I would like to start contributing to a 3rd pillar for me and my companion.
I live with my SO and our two kids but we are not married.
She’s not working so her taxes are really low. Mine are really high.
If I pay 6k each in third pillar. How would I deduct that?
What’s the best strategy in order to lower my high taxes?
Bonus question: is there a legal way to figure as I’m paying her and deduct that from my taxes (without raising her taxes too much) in a way that the overall taxes are lower?
If so, then the bank gives you a confirmation of the payments you made into your 3a deposit at the end of the year. In your tax declaration there’s a field for money paid to 3a, and you enclose the confirmation from the bank.
You cannot pay money into her deposit and deduct it from your taxes, obviously. And the maximum limit is per person, not per account, i.e. the total deduction over all accounts must not exceed 6826.- for 2020. The maximum amount is set by the government every year.
As to how you lower you taxes, there are likely many ways. I recommend either to read the guidelines for the canton where you live, or to fork out the money for a tax accountant and see what they can tell you. There’s also a Taxes section here in the forum, but depending on your situation, things can be complicated.
In the tax declaration there is a field where you declare how much you invested in 3a. This is then deducted from your taxable income and lowers the calculated tax. If you do not file a tax declaration then I don’t know if there is a workaround.
It’s probably depends on the Canton, but in BS unmarried parents have this, to lower the high-earners “income” - “Der Unterstützungsabzug für die kantonalen Steuern Basel-Stadt ist nur bei einem Konkubinat mit gemeinsamen oder nicht gemeinsamen Kindern möglich. Der existenznotwendige Unterstützungsbedarf des bedürftigen Partners wurde, wie bei den Sozialabzügen, auf CHF 18’000 pauschalisiert. Die Unterstützungsleistungen können in
Geld, in Naturalform oder durch Übernahme der Kosten erfolgen und sind gegebenenfalls nachzuweisen. Der Abzug entspricht der Differenz zwischen dem Betrag
von CHF 18’000 und dem Reineinkommen der unterstützten Person. Übersteigt das Reineinkommen der unterstützen Person CHF 18’000, ist ein Unterstützungsabzug ausgeschlossen.”
Maybe consider 6k in your 3rd pillar and a repurchase in your 2nd pillar if you are able to. There is no limit fixed for tax declaratiom in repurchasing 2nd pillar like in the 3rd. This would allow to reduce your taxable income.
Special situation exceptions aside, Paying into 3a only makes sense if you a margin tax rate of about >20%, else the extra fees you pay inside 3a, the loss of flexibility, the lowish tax savings at buy-in & the taxes when paying out don’t make it worthwhile.
PS “take care” when “giving” her money. If she has more money at the end of the year than at the beginning, she will “have to explain” to the taxman you gave her some. The taxman can tax that as a “Schenkung”, which would be unfortunate, as you already paid income tax on that.
Rather pay all the bills than “give” her money. Easier to explain to the taxman.
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