If you have ever worked in Germany or already have a decent job there, you must know the tax you are paying or have paid, is recoverable to some extent. How you can get your money back; we will discuss about taxes in Germany stepwise. But before that, you have to file your tax return as the time is near to start with all the formalities and this is known as “Steuererklärung” (Tax Return). Even if you have not done that, then there is no need to panic as you already pay a small amount of your salary towards the tax.
If we look at the exact figures, can get back upto Euro 900 from their actual taxes paid. But how are you going to get this money back? To answer your query, we have streamlined the process for you and given the stepwise method to get the money back on tax return.
Search for a reliable tax service online
There are stable software which will help you in filing the tax return- ELSTER and SteuerGo. The software provides a thorough explanation about filing tax returns; you will get tips to know how to get the maximum money in return. It also tells you the expected amount you will get and allows you to submit your tax return online.
Arrange all the documents for future references
While filling up the form, if you are deducting a few expenses, then be ready with the proof in the form of bills to back the claim. The local Finanzamt might ask for it after filing the return, so keep that paperwork handy. Following forms will be needed to file the return.
If you are an employee:
- ESt 1 V 2017 (The main form that details general info like your Address, ID Nummer, Etc)
- Anlage N 2017 (The form to detail your income as an employee)
- Anlage Vorsorgeaufwand 2017 (The form to detail your insurances)
If you are self-employed:
- Est 1A 2017
- Anlage S 2017 (Freelancers only)
- Anlage G 2017 (Gewerbetreibende only)
- Anlage USt 2017 (if you pay V.A.T)
- Anlage GeSt 1A 2017 (Gewerbetreibende only)
- Anlage EÜR (If income is more than 17 500€ a year)
Expenses of shifting due to work
The work-related cost incurred while moving from one place to another can also be written off till some extent. The deductible costs include:
- Moving cost to the nearby area which save time in commuting
- Cost of trucks, boxes, additional food & drinks, and extra housing cost
- Charges for the earlier flat or home if the shifting was done before your contract could be officially void
- Broker fees
- Increase in cost of education of children due to moving
Work from home expenses
These expenses incurred are for those who use home spaces as their office as they don’t have any other alternative from the employer. The freelancers, teachers and sales representatives can use the home space and get money on the same. Expenses to be written off:
- Around Euro 1250 for the whole year for the space used (rent deducted will be calculated on the size and the rent you make up.
- Other expenses of utilities might also add up in the deductions, but for this you have to thoroughly check the list.
Work-allied expenditures irrespective of the amount spent
Many other small expenses can be written off which are incurred due to your profession. They are paid out of the pocket and the time of occurrence and then later written off as professional expenses. Let’s look at the expenses:
- Eating out with the potential client
- Cost of new desk for working at home
- Phone bills and commuting cost
- Traveling expenses incurred on a business trip like food, are not reimbursed but the company, but German Government takes care of it. the companies only reimburse the traveling and lodging cost.
- Trips between 8 to 24 hours are granted allowance between Euro 12 to 24 per day.
- Miscellaneous expenses including transport cost will be Euro 10 per day.
If any renovation is done on the house owned by you, you can deduct 20 percent cost for standard services uproot Euro 4000 per year. Same 20 percent applies for hiring specialised services from skilled man with a cover of Euro 1200 as per the Scheller. These expenses include:
- Window cleaners
- Chimney sweepers
- Roof work
- Major Renovation
Tenants can also deduct the restoration expenses
Those who are living in rented houses also incur some or the other expenses on the repairs of the house. Their landlords usually charge operating costs in the form of repairs and maintenance around the building. All of these charges are mentioned in the rental agreement.
So, these expenses can be deducted while filing tax return as the tenants also spend towards the restoration. One has to maintain the claims properly at the time of itemising them via a statement from the property holder.
Child care expenditures
Child care expenses gross up a substantial amount. This expenditure is also taken care of in Germany as the cost of child care expenses is deducted from the tax return according to VLH. The amount cover upto Euro 4000 per child under the age of 14 and over the age of 14 if child has some kind of disability. The expenses include:
- Day care facility availed
- Babysitter appointed
- Au pair (a young foreign individual, usually a woman, who assists in housekeeping or childcare in exchange for food, a room, and some pocket money).
- Oma or Opa babysitting the child (their transport can be included in the expenses)
These payments must take place via bank transfer and not in cash. In few cases, in which Oma or Opa looks after the baby-a small contract must be signed by them declaring that they take care of the baby and charge for transportation.
For an expatriate, it becomes difficult to know all the minute details of the expenses and the types to be subtracted from the taxes. So, it is better to hire someone who is the resident of Germany and has the required knowledge (tax adviser or CA). He will be the best person to guide you thru the exact tax saving process and help you in saving upto Euro 1000 from the Finanzamt.
Moreover, if you have complicated job profile like of a writer or if you are self-employed, then the online firms like Scheller, Expat Tax, Ageras, etc. are the best platforms for you to find the right certified public accountant for your expense management and tax payment.
Last but not the least- you must keep the copy of all such expenditures mentioned above to show up when asked by the authorities. And also maintain the record of other petite expenses which might be deducted at the time of filing the tax. In Germany, it is imperative to keep track of your costs and maintain the receipts of all the expenditures done.
Therefore, you can save lots of money while filing tax return in Germany. Start planning for the next year by keeping your expenses bills now.