Tax return for pensioners

Over 5 million pensioners pay taxes in Germany. Whether you also have to submit a pensioner tax return and how you can save taxes.

    More money for pensioners:

    With the 2022 pension adjustment, there will be a significant increase in the pension. What impact does this have on your tax and how inflation affects the increase...

    Our contribution to Pension increase 2022 (German) provides the answer.

    01.

    When do you have to submit a tax return as a pensioner?

    Once your taxable income basic allowance (German) exceed one tax declaration (German) make. For the year 2023, the basic allowance is 10,908 euros for single people. Double the amount applies to married couples. 

    But how do you calculate your taxable income?

    On January 1, 2005, the Retirement Income Act came into force, which determines what portion of your pension is subject to tax. The new regime was chosen to gradually transform pensions into “deferred taxation”.

    This means: You do not pay any taxes on the contributions during the savings phase. Taxation takes place when you receive the money later, i.e. when you receive an annuity or pension. 

    Year of retirement is crucial

    Year of retirement

    Tax share in percent

    Until 2005

    50

    2006

    52

    2007

    54

    2008

    56

    following years

    every year plus 2 percent

    2020

    80

    2021

    81

    2022

    82

    following years

    every year plus 1 percent

    from 2040

    100


    Until then, however, all new pensioners will still benefit from their personal pension allowance. To make that a little clearer, here's an example:

    Example of pension calculation

    The unmarried Mr. Schneider retired in 2007 and receives 20,000 euros gross per year. He pays taxes on 54 percent of this amount, i.e. 10,800 euros. His pension allowance is therefore 9,200 euros. This amount is fixed at retirement and remains the same over the years - even if Mr. Schneider's pension should increase.

    Since the basic tax-free allowance for 2022 is 10,908 euros, Mr. Schneider must always pay taxes if he cannot deduct anything from the tax. Income tax only applies to the portion of his income that is above the basic allowance.

    In general, pension taxation not only affects statutory pensions, but also private provision, such as the 

    Riester pension or the company pension plan.

    Notice:

    With the Retiree Tax Return pension recipients are given the opportunity to claim incurred expenses.

    02.

    What do you have to consider when dealing with the tax office?

    If you have a correspondingly high pension income , you should file a tax return. If you do not submit the tax return that you are required to submit, the tax office's assessment of your income that then takes place could become unfavorable for you. This is because it may not include all of your expenses.

    You should also keep in mind that all types of income are added together. Not only the income from the pension, but also, for example, income from renting and leasing , possibly also a salary from a sideline job counts towards your income. As with employees, the personal tax rate increases with income. It is therefore all the more important that you are aware of the possibilities of what you can deduct as a pensioner.

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    03.

    Which income-related expenses can you actually claim as a pensioner?

    You can use some points in your tax return to reduce your income, others can directly reduce your tax burden.

    Deduct as a pensioner: special expenses

    For example, you can deduct medical and medication expenses due to illness, as well as nursing home and funeral expenses, as extraordinary expenses. However, these only have an effect if you exceed the reasonable personal burden with the expenses. Contributions for health, long-term care and liability insurance or donations are among the special editions (German).

    Disability allowance and old-age relief allowance

    If there is a disability, the Disability allowance (German) be invoked. This covers the costs that you regularly incur due to the disability.

    If you are over 64 years of age, you can also old-age relief amount benefit. The amount by which you can reduce your taxable income each year depends on the year following your 64th year and is a maximum of EUR 1,900 .  

    Other costs that pensioners can claim

    Other deductible costs as a pensioner are:

    Taxfix advantages for all

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

    Guided and intuitive process

    Answer our easy-to-understand questions, or sit back and have your taxes done by an independent tax advisor.

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    We check your data for plausibility through sophisticated plausibility checks.

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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.

    Efficient and secure tax returns

    Only answer what's related to your case. Or have your taxes prepared and submitted by an independent tax advisor.

    04.

    Working in old age: Are taxes due for a job?

    Once you have reached normal retirement age, you can earn as much as you want without your pension being reduced. Nonetheless, all income once they have the basic allowance exceed, to be stated in the tax return.

    What type of income is involved only plays a role in the amount of taxes. Depending on whether the income comes from self-employed or non-self-employed work, from renting and leasing or capital investments, it is treated differently for tax purposes.

    Job during retirement: exception mini job

    An exception to this is the mini job (German). Up to 410 euros per month can be earned tax-free with a mini-job and even if you have not yet exceeded the standard retirement age, there are no pension cuts. Do you work as an employee in addition to your pension and do you work on an income tax card? Then the salary is added to the other income and is also subject to taxation. However, you then have to pay wage tax again, which is offset against your tax burden. 

