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Old 19.02.2020, 21:02
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Normal tax bill significantly more than withholding tax

Hello,

Last year I finally broke 120K, my overtime pay pushed me over the limit where I have to do the normal tax declaration even though I'm paying withholding tax.

I was happy to do it, as I read here you'll probably get money back. At the end of the online tax form, they give you the provisional numbers, and I was quite surprised to see it's 3K more than the withholding tax I already paid. I live in Zurich.

I already went to my HR with this, and they have no clue, and I asked the Steueramt too, where of course they suggested to send it in like this, and pay any bill they might send me. So I was wondering if someone here was in the same situation, and if you could enlighten me if normal tax is indeed that much more, or if I'm reading the numbers wrong, or if I filled it out wrong.

My monthly payslip with the quellensteuer and AHV looked pretty much like the ethz calculator suggested. So Quellensteuer for a year was 13500.
screenshot with the numbers here

And the provisional tax calculation was pretty much the same as the calculator on admin.ch. I added around +5K of deductions.
It says Cantonal tax 6400, Communal tax 7500, and Federal tax 3000. A total of around 17000, which is about 3500 more than the withholding tax paid over the year.
screenshot with the numbers here

Which would mean I'm getting a hefty bill at the end
Thanks for any insights!
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Old 19.02.2020, 21:39
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Re: Normal tax bill significantly more than withholding tax

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Hello,

Last year I finally broke 120K, my overtime pay pushed me over the limit where I have to do the normal tax declaration even though I'm paying withholding tax.

I was happy to do it, as I read here you'll probably get money back. At the end of the online tax form, they give you the provisional numbers, and I was quite surprised to see it's 3K more than the withholding tax I already paid. I live in Zurich.

I already went to my HR with this, and they have no clue, and I asked the Steueramt too, where of course they suggested to send it in like this, and pay any bill they might send me. So I was wondering if someone here was in the same situation, and if you could enlighten me if normal tax is indeed that much more, or if I'm reading the numbers wrong, or if I filled it out wrong.

My monthly payslip with the quellensteuer and AHV looked pretty much like the ethz calculator suggested. So Quellensteuer for a year was 13500.
screenshot with the numbers here

And the provisional tax calculation was pretty much the same as the calculator on admin.ch. I added around +5K of deductions.
It says Cantonal tax 6400, Communal tax 7500, and Federal tax 3000. A total of around 17000, which is about 3500 more than the withholding tax paid over the year.
screenshot with the numbers here

Which would mean I'm getting a hefty bill at the end
Thanks for any insights!
You need more expenses, it was assumed you had 15k at that salary, clearly 5k is too low
Travel to work
Lunch at work
Some health Insurance
some work clothes
3% training costs.

Zurich city has a higher tax rate than average.
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Old 19.02.2020, 22:19
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Re: Normal tax bill significantly more than withholding tax

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Zurich city has a higher tax rate than average.

and you would have been paying the average rate in the Quellensteuer.
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Old 20.02.2020, 09:38
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Re: Normal tax bill significantly more than withholding tax

As someone else already commented in another thread: Quellensteuer is a good deal - and it is indeed true under some conditions.

For example the work related deductions are a lumpsum of 10% of the income. So in the case of earning 120k, they deduct 12k for work related expenses (in your sheet it is only around 3k5).

City of Zurich has a higher tax (119%) rate than cantonal average (used for quellensteuer). You see that your "Gemeindesteuer" is therefore 1204 CHF higher than the "Kantonsteuer".

So yes, the numbers you calculated look right and you may expect that bill indeed.

best, Erik
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Old 21.02.2020, 21:29
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Re: Normal tax bill significantly more than withholding tax

Thank you for clearing it up.
This might be my most expensive lesson learned yet. And the least profitable overtime I ever did.

I'll try to piece some more deductions together, but this may be more or less all I have. I did eat of course, but I didn't have to buy anything significant for work, nor did I have training paid by myself. And the 5K is my health insurance + the public transportation.

Looks like all that's left is to marry, get into debt, or to donate 15K to the SVP
Do you know if I can at least deduct the Serafe bill? I didn't find any information on that, but it's suspicious, because it's mandatory. Not that it made a huge impact, but that could be a free pizza and a burger right there.
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Old 22.02.2020, 06:45
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Re: Normal tax bill significantly more than withholding tax

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I'll try to piece some more deductions together, but this may be more or less all I have. I did eat of course, but I didn't have to buy anything significant for work, nor did I have training paid by myself. And the 5K is my health insurance + the public transportation.
Training: Ct. Zurich allows CHF 500 to be deducted for training without support.

Serafe fee: Serafe fee would not be tax deductible.
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Old 22.02.2020, 07:52
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Re: Normal tax bill significantly more than withholding tax

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I'll try to piece some more deductions together, but this may be more or less all I have. I did eat of course, but I didn't have to buy anything significant for work, nor did I have training paid by myself. And the 5K is my health insurance + the public transportation.
Deductions are one way of optimizing your tax bill:
-> follow up on suggestions from others (e.g lump sum deduction for work, lunch allowance)
-> I would add 3rd pillar to that but please consider wider situations and alternatives for the 6k a year or so, as short term gain could be offset by cost of opportunity or taxes you may incur in other jurisdictions (e.g if you’re American)
-> consider paying a tax advisor, if your situation is not complicated this shouldn’t cost more than CHF200.- and will pay for itself as most likely you haven’t covered all bases. (If you like to DIY your tax you can copy paste from next year and adjust where needed but you should be 80-90% there)

Other ways are:
-> obvious one is moving Gemeinde or Kanton

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Looks like all that's left is to marry, get into debt, or to donate 15K to the SVP
That is not necessarily the case unless the person you get married to doesn’t earn any money.
It is a known fact that the combined tax bill of an unmarried “both working” couple is lower than that of a married “both working” couple - google “marriage penalty” or “Heiratsstrafe”
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Old 22.02.2020, 08:14
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Re: Normal tax bill significantly more than withholding tax

Have kids. Although the extra expense isn't really compensated by the tax deduction.
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Old 22.02.2020, 09:33
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Re: Normal tax bill significantly more than withholding tax

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Thank you for clearing it up.
This might be my most expensive lesson learned yet. And the least profitable overtime I ever did.

