Tax Guide

Citizens have the possibility or are, if applicable obliged to file a tax return in Germany with the to the tax office.This serves to provide the tax office with all relevant information about income and expenses in order to calculate the tax burden correctly. calculate the tax burden correctly.In order to submit a correct and complete tax return and complete tax return, all relevant receipts and proofs should be collected be collected.This includes, among other things, wage and salary slips, bank statements, invoices for tradesmen’s services and donation receipts.These receipts serve as proof of the information in the tax return and can be presented in the event of an audit by the tax office.

 

But who is actually obliged to file a tax return?

There are simple rules as to when a taxpayer must file a tax return. You can find a list of items that are mandatory to file in the tax return section:

  • If you earn an additional income of € 520 or more.
  • The income from renting and leasing exceeds 520 €.
  • For income from self-employment. If you receive capital gains for which no capital gains tax has been paid, this is subject to withholding tax.
  • If you receive wage replacement benefits or social benefits (e.g. unemployment, insolvency, short-time work, maternity benefit, childcare allowance) above 520 €, you are subject to a progression rule.
  • If two employment contracts overlap in time, resulting in two salaries being paid at the same time.
  • When the old-age pension is paid out, the so-called fifths method is used. If the spouse or registered partner chooses the tax combination III/V or the factor IV/IV.
  • In the case of a separated spouse, the education allowance, the disability allowance and the survivor's allowance are not divided equally. In addition, there are always special cases in which you have to file a tax return, which is not an easy decision for you. However, in such cases the tax office will usually contact you directly and inform you that you are obliged to file a tax return.

  1. In Germany, taxpayers are classified into tax classes by the relevant tax office.
  2. There are a total of 6 tax classes.
  3. Factors influencing the classification into tax classes include marital status, employment relationship, and the tax class combination chosen by married couples.
  4. Tax classes assist employers in calculating an employee's income tax.

Tax Class I (1)

  1. Singles (single, divorced, widowed)
  2. Married/registered life partners (if you live permanently separated from your spouse)

 

Tax Class II (2)

  1. Single parents (from the first child)

 

Tax Class III (3)

  1. Widowed (spouse's year of death + following year)
  2. Married/registered life partners (if your spouse chooses tax class 5 or does not work or earns less)

 

Tax Class IV (4)

  1. Married/registered life partners (if your spouse also chooses tax class 4)
  2. Factor: If the couple earns approximately the same salary, the factorized tax class IV (4) is an option (available since 2010). The factor means that the tax office already considers the distribution advantage within the year. This means the tax office first calculates the couple's expected annual income tax liability. This is then divided by twelve and deducted monthly as income tax. This largely prevents retrospective tax payments.

 

Tax Class V (5)

  1. Married/registered life partners (when your spouse chooses tax class 3)

 

 

Tax Class VI (6)

  1. Singles and Married/registered life partners (if you have multiple jobs and need to present multiple wage tax cards or should present them but do not)

 

 

  1. Adjustment to Personal Circumstances: Tax classes are adjusted according to personal factors such as marital status and having children.
  2. Fair Taxation: This structure provides fairer taxation according to different incomes and family situations.
  3. Support for Families: Different tax classes for married couples help to alleviate the tax burden for families.

 

Although the various tax classes in Germany lead to different monthly tax deductions, they do not change the total annual tax obligation. The annual tax amount is determined based on the total taxable income and is independent of the tax class. Preparing the annual tax return allows for adjustments based on the income and taxes paid during the year and the possibility of a potential tax refund.

  • When spouses want to change their tax class, they must submit an application to the tax office.
  • This application can be made electronically via 'Mein Elster.'
  • Registration on Elster can be done directly via elster.de.

 

With the tax return, you inform the tax office about your income situation. This information enables the tax office to see whether you have already paid the necessary taxes or even paid too much.