Guide: Expenses you should not forget as a Swiss freelancer
A comprehensive list of all the expenses that you should think of in preparation for your tax return to make sure you pay the least taxes possible.
Managing your finances can be a complex task, especially when you are a freelancer. Keeping track of expenses is crucial for minimizing your tax liability, which can have a big impact on your bottom line. Below you’ll find an extensive list of items to consider when preparing your tax return as a Swiss freelancer.
As a self-employed, you probably use your phone to do business calls and use 3G and 4G for business communications (such as creating invoices for example).
You can therefore expense a percentage of your monthly phone subscription (Swisscom, Salt, Yallo, Sunrise, ...). It is your responsability to compute what % of your usage of the subscription is professional vs private.
20% is a reasonable estimate for most situations.
Courses, business coaching, ...
Did you buy any courses on platforms like Udemy or Coursera? Did you pay for business coaching like InnoSuisse or anything like that?
Those are all business expenses that you must make sure to expense.
Ads on Google, Facebook or other promotional material
Did you pay for ads on platforms like Instagram, Google, Facebook, Tiktok and so on? Or did you buy ads in newsletters or newspapers? Those are all expenses that you can use to reduce the profits you made in any given year. Make sure to expense them.
If you work from home, you can deduct expenses that relate to your workspace. This includes a portion of your rent or mortgage, utilities such as electricity and water, and property insurance. When claiming these expenses, assess the proportion of your home's space that is dedicated to your business. For accurate deductions, the space must be exclusively used for business purposes.
In a digital age, an internet connection is essential for business operations. Just like your phone subscription, a percentage of your internet costs can be deducted based on the professional versus private use. Remember to keep records that justify your calculations.
Office Supplies and Equipment
From pens to printers, all tangible items that you consume while doing business can usually be deducted. This might include:
- Printer ink
- Furniture like desks and chairs
- Computer hardware and software necessary for your work
Make sure to keep receipts for all such purchases to substantiate your claims (you can scan them using Magic Heidi!)
Travel and Transportation
All travel costs incurred for business, such as client meetings, conferences, and workshops, are tax-deductible. This includes:
- Public transportation tickets
- Fuel and maintenance for your car when used for business purposes
- Meals while traveling (within reasonable bounds and limits set by the tax authority)
- Mileage allowance, if using your own vehicle
Keep a detailed log of your business travel, specifying the purpose of each trip to defend your deductions.
Meals and Entertainment
Networking is part of the freelancer's toolkit, and sometimes that involves taking clients out for meals. A percentage of these expenses can often be expensed, provided there's a clear business purpose to the meal.
Any professional services you use directly for your business, such as:
- Accountants or tax preparers
- Lawyers for business-related matters
- Virtual assistants
- Website and graphic designers
- IT support
All these services should provide you with invoices you can include in your tax deductions.
Fees associated with a business bank account or the business portion of a personal account can be tax-deductible. This includes account maintenance fees, transaction fees, and overdraft interest.
Business insurance premiums, such as liability or property insurance, are deductible. If you have insurance policies that cover both personal and business aspects, you will need to divide the expenses accordingly.
In Switzerland, health insurance is mandatory. Though primarily a personal expense, portions related to your business, such as if you have specific insurances for business risks, may be deductible.
If you contribute to a third-pillar pension scheme (a private pension arrangement allowed under Swiss tax law), these contributions can reduce your taxable income. Be sure to keep all relevant documentation for your contributions.
Taxes and Licenses
Any taxes you pay that are attributable to your business activities can be expensed. This includes municipal trade taxes and fees for business licenses or regulatory compliance.
Education and Professional Development
Continuous learning is important for keeping your skills sharp. You mentioned courses and business coaching, but don't forget to include:
- Books, trade journals, and publications relevant to your line of work
- Fees for membership in professional associations
- Registration fees for seminars, workshops, and conferences
Advertising and Marketing
Expenses for marketing your services can extend beyond digital ads to:
- Business cards
- Flyers and brochures
- Promotional events
- Signage and branding materials
Ensure your marketing material carries a clear business message to justify these expenses.
Expensive items that last more than a year, like computers or cameras, might not be fully deductible in the year they were purchased. Instead, they are depreciated over several years. The Swiss tax system has rules on how and when to apply depreciation expenses, so consult with a professional if necessary.
Finally, there are various other expenses that may arise and be deductible, such as:
- Post office box rentals
- Software subscriptions (such as accounting software)
- Business-related magazine and newsletter subscriptions
- Donations to business-related charities
- Repair and maintenance of business equipment
- Business-related long-distance calls
Good record-keeping is essential to justify the business expenses you claim. For each expense, you should have supporting documents such as invoices, receipts, contracts, and logs that record your professional activities. Digital tools and accounting software can be remarkably helpful in keeping these records organized.
As a Swiss freelancer, your attention to tax-deductible expenses can save you a significant amount of money when it's time to file your tax return. By familiarizing yourself with the types of expenses outlined above and carefully tracking them throughout the year, you can ensure you take full advantage of the deductions available to you.
Be aware that the Swiss tax system can be complex and rules may change. Consider getting advice from a tax professional who is well-versed in Swiss tax law to ensure you comply with current regulations while maximizing your deductions.
Tax planning is a crucial part of the financial health of your freelance business. Remember that although paying taxes is inevitable, there are legitimate ways to minimize the bite they take from your hard-earned income. Use this guide as a starting point and stay informed about the intricacies of Swiss tax law for freelancers.
Disclaimer: The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized tax, legal, or investment advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. We cannot guarantee that the information herein is accurate, complete, or timely. We make no warranties with regards to such information or results obtained by its use, and disclaim any liability arising from any decisions based on the information provided in this guide. Always seek the advice of qualified professionals regarding financial decisions.