Taxes in Germany - how to get more money back on your return
The deadline to submit tax returns may have moved to July 31st. But you should still be prepared. Here's how to make tax day into your own personal pay day.
Germans receive about €900 on average back from their tax returns, according to the Frankfurter Allgemeine Zeitung. But how the heck do they get up to that figure or higher? Perhaps some of these hints can help.
SEE ALSO: Everything that's changing in May 2019 in Germany
1. Find an online tax return service - in English
If you’re using the free ELSTER software, which can be downloaded here, Toytown has a pretty thorough translation and explanation of the various forms to fill out, found here.
Otherwise, SteuerGo offers an English-language version of filling out the tax return, complete with tips along the way for how to get back even more money (though some tips are only in German, and some of the translations may be a bit funny). It also tells you how much you can expect to get back, and allows you to submit your tax return online for about €25.
2. Make sure you have the paperwork
Remember that if you’re going to try to deduct certain expenses, you should have the receipts as proof to back up these claims. Your local Finanzamt may write to you after you file your return, asking for this paperwork - so be prepared.
3. Costs of moving for work
If within the tax year you moved for work, you can write this off as a work-related expense (Werbungskosten).
This is also valid if your move within the same area significantly reduces your commute by at least an hour total, according to expat tax adviser Peter Scheller in Hamburg.
Deductible costs include moving boxes, moving trucks, extra food and drink expenses incurred, extra accommodation costs, and costs for the previous flat or home if the move had to be made before your contract could be legally cancelled.
You can also write off broker fees for finding a new place to rent, as well as increased educational costs for your children due to the move.
If you move but it's not work-related, you may also be able to write off certain costs incurred as household services - haushaltsnahe Dienstleistungen. This includes certain hired handy-workers, such as for renovations, according to Finanztip.de, as explained further in tip number 6.
4. Write off your home office
Photo: DPA
If you ever work from home and don’t have an alternative from your employer, you can write off up to €1,250 for the year in the costs for that space - so a portion of your rent. Teachers, freelancers, and sales representatives may all use home offices regularly.
The amount of rent to deduct can be calculated by the size of the room - living room, extra bedroom, etc - where you work, and therefore how much of your rent it makes up.
You can also deduct the costs of utilities for this room.
FIND A JOB: Browse thousands of English-language jobs in Germany
5. Work-related costs, no matter how small
Coffee or lunch with a potential client, a new desk at home to do work, business clothes for a job interview or new job, pens and paper, phone bills - any of these work-related items that you pay for out of pocket can be written off as professional expenses.
This also includes expenses for your commute, which is based on distance travelled along the shortest route.
If you had to travel for work, your employer may have covered the flights and housing. But if other things like food were not part of the budget, Germany has you covered, at least partially.
Trips between eight and 24 hours long get an allowance of €12 to be deducted for extra meals. Trips lasting more than 24 hours are granted an allowance of €24 per day. Minor expenses for things like public transportation to work during the trip have a cap of €10 per day.
6. Write off renovation costs
If you have work done on your private home, you can deduct 20 percent of expenses for regular services including gardeners, window cleaners and chimney sweepers, capped at €4,000 per year. For hiring specialized tradesman for set projects like roof work, repairs, and other renovations, you can also deduct 20 percent, with a cap of €1,200, according to Scheller.
7. Even renters can deduct repair costs
Landlords often charge tenants operating costs (Betriebskosten) for repairs and maintenance around the building. You may see a breakdown of these costs in your rental contract.
Tenants can thus also deduct these costs, since they’re also contributing towards the renovations. But you need to be able to enumerate these expenses through a statement from the property owner, advises Scheller.
8. Child care expenses
Photo: DPA.
For parents, child care costs can be a major expense. But luckily in Germany, these costs can be deducted on your tax return as Sonderausgaben (extra expenses). The rule of thumb is up to €4,000 per child under 14, per year, according to income tax help group VLH. This also goes for children over 14 who cannot care for themselves due to a disability.
Child care costs include day care, babysitters, nannies or au pairs. VLH advises that payments must be shown to have been made through bank transfers, not in cash. Costs for food or games are not deductible, however.
Even if Oma or Opa babysits the little ones, you can still write off their transportation costs, for example, as child care costs, if you paid for them. VLH advises that with family members, you should write up a small contract with their signature, declaring that they regularly care for the children and are compensated for their transport.
9. Find an expat tax adviser
If you’re self-employed or a freelancer with more complicated finances to account for, finding a good tax adviser can be particularly profitable in the end, especially if they can get you €1,000 back from the Finanzamt.
Scheller from Hamburg specializes in helping expats with their taxes, as do others like Expat Tax in Munich. The free-to-use search platform Ageras also helps you to find the right accountant for your needs.
10. Start saving receipts for next year
Part of what your first tax return filing in Germany teaches you is that it’s super important to keep track of expenses. You might realize that there were many other things you could have deducted, but never kept the receipts.
