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Old 16.10.2015, 15:35
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What can I do to reduce my taxable income this year?

Hi all,

I was granted a nice bonus this year, which made my quellensteur rate shoot up and next year I will have to do a tax declaration for the first time.

In order to try and recover some of the taxes which I have already paid, I have been told that I can:

- pay into the 2nd pillar, after asking the pension fund how much I can put in. But how much of this will actually be tax-deductible? Is it a problem that I have been officially in CH for just 3 years (well, in reality it's more like 8, but at some point I left and then came back). Also, what can one do with this money later on? Is it right that one has to pay 10% tax when taking them for buying a house (where one would live) or leaving the country? What other options are there? Someone mentioned using them as a security when buying a house... any pointers on this subject would be highly appreciated.

- do renovations on a flat that I own abroad. But I know that not all kinds of renovations are tax-deductible. Where to find what would be accepted?

- pay into the 3rd pillar, but I do that already and I know the cap to ~6.8K chf.

- give money to charity, which I did already

- what else?

I plan to contact some tax advisor and also make a phone call to the Zurich tax office, but I thought I could give it a shot here as well. Also, the first tax advisor I contacted asked me 1500 CHF for replying to my questions by email, doesn't that sound too much to you?

Thanks,
G
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Old 16.10.2015, 16:17
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Re: What can I do to reduce my taxable income this year?

Please search for a thread I started called "Obvious tax deductions".

Then if you still have doubts, come back here.

Obviously if you learn something new, please add to the thread.

In the coming days/weeks, I hope to tidy-up/consolidate the feedback in the "Obvious" thread.
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Old 16.10.2015, 16:22
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Re: What can I do to reduce my taxable income this year?

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- pay into the 2nd pillar, after asking the pension fund how much I can put in. But how much of this will actually be tax-deductible? Is it a problem that I have been officially in CH for just 3 years (well, in reality it's more like 8, but at some point I left and then came back). Also, what can one do with this money later on? Is it right that one has to pay 10% tax when taking them for buying a house (where one would live) or leaving the country? What other options are there? Someone mentioned using them as a security when buying a house... any pointers on this subject would be highly appreciated..
I paid a large amount into my 2nd pillar in my first year in Switzerland, fully deductible. My taxable income was so low that year, that I got assistance with my health premiums...

If you take it out to buy (or build) a house, there will be tax due. But it's less than the amount you saved. I used my pension instead as security - it allows you to borrow more than you otherwise would, as it counts towards your deposit. E.g. simple scenario: you buy a million franc house. Ordinarily you need a 200K deposit.You have 100K in cash, and your pension is worth 100K. So you can put down a 100K deposit and get a 90% mortgage. The bank secures the other 100K against your pension.
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Old 16.10.2015, 16:38
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Re: What can I do to reduce my taxable income this year?

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I paid a large amount into my 2nd pillar in my first year in Switzerland, fully deductible. My taxable income was so low that year, that I got assistance with my health premiums...

If you take it out to buy (or build) a house, there will be tax due. But it's less than the amount you saved. I used my pension instead as security - it allows you to borrow more than you otherwise would, as it counts towards your deposit. E.g. simple scenario: you buy a million franc house. Ordinarily you need a 200K deposit.You have 100K in cash, and your pension is worth 100K. So you can put down a 100K deposit and get a 90% mortgage. The bank secures the other 100K against your pension.
Thanks. Very interesting. I guess the downside of using the money as a security is that you borrow more so you'll pay more in interests (which are low anyway atm). I need to do some calculations . Any hint on how much the tax due actually is, if taking the money out as a lump sum? I always hear that's it's less than what one saves, but then nobody knows the exact number...
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Old 16.10.2015, 16:39
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Re: What can I do to reduce my taxable income this year?

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Please search for a thread I started called "Obvious tax deductions".

Then if you still have doubts, come back here.

Obviously if you learn something new, please add to the thread.

In the coming days/weeks, I hope to tidy-up/consolidate the feedback in the "Obvious" thread.
Thanks. I did read that thread some time ago but being a long one I probably missed something, will have a second look.
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Old 16.10.2015, 16:59
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Re: What can I do to reduce my taxable income this year?

If you already have the money it might be a bit late but depending on next year you could roll it forward or part there off for payment in January. Gives you a year to sort it out, Chf1500 is too much for personal tax.
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Old 16.10.2015, 17:05
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Re: What can I do to reduce my taxable income this year?

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If you already have the money it might be a bit late but depending on next year you could roll it forward or part there off for payment in January. Gives you a year to sort it out, Chf1500 is too much for personal tax.
Thanks, but I have to admit I don't understand what you mean with the part about next year. I have got money and paid taxes on it already, this year, now I would like to do something (before the end of the year) which would lower my taxable income and hopefully get some of these taxes back.
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Old 16.10.2015, 17:09
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Re: What can I do to reduce my taxable income this year?

My wife when she got large bonus' in December would ask for a portion to be paid in January (the company held this money) so to average or delay the tax. Bit late for you if you have the money.
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Old 16.10.2015, 17:13
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Re: What can I do to reduce my taxable income this year?

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My wife when she got large bonus' in December would ask for a portion to be paid in January (the company held this money) so to average or delay the tax. Bit late for you if you have the money.
Ah, I see. No, that has never been an option.
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Old 16.10.2015, 17:55
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Re: What can I do to reduce my taxable income this year?

Take out a massive loan and spend alot on credit cards, paying only the minimum off each month: interest payments are tax-deductible
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Old 16.10.2015, 20:39
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Re: What can I do to reduce my taxable income this year?

Get a lower paid job
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Old 16.10.2015, 20:47
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Re: What can I do to reduce my taxable income this year?

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Get a lower paid job
You guys are really funny
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