgewinnsteuern usw.)."

I would do the same (2019 exact outstanding amount; 2020 calculated taxes ./. paid taxes as of 31.12.2020)

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ok soooo lets experiment! as i told you if i act on anything i will share and you can learn from my mistakes.

So i had few USDT lying around in binance doing nothing so iam trying the following
1000 USDT on a flexible savings account expected annual return 6%
1000 USDT on a 7 day locked savings account expected annual return 6.3%
1000 USDT in a liquid swap paired with DAI with annual return 11.5%

will check 7 days later and report back with what happened : )

My understanding of the settlement with the new york attorney general is that tether will be required to publish their asset backings soon. I could’t find a deadline for this though.

Personally I’d avoid locking money in USDT at least until they provide that information…but I’m probably too risk-averse for this anyway.

Alright Alright Alright time to report back with the Results!

so 1) returned in 7 days 1.15 CHF money remains on the usdt savings account till i pull them the account is credited daily with the returns
2) returned in 7 days 1.2 CHF, money was returned to my main USDT balance no fees
3) returned in 7 days 2.4 CHF (net after taking out the fees)

1 and 2 are as straightforward as it gets and iam in binance now for 3 years with absolutely no issues.
3 there are more risks around that plus if you dont have both currencies that the swap pool supports you will pay some fees for partial conversion ,also the available information on the topic on forums etc is beyond minimal (or my google-fu went rusty)

…but what about a 4th experiment with bigger returns?

So couple of days later i find out FTX that has similar functionality albeit with higher and more volatile returns. so there i get for USDT an average of 20% p.a hourly. i say hourly because the rate changes every hour, funnily enough it supports also Fiat lending and USD -so far had better returns sometimes reaching 100% p.a hourly
So on 3 days ago i transferred there 4000 USDT that they were sitting in Binance doing nothing and so far it has returned 6 CHF
FTX is a much newer exchange but seems to be on the right track for the right reasons ,having said that iam still far from trusting it the same way i trust binance so for me this is higher risk. Though the fact that it supports Fiat lending thus removing the risk of the cryptocurrency makes it a very descent choice for me.

This are my money and my experiments and my risk tolerance you be you and have your own parameters. What i would say for sure is irrelevant to what exchange you sign up on take it slowly and by that i mean, take the time to transfer really small amounts see how it works how much time does it take what kind of fees are involved then also withdraw and look at the same parameters, then and only only then when you fully understand the process transfer bigger amounts.

Here also pics so you can see how it looks like plus its proof : )

If you found value in my post and want to check for yourself you can use my referal links →

https://ftx.com/#a=15773319
(it will give you 5% off your trading fees)

https://www.binance.com/en/register?ref=11675191
(not sure what you get here i just created a referal link havent done it before)

Or feel free to bypass my referrals if you wish and go directly :
https://ftx.com/
https://www.binance.com/en

Thanks!
Nik

17 posts were split to a new topic: USDC at Hodl Hodl

Some feedback about my swissborg experiment:

  • Revolut moneytransfer (2h hours)
  • Postfinance , next day

Buying crypto → instant without a delay and fair market price ( 1% fee for the transaction…).
I invested some money in the USDC and activated the Yield Wallet option to get daily interest.
At the moment 10.12% p.a.

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My previous reply was flagged as off-topic, which is correct, so I’ll be waiting for a split thread.

That’s… Massive. Are you a premium user? Did you have to stack their coins?