Too frugal and taxes

As the title says, is it possible to have trouble with tax office if you are too frugal and save too much? As many here I’m on path to Fire, but I’m on the extreme side, I’m actually saving more than 90% of my salary after standard expenses like rent, insurance, taxes, pension etc, I don’t spend more than a few thousand combined for things like clothes, restaurants, groceries etc.

Now it will be my second year doing a tax declaration and I have realized that my asset increase excluding investment gains will actually be higher than my taxable income(net income minus standard deductions) minus rent. It would be probably the same even without covid, but especially this year I have spent almost nothing for things like transport or work meals, and adding the rest deductions of 3% for work reasons. And newspapers say deductions can be similar to pre covid years. Adding a little bit of credit card cashback, small scale manufactured spending gains etc, I have ended up with taxable income almost same as asset gains. And if you deduct rent, which is on the lowest side for swiss standard but tax office might assume is the standard 30% of income,I get around 10000 difference, which is relatively little considering my assets, but I am afraid might cause trouble.

I’m tempted to ‘forget’ a bank account to avoid trouble and tax office assuming I have hidden income which I don’t. But I actually want to be honest, especially as this will probably be repeated next year, I never spend as much as standard work deductions. Has anyone ever been in a similar case and got questions from tax office? What happened?

Don’t do that ! Even if they ask questions, you can show them your expenses from you account etc. They will only verify that there is no additionnal income you forgot.


Just fill it in. They will ask if you save too much in their opinion. But you can explain it to them. When this happened to me I offered to show them all my banking accounts with my expenses, but they were not interested.

I agree. Be honest, don’t intentionally hide anything. There is nothing wrong about being frugal.

The mindset of many tax offices is all about the correct declaration of the taxes. Sometimes, I add more comments or send more documents to make their life easier so they don’t need to ask back. It saves everybody’s time and makes it more efficient.

I also avoid doing anything complicated financially to keep it easy to explain and transparent.


Well, in my case things are more complex as I have done some manufactured spending with gift cards, which I now regret since it adds a lot of complexity without any serious financial gain, it was more like a weird hobby and out of curiosity. I have proof for everything with credit card and bank account statements, so there is nothing illegal, just too complex. Anyway you convinced me to declare everything and see what happens. I suspect there will be a lot of letters back and forth with the tax office.

I suspect that you are overthinking it and they won’t care.


From experience, what triggers them are sudden changes in your income or savings rate. That’s when they come asking.

But if you save a lot of money every year and make steady progress, as long as your tax declaration doesn’t look fishy, they are likely to leave you alone.


Usually the tax office is more sceptical if you spend too much. I know someone that is earning ~200k and doesn’t save anything, so literally 0 on all accounts. The tax office is accusing him every year that he is hiding accounts lol.


Wow that sounds like trouble is always around the corner. I know of one guy who was living a luxurious life with his 10 kCHF salary. He spent all of it and then some. He included his annual bonus in the spending, always assuming the bonus would be the same as last year. Until one year there was no bonus and shortly thereafter also no job. :disappointed:


Hi fir,

That sounds like your frugalgame is nextlevel… could you share some details (breakdown), Hacks etc.? Just beeing curious here…

One time I declared a new account, that I didn’t know I should declare before. They came asking where is this money from. (it was a current account at my employer for income that he didn’t yet pay out, legally it’s my money)

But in your case, I really don’t see what you’re worried about. Even if they come looking, there is nothing to be found, or? They will not put you in jail for being frugal :smiley:

Btw in order to save more than 90% after rent, you would probably need to earn over 10k and spend under 1k. If that’s the case then I congratulate you twice. Although I don’t see why you exclude rent from expenses. Do you plan to FIRE in a cabin in the woods? :slight_smile:

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Ooh. somehow I missed the “after rent” part. I was wondering how can someone save so much.

You won’t have problems at all. You are not too frugal, you just calculate in a different way. :slight_smile:

For Rent, you might live with your parents and not paying anything, but if you also take out insurance and “etc”, it’s easier to reach 90%.

I mean, you skip probably 3000chf for Health insurance 100-200 for other insurances and something between 8000-24000 for rent. If you calculate everything together you’ll see you are on a normal frugal level :slight_smile:

I like to use the ETHZ table to calculate what’s can be a normal level of spending.

You remove health insurance and rent from it and you suddenly are already around 1000chf, especially if you don’t buy clothes every month.


Well, I don’t think it’s an accomplishment to save 90% of disposable income. Since it’s income after all MUST expenses, for which there are deductions in the tax declaration and rent, which they can easily realize I pay, I wouldn’t find even 95+ crazy myself, I might be over that
I have also seen such calculators as the ETH, which normally describe the minimum budget of a poor student, not someone with a reasonably good six-figure job and some solid savings.

And from that eth budget, I spend less than 300 anyway for health insurance, which is already deducted in tax declaration.
10 for yallo mobile internet is pretty good for one person, virtually nothing for phone since I have prepaid for emergency and the internet apps are usually enough to contact anyone, 30 for serafe. So that’s immediately 80 less than the poor student’s budget for phone& internet services.
I spend nothing for energy, it’s included in rent
Less than 100 for public transport, I think it comes to around 70-80 per month with the yearly abo, but this year was close to 0 with covid. I just live in Zurich. you can go everywhere necessary within 20 minutes on foot and only occasionally buy a tram ticket this year when necessary.
Food budget is around 150, usually coop/migros brands or lidl/aldi, there is every week meat/fruits at 50% somewhere, I find noname store brands good enough for the rest, I don’t get nestle products. Far less than 400 of poor student’s budget.
Nothing for clothes this year as far as I remember, I have enough from the previous year, some I haven’t even worn. Unfortunately no holidays this year. And no health expenses apart of health insurance, I’m healthy.
Spent nothing equivalent to the 3 percent deduction from net salary, and nothing for weiterbildung.
Entertainment,random purchases etc may be 1000 in the whole year.

And I consider rent separately than other expenses because they can realize that’s it’s additional expense to the taxable income, so if savings are similar or even higher than taxable income they might find it strange.

Those budgets and others published for “poor people” in Switzerland are nuts. Sozialhilfe is a dream in this country, if they don’t pay for you to have a car and chain-smoke life’s not worth living it seems etc.

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Frankly, you shouldn’t worry so much about the tax office…even if they ask you some questions it’s going to be alright as long as you’re not hiding anything and you can provide a reasonable explanation (just copy-paste your last post :slight_smile: ).


Indeed. I don’t get the “poor student” comment as well. This is a budget for a student though, so it’s not really meant for sozialhilfe. Sozialhilfe imho should calculate with less than that. I don’t know how much and don’t want to calculate it though (we might start a philosofical discussion on what should be given and I think sozialhilfe should be a bit more than just survive)

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