Estimating your tax burden and impact on assets

Taxes
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For my 2024 return my tax advisor subtracted open tax bills (i.e. not yet paid by year end 2024) from my assets. This reduces wealth tax and is fair as I have a documented invoice from the tax authority confirming I owe them money.

This made me start to wonder… I’ve been in Switzerland long enough and on a C-permit so I no longer pay taxes each month but at end of year and beginning of year. Those bills are based on ‘guesstimated’ tax burden.

Is there a window here which is open to reduce your tax burden? I.e. if I tell the tax authority I am expecting 2025 to be a very high income year, they’re going to issue draft tax bills which are very high and roughly half of that is not due until early 2026 and this enables you to deduct a big chunk of that from your end of 2025 assets (i.e. the open bill). What if you ‘mis-estimate’ things and when you actually submit your tax return in early 2026 your income is MUCH lower… will you then have artificially (and legally?) created a deduction from end of year assets? Bad forecasting surely isn’t a punishable offense but are there limits? How can you justify a major delta (expected a bonus which didn’t come, expected an asset sale which didn’t materialize, etc.)

To be frank, in prior years I’ve probably UNDER-estimated things (and did not think of deducting the open bill from my assets) so just trying to balance that out:)

Hope this makes sense.

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Where are you living where the wealth tax is so high it even makes sense considering this?

I’ve regularly overpaid by 10-20% (but also because income is very variable and I don’t always know whether I’ll do a buy in or not) and never had issue, but the impact on wealth tax would be really small).

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You can just call them up or perhaps nowadays enter your income/wealth estimates on their website if you expect big changes in the upcoming tax year. I believe in Zurich (the city) you can do this on their website after having created an account.

I did that – call them, ZRH tax office – (well, in the opposite direction) in 2020/2021 when I went from a lofty Hoolie salary to a mere mortal salary, and without any discussion whatsoever they adjusted the preliminary bill for the tax owed (both at municipal/cantonal level as well as for the Bundessteuer).

So, you can deduct taxes owed from wealth, but not (as debt owed) from income? That would reduce my tax bill by just a couple of francs, I’m guessing, and in your case maybe a few more, but not enough to offset the cost of that tax advisor … :wink:

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Reducing it from income would mean you’re admitting you’ll have to pay interest on taxes due because you underpaid the year when you accrued the liability. I’m guessing the tax office would ask you to reconcile your diverging tax estimates (the one for the taxes due and the one for the amount you’ve been paying as you earned) or just pick the one that’s the worst for you and let you try to correct it when you receive the actual tax assessment.

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