The Simplified Tax Return

If you’ve ever filed a standard tax return, you’ve likely dabbled through a few complicated forms before realising that they don’t affect you at all. With the simplified tax return or ‘vereinfachte Steuererklärung’, the tax office has tried to simplify the tax return process to its bare essentials. In other words, it aims to simplify the tax return for as many taxpayers as possible.

As with any other form, you must provide your personal information. This includes:

• your name and address
• your marital status
• your bank details

In addition, on the first page, you must provide brief information about:

• • your income from employment
  • your tax number
  • the e-Tin

 

On the second page, you fill in the fields for:

• ‘Werbungskosten’ or income-related expenses (e.g. commuting allowance, etc.)
• ‘Sonderausgaben’ or special expenses (e.g. church tax, donations, etc.)
• ‘Außergewöhnliche Belastungen’ or extraordinary expenses (e.g. due to illness) and
• household-related services and craftsmen’s services (e.g. for renovation work).

Here are a few extra forms you’ll have to be mindful of when filing your simplified tax return:

• If you have children, the Child annexe
• the Pension expenses annexe for pension and retirement expenses
• AV annexe to apply for the ‘special expenses deduction’ for Riester contributions

Ironically, with the simplified tax return, there are some restrictions that arise due to the simplification; Income from capital gains or from rent is not taken into account here. In addition, you cannot claim all income-related expenses, special expenses and extraordinary expenses on this form.

These include, for example, the following:

• home office
• double housekeeping (doppelte Haushaltsführung)
• alimony payments (Unterhaltszahlungen)

There is no additional form for these topics and you will have to submit an extensive tax return for such information.

In principle, all employees who don’t have complicated income-related expenses can file such a tax return. For instance, costs for work equipment and office supplies, technical literature, application and training costs, account maintenance fees, travel between home and work, and contributions to professional associations are taken into account. These income-related expenses or ‘Werbungskosten’ help you save more from taxes. Explore the subject of income-related expenses here in this article.

The simplified tax return is not intended for landlords, pensioners, self-employed persons, farmers, and entrepreneurs. Even if you have foreign income or are subject to limited tax liability and your main place of residence is not Germany, you must file a regular tax return.

No additional income can be declared in the simplified tax return unless domestic investment income has already been taxed by the credit institution with which you work.

In addition, the cases mentioned above, such as home office, etc., do not apply.

You can get current tax return forms in hard copy at every tax office and at many city councils and mayor’s offices. A digital version is available at the Federal Ministry of Finance. There you will also find the simplified tax return ESt1V.