Pillar 3, double earners, and tax returns

[chca]

My wife recently re-entered the workforce part-time. Due to this and due to the new tax-at-source policy (we are on permit B), we will need to do our first full tax return next year (for 2021).

I max out my 3rd pillar every year and this has just gotten more interesting as my employer is now applying the double earner tax table which has doubled my rate (wife currently pays little-to-no income tax). Our gross earnings over the course of the year will probably be split about 75/25. I am wondering if it is worth it that she opens a 3rd pillar account and we also max it out. My thinking is yes, as we must do the return as a couple, so we can therefore deduct 2*6883 Fr. Or am I missing something here?

Another somewhat unrelated thing: my canton assumes a certain amount (about 4k Fr.) for work-related transportation costs in their tax-at-source calculations. We both cycle everywhere so our work-related transport expenses are basically 0. Will this be a problem or will we be able to just claim a standard amount in the full return with no documents?

[MrCheese]

@chca

My thinking is yes, as we must do the return as a couple, so we can therefore deduct 2*6883 Fr. Or am I missing something here?

Makes sense as long as you’re not an US citizen because you would need to pay higher taxes in the US in this case. (tl;dr: Swiss retirement accounts are not deductable in the US).

@chca

Will this be a problem or will we be able to just claim a standard amount in the full return with no documents?

At least the different cantons I was living in were giving a 700.- Fr. deduction on Bicycle use for commute (per person).

[chca]

@MrCheese

Makes sense as long as you’re not an US citizen because you would need to pay higher taxes in the US in this case.

I’m not American, but I don’t actually know if Switzerland and my home country have this type of agreement… I do know that I’d pay a lot more tax there than here if it is not tax-exempt. But I also don’t know if or when I would move back there so it is perhaps a moot consideration.

[Patirou]

Hi, yes you can deduct 2* 6883 CHF (exact number to be checked, don’t know by heart), as soon as both of you are employed.

Most countries do not know taxes for non residents (USA is an exeption there), so it is something you can check easily. For all other countries, as soon as you leave switzerland you can get that payment paid out. You will pay some tax on the Swiss side. What happens on the new country side will depend on DTAs and local tax law.

I have the feeling that as soon as you pay into 3a, the mere tax deduction the following year just makes it interesting enough.

[Dr.PI]

@chca

Our gross earnings over the course of the year will probably be split about 75/25.

If you are married, you are taxed together and it is not relevant anymore. There are already many discussions here if one should pay to 3a or not.

[chca]

@Patirou

For all other countries, as soon as you leave switzerland you can get that payment paid out. You will pay some tax on the Swiss side. What happens on the new country side will depend on DTAs and local tax law.

Yeah, this is the thing I have never been able to find info on… the tax savings here could be completely negated if one ended up being taxed upon withdrawal while resident in another country and at a high marginal tax rate (compared to Swiss rates).

That said, this issue applies to few… in general the responses are clear and I am not missing any piece of important info… we can easily double our deduction by maxing out 2 Pillar 3 accounts.