Here you will find expert answers to numerous, regularly occurring tax issues.
What deductions can you make from your income tax?
There are many types of deductions: for job-related expenses, retirement plan (AHV) contributions, contributions and purchases of credits in the pension fund, contributions to individual retirement savings (3rd Pillar), childcare outside the family, interest on debt, asset management fees (bank charges, property management fees), alimony, healthcare costs, charitable donations, insurance premiums, social security premiums.
How are lottery winnings taxed?
Lottery winnings must be declared as income for cantonal tax and direct federal tax purposes. Any uses in the same calendar year can be deducted from the winnings. Reimbursement of taxes on domestic lottery winnings requires proper declaration of the winnings. Casino winnings, on the other hand, are exempt from cantonal and federal tax.
How are balances in Pillar 3a accounts taxed, if both spouses retire in the same year?
The balances are taxed separately from ordinary income as a capital payment and are not totaled together.
Is there an income threshold below which sideline income does not have to be taxed?
No, regardless of the amount of sideline income, you must report all earned income for tax purposes!
If a woman does not receive alimony from a divorce, but instead a capital payment or real property, what and how must this be taxed?
Alimony settlements are not taxable, but they are also not deductible by the spouse who is pays them.
Your employer provides you free room and board. What are the tax consequences?
Income in kind is taxed at market values (empirical figures used by the tax authorities).
Must wages from military service or civilian alternative service be reported?
These wages are exempt from federal and cantonal tax.
Can you take a deduction for underutilization, if you only use a part of a vacation home?
Underutilization deductions are recognized for federal tax purposes, but these do not apply to vacation houses or apartments.
Can you deduct amortizations on mortgages from your taxes?
In contrast to mortgage interest payments, mortgage repayments cannot be deduced from income taxes.
You neglected to take the child deductions in your tax return. Will these be allowed to you subsequently by the tax authorities?
Yes, social deductions must be taken by the tax authorities, provided that the authorities are aware of the relevant circumstances.
Can you deduct taxes you have paid from your taxes?
No, taxes are non-deductible household expenses.
What types of property are exempt from property tax?
Household and personal effects, as well as pension insurances after start of retirement, as long as they were contracted before January 1, 2008, are not subject to property tax.
You have your retirement benefits paid in a foreign country. What tax consequences should you expect?
Retirement benefits paid from occupational pensions (Pillar 2) and from individual retirement savings (Pillar 3a) to persons domiciled in a foreign country are subject to withholding tax.
From which country are commuting workers with domicile in Germany who work in Basel be taxed with respect to their earned income?
For German cross-border commuters, the credit method is used. This means that the Swiss tax authorities deduct a withholding tax, which is usually 4.5% of the income earned in Switzerland. The German tax authorities credit this amount against the taxes owed in that country. In contrast to this scenario, the tax exemption method is used in the case of French border-crossers. In this case, the earned income is taxed only by the country of domicile.
Is the gift tax or the inheritance tax lower; i.e., should one give away one’s assets while still living?
With respect to the tax burden, inheritance and gift taxes are basically equivalent. The reason is to prevent donations inter vivos from being used as a means of avoiding inheritance tax.
What can you do if you do not agree with a tax bill?
Within 30 days from the date of the bill, you can contest it. The written objection should include a request or petition and a brief justification. In addition, substantiating information should be included or attached.
What is the tax payment deadline for Basel-City and when will you receive your withholding tax credit?
Basel-City cantonal taxes must be paid by May 31 of the following year (post numerando collection). When the cantonal tax assessment is made, the withholding tax credit and interest as of the beginning of the year is offset against the cantonal tax liability.
What is a tax exemption and what forms can it take?
A tax exemption is the waiver by the government of a tax debt. The tax exemption can take the following forms: simple deferral and accommodations for payment or waiver of a portion or of the entire tax payment.
What happens if you don’t submit a tax return?
If you do not submit a tax return after repeated reminders, the tax authority will estimate your tax liability at its own discretion. Customarily, the estimation by the tax authority will be higher than the liability you would owe if you had submitted a correctly and timely tax return. In addition, a fine of up to 10,000 Francs will be assessed. If the official estimate is too low in comparison to the actual figures, you must report this to the tax authority within 30 days. Otherwise, you are committing tax evasion.
What must you expect when you commit tax evasion?
The consequences are back taxes for the past ten years with interest, as well as a penalty, which is usually equivalent to 100% of the amount of back taxes. This applies both for the cantonal as well as the direct federal taxes. If you make a voluntary declaration for the first time, you will not be subject to penalties. Necessary conditions for impunity are that no tax authorities are aware of the tax evasion and that the tax debtor cooperates fully with the tax authorities in the retroactive taxation process and seriously endeavors to pay the amount of back taxes owed. For each further voluntary declaration, on the other hand, a fine will be assessed equivalent to 20% of the amount of back taxes owed