2023+Tax+Guide 2023 2024

Tax Guide
2023/2024
Everything you need to know

about your 2023 tax return
Berlin, 22.05.2024
Most taxpayers will find that it’s worthwhile to file a tax return – even if they’re not required to. 90%
of the time you will receive an average tax refund of 1,095 euros!1 Who would want to miss out on
so much money?
wundertax offers the opportunity to submit your tax return in just 17 minutes without any prior
knowledge. Since our debut in 2016, our goal has been to make filing your tax return online easy, un-
complicated, and secure. Our tax tools, tailored towards your specific needs, ensure that you’ll save
plenty of time filing while simultaneously maximizing your refund.
With our help and guidelines, we’ll ensure that your tax return is an immediate success – no need to
call up an expensive tax consultant. No more panicking about deadlines and no more incomprehensi-
ble tax forms!
We hope you enjoy our tax tools and wish you a large tax refund!
If you think we’ve missed any important topics in this guide, please reach out to us via the e-mail
[email protected] so we can include it in the next edition.
Table of Contents
1 What is a tax return (Steuererklärung)? .................................................................................. 2
2 2023 tax return: important tax changes .................................................................................. 8
3 Saving taxes as a family .......................................................................................................... 11
4 Income-related expenses (Werbungskosten) ........................................................................ 14
5 Special expenses (Sonderausgaben) ...................................................................................... 18
6 Extraordinary expenses (außergewöhnliche Belastungen).................................................... 21
7 Household-related expenses (Haushaltsnahe Aufwendungen) ............................................. 23
8 Capital gains, rental income, and foreign income – how are they taxed?............................. 24
9 Lump sums (Pauschalen) and allowances (Freibeträge) you need to know .......................... 25
10 Monetary benefits and one-fifth method .............................................................................. 26
11 2024 tax changes at a glance ................................................................................................. 27
12 The simplest way to file your taxes: wundertax .................................................................... 31
1
Source: Federal Office of Statistics: Employees receive an average tax refund of 1,095 euros.
wundertax GmbH | www.wundertax.de/en | Page 1 of 32

1 What is a tax return (Steuererklärung)?
Your income tax return provides the tax office (Finanzamt) with information about your income and
deductible expenses. Through this, they can determine how much tax you owe.
As a taxpayer, it’s possible that you’ve paid too much tax in advance within the calendar year which
leads to a tax refund – however, it’s also possible that you paid too little, leading to a tax back pay-
ment.
You can claim all of your tax-deductible expenses on your tax return and likely receive a tax refund,
1,095 euros on average.
If you’re required to file a tax return (see Mandatory Tax Assessment (Abgabepflicht)) and are at risk
of paying a tax back payment, you can reduce the tax due by deducting various expenses – thus making
a tax return worth it, no matter what!
Tax ID (Steuer-Identifikationsnummer)
All residents of Germany receive a personal and permanent 11-digit tax ID (Steuer-ID). Citizens receive
these numbers upon birth and expats typically receive them upon registering their address
(Anmeldung).
Tax number (Steuernummer)

The structure of tax numbers changed during the introduction of the ELSTER procedure for electronic
tax return submissions. Tax numbers consist of 13 digits and change when one moves residences,
newly generated tax numbers are issued by one’s local tax office (Finanzamt). Tax numbers are not to
be confused with tax IDs which never change.
Employees who haven’t yet received a tax number will receive one with their first income tax assess-
ment notice (Einkommensteuerbescheid).
Applying for a tax number

Self-employed workers must register their freelancing jobs with their local tax offices (Finanzamt)
within 4 weeks of starting a new professional activity. Upon registration, they will receive a tax number
as well as a questionnaire that registers them for taxes – since 01/01/2021, this questionnaire can
only be submitted electronically via ELSTER. A user account (“Mein ELSTER”) on the Elster platform
must be created for this purpose. ELSTER is the portal of German tax authorities used to store and
process your tax data.
Note: If you’re considered filing your tax return via ELSTER, keep in mind that the tax authorities are
not interested in helping you save taxes. On the contrary, wundertax offers you a tax solution and
tax tips that enable you to receive the highest possible tax refund.
Tradespeople are required to register with the trade office (Gewerbeamt), which will then inform
their local tax office about the registration. The tax office will then send the tradesperson a question-
naire where they can enter their anticipated profits to register them for taxes. After this, the trades-
person receives their tax number.
Your local tax office (zuständiges Finanzamt)

Your local tax office varies depending on where you generate your income.
• An employee’s local tax office is the one responsible for their area of residency.
• The tax office in charge of self-employed people depends on the district where their profes-
sional activity takes place.

