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Old 22.05.2012, 10:33
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No longer taxed at source

Hi All!

I recently got married (to a Swiss) and dutifully notified my employer by sending HR my marriage certificate. To my surprise, my salary statement this month shows that there were no longer taxes withheld at source.

My questions are:

1) Is it automatic that once you marry a Swiss, you are no longer taxed at source?
2) Do we file jointly for 2012 or we start filing jointly only in 2013?
3) Is there actually any advantage to not being taxed at source? I actually preferred being taxed at source as I do not have to worry about saving money for the tax bill. I always got money back from the tax authorities - just had to wait for like over a year once I filed my taxes.

To further complicate matters, I am also a US green card holder so will need to figure out how to file the US taxes for 2012.

Thank you for your help!
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Old 22.05.2012, 10:42
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Re: No longer taxed at source

you will file in 2012 and i guess the advantage is that you don't have to pay taxes until the end of the year.
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Old 22.05.2012, 10:42
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Re: No longer taxed at source

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1) Is it automatic that once you marry a Swiss, you are no longer taxed at source?
That was the case for me in ZH, but it depends on the canton, as when we moved to Ticino I was taxed at source again (for a while, until they figured out I was making more than the 90k or whatever the limit was back then).

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2) Do we file jointly for 2012 or we start filing jointly only in 2013?
Again, depends on the canton. Here, it's your marital status on 31 December, others on 1st of January.

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3) Is there actually any advantage to not being taxed at source?
Not having to pay your taxes until the end of the year (or later). If you are short on cash, just pay late, the interest is less than pretty much any loan.

Tom
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Old 23.05.2012, 01:01
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Re: No longer taxed at source

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Hi All!
1) Is it automatic that once you marry a Swiss, you are no longer taxed at source?
2) Do we file jointly for 2012 or we start filing jointly only in 2013?
3) Is there actually any advantage to not being taxed at source? I actually preferred being taxed at source as I do not have to worry about saving money for the tax bill. I always got money back from the tax authorities - just had to wait for like over a year once I filed my taxes.
Congratulations! But, sucks for you! You should have asked your employer to keep taxing you at source for the rest of the year if possible. And no, you can't go backwards now. No more Quellensteuer ever.

FWIW, I am an American who married a Swiss and the same thing happened to me. I got married in August 2010 and told my employer. In November that year I got a hefty tax bill from the Steueramt for what I would owe for my 4 months taxes with my "new status". They sent it to me in two parts for federal and city, some months apart. (Federal always seems to be later...)

I went from paying 8% withholding tax on my Quellensteuer to paying around 19% as "single Swiss status". AKA they bumped me up from cheap foreigner tax status into the same tax bracket as my Swiss husband had always been in. BUT they did not start taxing us together as a couple until January the following year. Surprise surprise, in January the % went up to the even higher "married Swiss" status.

I could have saved 11% of my salary for those 4 months in 2010 if I had requested my company continue taxing my Quellensteuer for the rest of the year until my husband and I would have to file together, but alas I didn't know. (Neither did you... sorry.)

Hoorah.

And don't worry... the Steueramt knows that you are married. They are great about sending you bills in the mail. Don't be surprised if they take a random estimate of what they suppose your salary is and give you a huge bill. For me, they assumed I was being changed to the non-QS tax bracket because I had surpassed 120k. Ha ha ha. Not quite. But it was a good joke.

You can call them up and tell them what you earn to dispute any overestimates... or you can just pay out of pocket and then you'll get some kind of tax refund in two years or so. I just now got my refund from 2010 when I first had to pay myself.

For American taxes, there are lots of threads you can read up on here. Basically, if your husband is a non-resident alien in the US and has no US income, you can file your US taxes as "married filing separately." Works fine and dandy.

Good luck!!
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Old 23.05.2012, 01:49
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The tax man will send you one big bill payable for the next year each April (or it might be June). Hell also send you 3 bills (the big one in 3 payments) payable in Mar, Sept and Dec. When you file for that year you'll either get a refund (we never did) or a bill with the balance of the adjustment owed.

