Common deductions include pension contributions (pillar 3a in Switzerland up to CHF 7,258; Riester-Rente in Germany), mortgage interest, professional expenses (travel, training, home office), childcare costs, donations to qualifying charities, and certain insurance premiums.
A deduction differs from a tax credit: a deduction reduces taxable income (so the saving equals deduction × marginal rate), while a credit reduces tax directly (1:1). For a Swiss resident at a 30% marginal rate, a CHF 7,258 pillar 3a contribution saves CHF 2,177 in tax. For a German employee at the 42% bracket, a EUR 1,000 deductible expense saves EUR 420.
Track all deductible expenses throughout the year — most countries require documentation (invoices, receipts, certificates) and tax offices conduct random audits. Tax software (e.g. PrivatTax, WISO, ClickImpôts) helps identify deductions you might otherwise miss.
Tax saved = Deduction × Marginal tax rate
A Geneva freelancer earning CHF 120,000 contributes CHF 7,258 to pillar 3a, deducts CHF 5,000 of professional expenses and CHF 3,000 of additional pension buy-in. At a 35% marginal rate, total tax saving: CHF 5,340.