• The tax office assigned to tradespeople manages the district where the trade’s management
is located.
• If a taxpayer moved away from Germany, their local tax office is the one in charge of their last
area of residency in Germany.
You can find your local tax office here.
Tax classes (Steuerklassen)

In Germany, there are six different tax classes (sometimes called “tax brackets”), your primary job (if
unmarried) is typically assigned to tax class 1. If you take on a second or side job, this is usually taxed
according to class 6.
If you get married, you and your spouse are automatically assigned to tax class 4/4. You also have the
option to choose the tax class combination 3/5. This also applies to registered partners (eingetragene
Lebenspartnerschaft). For income tax purposes, it does not matter which tax class you are assigned
to: your tax liability remains the same in the end. The tax class only affects the amount of tax you pay
in advance - the monthly wage tax deduction. The person assigned to tax class 3 has the lowest de-
ductions. That’s because they receive both their own basic tax-free allowance and the one of the per-
son in tax class 5. Therefore, the deductions in tax class 5 are significantly higher, and there is less net
income.
Couples with the tax class combination 3/5 are required to file a tax return and often have to pay a
back tax payment (Steuernachzahlung) because the person in tax class 3 has made too low advanced
payments.
Since 2010, married couples can apply for a combination of tax classes 4/4 with a factor procedure
(Faktorverfahren). In this case, the income tax is distributed fairly, and the amount of monthly deduc-
tions is adjusted to the expected annual salaries. This largely avoids back tax payments. The splitting
procedure (Splittingverfahren) is also already considered during the year.
Single parents choose tax class 2 and already benefit from the relief amount for single parents (Ent-
lastungsbetrag für Alleinerziehende) in their monthly wage tax deduction. The allowance amounts
4,260 euros per year as of 2023.
List of tax classes

Tax class 1 Single, or separated, divorced or widowed
Tax class 2 Single parent (single, separated, divorced or widowed)
Tax class 3 Married, combination with tax class 5 (tax return is mandatory)
Tax class 4/4 Married
Tax class 4/4 with Married (splitting procedure is considered throughout the year) (tax return
factor procedure is mandatory)
Tax class 5 Married, combination with tax class 3 (tax return is mandatory)
Tax class 6 Second and side job (tax return is mandatory)
Changing your tax class (Steuerklassenwechsel)

As of January 1st, 2020, married couples are permitted to change their tax classes multiple times
throughout the year in order to choose the most beneficial combination. You can simply apply for the
change at your local tax office and the change will take effect in the following month. Even if only one
partner applies for the change, it applies to both.

Joint Taxation (Zusammenveranlagung)
There are two ways for spouses or registered partners to file their tax returns: either by being assessed
individually (Einzelveranlagung) or together (joint taxation, Zusammenveranlagung). Each year, mar-
ried couples or partners can choose which assessment they’d prefer.
If married couples choose to be assessed together, they file one joint tax return, receive one tax as-
sessment notice (Steuerbescheid), and if a tax refund is granted, it will only be transferred to one bank
account and will not be split. If you submit a joint tax return, the splitting method, also known as
“Ehegattensplitting”, is then used to calculate your taxes.
Requirements for joint assessment that must be met simultaneously

