Tax deductions – 10 tips for minimizing your tax burden

Simple ways to save: deductions you can claim on your tax return. Source: iStock / BrianAJackson

You can keep your tax bill down by claiming the cost of things like your bike, lunch and insurance premiums on your tax return.

But exactly what and how much can be deducted from your taxable income is often a source of confusion, so here is a list of useful tips for the 2017 tax year for employed persons.

Important: Note that the information in this article is general in nature. Different regulations may apply in your canton. If there is anything you are unsure of, your local tax office will be able to help. You can also find more information on the most common deductions here.

  • Travel expenses

    You can deduct the cost of your commute to work – but since the 2016 tax year this is limited to a maximum of 3,000 francs. As a rule, you can claim for the cost of public transport passes, bicycles or small motorised bikes – but the cost of driving to work in a private vehicle is only deductible under certain conditions: if the home and workplace are too far from the nearest public transport stop (approx. one kilometre), or if a significant time saving is achieved by travelling by car (approx. 1 hour). People who are too incapacitated to take public transport can also deduct the cost of travelling by car.

  • Meals

    Employees who are not able to go home for lunch can deduct a flat rate for meals. For direct federal tax and in the canton of Zurich, this rate is the not-insignificant sum of 3,200 francs per year or 15 francs per working day. If the employer offers subsidized meals, this figure drops to 1,600 francs per year or 7.50 francs per working day.

  • Insurance premiums

    Premiums for health, accident, life and pension insurance can be deducted up to a certain amount. For direct federal tax, the maximum deduction allowed is 1,700 francs for single tax payers, or 3,500 francs for married tax payers and those in registered partnerships.

  • Donations

    Contributions to public or exclusively non-profit organizations can be deducted from your taxable income. The total contributions may not exceed 20 per cent of your net income.

  • Pensions

    Money paid into a pillar 3a account is also tax-deductible. The maximum deduction for the 2017 tax year is 6,768 francs for employed persons. You can work out how much you can save here. Contributions to the second pillar may also be deducted.

  • Medical expenses

    If any medical costs paid for out of your own pocket exceed a certain portion of your income, you can deduct them from your tax return. You might be able to claim for dental treatment, for example. However, the limit is usually set quite high – in most cantons, it is 5 per cent of your net income. You can also deduct additional expenses arising as a result of a disability.

  • Loan interest

    You can reduce your taxable income by including any interest paid on mortgages and personal loans, but not the repayments. Leasing costs are not allowed either.

  • Childcare

    The cost of childcare by a nanny or at daycare is tax-deductible. Again, there is a maximum limit and parents must provide proof of payment. For direct federal tax, the limit is 10,100 francs per child per year.

  • Lump sum deduction

    A social deduction can be claimed for children and other dependants. For direct federal tax, the amount is 6,500 francs per child.

  • Alimony and maintenance payments

    Alimony and maintenance payments to ex-partners and children are tax-deductible. Maintenance payments intended for children can be deducted up to and including the month in the which the child comes of age.

In most cantons, the tax return must be submitted by the end of March. This deadline can be extended provided you apply for the extension on time. You can do this by submitting a request (with reasons provided) at your local tax office.

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