Tips to pay less taxes

Taxes
61

This most likely depends on your canton and municipality. Generally, the lower your municipality’s tax rate, the more likely it is to be worth it. Use a tax calculator where you can specify deductions such as FTA tax calculator (although, it seems to be broken right now) and compare with your tax-at-source deductions.

You should also consider pillar 3a in this calculation.

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62

Unless I don’t understand something, you can only “deduct” them if you submit an ordinary tax declaration.

This calculator might be not detailed enough for @lloren . I suggest to take actual software for tax declaration of your canton, for 2021 or 22 already, and fill it with your data.

As far as I remember, now in all cantons it is obligatory to submit an ordinary tax declaration if you contribute to 3a.

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63

I currently have not a 3a pilar, mainly because I plan to move abroad in few years and does not seem to be a good move.

thanks for the comment, I will check with this tax calculator

64

moving abroad is a reason to withdraw 3a money, I cannot see why it would not be a good move to save some taxes in the meantime

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65

Depending on the municipality, you could be better off by getting taxed at source.

66

Because there are 2 threads about saving taxes / listing all deductions I thought it would be good to summarise all points from the discussions:

Second and third pillars (pillar 2 and pillar 3a)

  • Tax savings: The maximum deduction for contributions to the pension fund (pillar 2) is
    CHF 7,056 for taxable persons who belong to an occupational pension scheme.
  • For contributions to tied pension provision (pillar 3a): CHF 7,056 for taxable persons who belong to an occupational pension scheme.
  • Up to 20 % of earned income, up to a maximum of CHF 35,280 for taxable persons who do not belong to an occupational pension scheme.
  • These amounts should be entered in the E-Tax software under the specific sections for pension expenses.

Custody account / Portfolio “abroad” (avoidance of stamp duty)

  • Tax savings: No direct tax savings in income tax, but avoidance of Swiss stamp duty on transactions.
  • Entry in E-Tax: Financial assets must be entered under ‘Securities and assets’, including foreign accounts and custody accounts.

Reduced consumption of taxed goods

  • Tax savings: Indirect savings through reduced consumption of goods and services subject to VAT.
  • Entry in e-tax: No direct entry in e-tax, as this is a consumption tax saving.

Alimony / Support deduction

  • Tax savings: Up to CHF 6,500 for the support of financially weak persons can be deducted.
  • Entry in E-Tax: Under the sections for maintenance payments for persons in need of support.

Marriage or divorce for tax benefits

  • Tax savings: Variable, depending on the specific financial constellation of the partners.
  • Entry in E-Tax: Change of marital status must be adjusted in the tax return, which allows for different rates and deductions.

Costs for work-related travel

  • Tax savings: Deduction for actual costs or lump sums for travel to work. Deduction of costs for travel to work by car, public transport AND bicycle (700 CHF on top).
  • Entry in E-Tax: Under the sections for work-related expenses, specifically the costs for travel between home and work.

Meals away from home

  • Tax savings: Flat-rate deductions for additional expenses for meals away from home if they are work-related.
  • Entry in E-Tax: Also under professional expenses.

Training and continuing education

  • You can deduct from your taxes the cost of training and continuing education for professional purposes, including retraining costs, up to max. 12,000 CHF per year.
  • Provided : Hold an upper-secondary level diploma Be aged 20 or over, and be following a course of study leading to a diploma other than a first upper-secondary level diploma.
  • Entry in E-Tax: Also under professional expenses.

Home office costs

  • Tax savings: Deduction for rent, heating, electricity, etc., if the home office complies with the regulations.
  • Entry in E-Tax: Deductions under costs for the home office if the specific requirements are met.

Renovation costs for real estate abroad

  • Tax savings: Deduction of costs is possible if they generate income from the property.
  • Entry in E-Tax: Income and related expenses for foreign real estate must be declared.

Deduction for childcare

  • Tax savings: Deductions for the costs of childcare provided by third parties up to a certain maximum amount.
  • Entry in E-Tax: Special sections for childcare costs.

Further strategies that need more details/ refinement:

  • Becoming a self-employed entrepreneur: Self-employment and starting a business can provide tax benefits by deducting business expenses and choosing the form of income (salary vs. dividend).
  • Donations: Gassenspenden/ Kleinspenden seem to be deductible without further proof. The amounts seem to differ from canton to canton widely. ZH seems to be 500 CHF.

Did I forget anything?

Canton specific advice would also be great. If everyone could name the canton after they provide further insights that might also help in the search function.

E.g. “BL” was easy to find and very relevant. Unfortunately (for me), not many people named it.

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67

IIRC 6500 is the minimum required to ask for the deduction.

68

Costs of education / further training. As far as I know some sorts of studies can be deducted.

69

You sure?

Poorswiss mentions this: "Dependents

If you have children or care for disabled dependents, you can claim up to 6500 CHF per dependent. At the cantonal level, this will vary highly from one place to the other."

70

Added

71

The interesting discussion to me were not only on what, but how much and how to document it, where needed. Which is as you say can differ locally.

There’re also deductions for a working spouse, children and work-related cost. These are calculated automatically, though, at least in my tax software.

Further, there are deduction for debt, health insurance and cost of asset management. The first two are part of the standard section, but you need to add the values.

and, not or in many cases :wink:

72

Yes, happy to edit and refine as much as possible! If you name me what to add where, happy to include it. (Like the bike, I added already). Also refined the documentation part.

73

More accurate wording might be :

"Maintenance and repair costs for real estate abroad

  • Tax savings: maintenance costs lower tax rate"

-If the property is located abroad, the income and costs are not taxed in Switzerland, but are used to determine your tax rate.

-If the property is habitable and not generating a real rental income, I believe most cantonal tax authorities will still apply a hypothetical rental value (from which maintenance costs can be deducted)

-improvements are not deductible from income tax. Only repairs and maintenance are deductible.

74

Depends on the purpose and target group of your summary of the old thread. There’s a “Wegleitung zur Steuererklärung» that covers all areas, and the new tax software is quite intuitive, at least where I pay taxes.

Alternative way to think about it is to group by

  • Deductions filled out automatically, like for children
  • Deductions prominent in your declaration, but you have to calculate and enter the values, like child care
  • Deductions not prominent your declaration and you might miss them, if you don’t know about them, like cost for asset management

Examples are based on my local tax software, not sure how much these differ.

75

What I can say is that once I sent ~7000 CHF to a relative abroad (not disabled, not poor) and the deduction was accepted. I provided a proof of the payment and a signed letter from the receiver. Will do again this year I think.

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76

This deduction is for dependents. They don’t need to be disabled or poor. But i believe the concept is that they need your help.

I know some cases where people were asked to submit proof that “dependent “ person is indeed dependent

77

Thanks for taking time to put this together. Will be useful for future reference

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78

I don’t quite understand this.
For 2nd pillar the maximum is not 7056 CHF. What exactly are you referring to?

Voluntary 2nd pillar contributions don’t have limits but are controlled by pension funds on how much is possible.

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79

What did such proof look like?

80

Proof of no income / low income @Giff