In order to reduce taxable income and lower the tax burden for the year 2024, individuals must take proactive steps before the end of the current year. Acting now can lead to significant savings amounting to thousands of Swiss francs when it comes to filing tax returns in 2024. To maximize deductions and minimize tax liabilities, it is crucial to consider various strategies and opportunities available for tax planning. Here are some key areas where individuals can take action before the year ends:
### 1. Investing in Pillar 3a
– Individuals affiliated with a pension fund can contribute up to 7,056 Swiss francs to Pillar 3a this year and deduct the corresponding amount from their taxable income for the year 2024.
– Self-employed individuals not covered by a pension scheme can contribute up to 35,280 Swiss francs or 20% of their net income to Pillar 3a and claim tax deductions.
#### Future Opportunities:
– The Federal Council has approved voluntary contributions to Pillar 3a starting in 2025, allowing individuals to make up for missed contributions. However, contributions for gaps in Pillar 3a before January 1, 2025, cannot be filled yet.
### 2. Considering Pension Fund Contributions
– For individuals aged 50 and above, making voluntary contributions to the pension fund can be an effective way to save on taxes, especially as retirement approaches.
– Before making contributions, it is essential to assess the quality of the pension fund based on indicators such as the funding ratio and conversion rate.
### 3. Monitoring Federal Council’s Tax Plans
– The Federal Council’s plans to increase taxes on capital withdrawals from the second and third pillars have raised concerns among taxpayers.
– Changes in tax regulations could impact pension fund contributions and Pillar 3a deposits, emphasizing the importance of strategic retirement planning.
### 4. Timely Fund Deposits
– It is crucial not to delay contributions to the second pillar and Pillar 3a until the end of the year to maximize tax savings and avoid potential penalties.
### 5. Planning Property Maintenance Expenses
– Property owners can deduct maintenance and eco-friendly renovation costs from their taxable income, with the option to spread larger projects over multiple years for tax efficiency.
### 6. Preparing for Tax Returns
– Organizing receipts, invoices, and forms throughout the year can streamline the tax filing process and ensure accurate deductions for expenses like healthcare, transportation, and childcare.
### 7. Deductions for Donations
– Charitable donations to tax-exempt organizations in Switzerland are deductible from taxable income, providing an opportunity to support worthy causes while reducing tax liabilities.
By taking proactive steps and leveraging available tax-saving opportunities before the end of the year, individuals can optimize their financial planning and minimize tax obligations for the upcoming year. It is essential to stay informed about changing tax regulations and seek professional advice to make informed decisions regarding retirement planning and tax optimization strategies.