How to reduce your taxable income?
There are three different expense categories, with which you can reduce your taxable income and thus increase your tax return from Germany:
- Work-Related Expenses (Werbungskosten) Costs created through job applications, your daily commute to work, any new electronics you bought, which you also use for work, an office room in your apartment.
- Special Expenses (Sonderausgaben) Charity or political donations within Germany, expenses for private pension savings, social security contributions (such as unemployment, health care, etc.), church tax, business-travel expenses, educational expenses.
- Exceptional Expenses (Außergewöhnliche Belastungen) Medical costs, such as a wheelchair, glasses, etc., alternative medicine, such as acupuncture, homeopathy, etc., fertilization, reconstruction of a household due to a disability, support of family in need, such as payments to your parents.
Some of these expenses get taken into account automatically, others stand in relation to how much you earn.
To make your life easier, you should start collecting or archiving the receipts for any qualifying expenses throughout the year, so you don’t begin scrambling when it is time for your tax return.
Credit: Content by Anshul Srivastava
DISCLAIMER: The information provided here is for general informational purposes only and does not constitute professional tax, legal, or financial advice. I am not a licensed tax consultant under German law. For tailored advice specific to your situation, please contact a certified Steuerberater or tax advisor.
- tmr asked 2 weeks ago
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