This is my first year filing taxes in Switzerland with my Swiss wife. We got married in 2021 and I officially moved here in September. I wanted to see if any American expats can help me with the following questions.
Regarding Filing Taxes in Switzerland:
1. What U.S. financials am I are required to report to Switzerland? My wife seems to think that I have to report all of my accounts, however, we weren't sure if I have to report my U.S. retirement account (401k)
2. Does Switzerland adopt the same approach as the US, where I only need to report my US accounts that have accrued a certain threshold of interest, or do I need to report all of my US. accounts regardless of how much interest has been accrued?
3. Switzerland is my primary residence, but I have my own company where I get paid out of my US entity. Since Switzerland is my primary residence, do I first pay all of my taxes in Switzerland and then whatever is left over gets paid in taxes to the US? I want to make sure that I am not double taxed, but I assume since my income comes from my US entity and primary residence is in Switzerland, my case is more complicated.
Regarding the Order of Filing Taxes in the USA:
5. Do expats who have their primary residence in Switzerland file an extension for their US taxes, then file their taxes in Switzerland, and then report what taxes they paid in Switzerland to the IRS so they are not double taxed?
6. Does anyone have any recommendations on a good Tax Accountant who would be familiar with my case?
I appreciate everyone's feedback! Since I am new to Switzerland, your advice is extremely helpful. Once I establish enough experience here, I plan to "pay it forward" to other expats too. Thanks in advance for all of your help.
1/2. Yes, you must report all accounts, Swiss and foreign, and it’s doesn’t matter how big or small they are; all have to be reported regardless. Also you will need to report your income/salary from your US company.
Start your research on the US side of things here.
I do my Swiss taxes in March and that gives me a fairly good estimate of how much taxes I will need to pay to Switzerland. Then I just round that down a little bit (if I am unsure about something) and use that calculation for US taxes. It is not really possible to rely on getting the official number in time as sometimes Swiss tax authorities don't get back for multiple years. I don't include the wealth tax and taxes on dividends in my calculation of Swiss taxes that I report to IRS.
If you are resident here and working you also need to check for obligation to pay social security and such. Not an expert on US taxes but wondering whether you should get some advice at least this first time to do it right
This Moneyland Moneyguru response regarding taxes on foreign pensions in Switzerland might be relevant:
" Foreign old-age pensions are taxed differently depending on whether they are comparable to Swiss pension funds or not. This will be decided by the tax office.
Withdrawals from pension funds which are considered similar to Swiss pension funds are taxed at the same reduced rate which applies to Swiss pensions when performed after you reach retirement age. Pension savings are not counted as taxable wealth until they are withdrawn.
When a foreign pension fund is not considered comparable to Swiss pension funds, assets held in the fund must be taxed as wealth and you do not benefit from lower income tax rates when you withdraw your assets."
To add to the above post, Bär & Karrer AG notes this in a presentation from 2019 (translation):
"Initial situation
Joe has Individual Retirement Account (IRA) or 401k in the USA (e.g. with a bank).
2015 Move to Zurich, gainful employment in Switzerland.
Question
Declaration requirement in Switzerland:
Wealth tax canton of Zurich?
Income taxation with regard to current investment income?
Taxation of disbursements?
Tax law
Recognition as foreign pension assets, if comparable with Swiss counterpart.
Both accounts are so-called Traditional Individual Retirement Accounts, which in practice are comparable to the Swiss tied pillar 3a pension plan. As with Pillar 3a accounts, they are not subject to income and wealth tax until the lump-sum payment is made.
Taxable upon payout ("leaving the pension cycle"): separate assessment of lump-sum withdrawal."