Why declare on taxes health insurance and interests

Taxes
1

As per title. I always wonderend why I have to waste my time filling those fields.
I understand the concept, especially for the bank savings’ interest, but today (and at least for the last several years), the health insurance only is way over the maximum allowance for the deductions.

In Zurich I think it’s 2500 chf for single persons, so if they don’t raise to 3500-4000, the deductions make no sense anymore, so people have a bit less reasons to save money.

I’m aware they are planning to change, but I’m not sure where and what anymore :slight_smile:

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2

Yes, it does seem odd that you even have to declare it. There might be some cases where your health insurance deduction is lower than the maximum, though. Maybe ‘Prämienverbilligung’ or a temporary stay where you have coverage from an international health insurance (possibly paid by the employer). These are just guesses.

In ZH it will be increased to CHF 2900 for single persons. The initiative last November to increase it to CHF 3600 was rejected but CHF 2900 was the counter proposal, which will come into effect at some point.

The Council of States rejected a proposed change to increase the federal deduction from CHF 1700 to CHF 3000.

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3

If you have Prämienverbilligung you probably don’t pay much taxes. You might save a few 10s or less.

4

You don’t have to. Enter your insurance premiums and move on to the next section.
It used to be possible to be below 2’600 per adult and still is for children below 1’300.

5

I’m at CHF 2’700, the max deduction in Wallis is 3000.

Not saying this small difference warrants not making it an automatic deduction, just that it’s possible to not reach the max.

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6

There are 2 scenarios in which the mandatory health insurance premiums may not use up the full deduction (In Zurich CHF 2600 for an individual, CHF 5200 per couple, CHF 1300 per child. For federal income tax CHF 1700 for individuals, CHF 3500 per couple, CHF 700 per child):

  • You are eligible to claim substantial premium reductions. Premiums reductions must be deducted from the premiums you declare on your tax return, which can result in your effective insurance premiums being far below the deduction limit, if you are eligible for high premium reductions. This is especially true if you use the cheapest available insurance with the highest deductible.
  • You live in one of the premium regions with the lowest health insurance premiums. For example, the cheapest available offers in Appenzell Innerrhoden in 2023 are CHF 178.50 per month (CHF 2142 per year) for adults, and CHF 125.10 per month (CHF 1501 per year) for young adults. The cantonal deduction for insurance premiums in AI is CHF 2900 for individuals, CHF 5800 for couples, and CHF 600 per child. So a young adult using the cheapest insurance would have CHF 1400 of the deduction left for interest on savings or life insurance premiums.
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7

But what exactly is declared Versicherungsprämien → Zinsen von Sparkapitalien?
Total interest I got on bank accounts and IB and overted to CHF?

I thought it goes under Wertschriftenverzeichnis → Wertschrift erfassen (Sparkonto) → Ertrag, no?

On the other had, how do you guys declare cash/interest at IB and especially in multi currency? Can you just provide all in base currency you have selected at IB? Also, I understand IB does not do any withholding on interest, right?

8

You can deduct interest you earn on bank account balances, bonds, medium-term notes, and loans.

So if you only use part of this deduction for health insurance premiums, you can use the rest to deduct interest you’ve earned from your taxable income, up to the deduction limit.

You will list investments on the Wertschriftenverzeichnis, but that is not the same as a tax deduction.

In most cantons, the limits for this deduction are higher if you do not have a pillar 2 or pillar 3a (e.g. after FIRE/retirement, etc.)

9

Aha, understood and thx!

10

I am a bit confused as to when one can declare health insurance costs.
Am I correct that if the total costs (monthly health insurance rate, franchise, deductible, and additional costs not covered by the health insurance, e.g., medication costs, dentist, etc) are >5% of the “Nettolohn”? And I suppose also if one is not eligible for a reduction of the monthly insurance which makes sense.