(for at least one day of the year)
· Both partners have unlimited income tax liability
· The couple may not live permanently separated
· The marriage must be legally valid
This is how your tax liability is calculated in a joint assessment: both spouses' incomes are initially
assessed individually and then both incomes are added together. The total income is halved again,
and the income tax is then applied to one half. The result of this is multiplied by two, which yields the
tax payment that is owed. Since both spouses‘ incomes are considered, both of their expenses are as
well. Extraordinary expenses (außergewöhnliche Belastungen), special expenses (Sonderausgaben),
and more can therefore be declared on the couple’s tax return – even when the expenses only affect
one spouse.
If the couples’ salaries greatly vary, joint assessment can be more lucrative due to tax progression:
their tax rate does not increase linearly with their income amount, it increases disproportionately.
If there is less or no difference in wages, the splitting procedure no longer has any tax-saving effect.
If one spouse received wage replacement benefits (Lohnersatzleistungen), it is probably more advan-
tageous to submit separate tax returns (Einzelveranlagung) so that the so-called Progressionsvorbe-
halt only affects the partner who received the benefits.
Good to know: Even though men and women share equal rights in Germany, the male partner must
be entered first in the joint tax return (partner A) and the female partner second (partner B). This is
due to the IT systems of the tax authorities. For persons of the same sex, the alphabetical order of
surnames or first names applies.
Types of income (Einkommensarten)

The German tax system recognizes seven different types of income:
• Income from employment

• Income from capital assets
• Income from renting and leasing
• Other income
• Income from agriculture and forestry
• Income from business operations
• Income from self-employment
In this guide, we focus on the main type of income for employees: income from traditional employ-
ment.

Wage tax (Lohnsteuer) and annual payslip (Lohnsteuerbescheinigung)
All taxpayers in Germany are required to pay income tax (Einkommensteuer) if their income exceeds
the basic tax-free allowance (Grundfreibetrag). The basic tax-free allowance exists to ensure the ex-
istence minimum and amounts to 10,908 euros for 2023 and 11.604 euros for 2024.
Wage tax (Lohnsteuer), an automated method of taxation for employees, was established to simplify
tax collection. This is an advanced payment on your annual income tax and is deducted from your
monthly gross wage (for non-independent work). Your wage tax is calculated according to your per-
sonal electronic wage tax deduction details (Lohnsteuerabzugsmerkmale or ELStaM for short) and
transmitted monthly to the tax office (Finanzamt) – details about these deductions can be seen in your
monthly pay slip (Gehaltsabrechnung).
At the end of each calendar year – by the end of February at the latest – your employer submits your
annual payslip (Lohnsteuerbescheinigung) to the tax office and provides you with either a printout or
electronic copy. The data from the annual payslip is the basis for your tax return
Wage replacement benefits and Progressionsvorbehalt

Wage replacement benefits (Lohnersatzleistungen, officially called Entgeltersatzleistungen) are gov-
ernmental benefits provided by social insurance institutions to compensate for the loss of earnings in
the event of unemployment, illness, parenthood, etc.
Wage replacement benefits include:
• Unemployment benefits (Arbeitslosengeld)

• Short-term work benefits (Kurzarbeitergeld)
• Maternity benefits (Mutterschaftsgeld)
• Parental benefits (Elterngeld)
• Sick pay (Krankengeld) after discontinuation of payment from your employer
• Transitional allowance (Übergangsgeld)
• Injury benefits (Verletztengeld)
• Subsistence payment (Unterhaltsgeld) as a supplement
• Care assistance benefits (Pflegeunterstützungsgeld)
• Employer supplements to wages and salaries (Arbeitgeberzuschüsse zum Arbeitsentgelt)
• Insolvency allowance (Insolvenzgeld)
• Compensation for loss of earnings (Verdienstausfallentschädigung) in accordance with the In-
fection Protection Act (Infektionsschutzgesetz)
If you receive more than 410 euros in wage replacement benefits throughout the year, you are re-
quired to file a tax return (Pflichtveranlagung) in the following year. Wage replacement benefits them-
selves are tax-free – but there is a catch: they are subject to the so-called Progressionsvorbehalt. Alt-
hough these benefits are not taxed, the amount is added to your total taxable income – if this increase
pushes you into the next tax bracket (Steuertarif), it leads to a higher tax rate (Steuersatz) which is
then applied to your regular income.
On a more positive note, it is also possible that you’ve paid too much wage tax outside of your short-
term work (Kurzarbeit) and are entitled to a tax refund.
Mandatory Tax Assessment (Abgabepflicht)