If you don't/can't pay please call them and tell them - the interest in not paying will be low but they will betreib your ass, and in a short period of time.
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Old 23.05.2012, 09:01
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Re: No longer taxed at source

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I went from paying 8% withholding tax on my Quellensteuer to paying around 19% as "single Swiss status".
are you serious? no longer paying quellensteuer means that there is a huge increase in your tax bill? I am a permit B holder and will have a permit C next year - will my tax rate be greatly increased then?
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Old 23.05.2012, 09:25
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Re: No longer taxed at source

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are you serious? no longer paying quellensteuer means that there is a huge increase in your tax bill? I am a permit B holder and will have a permit C next year - will my tax rate be greatly increased then?
Nothing to do with C - everything to do with being married.
Being married means that you have to pay the "marriage penalty". This is a bit of a shock for those who come from places where being married has tax advantages (ie most anywhere else in the world).

Take diamondscan's post. She assumes that she sid something wrong. But she didn't. The taxman did what he has to do once you get married, and that is:
a) add husband's and wife's income
b) apply tax rate for combined (!) income to both husband's and wife's income
c) that means that
(i) both partners are taxed as though they were earning more than they actually do
(ii) in most cantons, on top of that, the tax rate for a "wife" is much higher than the tax rate for a single person or a "husband" with the same income (or assumed income).

But, you're no longer at source, so all that tax money ends up in your bank accont first. Put it in a savings account and earn 0.5% p.a. interest while you wait for the tax bill.
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Old 23.05.2012, 09:44
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Re: No longer taxed at source

Thanks a lot, am surprised to hear that married people are taxed in this manner. How does it work if there is just one partner earning?
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Old 23.05.2012, 09:51
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Thanks a lot, am surprised to hear that married people are taxed in this manner. How does it work if there is just one partner earning?
You would pay less tax by being married.
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Old 23.05.2012, 09:55
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the interest in not paying will be low but they will betreib your ass, and in a short period of time.
Not until after your tax return has been accepted and agreed. Estimates are just that & not legally enforceable
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Old 23.05.2012, 09:56
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Re: No longer taxed at source

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are you serious? no longer paying quellensteuer means that there is a huge increase in your tax bill? I am a permit B holder and will have a permit C next year - will my tax rate be greatly increased then?
Yup. I was enjoying a really really low tax rate on my measly salary with Quellensteuer. But it depends on how much you are earning right now as well…

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Nothing to do with C - everything to do with being married.
This is not entirely true. Quellensteuer (witholding tax) is much different than if you were to fill out taxes like a regular Swiss if you have a C-permit. Had I earned enough to qualify for normal taxes or had my tax status changed to normal taxes because of a C-permit, my taxes still would still have been higher.

For example, while I was on Quellensteuer, my now husband was enjoying a much higher rate as a citizen of his country. We were both unmarried at the time and not earning huge amounts different from each other. He paid more because he wasn't on QS.

But Tom is right, they do add your income to your husbands. Depending on how much you earn, this puts you in a much higher tax bracket than you would be in by yourself. Thus a higher tax rate in the new bracket.

For me, I was paying X for taxes until we got married. For the rest of the year I paid 2.5X in taxes and then the next year when we filed together, I was effectively paying 3.3X in taxes.

You can look it up on Comparis to compare as well. Compare the tax rate for yourself on withholding, yourself as a single earner at the normal rate, your husband as a single earner at the normal rate and your new tax rate together as married, double earners.

If you earn a lot, maybe it will not be a big problem, but with 11% of my income suddenly missing, I had to find a new job to survive Zürich rent! Especially since they send those tax bills for the year in March, before you've earned all that income. DH likes to pay it all then so we earn more interest on our possible refund.
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Old 23.05.2012, 10:36
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Re: No longer taxed at source

For those newbies on lower incomes:

Many canton tax departments have a savings scheme (which in Bern pays 1% gross interest). After completing my tax return in March I estimate my annual tax bill and then I pay 10% into the cantonal tax savings account every month. When there is a tax demand, the cantonal tax authority take their money and send me a statement, or a bill if I haven't saved enough.

