Especially at a young age, when there is no property yet, the commute to work is only 15 minutes by bicycle or public transport and there are no other special features, no significant deductions can usually be made. As a significant deduction, the payment into the third pillar is the highest of the feelings. The bill from the tax office is therefore correspondingly painful. This does not mean, however, that you should change your employer and commute 100 km every day. For many people, a short commute means quality of life. Buying into the pension fund at the age of 30 for the sole purpose of saving taxes is not necessarily advisable either. These liquid assets can be put to better use elsewhere, and besides, it is always advantageous to have a certain financial cushion on the side. Whether and when it makes sense to buy into the pension fund depends on very different individual factors. It is advisable to go through these with a financial planner before making such a decision.
But now back to the tax return. In certain cases, even a tax advisor can hardly help you save huge amounts of tax. However, he or she can point out what must be taken into account, what should not be forgotten and which events in life have an influence on the tax burden. These include, for example, a wedding, the birth of a child or the purchase of a house. With good planning, one can therefore influence the tax bill for the coming years. However, the advisor can and should also warn of possible stumbling blocks, such as the purchase of a property in a cohabiting relationship. Here is a brief example: Anna and Alex would like to buy a flat. It costs CHF 1,000,000. The necessary own funds of CHF 200,000 come entirely from an advance on Anna's inheritance. Anna and Alex are entered in the land register as owners of 50% each. Alex has therefore received a gift of CHF 100,000 from Anna's parents. Since Alex and Anna are not married, taxes are due on this amount. These can be high, namely up to CHF 15,000, depending on the canton. However, since Anna and Alex's personal financial planner explained this to them in good time, a suitable solution could be found in advance.
Value-enhancing and value-maintaining renovations
Another example is the renovation of a property. Here it is important to note that a distinction is made between so-called value-preserving and value-enhancing renovations. Value-preserving renovations include, for example, renovating the kitchen, the bathroom or painting the walls. Since real estate is usually mortgaged and thus also belongs to a certain extent to the bank, properties should be maintained accordingly. If these costs exceed the lump sum, they can be declared and deducted in the annual tax return. However, the case is different for value-enhancing investments. These can only be deducted from the real estate gains tax when the property is sold. But what is a value-enhancing renovation? This is illustrated by the following example: An important factor in the valuation of a property is its location. If you build another storey with two rooms on top of your attic, you have more living space available in the same location and thus the value of the house increases. Therefore, in the case of an increase in the number of floors, one speaks of a value-increasing renovation.
Here you will find a list of deductible renovations.
It is advisable to spread the renovation work over several years if possible, as this allows the tax progression to be broken more often. Most craftsmen are aware of this and often point it out to their clients during the planning phase.
Save taxes through PK purchasing
Last but not least. The ever-coveted purchase into the 2nd pillar already mentioned above. Should I or should I not? As already mentioned, there is no general answer to this question. The reason for a purchase into the pension fund is in many cases a prompt tax saving, which is realised at best over several years through staggered payments. Nevertheless, such a purchase should not be made without reflection. There are various questions that must first be clarified. For example, the degree of coverage and the interest on the money in the pension fund should be checked. But also the individual life plans in the time horizon of the next few years must be taken into account. There may be lock-up periods that need to be observed. Furthermore, alternative investment options that cover more flexible needs can be considered. For example, if one needs a new car five years after the purchase, one cannot fall back on 2nd pillar funds for this. There are legal provisions on when and for what purpose one can withdraw the pension fund capital early.
More useful tips and advice on PK shopping.
At this point, one could still name many factors that can have an influence on the amount of tax. However, since every person and every family is individual, one should never give a blanket answer to the questions.
FINBERG AG not only helps you fill out your tax return, but also accompanies you through all stages of your life and works with you to develop a plan for each situation that is tailored to your individual needs.
We look forward to getting to know you during a free initial consultation.