Income tax is deducted directly from employee wages each month, but in certain cases, the govern-
ment wants to ensure that your tax liability is in accordance with the law and not detrimental to the

government. In such cases, one must file a tax return to be assessed. You cannot avoid filing a tax
return if:
• the tax office (Finanzamt) entered an income tax allowance (Lohnsteuerfreibetrag) for you.
However, you are not required to file if your gross annual salary doesn’t exceed 13,150 euros
(or 24,950 euros if you are jointly assessed).
• you received wage replacement benefits (Lohnersatzleistungen) that amount to more than
410 euros.
• you received taxable supplementary income (Nebeneinkünfte) besides your wage exceeding
410 euros.
• you are separated and haven’t split the education allowance (Ausbildungsfreibetrag), disabil-
ity allowance (Behindertenpauschbetrag), or survivors' allowance (Hinterbliebenen-Pausch-
betrag) for your children 50/50.
• you received income from a second job in tax class 6.
• you received a severance package which is taxed according to the one-fifth method
(Fünftelregelung).
• you received capital gains (Kapitalerträge) that are subject to withholding tax
(Abgeltungsteuer), but no withholding tax was paid yet.
• you received vacation pay (Urlaubsvergütung) from the wage compensation fund for the con-
struction industry (Lohnausgleichskasse der Bauwirtschaft).
• you are married and both spouses receive employee wages and have chosen the tax classes
3/5 or 4/4 with factor procedure.
• the employee’s marriage was ended by divorce or death during the tax assessment period and
one partner remarried in the same year.
• your minimum pension lump sum (Mindestvorsorgepauschale) is higher than your pension
expenses (Vorsorgeaufwendungen).
• income from self-employment, renting, leasing, or other income exceeds the tax-free basic
allowance (Grundfreibetrag).
Learn more about this topic: Mandatory Tax Assessment - Who has to file a tax return?
Deadlines (Fristen) / Extensions (Fristverlängerung)

Anyone required to submit a tax return has until July 31st of the following year, missing this deadline
can lead to penalty payments. If the deadline falls on a holiday or weekend, it will be extended to the
following workday.
Note: Due the Corona pandemic, the deadlines for 2020-2023 tax returns were extended. That means
the tax office (Finanzamt) must receive your 2023 tax return by September 2nd, 2024.
Starting with the tax return for the tax year 2024, the deadline will once again be July 31st.
If the deadline is missed, tax authorities (Finanzbehörde) can charge a lateness penalty fee of 0.25%
of the assessed tax for each month (or part of the month) past the deadline with a minimum penalty
charge of 25 euros. Taxpayers who are required to file their tax return and choose not to while ignoring
reminders from the tax office can be issued with an estimated tax assessment, which is typically to
their disadvantage. Even if you receive an estimated tax assessment, you still have to file your tax
return!
Extension requests for mandatory tax returns must be received and approved before the deadline and
the tax office typically only grants these requests in exceptional and justified cases.

Those who are not required to file but wish to file a voluntary tax return have up to 4 years to submit
it. For example, if you wish to file your 2020 tax return voluntarily, your deadline is December 31st,
2024. The deadline is always December 31st, 4 years later and there are no extensions.
Obligation to provide proof (Nachweispflicht)

Before 2017, you were required to submit proof (receipts/invoices) of all of your expenses along with
your tax return – since then, this is no longer required. Instead, you are required to preserve original
proof in case the tax office requests it. This can include bills, receipts, certificates, and purchase con-
tracts.
If you are claiming certain expenses for the first time which cause your tax return to significantly differ
when compared with previous years, it is still advisable to submit receipts with your tax return. Some
examples of this could include claiming a home office or second household for the first time, high
medical expenses, large donations, etc. In such cases, the tax office will most likely request proof and
by submitting them in advance, you end up saving yourself time and receiving your tax refund sooner.
Obligation to preserve records (Aufbewahrungspflicht): You are required to retain relevant receipts
and invoices until your tax return is final. Your tax return becomes final one month after you receive
your tax assessment notice (Steuerbescheid), which is also when the period to make an appeal ends.
If you choose to file an appeal or lawsuit against your tax assessment notice, you are required to pre-
serve your proof of expenses until the proceedings are complete. Donation receipts must be kept for
1 year after receiving your tax assessment notice and invoices for household-related expenses
(haushaltsnahe Dienstleistungen) for 2 years following the year they are paid. Some receipts/invoices,
such as medical certificates, are important to hang on to for even longer.
Tax assessment notices (Steuerbescheid)

