Tax Deductions: The 10 most important Categories

Deductions are an important part of your tax return, as they reduce the amount of taxes you have to pay. We have summarised the 10 most important types of tax deductions in Switzerland for you below.

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1. Commute to work

If you do not work from home you may deduct the costs of your commute to work. In principle, this is true for both the use of public transport as well as your own vehicle such as a car or motorcycle. However, there are various cantonal differences on which costs exactly are deductable. If you travel by public transport, you can deduct the cost of your season ticket or hand in the individual receipts of your commutes. In case it is possible to deduct the costs of using a private vehicle, always use the mileage of the shortest route. If you are not sure which costs are deductable in your canton of residence, we recommend you to check it on your cantons website or ask a local tax consultant for advice.

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2. Meals

The cost for meals consumed during work hours are generally deductible. However, please note that your cantonal guidelines state that only reduced deductions are possible if you are not employed full-time. If you only work morning hours, for example, no deductions can be made, as you can go home for lunch at the end of your shift. Additionally, note that if your home is a short distance from your place of work, only commuting expenses may be deducted.

3. Job application costs

Costs for job applications may be deducted from your taxes under the heading of professional expenses. Please make sure that you keep all receipts from the expenses that you wish to deduct, as the tax authorities may demand to see them.

4. Weekly residence

Under certain circumstances the cost for a weekly residence may be deducted from taxable income. A trainee for example, whose main residence is in Geneva but lives and works in Zurich during the week may deduct rental costs as professional expenses.

5. Education

Expenses for further education and trainings may be deducted if they exceed the so called initial education. However, the costs must be job related to allow for reductions. A banker, for example, may deduct the expenses for a management course, but not those for a salsa class. Furthermore, the tax payer needs to be the one who payed for the expenses. Educational trainings paid for by the employer do not justify deductions. At federal level, this type of deduction is limited to CHF 12,000; at cantonal level, the maximum permissable amounts vary.

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6. Medical expenses

It is possible to claim a deduction if the cumulative amount of illness-related and accident costs, as well as dental costs, exceed 5% of net income.

For example, with an income of CHF 90,000, you are allowed to claim deductions for medical expenses exceeding CHF 4,500.

7. Pension fund and pillar 3a

Both purchases into the pension fund and payments into the voluntary pension pillar 3a may reduce your tax burden.

In case of payments to the pension fund, you may find the maximum amount of permissable deductions on your pension statement.

Payments into pillar 3a are deductable up to an amount of CHF 6,826 (2020) or CHF 6,883 (2021) for regular employees. Self-employed people may make payments up to CHF 34,128 (2020) or CHF 34,416 (2021).

8. Pillar 3b insurance premiums

Contributions to Pillar 3b cannot generally be claimed as deductions. However, to compensate for this, subsequent payouts are tax-free.

9. Child deduction and childcare

Deductions may be claimed for each child in your household until they reach the age of majority or complete their initial education. The deduction at federal level is limited to CHF 6,500, half of which is deductible in the case of joint custody. The permissible deductions at cantonal level vary, please refer to your local tax authority or a tax consultant for the exact amount.

10. Support for parents

If your parents are of retirement age and in need of your support, you may claim a deduction when certain conditions are met. The permissible reduction amounts to CHF 6,500 for federal tax purposes; at cantonal and communal level, the additional deductions available vary. Please note that you need a confirmation from the municipality of your parents' residence confirming the need for your support.

Want to maximize the permissible deductions? The specialists at taxea are happy to assist you with their comprehensive expertise.

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