When you are pruning out an entire branch, you can cut back to the collar of the branch, slightly away from the trunk. Just follow the ring of the collar.
However when you are only partially pruning the branch, you'll want to try and prune to an outward facing bud. In the photo above, you can see that the outward bud is directed away from the neighboring branch. Cutting just above this bud will encourage it to sprout a new branch that will grow out, away from the other existing branch. If you were to cut above the inward facing branch, you would be encouraging a new branch that would cross and/or shade the existing inner branch and would eventually have to be removed.