Tax declaration vs. Source tax with 3a pillar retroactive purchase

Taxes
1

Hello everyone,

My situation is the following : I earn less than the 120k threshold (B permit, source tax) for tax declaration, and am still considering starting investing in a 3a pillar.

If I declare taxes for 2025, I will be taxed more heavily, even with the 3a deduction.

Now that it’s possible to do retroactive purchase of 3a pillar contributions, does that mean that I should try to benefit from the source tax rate as long as possible ? I would then purchase every year back (2025 and the following years) when I end up having to declare taxes because of a higher income / net worth in the future ?

For instance :

  • 2025 on source taxes, no 3a pillar
  • 2026 on source taxes, no 3a pillar
  • 2027 on declared taxes, contributing for 2025 to 2027 (~22k CHF) for 3a pillar ?

With this, I would save taxes in 2025 and 2026 by keeping the lower rate offered by being taxed at source, and have a huge cut in my taxable income in 2027 ?

Thank you very much for your help

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2

If that’s correct and your net worth is also below the threshold of your canton, then your plan makes sense to me (with the correction below).

The backfill is limited to the normal yearly limit. I.e., in 2027 you could contribute for years 2025 + 2027 (~14.5k) and then in 2028 you could contribute for years 2026 + 2028 (another ~14.5k) and you would be caught up.

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3

Is this an assumption or did you check?

4

Did you check the other reasons to be obliged to do a tax declaration in your canton?

5

I did check the conditions for my specific situation, right now I’m still below all thresholds.

I forgot about this limit in the backfill, thank you for the answer !

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6

I am not sure why the decision has something to do with retroactive purchases. You are saying that you don’t need to file taxes, and if you do, even with the pillar3a contribution you will need to pay extra taxes.

So the decision seems obvious - no pillar 3 payment and no tax filing until the above is true? If you can do the retroactive purchase later that’s even better, but even if you don’t - nothing changes.

In the same way I am not sure why you are “considering starting investing in a 3a pillar” if that would raise your taxes: if you want to invest in stocks, just do it in a taxable account and exploit the tax-at-source error in your favor until you can

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7

I believe OPs assumption is that their income will increase in the future to the point that they will no longer qualify for withholding tax, and will become subject to standard taxation.

In many cases, standard taxation results in higher taxes, so available tax deductions can have a bigger impact.

As a general rule, saving pillar 3a deductions for a time in the future when they will bring a much bigger tax saving is a sensible approach. The same could also apply to closing gaps in your pension fund.

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8

I think best option is to accumulate 3a potential until income goes to level where you can really benefit. And then slowly capitalise on backfill

this might be 2027 or later. Doesn’t matter. Do this math every year and then decide

Your idea makes sense

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