Control your taxes – the top ten deductions for your tax declaration!
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Of course, the starting position is not similar for all taxable persons, nonetheless is makes sense to recall the possibilities for tax planning and tax optimisation. Here our Top Ten:
This may sound simple, but it isn’t always, because the taxable person has to proof the rightfulness of her deductions. It is therefore to be recommended, that the taxable person already opens a tax file during the year and collects the relevant proof and documents orderly in such file. Then the Instructions going with the tax declaration should be read in detail or – even better – the declaration should be done with the respective tools provided by the canton, as these tools do most deductions automatically and correctly as well.
Once again, planning is king: If the possibility for a benefit purchase is possible with you pension plan or the possibility of a contribution to pillar 3a exist and you have made use of these, they can be deducted from your income in full.
In all cantons and in the Swiss federation child care costs can be made accordingly. If you have children and you spend money for day care centres or similar institutions – make use of these tax deductions.
If third parties (e.g. a bank) are taking care of the management of your assets, the respective cost can be deducted from your income. In most cantons a general deduction is possible (usually 0.5 – 3.0 per mil of invested assets). The state of Zug allows a general deduction of 3.0 per mil up to a maximum amount of CHF 9'000 (corresponding to an asset value of CHF 3 million). Asset management cost exceeding this amount have to be proven with relevant documents.
If you have a study at home, from which you perform part of your job, you can deduct the respective cost from your income. Required is a proof of need and a confirmation of your employer.
Medical and dentist bills you paid yourself, can be deducted from the income, if they exceed a certain percentage of your net income and if they are medically necessary (cosmetic surgery is not deductible). In the canton of Zug the amount of such cost, that exceeds 5 % of the net income of the taxable person, is deductible.
Since 2016 the differentiation between education and training has been abolished, now the self-paid (and proven) cost for vocational education and training are fully deductible up to a maximum amount of CHF 12'000 per year.
Contributions to non-profit institutions (from the Swiss ornithological station Sempach, the Swiss hiking federation until the Swiss salvation army and doctors without borders) can be deducted from your taxable income. On federal level the minimum contribution has to be CHF 100 and even contributions to political parties can be deducted. The maximum deductible amount of such contribution is limited at 20 % of the taxable income.
You have a big house, but do not anymore make full use of it (e.g. because your children have move out). In this case, you can claim the so-called underutilisation deduction. The canton of Zug required for this deduction a minimum size of your house or apartment of 5.5 rooms and you have to prove that the respective rooms are really unused (the my not even be used for storage or an archive).
In the case of indirect repayments, the repayments to the bank are made into a pillar 3a account, which serves as security for the bank. By doing this the mortgage and the respective interest stay at the same level and can be fully deducted from your taxable income (interest) and your taxable assets (mortgage).
Every citizen is obliged to pay taxes. But at the same time, he has the right, to make use of all possibilities to optimise his tax burden.
In the case of complex tax declarations with several real estate properties and substantial assets there are other possibilities for optimisation besides the Top Ten shown in this article, especially long term planning opportunities. In such cases, it makes sense to get professional advice to make the best out of your tax planning and tax saving opportunities.
«Good planning = tax savings» always applies. Has a decision to be taken or is a change in sight, that could influence your tax situation? Then get in touch with our tax expert Christian Lingg.