So learn for the future and start filing away your own paper trail to make things easier on yourself next year - and perhaps your tax consultant, too.
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Germans receive about €900 on average back from their tax returns, according to the Frankfurter Allgemeine Zeitung. But how the heck do they get up to that figure or higher? Perhaps some of these hints can help.
SEE ALSO: Everything that's changing in May 2019 in Germany
1. Find an online tax return service - in English
If you’re using the free ELSTER software, which can be downloaded here, Toytown has a pretty thorough translation and explanation of the various forms to fill out, found here.
Otherwise, SteuerGo offers an English-language version of filling out the tax return, complete with tips along the way for how to get back even more money (though some tips are only in German, and some of the translations may be a bit funny). It also tells you how much you can expect to get back, and allows you to submit your tax return online for about €25.
2. Make sure you have the paperwork
Remember that if you’re going to try to deduct certain expenses, you should have the receipts as proof to back up these claims. Your local Finanzamt may write to you after you file your return, asking for this paperwork - so be prepared.
3. Costs of moving for work
If within the tax year you moved for work, you can write this off as a work-related expense (Werbungskosten).
This is also valid if your move within the same area significantly reduces your commute by at least an hour total, according to expat tax adviser Peter Scheller in Hamburg.
Deductible costs include moving boxes, moving trucks, extra food and drink expenses incurred, extra accommodation costs, and costs for the previous flat or home if the move had to be made before your contract could be legally cancelled.
You can also write off broker fees for finding a new place to rent, as well as increased educational costs for your children due to the move.
If you move but it's not work-related, you may also be able to write off certain costs incurred as household services - haushaltsnahe Dienstleistungen. This includes certain hired handy-workers, such as for renovations, according to Finanztip.de, as explained further in tip number 6.
4. Write off your home office
Photo: DPA
If you ever work from home and don’t have an alternative from your employer, you can write off up to €1,250 for the year in the costs for that space - so a portion of your rent. Teachers, freelancers, and sales representatives may all use home offices regularly.
The amount of rent to deduct can be calculated by the size of the room - living room, extra bedroom, etc - where you work, and therefore how much of your rent it makes up.
You can also deduct the costs of utilities for this room.
FIND A JOB: Browse thousands of English-language jobs in Germany
5. Work-related costs, no matter how small
Coffee or lunch with a potential client, a new desk at home to do work, business clothes for a job interview or new job, pens and paper, phone bills - any of these work-related items that you pay for out of pocket can be written off as professional expenses.
This also includes expenses for your commute, which is based on distance travelled along the shortest route.
If you had to travel for work, your employer may have covered the flights and housing. But if other things like food were not part of the budget, Germany has you covered, at least partially.
Trips between eight and 24 hours long get an allowance of €12 to be deducted for extra meals. Trips lasting more than 24 hours are granted an allowance of €24 per day. Minor expenses for things like public transportation to work during the trip have a cap of €10 per day.
6. Write off renovation costs
If you have work done on your private home, you can deduct 20 percent of expenses for regular services including gardeners, window cleaners and chimney sweepers, capped at €4,000 per year. For hiring specialized tradesman for set projects like roof work, repairs, and other renovations, you can also deduct 20 percent, with a cap of €1,200, according to Scheller.
7. Even renters can deduct repair costs
Landlords often charge tenants operating costs (Betriebskosten) for repairs and maintenance around the building. You may see a breakdown of these costs in your rental contract.
Tenants can thus also deduct these costs, since they’re also contributing towards the renovations. But you need to be able to enumerate these expenses through a statement from the property owner, advises Scheller.
8. Child care expenses
Photo: DPA.
For parents, child care costs can be a major expense. But luckily in Germany, these costs can be deducted on your tax return as Sonderausgaben (extra expenses). The rule of thumb is up to €4,000 per child under 14, per year, according to income tax help group VLH. This also goes for children over 14 who cannot care for themselves due to a disability.
Child care costs include day care, babysitters, nannies or au pairs. VLH advises that payments must be shown to have been made through bank transfers, not in cash. Costs for food or games are not deductible, however.
Even if Oma or Opa babysits the little ones, you can still write off their transportation costs, for example, as child care costs, if you paid for them. VLH advises that with family members, you should write up a small contract with their signature, declaring that they regularly care for the children and are compensated for their transport.
9. Find an expat tax adviser
If you’re self-employed or a freelancer with more complicated finances to account for, finding a good tax adviser can be particularly profitable in the end, especially if they can get you €1,000 back from the Finanzamt.
Scheller from Hamburg specializes in helping expats with their taxes, as do others like Expat Tax in Munich. The free-to-use search platform Ageras also helps you to find the right accountant for your needs.
10. Start saving receipts for next year
Part of what your first tax return filing in Germany teaches you is that it’s super important to keep track of expenses. You might realize that there were many other things you could have deducted, but never kept the receipts.
So learn for the future and start filing away your own paper trail to make things easier on yourself next year - and perhaps your tax consultant, too.
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