Tax returns for families

Parents know the drill: new clothes, education, music lessons, holiday camps and more. Besides the joy they bring, children cost a lot of money, but the state contributes to some of the expenses, which means you can save taxes.

    Many parents look to deduct child related expenses from their taxes.

    On this page, we’ll show you what you can claim for, how to do it, and how to save time and stress when filing your tax return.

    The way to a better tax outcome with children are things like the tax-free allowance and child benefit. If you were doing a manual tax return, these details would usually be entered into Annex K.

    Tipp:

    However, there is a faster, correct and intuitive alternative to the hated forms for the tax return, which we also describe here!

    01.

    Children and marriage

    Marriage offers many tax advantages, like the possibility of a joint tax assessment and spousal splitting.

    Find out how to make use of these advantages in our guide on tax advantages through marriage.

    02.

    Child benefit and allowance

    Child benefit and child allowance are two different forms of support that the state offers to families. The child benefit is support received in the form of payments, while the child allowance reduces your income tax. Families can claim either one of these, but not both.

    The child allowance is based on the subsistence level of the child. As a rule, it is only worthwhile claiming the child allowance if your income exceeds a certain level. In our article on child allowance and child benefit, we provide the current figures.

    It’s important to note that child benefit is also available for adopted and foster children. In both cases, your children must live in your household.

    The child benefit amounts are adjusted annually, and you can find them in the child benefit article.

    Hinweis

    In the course of your tax return, the tax office then carries out a so-called favourable tax assessment ("Günstigerprüfung") and calculates which option is more advantageous for you.

    Prepare your own tax return

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    03.

    The easy way to file taxes as a family

    ELSTER is the official software of the tax office. Forms are filled out online and submitted via My Elster. This also works for families, but the software is by no means popular everywhere.

    Complicated tax terminology and a large number of fields that leave people confused and frustrated, and not wanting to carry on.

    Fortunately there is another way

    Taxfix helps you fill in your tax return via smartphone app or browser application. You simply answer easy-to-understand questions and thus arrive at your correct tax return.

    It takes less than half an hour and all tax relief for parents is taken into account by the app in the question and answer procedure!

    04.

    Family tax return: Benefits for children over 18

    In many cases, the child benefit entitlement extends beyond minors, to people who are in training or studies, for example.

    In cases like these, the entitlement is valid until the child reaches the age of 25. If studies or training are not completed at that point, the entitlement can be extended even further.

    Child benefit also continues to be paid if there is an interruption of a maximum of four months between different phases of education, e.g. between leaving school and starting education or studies.

    Furthermore, there is continued payment of the child benefit if the child is unable to care for himself or herself due to a disability.

    Fortunately there is another way

    Taxfix helps you fill in your tax return via smartphone app or browser application. You simply answer easy-to-understand questions and thus arrive at your correct tax return.

    It takes less than half an hour and all tax relief for parents is taken into account by the app in the question and answer procedure!

    Now also for 2023!

    At Taxfix you can now find all the updates for the new tax year 2023 and can get started with your return straight away.

    Start now

    05.

    Parent tax return: How to get parental allowance

    Parental allowance is designed to support new parents by compensating the loss of salary after child birth.

    However, regardless of whether you are employed, self-employed, unemployed, studying, or in training, all young parents are entitled to this benefit.

    Parental allowance is paid for a maximum of 14 months, and can also be split between you and your partner. In the case of a split, the period of entitlement is reduced to 12 months. The allowance amount depends on your previous income.

    You can find all relevant information on parental allowance and how to apply for it in this article.

    Additional info around income and tax progression:

    Since it is a wage replacement benefit, you do not have to pay tax on the payments, but they are subject to progression, i.e. your personal tax rate may increase as a result ("Progressionsvorbehalt").

    Video - Tax tips for parents

    Learn from Inken how to can save on taxes as a parent.

    Taxfix advantages for all

    With Germany's most popular mobile tax app, you can do your tax return in no time.

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    Answer our easy-to-understand questions, get guided through your tax declaration, and sit back.

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    If you choose to file your own taxes with Taxfix, we’ll calculate how much you can expect back from the tax office.

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    06.

    Deductible costs related to having children

    A confirmed child benefit claim is also relevant for other items: If your child living with you is under 14, you can deduct the childcare costs from your taxes.

    This includes expenses for things like:

    • Day care
    • Childminder
    • Domestic helper who also looks after your child while you are at work.
    • Disability (age limit does not apply)

    Two thirds of your childcare costs per year can be deducted as special expenses. However, there is a limit to take into account. You can find this in the article on special expenses ("Sonderausgaben").

    Health and long-term care insurance contributions paid by you are considered special expenses, as is part of public school fees.

    07.

    Adult children: tax allowances & benefits

    If your child is already of age and their maintenance and vocational training is paid for by you, education allowance can be claimed, if you are entitled to child benefit. In the article on the current tax-free allowances, you will find the maximum amount that can be claimed.

    If you are not entitled to child benefit, you can still declare these expenses as extraordinary expenses. The amount is then based on the annual basic allowance.

    08.

    Support for old-age provision: Riester pension

    If you have taken out a contract for state-subsidised old-age provision (Riester pension), your offspring will contribute to your old-age security from the moment they are born. You will receive an annual allowance of hundreds of euros per child; for children born after 2008, the allowance is even higher.

    In the article on the Riester pension, you can find out what proportion of your gross salary must be paid in order to receive the full subsidy, and exactly how high the allowance is.

    Around the family tax return

    Taxfix shows you some basic topics on how to file your income tax return as a family.

    Annex child (Anlage Kind)

    Learn how to state children in the forms of your tax return.

    Apply for the child allowance ("Kinderfreibetrag")

    Find out when and how you should apply for the child allowance

    Family & single parents

    Here you can find relief amounts and deductible costs

    Child with a disability

    How the state takes possible financial burdens into account for tax purposes.

    Tuition & taxes

    Which school costs are recognised by the tax authorities and how you can claim them for tax purposes.

    At a glance: Tax issues for families

    All the contents of the Taxfix guide for parents at a glance.

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