Tax assessment notices are always structured the same way. You will receive a letter stating whether
your tax assessment notice is provisional or final. You receive a provisional notice if a tax court ruling
hasn't been issued yet - once they reach a judgement, a provisional notice is changed into a final one.
Sometimes a second "final" notice is sent.
Your tax liability, determined by the tax office (Finanzamt), is listed in your assessment notice. This is
divided into:
• Income tax (Einkommensteuer)

• Solidarity surcharge (Solidaritätszuschlag) which was eliminated in 2021 for 90% of taxpayers
• Church tax (Kirchensteuer) if applicable
Underneath this, you will find your personal data. It is important that you ensure that the correct bank
details are listed so that any possible refunds are transferred to the correct account.
Correcting your tax assessment notice

There are two ways to contest your tax assessment notice in Germany. You can either file an appeal
(Einspruch) if certain items are not recognized, or you can make a request for a simple amendment
(Änderung).

Amendment request
Requirements and advantages Reasons for an amendment

· Selective review · Tax assessment notice contains errors
(such as wrong address)
· Tax assessment notice can only be · Your case was not clearly described
amended if it leads to an advantage for
the taxpayer
· The deadline to submit an amendment · You forgot to claim certain expenses or
request is a month after receiving your expenditures
notice
· The request must be formulated in con- · Only one item needs to be changed,
crete terms (you must indicate exactly not the whole assessment
what needs to be changed)
Appeal
Requirements and advantages Reasons for an appeal

· Essential data can be changed · Your household-related services
· Your appeal can be withdrawn later (haushaltsnahe Dienstleistungen)
without consequences weren’t recognized
· Tax burdens can be reduced (if the tax · Your special expenses (Sonderausga-
office recognizes the appeal) ben) weren’t observed
· The deadline to file an appeal is one · The tax office miscalculated
month after receiving your tax assess-
ment notice
· Initially, you can send an informal letter · Taxpayer-friendly rulings and adminis-
stating that you’d like to file an appeal trative instructions were disregarded
· Reasons for your appeal can be given · Income-related expenses (Werbung-
following your initial letter skosten) weren’t recognized
More information on this subject, including a sample letter, can be found here: How do I file an appeal
against the tax notice?
2 2023 tax return: important tax changes

Numerous tax changes will come into force throughout 2023. These stem from multiple sources in-
cluding the 2022 Annual Tax Act (Jahressteuergesetz 2022), the third relief package, and the coalition
agreement. These changes are primarily intended to provide tax relief in the face of increased infla-
tion. In this section, you can find a clear overview of the upcoming changes.
2023 Tax return deadline

Mandatory tax returns for the 2023 tax year must be submitted to the tax office by September 2nd,
2024.

Single parents & Families with children
The relief amount for single parents (Entlastungsbetrag für Alleinerziehende) will be raised by 252
euros as of January 2023 and amount to 4,260 per year. Single parents will receive another 240 euros
for each additional child.
Child benefits (Kindergeld) were increased for the years 2023 and 2024 to a uniform 250 euros per
child per month. From 2025 onwards, a new type of support for children is planned to be introduced
(Kindergrundsicherung) which already includes child benefits.
The maximum amount for child supplements (Kinderzuschlag) will also be increased to 250 euros per
month per child. Low-income families entitled to child benefits can apply for child supplements as
well. The immediate supplement, which has been paid to children affected by poverty since July 2022,
is already included in the new maximum amount.
As of 2023, the child allowance (Kinderfreibetrag) has been increased to 8,952 euros per child. This
includes the base child allowance as well as the allowance for childcare, education, and training needs
(BEA).
Retirement provisions fully deductible

The tax-deductible portion of retirement contributions has increased by 2 percent each year and
should have reached 100% from 2025 onwards. The German government’s joint plan from the coali-
tion agreement is instead implementing this in 2023.
Increases in allowances and lump sums

