Tax deductions: How to save taxes with deductions and lump sums for 2023

Last update: 17.09.2024 08:34

Taxes help the Confederation, canton and municipality to fulfill their tasks. Tax deductions ensure that you don’t contribute more money than necessary to these tasks. This is because they reduce your taxable income. How can you save tax with tax deductions? Discover our best deductions!

The basis for the tax calculation is the net wage. This is calculated by your employer deducting the social security contributions from the gross salary. You can find the net wage on your wage statement. You have to state this in the tax return and can reduce it by the tax deductions. This is your taxable income. The lower your taxable income, the lower your taxes. So, what tax deductions can you claim?

Uniform tax deductions at federal level, different tax deductions at cantonal level

You pay taxes to the federal government and to the canton in which you live on December 31st. of the year live. At the federal level, the tax deductions are the same everywhere in Switzerland and in terms of amount. For 2023, numerous federal tax deductions will increase due to inflation. What you can deduct at federal level generally also applies as a tax deduction at cantonal level. However, the amount and type of tax deductions differ from canton to canton. The cantons publish annual “Tax return guidelines”, which list all permissible deductions.

Some tax deductions are automatic, but you must claim personal tax deductions. The following tax deductions mitigate the tax burden of certain groups and are automatic. They vary from canton to canton:

• the general tax deduction
• the tax deduction for married couples
• the two-earner deduction
• the tax deduction for those on low and medium incomes

Different rules apply for taxpayers subject to withholding tax

From income “at source”, i.e. payments from employers, pension funds or insurance companies, a flat-rate tax for the federal government, canton and commune (“withholding tax”) is paid to the cantonal tax administration for certain groups of people. This is to ensure that they pay taxes. Withholding tax is levied on all foreign employees who live in Switzerland, unless they or their spouse have a C permit (permanent residence permit) or a Swiss passport. Cross-border commuters, weekly residents, speakers, athletes and artists who live abroad but earn income in Switzerland are also subject to withholding tax. The withholding tax rates differ from canton to canton. Those who are taxed at source do not have to complete a tax return (provided that income is less than CHF 120,000 and assets less than CHF 150,000 per year and other income does not exceed CHF 3^000). Which of the tax deductions described below are available to you depends from canton to canton. Please contact your cantonal tax administration for more information.

The best-of list for your personal tax deductions in 2023 for the ordinary assessment

In addition to the automatic tax deductions, you can claim personal tax deductions if the conditions apply to you and you have had expenses. Some deductions are limited in amount. This means that the tax authorities will automatically reduce your deductible amount to the legal maximum.

Below you will find the best personal tax deductions, grouped according to different situations. What applies to you?

Personal tax deductions in 2023 in connection with your professional activity

Do you work and have travel expenses?
Do you occasionally cycle to work?
Are you working and can’t go home in the afternoon?
Do you have high work-related expenses?
Do you work nights or in shifts?
You don’t live at home during the week?
Did you educate yourself?

Personal tax deductions around the family

Does your spouse work too?
you have children
Were your children in someone else’s care?
you pay alimony
Are your children studying abroad?

Personal tax deductions related to health and special needs

Did you pay insurance premiums?
Do you have high illness or accident costs?
Do you have additional costs because of a disability?

Personal tax deductions related to your retirement savings

Have you paid AHV contributions in arrears or are you an early retiree?
Have you bought into the 2nd pillar?
Have you paid into pillar 3a?

Personal tax deductions for homeowners and debtors

Did you pay debt interest?
you own a property Or did you refurbish them?
do you have debts

Personal tax deductions if you have made or given away money

did you donate
Do you have costs for securities?
Did you pay withholding tax?

Below you will find all the details on the possible personal tax deductions.

Personal tax deductions for your professional activity

Do you work and have travel expenses?

You can deduct up to CHF 3,000 per year from the federal government for your commuting costs. The costs include a public transport season ticket, a flat rate for a bicycle, e-bike, motorcycle or motorcycle with a yellow license plate and the mileage of your car from home to work. However, you may only apply the kilometers driven of 70 centimes / kilometer if one of the following 3 cases applies:

• Case 1: Your place of residence or work is more than 1 kilometer away from the nearest public stop
• Case 2: you save more than 1 hour by car for the route
• Case 3: You cannot be expected to use public transport because you are too ill or too frail or the timetable is too unfavorable. In this case you can also try to claim the costs for your rented parking space at the place of work.

In the canton of Zurich, the tax deduction for travel expenses was now limited to CHF 5,000 in 2018. In the canton of Bern, the tax deduction for travel expenses is up to 6,700 francs.

