Every year without fail, your tax return becomes due. But if you want to save money you have to act in advance. Here are the most important savings tips, compiled by our experts. If you want to save more you can contact us directly for individual advice, as the regulations vary from canton to canton.
General tax tips
- In Pillar 3a there are some attractive tax deduction options for part-time employees. They should remain insured, because if they pay into Pillar 2 (however small their contribution is), they are entitled to the full tax deduction of up to CHF 6,286 per year. However, married couples must be careful: If the income-related deductions exceed the taxable net earned income, this may, in certain cases, lead to cuts in the second-earner allowances.
- In the case of cohabiting couplesit is important to check in each case which partner claims any joint child deductions. If partner A retains a high income and partner B reduces to 40%, for example, then it makes sense to assign the child deductions in full to Partner A. The same is also possible with childcare costs or any medical costs for the child. The deductions have a greater impact on the higher income. In such a case partner A alone would benefit from a significant tax deduction, so an internal compensation payment to partner B would have to be agreed and implemented by means of an addendum to the cohabitation agreement.
- Dental restoration work can be planned: It is well worthwhile saving up for it and carrying out the restoration work within one tax year. You can deduct medical costs from your income, but only when they exceed a certain percentage of income.
Tax tips for people with Pillar 2
- Tax can be saved by purchasing additional contribution years in Pillar 2. This makes sense for people who have pension shortfalls because, for example, they were unemployed or had a reduced workload for a certain period. In this case it is worthwhile spreading the purchases over several years, to save even more. But similarly in this case the total of all income-related deductions must not exceed the taxable net earned income. Otherwise there may be cuts to the second-earner allowances or a reduction in the approved deductions.
- If you are married and you draw Pillar 2 money early for the Promotion of Home Ownership (to acquire residential property as a home, to pay off a mortgage or to carry out renovations), it is important that only one partner should do this because, in the case of an advance withdrawal, tax deductions can only be made again after full repayment. In the case of the other partner, the purchases can be deducted from taxable income without prior repayment of the withdrawal.
- You can also achieve tax savings with partial retirement phases (these must conform to LOB regulations and be carried out in minimum partial phases). It is important to note that the payments (employer and employee contributions) also fall as a result. This results in losses of benefits, which must be set against the tax savings. In most cases the balance is positive but it may also tip into the negative, which must be explained in advance.
- Continuation of gainful employment after the age of 64/65: Those who have the opportunity to continue working after retirement age can do so for a maximum of 5 years after reaching normal retirement age. They may continue to save into the pension fund, provided that the regulations provide for this option (which is now almost always the case). In this way the benefits can be improved with regular savings contributions, which can also be deducted from income. This option is popular with company owners and can be very attractive in tax terms.
Tax tips for home-owners
- When you carry out work on your own home to maintain its value (e.g. replacement of windows, heating systems, roof or insulation renovation, garden renovation, etc.), you can deduct this from tax. Our tip: Phase the work systematically over several years. In that way you can save more with the deductions.
- Indirect mortgage repayment allows you to use the low interest rates for deductions in your tax return. However, for that purpose it makes sense for you to pay the maximum amount into Pillar 3a for all persons entitled to tax deductions. You can also deduct that in full from your taxes. Once again, the drawing of benefits should also be phased.
- With a Helvetia Benefit Plan you can draw part of Pillar 3a early, to repay a mortgage or to invest in a home of your own. With such payments you can make significant savings on special tax.