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?