Third option: pay the taxes in advance? Not sure how much in interest Vaud charges on this kind of ‘unpaid/late’ taxes, but I’ve lived in places where it can be quite high.
Of course, that’s option 3.
Or option 4: pay taxes late and keep the money invested because interest on late payment could be lower than expected returns. Check on your canton’s website.
Actually, this thread could be merged with either of these two:
Final tax bill timing - Taxes - Mustachian Post Community
Timing tax payments - Taxes - Mustachian Post Community
0.3% until Final Bill for Vaud.
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If you need to take money out in 1-2 years then I suggest
1- Short term bonds with maturity date before the time you need the money
2- Money market funds
3- Bank fixed deposits
You cannot really invest in stocks because of volatility.
Then it doesn’t seem worth it. There are ‘safe’ investments that yield more than that.
What percentage of your assets is this? If you can cover even if your investment drops, then why not allocate it to your portfolio? It behaves a bit like free leverage for a fixed amount and a fixed term (you can’t deleverage).
If this would lead to undesirably high leverage, then one of the safe options named in this thread would be better.
Just a quick note - as far as I know the date is 15.03 and to be able to send declaration without consequences until 30.06, you have to fill simple and automatically processed online form. Not sure though what happens if it’s not done and you send the declaration later than 15.03.
Hi folks,
I’m a C permit holder and residing in Kanton Schwyz.
Due to my permit, I don’t have tax deducted at source and need to pay it separately either during the tax year or when the final tax bill comes.
Speaking with the local steueramt, they said that the prepaid amount “skonto” gets an interest rate of 0.75% and the late payment gets a penalty of 3.5%.
They further mentioned that the late payment is only on the unpaid amount (i.e., tax owed - tax paid) adding that the final bill usually comes around October with 1 month to pay and the penalty kicks off from the start of the next year. So, the taxes owed for 2023 will start accuring penalty from Jan 1, 2025. This is for the Kantonal and Gemeindesteur and the Bundessteuer (federal) should have a similar timeline but maybe different rates for prepayment and penalty.
Few questions about this:
- Does the above information make sense or did something get lost in translation?
- Considering the prepayment gives “only” 0.75% and WillBe’s at 1.3%, do you folks pay the bill only when the final amount comes due or do you pay in over the year?
- Do you folks keep it in CHF or convert it to USD to use WillBe’s 4.7% / IBKR’s blended rates?
Thanks!
It is the last of a few requests I see posted on this forum but also at the same time on r/SwissPersonalFinance.
While I understand your motivation for posting on multiple platforms, please bear in mind that people take of their personal time to answer you. An answer you may have already got elsewhere by the time it is posted.
Not against you personally, but if I may suggest, take your chance on the platform of your choice first and if it does not lead to the result or answer you were looking for, try then elsewhere.
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That is probably one of the more common ways people do it.
But how are people here using their (potential) 13. monthly salary?
I currently calculate that in (use all of 13. monthly salary for provisional tax at the end of the year), so I put less aside each month and am able to invest more during the year.
The risk of not getting the 13. salary I don’t really see, as even if I would lose my job, I would still be eligible to the part of the 13. salary for those months I worked (and taxes would go down as well of course).
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Invest all and pay pillar 3a and taxes with a margin loan from IBKR.
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Yeah, thats the hardcore method. I am not comfortable enough with it risk wise.
Haven’t found any mention of the 13. monthly salary in this thread but it seems rather obvious to me that many will use it for timing tax payments…?
I use my 13th salary and pay in my pillar 3a maximum amount at the beginnig of the year. But not because I’ve given it much thought, but because it’s then simply done. The provisional tax invoice doesn’t arrive until a month later. But an interesting thought about the 13th month’s pay.
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I also use it to max out 3rd pillar, but for the ongoing year.
As I receive the 13th in November, i prefer not to leave the money lying around for more than a month.
As far as the provisional tax is concerned, I start paying in July and finish 12 months later for a tiny amount of compensatory interest (Ausgleichszins).
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I keep about (max) 10% of my NW in cash (part for EF, part because my wife is still re-establishing her business, part because it just feels right at the moment / in line with my risk tolerance),
and use that pool to pay for taxes, then replenish with next months’ income.
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