Third pillar questions

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?

Thanks for the patience :smiley:

I presume you mean 3a?

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.

If employed by an employer and/or under pension fund coverage.
The limit is higher for the self-employed without pension fund coverage.

Correct!

I was thinking about myself here… :grimacing:

yes 3a (my bad)

so I would deduct the maximum (lowering my taxes) while if I would pay the maximum to my GF her taxes should drop to zero (or probably negative).

I am not sure she can deduct her own contributions…

Because she’s not employed or self-employed if I got it right…

Is there a legal way to have only 1 account and share it?

How does it work for married couples?

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.”

What do you mean? …

her taxes are like 1000chf

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.

Also get married. Married couples with only one income generally benefit from a lower tax bracket :slight_smile:

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This. I have a friend that lives in ZH with 100k gross. Only pays 4k in taxes.

I don’t understand this bit. Pay what maximum to your gf?

I meant if I would pay her 6.8k

IIUC. If she has no income she’s not allowed to deduct 3a contributions from taxes.
https://www.optimaplus.ch/faq/personenversicherungen/altersvorsorge/wer-darf-alles-3a-einzahlen.html

And there is no point when you don’t really save taxes but end up paying taxes when withdrawing it.

Well, if he paid her, she’d have some sort of income :wink:

Ah, ok.

Like @Cortana & @MrCheese have said

  • she can’t
  • she won’t gain anything

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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