I'll try to piece some more deductions together, but this may be more or less all I have. I did eat of course, but I didn't have to buy anything significant for work, nor did I have training paid by myself. And the 5K is my health insurance + the public transportation.

Looks like all that's left is to marry, get into debt, or to donate 15K to the SVP
Do you know if I can at least deduct the Serafe bill? I didn't find any information on that, but it's suspicious, because it's mandatory. Not that it made a huge impact, but that could be a free pizza and a burger right there.
There is also a deduction of about 3% of earnings, can't remember exactly but you can't just have 5k of deductions.
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Old 22.02.2020, 13:08
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Re: Normal tax bill significantly more than withholding tax

What if spouse is working for UN?

For example, the document below says if spouse is not employed OR is working for UN you select Bx (B0 without kids):

https://imgur.com/9TtNuo8


and in tax table the rate is significantly lower compared A0 (single person no kids) and B0:

https://imgur.com/spvYnoN

I don't get it... Why tax should be lower, since both are working. Is there a catch somewhere else? Shall I combine both salaries in this case?



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That is not necessarily the case unless the person you get married to doesn’t earn any money.
It is a known fact that the combined tax bill of an unmarried “both working” couple is lower than that of a married “both working” couple - google “marriage penalty” or “Heiratsstrafe”
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Old 22.02.2020, 14:19
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Re: Normal tax bill significantly more than withholding tax

Any medical or dental bills that you have to pay out of your own pocket are also tax deductible. Includes your Franchise too, I believe.
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Old 22.02.2020, 14:31
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Re: Normal tax bill significantly more than withholding tax

Did you actually receive a tax return to file?

Cuz overtime payment should not count towards the CHF 120K threshold.
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Old 22.02.2020, 16:32
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Re: Normal tax bill significantly more than withholding tax

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Did you actually receive a tax return to file?

Cuz overtime payment should not count towards the CHF 120K threshold.
Ho hum any month above 10k would trigger a tax return. 13 months salaries anyone?
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Old 22.02.2020, 16:38
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Re: Normal tax bill significantly more than withholding tax

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Did you actually receive a tax return to file?

Cuz overtime payment should not count towards the CHF 120K threshold.
Why not? Salary is salary
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Old 22.02.2020, 18:36
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Re: Normal tax bill significantly more than withholding tax

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Why not? Salary is salary
I was in the same situation (fixed salary below but total package above with paid overtime and bonus). Zurich tax authorities told me only the fixed salary amount counts.
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Old 12.03.2020, 23:06
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Re: Normal tax bill significantly more than withholding tax

Had it made professionally. The final tax is 2K more than the quellensteuer was. Almost all of the viable deductions were automatically added by the program by default.
In the end, the deductions are:

780 public transportation
700 bike to work pauschal
3200 food at work pauschal
3200 work related expenses pauschal (was included by default)
500 training cost pauschal (was included by default)
3200 health insurance
2600 insurance pauschal (was included by default)

I added the healthcare costs (dentist + franchise) to see how it's done, but you can forget about that deduction. It's only considered if it's more than 5%. So you have to do a more complex tax return to include it, and it will almost always be ignored.
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Old 13.03.2020, 09:00
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Re: Normal tax bill significantly more than withholding tax

Hi Ingsoc,

These figures do indeed look ok. A comment. The 3200 work related expenses (pauschal) is 3% of your net salary, so I deduce that is about 107.000?

Your total work related costs are 8380. In the "tax at source" calculation they use a Lumpsum of 10% for work related costs, which in your case would be about 10700. So with ordinary taxation you have 2400 less discounts.
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Old 14.03.2020, 10:37
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Re: Normal tax bill significantly more than withholding tax

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Had it made professionally. The final tax is 2K more than the quellensteuer was. Almost all of the viable deductions were automatically added by the program by default.
In the end, the deductions are:

780 public transportation
700 bike to work pauschal
3200 food at work pauschal
3200 work related expenses pauschal (was included by default)
500 training cost pauschal (was included by default)
3200 health insurance
2600 insurance pauschal (was included by default)

I added the healthcare costs (dentist + franchise) to see how it's done, but you can forget about that deduction. It's only considered if it's more than 5%. So you have to do a more complex tax return to include it, and it will almost always be ignored.
I think you can skip the "bike to work" pauschal, as they will (would) only take the larger of the two into account - public transport / bike - AFAIK.

Wow that's quite a deduction for health insurance - is it that high in Zurich? (only 1700 in Basel)
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Old 14.03.2020, 19:51
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Re: Normal tax bill significantly more than withholding tax

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Wow that's quite a deduction for health insurance - is it that high in Zurich? (only 1700 in Basel)
It's like 4k here as I recall.

I will check.

Tom
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Old 14.03.2020, 20:15
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Re: Normal tax bill significantly more than withholding tax

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I think you can skip the "bike to work" pauschal, as they will (would) only take the larger of the two into account - public transport / bike - AFAIK.

Wow that's quite a deduction for health insurance - is it that high in Zurich? (only 1700 in Basel)

The 3,200 is the 2,500 franchise plus remaining 700 Selbstbehalt?


Seems these are all maximum numbers and to put them all in would really be chancing your arm.
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