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Created on 12.11.2018

Advice on reducing tax: how to optimize your tax return

Completing tax returns is not much fun. But our advice is well worth following.

Completing tax returns is the same for all of us: it’s a painstaking task and usually costs us a lot of money in the end.

To ensure you claim as much tax relief as possible, we’ve put together a brief guide with some key pointers. Ensuring you make the most of tax benefits.

Don’t forget these deductions

  • Interest credits above CHF 200 and interest income from bonds and dividend payments are subject to withholding tax. The 35% withholding tax is reimbursed to you if you provide details of your accounts and securities
  • Expenses such as commuting costs, meals and the purchase of necessary items, like work clothing (collect receipts and account statements for all deductions for which there is no flat rate)
  • Expenses on further training
  • Payments into the fixed pension plan (pillar 3a)
  • Donations to charitable organizations (collect receipts and account statements for all deductions for which no flat rate exists)
  • 1. Value-maintaining expenses

    Expenses on maintaining the value of a property can be deducted from taxes. Also list expenditure on minor renovation work if it exceeds the flat-rate amounts which you can deduct for property maintenance.

    2. Debt interest

    Interest on loans – for example, mortgages, bank loans or private loans – can be deducted from income. However, this only applies to interest and not to loan repayments (amortization). Leasing costs cannot be deducted either.

    3. Maintenance costs

    Many maintenance costs are deductible depending upon the canton. They include charges on water and electricity meters or heating servicing contracts. Collect the receipts.

    4. Investments

    Investments which aim to reduce energy consumption in the home are deductible in many cantons.

    Please note

    The tax return requirements differ from canton to canton: contact the tax administration office in the canton where you live if you have any questions on completing your tax return.

  • 1. Deduction from taxable income

    Payments into pillar 3a (into a retirement savings account 3a or a life insurance 3a) plan can be deducted from taxable income. Persons in employment who are insured in a pension fund can pay in a maximum of CHF 6,768 a year. For persons in employment without a pension fund, it is up to 20% of their income a year but a maximum of CHF 33,840. (As at 2018).

    2. Reduced tax rate upon withdrawal

    Capital withdrawn from pillar 3a is taxed at a reduced rate. With a staggered withdrawal of various assets from pillar 3a during old age, progressive taxation can be avoided in most cantons. This allows you to reduce your tax liability.

    3. Tax-free asset growth

    The accrual of capital in pillar 3a is tax-free. You don’t pay any withholding tax on your assets and capital/interest income is tax-free.

Tip

Calculate your tax saving from paying into pillar 3a quickly and easily:

To financial calculator

Your interest statement in e-finance

The interest statement for the previous year is available to PostFinance customers electronically as a PDF in e-finance under the menu item “Documents”. The documents remain available in e-finance for 24 months. The digital signature confirms that the documents have been produced by PostFinance so that they can be forwarded directly to the tax office. Customers who manage their retirement savings account 3a in e-finance will also find the tax certificate for the previous year directly in e-finance as a PDF.

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