Who Must File Taxes? (Pflichtveranlagung Steuererklärung)

People who are self-employed cannot realistically evade taxes or escape tax-filing. However, in Germany, even working employees may find themselves answerable to the tax authorities. If you are working in Germany and have never found the need to contact the local tax office, it may not be too long before you end up touching base with one. If liable, you must have the tax forms handy by a specific date, or you would be fined for your inaction or lack of proper action.

Most people may also have to go through a “compulsory assessment” (Pflichtveranlagung), even though the tax clerk would not explicitly ask for one. This should primarily concern freelancers, traders, and self-employed professionals. “Employees” would have to follow other guidelines. You may find those out here.

Who is under obligation to pay (Pflichtveranlagung)?

The income tax money (Einkommensteuer) an employee pays gets directly deducted from their salary. However, at times the money deducted could be different from the wage tax, warranting a compulsory assessment (Pflichtveranlagung), and for which a tax return is needed.

You have to file your taxes if:

  • You are in the tax exemption category (Lohnsteuerfreibetrag) or you are not obliged to pay if you are not making more than €10,800 annually in wages and no other income was documented.
  • Benefits subjected to progression amount (Progressionsvorbehalt) to in excess of €410.
  • Multiple incomes were drawn from multiple employees.
  • Compensation (Abfindung) made using the fifth method (Fünftelregelung).
  • Spouses have opted for the IV factor (Steuerklasse IV/IV mit Faktor).
  • Termination of the employee’s marriage done by divorce or death at the time of assessment (Veranlagungszeitraum).
  • Additional income is over €410.

Creating Tax Returns Online

Tax returns are to be filed in a certain way. In other words, there are officially prescribed forms for the purpose. With ELSTER program’s assistance, you may file your tax returns online. But if you aren’t quite familiar with the process or have not filed taxes before, this method could turn out a bit complicated and nerve-wrecking.

Wundertax provides you the right solution to this problem with taxerklaerung.de. It presents you with easy-to-comprehend templates for entering tax information, which help you learn how much tax you owe. The built-in tax calculator works quite well in this regard.

More benefits include:

  • No tax form complications
  • Data gets inserted automatically into the form
  • Ideal for people who don’t have much time to spare for tax-filing
  • No prior tax knowledge needed
  • Considers all professional lump sums (Pauschalen) and costs

The Main Deductibles (Absetzbare Kosten)

Relocation Costs (Umzugskosten)

Relocation expenses constitute household services. Singles are eligible for up to €746 in deductions, while the tax deduction ceiling for the married folks is set higher at €1,493.

Telephone and Internet Expenses

If you use your personal phone for work, you could deduct up to 20% of the total invoice amount, with the maximum deduction capping out at €20.

Commuter Tax (Entfernungspauschale)

Commuter allowance is granted by the tax office for a route, with 30 cents deducted for every kilometre driven (one-way trips are considered).

Household Services (haushaltsnahe Dienstleistungen)

You will not just claim domestic help costs for taxation, but also the costs you incur on gardening or lawn maintenance and care services. The maximum you could claim is €4,000. Remember to keep the bills handy.

Allowances 2018 (Freibeträge)

Basic allowance (Grundfreibetrag): €9,000 Kid’s allowance (Kinderfreibetrag): €4,788 Child benefit - Kindergeld (first and second child): €194 Child benefit (third child): €200 Child benefit (fourth child onwards): €225

Application Costs (Bewerbungskosten)

The expenses for folders, specialist literature, etc. are deductible from the tax. €2.50 is applicable per digital application; €8.50 for application letters through traditional posts.

Professional Associations (Gewerkschaften)

Anyone who is registered with a professional association or trade union can furnish their contributions fully to the local tax office.

Workspace (Arbeitszimmer)

The workspace must be treated like one. In other words, a study room shouldn’t be used for non-professional reasons. This particularly concerns teachers, professors, and professionals who are in similar jobs. Up to €1.25 could be subtracted from the tax.

Retirement Provision (betriebliche Altersvorsorge)

Employees have had no issues selling their old-age private provisions since 2017. Contributions to different pension schemes, such as statutory pension fund, could be applied. The maximum sum currently is €23,362, of which a solid 84% can be claimed for taxation purposes.

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