When I first moved here I had no tax demand from Freiburg for 15 months, and then I received a tax demand for over CHF 19'000. As I was told to expect about 12'000 this was quite a shock. Since then I have always tried to save a bit more than expected!

Your tax bill varies with your postcode! A point to remember when moving from Quellensteuer is you have been paying the average tax for the canton you live in. When you get your 'C' pass, you might end up paying more or less tax depending on which village or town you live in.

Some good advice here from a Swiss consumer magazine, sorry it's only in German, but you can translate paragraphs with Google!
http://www.ktipp.ch/themen/beitrag/1...Steuern_bleibt
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Old 23.05.2012, 10:38
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Re: No longer taxed at source

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Quellensteuer (witholding tax) is much different than if you were to fill out taxes like a regular Swiss if you have a C-permit. Had I earned enough to qualify for normal taxes or had my tax status changed to normal taxes because of a C-permit, my taxes still would still have been higher.
It doesn't make sense to me that Quellensteuer is lower than the taxes paid by Swiss citizens or C permit holders. Why would he tax authorities do this?
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Old 23.05.2012, 10:51
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Re: No longer taxed at source

It's only lower if you happen to live in a high tax-rate town, as quellensteuer is based on the cantonal average.

Tom
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Old 23.05.2012, 10:52
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Re: No longer taxed at source

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Your tax bill varies with your postcode! A point to remember when moving from Quellensteuer is you have been paying the average tax for the canton you live in. When you get your 'C' pass, you might end up paying more or less tax depending on which village or town you live in.

Some good advice here from a Swiss consumer magazine, sorry it's only in German, but you can translate paragraphs with Google!
http://www.ktipp.ch/themen/beitrag/1...Steuern_bleibt
Ok, thanks. This makes sense.
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Old 23.05.2012, 11:00
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Re: No longer taxed at source

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you will file in 2012 and i guess the advantage is that you don't have to pay taxes until the end of the year.
I'm guessing this must depend on your Canton. In mine you pay in May, July and September of the current year on the estimate - and interest is charged on any difference to the final assessment.
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Old 23.05.2012, 11:06
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Re: No longer taxed at source

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It's only lower if you happen to live in a high tax-rate town, as quellensteuer is based on the cantonal average.

Tom
That doesn't make sense, because my Quellensteuer taxes were significantly less than yearly taxes in Zumikon, the cheapest postal code in Canton Zürich. I don't think it's an average for the canton… I think it's just less.

Not sure why foreigners pay less tax than Swiss. It makes no sense to me, but that's apparently the way it is. More reason to stay foreign and to stay unmarried if you can. (And IMO another reason why Swiss could resent Germans for coming over here…)
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Old 23.05.2012, 13:55
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Re: No longer taxed at source

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...But, you're no longer at source, so all that tax money ends up in your bank accont first. Put it in a savings account and earn 0.5% p.a. interest while you wait for the tax bill.
If you pay your taxes early you'll get a better interest rate - though there's a limit to how much you can overpay.

In the current climate, paying early makes financial sense.
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Old 23.05.2012, 15:15
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Re: No longer taxed at source

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That doesn't make sense, because my Quellensteuer taxes were significantly less than yearly taxes in Zumikon, the cheapest postal code in Canton Zürich. I don't think it's an average for the canton… I think it's just less.
In that case it's surely better to hold on to your B permit rather than move to a C permit? After 5 years living here, why not announce you are leaving, take a one month holiday, and come back and start all over again with a B permit? (in the case of an EU citizen)
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Old 23.05.2012, 21:58
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Re: No longer taxed at source

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are you serious? no longer paying quellensteuer means that there is a huge increase in your tax bill? I am a permit B holder and will have a permit C next year - will my tax rate be greatly increased then?
Your taxes may go down a little, but over all you should not see much difference, unless you have lots of deductibles that you were not able to claim up to now.
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