Do you occasionally cycle to work?

If you cycle to work, you can deduct between 300 and 700 francs as a bicycle allowance, depending on the canton.

Are you working and can’t go home in the afternoon?

If you are unable to eat at home at lunchtime, you can claim a daily allowance for out-of-towners regardless of the actual costs. The flat rate is CHF 15 per day, but no more than CHF 3,200 per year. If your employer offers discounted food (e.g. through a canteen, cash contribution or meal vouchers), you can still deduct CHF 7.50 per day or a maximum of CHF 1,600 per year.

Do you have high work-related expenses?

For work-related costs (such as special work clothing, tools including IT hardware and software, specialist literature, private study), you can claim a flat-rate deduction of 3% of your net salary (minimum CHF 2,000, maximum CHF 4,000 per year). If you have higher costs, you can also prove and estimate the actual costs.

Do you work nights or in shifts?

A full shift deduction of CHF 15 per day is granted for each declared shift day with at least 8 hours of shift work or night work, but a maximum of CHF 3,200 per year. This applies even if canteen catering would be possible during the shift. However, you cannot claim the tax deduction in addition to the deductions for external meals or for a weekly stay abroad.

You don’t live at home during the week?

If you stay at work during the week and regularly return home on non-working days and are therefore liable for tax there, you can claim various tax deductions. However, this only applies if the center of your life is not at your place of work. For married people with children, the place of residence is usually the center of life – and you are liable for tax there. In the case of single people, it is assumed that after more than 5 years of activity at the place of work and an age of more than 30 years, the center of life is at the place of work. But exceptions are possible if you can justify them well, e.g. very intensive and regular relationships with family, friends, club members, service providers (such as hairdressers, doctors). So if your place of residence under civil law and tax law do not coincide, you can usually claim the following tax deductions for the week’s stay abroad:

• Additional costs for external meals: CHF 15 for a main meal, i.e. CHF 30 per day, maximum CHF 6,400 per year for a week-long stay all year round. If your employer makes lunch cheaper (e.g. canteen, cost contribution), you can only claim half the tax deduction (7.50 francs) for this meal, i.e. a maximum of 22.50 francs per day and 4,800 francs per year.
• Additional costs for accommodation: you can only claim the costs for a room/studio as a tax deduction, even if you rent a larger apartment. In this case you calculate the deduction as follows: Rent (including additional costs) divided by the number of rooms times 1.5. In addition, a minimum deduction of CHF 6,000 per year applies. If your rental expenses are lower, you may only deduct the actual expenses.
• Travel costs for home: You can claim the outward and return journey at the weekend as a tax deduction once a week, but not additional journeys during the week for family reasons. Travel costs are generally considered to be public transport costs.

Did you educate yourself?

If you have a secondary level II degree (apprenticeship, high school diploma, etc.) or are older than 20 years and it is not a question of training costs for a first degree at secondary level II, you can claim all costs for vocational training and further education as well as retraining at the Deduct federal tax and in all cantons up to an amount of 12,000 francs. Of course, only if you pay for the training yourself. Your further training must provide you with knowledge that you can and want to earn your living with – this is the second requirement in addition to a completed initial training. However, you do not have to have your own income from employment (e.g. as a spouse) to claim the education deduction.

The Canton of Zurich grants a lump sum of CHF 500 for training and further education without special proof.
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Personal tax deductions around the family in 2023

Does your spouse work too?

The canton and the federal government automatically make a two-earner deduction; it is between 8,100 and 13,400 francs at the federal level (2019). Here, too, the maximum amount varies from canton to canton. Bern, for example, allows a maximum of 9,300 francs, Zurich up to 5,900 francs.

you have children

Then 6,500 Swiss francs are automatically deducted from the direct federal tax for every child who is younger than 18 years old or is still in initial vocational training. The tax deduction is also available if you support people in need. Depending on the canton, there are different maximum limits for child and support deductions. For example, the Canton of Bern recognizes CHF 8,000 as a child deduction or CHF 4,700 as a tax deduction for supporting people in need, or the Canton of Zurich CHF 9,000 (for children) or CHF 2,700 (for people in need).

Were your children in someone else’s care?

You can reduce your taxable income if your child(ren) is/are cared for by a third party (e.g. childminder, crèche). Your child must be under 14 years of age, live with you, qualify for the child deduction and the costs must be incurred so that you can carry out your gainful employment or education. You can deduct proven costs from the federal government up to a maximum of CHF 10,100 per year per child. The maximum amount is regulated differently in each canton. For example, Bern allows 12,000 francs or Zurich 10,110 francs per year and child as a tax deduction. If you are cohabiting and have agreed joint custody with your partner, both partners can claim half of the amount in their respective tax returns.