    Increased additional income limit during retirement

    Until you reach your regular retirement age, the following also generally applies: You may earn a maximum of EUR 6,300 per year without your pension being reduced. If your salary exceeds the allowance of EUR 6,300, only the excess amount will be taken into account.

    With the social protection package, the limit was raised to 44,590 euros for 2020 due to the corona pandemic . The limit was also increased for the years 2021/2022 : it was/is 46,060 euros . Early retirees can even earn up to 46,060 euros in addition to their statutory pension without being offset.

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    The general deadline applies (September 02)

    €59.99 for married couples or registered partnerships looking to file a tax return together

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    07.

    Occupational disability

    Insured persons who, for health reasons, cannot work or earn half as much as other employees with similar training, equivalent knowledge and skills, neither in their learned nor in a reasonable occupation.

    Since January 1, 2001, no new entitlements to an occupational disability pension can arise.


    For insured persons who were born before January 2nd, 1961, the occupational disability remains as a possible benefit event. This means that they continue to enjoy professional protection and cannot be referred to any other activity.

    If necessary, they will also receive half a disability pension if they can no longer work six hours a day in their previous job or in another reasonable job.

    Difference between disability pension and disability pension

    Disability  occurs when you can work less than three hours a day due to illness or disability. Here it doesn't matter whether you can no longer work in your trained profession or whether you can no longer work to the same extent in general.

    Disability pension  is an option for people who are no longer able to work full hours and is generally available to all age groups. The criterion is no longer based on the actual job, but the lack of or only partial opportunity to practice any job is decisive.  

    Disability pension: requirements and scope of assistance

    The disability pension provides support if you can no longer work (full-time) for health reasons . At the same time, the standard retirement age (i.e. the point in time from which old-age pension is paid) must not yet have been reached. The following table gives you an overview of the requirements for the two forms of disability pension.    

    A few steps are necessary to determine a disability: 

    1. Attempt to restore ability to work through rehabilitation measures
    2. Support when looking for work, e.g. also through professional reorientation
    3. assessment of the opportunity to work

    Criteria

    Partial disability pension

    Full disability pension

    Possible working time

    3 – 6 hours daily

    max. 3 hours daily

    amount of payout

    50%

    100%

    insurance period

    Pension insurance for at least 5 years

    Pension insurance for at least 5 years

    Duration of deposit

    at least 3 years

    at least 3 years

    maximum additional earnings

    individual determination

    6,300 euros

    maximum duration of secondary employment

    < 6 hours

    < 3 hours

    Tax return as a pensioner

    Taxfix shows you the basics about filing your income tax return as a pensioner.

    Deadlines for filing tax returns

    The tax office is strict with its deadlines. You should therefore definitely comply with them. For the 2022 tax year, the submission deadline is October 2nd, 2023. If you submit voluntarily, you have significantly more time, if you submit promptly, but you probably remember your income and expenses best.

    This is how the tax return works online – guaranteed

    All information about the 2022 tax return and which others you can submit in 2023: deadlines, programs and apps, tax liability and what is new in tax law.

    Duty to pay or voluntary?

    We will tell you who is required to submit a tax return and what you need to consider if you were affected by short-time work or unemployment in 2022. By the way: In most cases, a voluntary fee is also worthwhile.

    Do you want to save as much tax as possible?

    All tips for your greatest possible tax savings can be found in our guide. Whether it's moving expenses, deductible special expenses, or how to get the most out of business expenses, you'll find answers to big, detailed tax questions here.

    Tax return in 2023: That's all you need to know

    All information about the 2022 tax return and which others you can submit in 2023: deadlines, programs and apps, tax liability and what is new in tax law.

    Make the tax return easy

    Don't want to pay taxes? Then let your tax return be done in a relaxed manner by state-certified tax consultants. Just upload some documents and receive your tax return in a few days. All you have to do is check and approve them - done!

    08.

    Make your tax return as a pensioner: With Taxfix!

    Just the word 'investment' triggers a lot of uneasiness – the reason is the tax administration forms. For pensioners it is mainly 'Annex R', but others may be added. We don't think it has to be with the forms.

    That's why Taxfix now also offers those drawing statutory pensions the opportunity to do their tax returns with Taxfix! 

    With the expansion of the product we want to help many more people. The tax return for pensioners has thus become much easier. The following video shows you how easy it is. You can use the button directly below to try Taxfix's tax program for free!

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