1. The Classic: Income-Related Expenses (Werbungskosten)
Advertising expenses include all professional expenses and that help you operate and maintain your income. The list of possible expenses recognized by the tax office is long, but some items affect almost every employee. For instance, travel expenses, work clothes, work equipment (such as tools), application costs, contributions to trade unions and professional associations, travel expenses, and telephone costs are tax-deductible.
Every employee is entitled to a lump sum of 1,000 Euros for income-related expenses. This amount is automatically deducted from your taxable income if you do not submit any individual items. In case you had educational expenses or court costs that were closely related to your profession, your costs possibly exceeded 1,000 Euros.
We recommend you list all your expenses individually and organise your receipts in an orderly manner. In case the tax office demands to see them, these receipts will help you claim your rightful tax refund.
2. Nothing Extraordinary: Every Employee Has Special Expenses (Sonderausgabe)!
Take a close look at which costs are classified as special expenses: here, too, there are many tax-deductibles relevant to all employees. For example, you may enter paid social security contributions (Sozialversicherungsbeiträge), expenses for old-age provision (including the Riester and Rürup pensions), church tax, childcare costs, or school fees.
There is a flat rate of 36 Euros. Normally, the actual special editions exceed this rate. A detailed specification with all evidence can therefore be useful here!
3. An Eternal Cycle: The Cost of Tax Advice
Not only will tax advice will help you get a high tax refund, but it may also be tax-deductible. Expenses for specialised tax literature, tax software or contributions for an income tax aid association may be stated. For amounts up to 100 Euros, the tax office does not care about the distinction between private and professional costs, and so, it’s safe to classify them as advertising costs. Exceed that amount, and you need to differentiate between the costs for the professional and the private part of your tax return.
You are not allowed to deduct private expenses such as those related to child-care from this section. The professional costs that determine your income may be claimed as income-related expenses or (in case you’re self-employed) as operating costs. If necessary, your tax advisor should list the items separately in the issued invoice.
4. Alleviate Extraordinary Burdens
Claiming extraordinary burdens in your tax return is helpful, especially if you had enormous expenses in the respective tax year. For example, you may have incurred funeral costs due to a death that exceeded the inheritance received. This can also include expenses for a divorce, illness (glasses and dentures included), or relatives’ support and care. The tax authorities decide on a case-by-case basis whether the reasonable burden has been exceeded. You can find out how this limit is calculated here.
5. Simplify Things for the Tax Officer!
As with every profession, tax officials have some clients who simplify their work and some who complicate it. Depending on the client, the same tasks can be annoying or effortless. And who would want to stress out the tax officer who’s calculating their tax refund?
If you follow our tips, you will ensure that the tax officer is in a good mood when calculating your tax refund. It can’t hurt to get a massive tax refund!
We recommend you organise the content you’re sending to the tax office. Arrange bills, bank statements and receipts in the right order. Make sure you do not staple them together! Don’t fill out any lines in the form that don’t apply to your situation.