Saving Taxes 2021: Year-End Tips

At the latest when the tax return flutters into the house, many wonder how they can best save taxes. Those who are smart think about the answer to this question beforehand. With our tips for the end of the year, you can reduce your tax burden for the tax period 2021.

As the year ends, the tax return for the tax period 2021 is also approaching soon. Take the opportunity now to save taxes with our end-of-the-year tips.

1. Purchase into the pension fund

Experience shows that many Swiss have a pension gap. Payments into the pension fund are doubly worthwhile. If you are also affected, now is your chance to close the gap and save taxes at the same time. You can find out your maximum possible purchase amount from the pension fund statement, which you receive annually, or from your pension fund. However, you should note that the purchases made cannot be withdrawn in the form of capital benefits from the provision for the next three years.

2. Payments into the third pillar

Pillar 3a not only complements your retirement provisions but also allows you to save taxes. After all, payments into pillar 3a can be deducted from taxable income. For the tax period 2021, the permissible maximum amounts are CHF 6,883 for employees or CHF 34,416 for self-employed individuals and other persons without a pension fund. If you have not yet paid or not fully paid the corresponding amount and have free funds, you can make a deposit for your future and save taxes at the same time. Good to know: the above maximum amounts also apply in the tax period 2022.

3. Deductions for side jobs

Earning money and still saving taxes? This is exactly what is possible with the lump sum deduction for secondary income. The federal government and most cantons allow a lump sum professional expense deduction of 20 percent of the secondary income, but at least CHF 800 and at most CHF 2,400 per year. This regulation means that secondary income is factually tax-free under the minimum deduction or even reduces the absolute tax burden. So if you have a lucrative hobby or another opportunity for generating additional income, you can save taxes this year.

4. Deduct training and further education costs

Anyone who wants to hold a competitive position in the job market and be attractive to employers needs to keep up with the times and educate themselves sooner or later. Fortunately, occupation-oriented training and further education costs paid by the taxpayer themselves can be deducted in the tax declaration up to an amount of CHF 12,000. It should be noted that only expenses for training and further education related to professional activity are deductible. If you have attended such training or further education this year and paid for it yourself, your taxable income is reduced by the incurred costs.

5. Donations

The Christmas season is the time to do good. To show their goodwill, many people support charitable organizations. If the donation goes to a Swiss charitable organization and amounts to at least CHF 100, it is even tax-deductible. So take the opportunity to support a good cause towards the end of the year and save taxes at the same time.

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