The amount of the deduction for childcare costs will increase from 2023 (the deduction of CHF 10,100 still applies for 2022). In 2023, you can deduct proven costs of up to a maximum of CHF 25,000 for third-party childcare.

you pay alimony

You can deduct maintenance contributions (“alimony”) for your children under the age of 18 or if they are still in initial education (with little income or assets of their own) if the children do not live in your household. You must prove these costs. If the children live in your household, the child deduction applies. Who can deduct how much and for how long in the case of married couples who are assessed separately also depends on where the children live. The details are in the guidelines of your canton.

You can also fully claim maintenance contributions for your divorced, legally separated or actually separated spouse during the tax year as a deduction. This includes rent, health insurance premiums, taxes or other living expenses.

Are your children studying abroad?

Some cantons, but not the federal government, recognize costs for education away from home or for additional education costs in the context of basic education for children. The children may well be adults; some cantons have an age limit of 25 years for the child deduction for children in education, while in other cantons an income limit for the child applies. Bern, for example, accepts up to 6,200 francs per year per child if the education is organized by the school.
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Personal tax deductions related to health and special needs

Did you pay insurance premiums?

You can add up your premiums for health insurance, accident, life and pension insurance and claim them. The tax authorities will then attribute your income from bank and savings accounts to you and cap the deduction to a maximum amount. At the federal level, this amounts to CHF 1,700 (for single people) or CHF 3,500 (for married couples and registered partnerships). You can often save yourself a lot of work by putting together the bonuses down to the last detail. Because you often reach the maximum deduction with the expenses for the basic health insurance.

Do you have high illness or accident costs?

You can claim self-funded expenses for medically necessary services as a tax deduction. The chargeable costs include expenses for doctors, dentists and prescribed medication, glasses and contact lenses, medically prescribed hospital and spa stays and curative treatments as well as for nursing care costs. Many do not know that in addition to the doctor and medication costs they have paid for themselves, the deductible in health insurance and the paid deductible also belong. From dYou must deduct reimbursements paid by third parties from these costs. Incidentally, anything that falls under cosmetic surgery is not deductible.

In most cantons, only the amount that exceeds 5% of your net income is recognized as sickness and accident costs. Some cantons (e.g. Berne) accept a celiac disease flat rate of CHF 2,500 in the case of gluten intolerance without proof of costs.

Do you have additional costs due to a disability?

If you have a permanent physical or mental disability, you can claim the actual costs you have borne yourself without a deductible. Tax deductions for disabilities can be made by recipients of IV pensions or helplessness allowances, Spitex patients with more than 60 minutes of care and support per day and residents with care level 4 and more. As an alternative to the actual costs, you can claim a flat rate for this, which, depending on the degree of disability, is between CHF 2,500 and CHF 7,500 or, for residents of the home, includes the entire actual costs of the home less a flat-rate living allowance. You can also claim the lump sums if you have received benefits from third parties (such as helplessness allowances). Disabled associations provide a lot of information on this.
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Personal tax deductions in 2023 in connection with your pension provision

Have you paid AHV contributions in arrears?

You can make up to 5 years of missed AHV contributions by voluntarily paying the minimum AHV contribution. You can deduct these contributions from your taxable income.

And even as an early retiree, you can deduct your AHV contributions from your taxes. This is because early retirement does not protect you from the AHV contribution obligation; this applies until normal retirement age – regardless of whether you are still working or not. Exception: you are married / in a registered partnership and your partner pays at least double the minimum contribution.

Have you bought yourself into the 2nd pillar?

If you bought into your pension fund, you can deduct the full amount as a tax deduction.

Have you paid into pillar 3a?

Your actual payments into pillar 3a can be deducted. The amount of the deduction usually increases every two years, in line with the adjustments to the AHV pension . If you are employed, you can deduct payments made in the tax year up to the small 3a maximum amount. If you are self-employed (without a pension fund), you can deduct the large 3a maximum amount. You can find the applicable maximum amounts in this specialist article. You can find all the tax benefits of Pillar 3a in this article.
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Personal tax deductions for homeowners and debtors

You paid interest on debt or into the renewal fund?

You can claim any interest you pay as a tax deduction. This includes, in particular, mortgage interest, early repayment penalties if the loan is continued with the same bank, costs for bank loans, personal loans, overdraft interest on the current or credit card account or interest on arrears in the case of a tax arrears payment.

