That’s how the tax return works

Tax office
That’s how the tax return works
from Feras Trayfi

Nine out of ten employees receive money back when making a tax return.
So it pays off to file a tax return. But how does it work?

The editor Feras Trayfi from tünews INERNATIONAL conducted a written interview with Mrs. Hunger from the tax office. These questions were collected in discussions with various people about their difficulties with tax filing.

What is a tax return?
Tax returns serve to correctly determine the taxes due under the respective laws. Examples include the income tax return for the taxation of the income of natural persons, the corporation tax return for income of legal persons, the VAT return for the determination and collection of VAT paid by entrepreneurs and the trade tax return of traders. In the following, it’s all about the income tax return.

How do you make a tax return? Do you have to fill out a form?
The income tax return must be submitted electronically or by official form. Further details can be found at https://www.elster.de/eportal/start.

Why do you make a tax return?
Employees can submit an income tax return to the tax office at the end of the year. By deducting tax-allowable costs (income-related expenses, special expenses, extraordinary charges), they may request a refund of excess withholding tax.
If other income is earned – e.g. self-employed or commercial – an income tax return must be issued in order to increase the taxation of previously untaxed income. The obligation exists if the total amount of income exceeds 9,000 Euros or 18,000 Euro for married couples (2018).

Where and when do you have to make the tax return?
Responsible is the tax office, in whose district the taxpayer has his residence at the time of the application. If only taxed wage income is available (application for payment), the due date is 4 years. If the taxpayer did not receive other income subject to withholding tax, the declaration is until 31.07. of the following year.

What happens after you file a tax return?
Depending on the tax form of the income tax return, it will be scanned (if filled out by hand) or, if electronically transmitted, processed directly from the electronic memory and the overpaid tax reimbursed or the missing tax levied.

Do you really need a tax accountant? What does he or she help you with?

A tax return must be submitted in full to the tax office. A member of the tax-consulting professions or, as an employee, possibly also a Wages Tax Assistance Association should be called in if the taxpayer does not feel able to handle his tax affairs himself.

What do you have to save for the tax return?
All invoices and other supporting documents relevant to the income tax return are kept at home and only presented at the request of the tax office. A detailed breakdown of costs in the electronic income tax return or the presentation of a detailed list are helpful.

 

 

Which expenses are tax-free?
Tax law distinguishes between special expenses, professional expenses, extraordinary burdens and some other tax benefits. A final list would be too extensive at this point. Details can be found in tax laws and in the specialist literature.

From what income do I have to pay tax?
Taking into account all taxable income and all tax-allowable expenses, there is a taxable income. If this is below the so-called basic allowance, which is increased slightly each year, no income tax is payable. For 2018 it is € 9,000 and for married people € 18,000 (2018).

What is a free allowance?
Tax-deductible costs can already be taken into account during the current year as a tax exemption for income tax deduction. For this purpose, an application for a reduction in payroll tax (official form) may be submitted, subject to a minimum limit, to the tax office. The allowance is then transmitted electronically to the employer, resulting in a lower income tax deduction.

What is the difference between “Lohnsteuer” and “Einkommenssteuer”?
There is no difference. Lohnsteuer is the tax deducted by the employer from the wage (special income tax form). In the “Einkommenssteuerbescheid” the Einkommenssteuer is determined.

What can I charge to pay less taxes?
See above under “What expenses are tax-free?”

What can I deduct from the tax?
The tax to be determined is based on the taxable income. Another reduction of this set tax is e.g. provided in the regulations on household employment or household services, craftsmanship and party donations.

Do I get back taxes if I send money abroad to support family members?
Payments to members in a straight line (e.g., parent – child) may be deductible as extraordinary expenses. Required is a certificate from the home authority about the income and assets of the person being assisted (maintenance statement) and evidence of the payments made. If children are entitled to children’s allowance payments to the child are not favored. The costs, like all other deductible amounts, lead to a tax saving in the amount of the individual tax rate.

Suppose I have a taxable employment and a tax-free mini-job, are the two incomes taxed together, or is the mini-job tax-free?
The wage from a mini-job is not tax-free. The mini-job, however, is left out of the regular income tax deduction and the income tax assessment if the salary does not exceed € 450 a month and the employer deducts lump-sum contributions to the Bundesknappschaft (mini-job center).

Are fees for volunteering credited to the tax?
Honorary fees for voluntary work are also taxable. Under certain conditions, such payments can be treated as tax-free allowance (for example, a part-time instructor at a non-profit sports association € 2,400).

If you get several tax-exempt amounts at the same time (eg 2 mini-jobs, fees, …) are the incomes aggregated and the entire amount taxed or is each single income separately treated as tax-free?
Regardless of the type of income, these are – unless tax-exempt – added together for the tax calculation (total annual income). Several mini-jobs are excluded from regular income tax deductions and income tax assessment if the sum of wages does not exceed the limit of € 450 per month. If there is a main work relationship, only the first mini-job remains out of calculation. Other mini jobs must be taxed according to tax class 6. They will then also be included in the income tax assessment.
Note: Detailed information about mini jobs is available from the Minijobzentrale.

What should I do if I do not agree with the tax assessment?
Within one month of the notification of the decision, an objection may be filed with the tax office or an application for modification may be submitted with justification and submission of evidence.
The objection must be submitted in writing and does not require any specific form.

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