How to save taxes

Pillar 3a (restricted pension plan)

Money that you pay into your pillar 3a account or custody account year after year can be fully deducted from your taxable income. In 2024 you can pay up to 7,056 francs into pillar 3a. If you are not a pension fund member, you can contribute up to 20 percent of your net income to pillar 3a (max. 35,280 francs). By the way, you can also pay in smaller amounts.

Pension fund buy-in

Voluntary contributions to your pension fund are also fully deductible from taxable income. Ideally, you would spread out your payments over a number of years. That way you save more taxes than if you pay in once. Normally, you can see on your benefits statement whether you are able to buy in. A gap in your pension fund might be the result of a lack of contribution years because of parental leave, for example.

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Stagger the withdrawal of retirement savings

You can save a lot of money depending on your canton if you stagger the withdrawal of your retirement savings, for instance for the amortization of residential real estate or when retiring from professional life. That’s why you should try to stagger the withdrawal of capital from pillar 3a, from your pension fund or, if available, from the vested benefit foundation. It is helpful if you have several pillar 3a accounts. Open a new pillar 3a account as soon as the existing 3a account has reached approximately 50,000 francs.

Extended career break

It is best to plan an extended, unpaid career break, such as a trip around the world, over two calendar years. You save more taxes if you’re missing from June to June instead of from January to December. This spreads your loss of salary over two tax years.

Plan renovations carefully

You can deduct real estate maintenance from your taxable income. Large-scale renovations for value preservation purposes should not be carried out in the same year but should be spread over several years. This reduces the total tax burden since you can lower your tax bracket for more than one tax period.

Tax deduction for empty rooms

If you own your own home and don’t need a room in it anymore – because your children have moved out for instance – you can contact the tax office and claim a deduction for underutilization. The imputed rental value is reduced in proportion to the rooms that are not utilized. But be careful: Not all cantons grant this deduction.

Don’t get married at the end of the year

As soon as you marry your partner, you are taxed jointly by the state and the cantons for the entire year of marriage. Dual-income families normally have a higher tax burden. It can make sense financially not to get married shortly before the end of the year, but instead to schedule the wedding at the beginning of the next year.

Asset management costs

For asset management agreements, costs that are directly related to earning income (interest and dividends) can be deducted from income tax. Investors without an asset management agreement can, for example, deduct the costs for the tax statement as well as custody account and account maintenance fees.

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