You may not deduct mortgage repayments (so-called amortization) as debt. In most cantons, you are also not allowed to deduct loan repayment fees or termination fees charged by banks when balancing the mortgage or switching to another lender as debt – at least you can then claim these as “asset management costs”. For income tax purposes, prepayment penalties can only be claimed as deductible debt interest if the terminated mortgage is replaced by another with the same lender.

And you can’t deduct leasing payments at all. Because with the leasing fee you pay for the transfer of use because you do not own the leasing object (e.g. car) during the leasing period.

If you made contributions to the renewal fund as a condominium owner, you can list these as a tax deduction in the relevant year.

you own a property Or did you refurbish them?

When it comes to taxes, a distinction is made between value-preserving and value-enhancing expenses for real estate. Only that which preserves the value of your property receivesyou can deduct as property maintenance in the tax year. Exactly what this involves is recorded in great detail in the cantonal guidelines. Renovations and painting work are part of this, for example, or the equivalent replacement of technical systems such as heating. Any expenses that increase the value of the property may not be deducted from taxable income. There is one notable exception to this: spending that increases energy efficiency. These can be deducted in full immediately (except in the canton of Lucerne).
What many people don’t know or simply forget: you can deduct the insurance premiums for property and liability insurance from your property expenses. For example, supplementary building insurance or builder’s liability insurance.

In principle, it is very advantageous if you spread larger maintenance expenses (e.g. conversions) over two tax periods. So you can break the tax progression in both periods. You can achieve this by starting construction in the fall and completing it in the spring and with the appropriate invoicing by the craftsmen. Depending on the canton, the time of the work or the date the invoice is received (in individual cases also the payment date or the invoice date) decides in which tax period you can deduct the expense. Tip: If you are carrying out extensive renovation work at the turn of the year, find out in advance from your tax administration which date in your canton determines the allocation to a tax period.

do you have debts

You can deduct debts from your assets. This is how you reduce the assessment basis for wealth tax. Most people know that their mortgage interest is deductible.

However, debts include not only (bank) loans or other loan obligations, securities (Lombard) loans, but also outstanding tradesmen’s bills or outstanding tax invoices as at December 31. of the year. You can also deduct interest on private loans, consumer credit and even credit cards. Many financial service providers and banks automatically provide you with a list of these at the end of the year.

By the way, 2nd and 3a pillar assets are not subject to wealth tax, so you don’t have to state them in your tax return.

And one more thing: leasing payments are not tax deductible for private individuals; ideally, you should avoid putting your money into expensive vehicles. Cars are liabilities, not assets.

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Personal tax deductions if you have made or given away money

did you donate

Great, because you can claim a very high deduction for donations to political parties or organizations with an exclusively charitable or public purpose (church, Salvation Army, etc.). At the federal level, this amounts to up to 20 percent of your net income; at cantonal level, the deduction is between 10 and 20 percent, depending on the canton. Donations are voluntary contributions of money or other assets without consideration. Therefore, membership fees and work contributions (“time donations”) are not donations. Contributions to political parties are limited to CHF 10,000 per year at the federal level. The canton of Lucerne regularly updates a list of non-profit organizations in other cantons as well. If your organization is not on the list, you can try deducting it from the list.

Do you have costs for securities?

In principle, you can deduct the costs of storing the assets from your taxes. In most cantons, you can decide whether to deduct the actual costs or a flat rate.

The actual costs include, in particular, custody account costs for your securities and charges for your current, investment or savings accounts or costs for a tax statement with the income details of your securities. This also includes fees for a safe deposit box or a safe and collection fees for redeeming coupons. Negative interest and postage costs for the delivery of statements are also included.

On the other hand, costs that serve to increase the assets are not deductible. This includes transaction costs and any brokerage fees, stamp duties or fees, commissions or EC/credit card fees. You are also not allowed to deduct costs for financial, tax or investment advice or for completing the tax return.

Did you pay withholding tax?

Withholding tax (VSt) is an advance tax payment for certain distributions. This advance payment will be credited to your tax liability later on in your tax return as tax already paid. The amount of the withholding tax differs depending on the type of distribution:

• 35 % on interest or dividend payments
• 15 % on life annuities and pensions
• 8 % on insurance benefits in the form of capital

Winnings from lotteries, competitions and internet casinos up to CHF 1 million are not only exempt from withholding tax from 2019, but are also completely exempt from tax (but you still have to declare them). On the other hand, interest income of up to 200 francs is only exempt from withholding tax on accounts that have an annual interest payment and annual closing (e.g. savings accounts). What do you have to do? Declare these distributions and the withholding tax already paid in your tax return. In this way, the tax authorities offset the withholding tax paid against your tax liability.