The income-related expenses lump sum (known as Werbungskostenpauschale or Arbeitnehmer-
Pauschbetrag in German) is increasing by 30 euros to 1,230 euros in 2023.
The basic tax-free allowance (Grundfreibetrag) was also increased, from 10,347 to 10,908 euros. Pay-
ments made to dependent relatives (Unterhaltszahlungen) can be deducted as extraordinary ex-
penses (außergewöhnliche Belastungen) up to a maximum of the basic tax-free allowance amount.
The education allowance (Ausbildungsfreibetrag) is increasing from 924 euros to 1,200 euros per cal-
endar year. If your child entitled to child benefits/allowance is pursuing an education and living away
from home, this allowance can be claimed for them. The allowance is granted pro rata each month
and serves to reduce parents’ taxable income. The allowance is halved for married parents who file
individual tax returns.
The coalition agreement has also led to an increase in the Savers’ Allowance (Sparer-Pauschbetrag).
From January 2023, the allowance will be increased from 801 euros per year to 1,000 euros per year.
Married couples filing a joint tax return can double the exemption amount to 2,000 euros (previously
1,602 euros). If you’ve already issued an exemption order, it’ll be automatically adjusted to the new
limit and increased by 25%.
Income tax rates adjusted

To help reduce the so-called cold progression (additional tax burden due to the rate of price increases),
the tax rate thresholds (Einkommensteuertarif) will be shifted to the right. As of 2023, the top tax rate
of 42 percent will be applied to annual incomes of 62,810 euros (2022: 58,597 euros).

Food service industry
A reduced sales tax rate of 7 percent will continue to apply to food (excluding beverages) in the res-
taurant industry in 2023.
Reforms: Housing benefits & Bürgergeld

As of January 1st, 2023, the new “Citizen’s Benefits” (Bürgergeld) will replace unemployment benefits
II (ALG 2/Hartz IV) and income support (Sozialgeld). The standard rate for single adults will increase by
52 euros to 502 euros per month. In the future, the requirements to receive such benefits will be
adjusted to inflation rates looking forward instead of retroactively. During the waiting period of 12
months, assets of up to 40,000 euros will not be taken into account and accommodation costs will be
covered in full while an appropriate level of heating costs will also be covered.
The housing benefits (Wohngeld) reform will introduce “Housing benefits +” (Wohngeld Plus) from
January 2023 onwards. Entitlement to the benefits will greatly increase from 600,000 residents to
around 2 million. The amount of housing benefits will also double from an average of 180 euros to
370 euros.
Tax-free photovoltaics
Income from the operation of photovoltaic systems on single-family homes or commercial properties
will be tax-exempt for a total output of up to 30 kW and applies retroactively to January 2022. This
applies regardless of whether the generated electricity is consumed by the owner or not.
The tax exemption for multi-family dwellings and mixed-use buildings applies to a total output of up
to 15 kW per residential and commercial unit. If there are multiple installations, the revenue remains
tax-exempt up to a maximum total output of 100 kW.
As of January 2023, sales tax for delivery, import, purchase, and installation of small photovoltaic sys-
tems (up to 30 kW) amounts to 0% (previously 19%).
Basic retirement supplements

Since January 2021, a supplement known as “basic retirement” (Grundrente) has been granted to re-
tirees with low pensions. This supplement will be made tax-free retroactively to the point of its intro-
duction as a result of the 2022 Annual Tax Act.
Price breaks for electricity, gas, and heating

Due to the massive increase in energy costs, the German government decided to implement price
breaks on gas, heating, and electricity that will come into effect from March 2023 and apply retroac-
tively to January and February 2023.
Maximum prices will apply to “base consumption” (80% of the previous year’s consumption): Electric-
ity prices are capped at 40 cents per kWh, gas at 12 cents per kWh, and district heating (Fernwärme)
at 9.5 cents per kWh. The normal market price must be paid for the remaining consumption.
A one-off relief (Dezemberhilfe) was provided as a bridging measure for gas and heat customers until
the price brakes take effect. The federal government will pay the advance payment for December
2022. Please note: Originally, the December benefit was subject to tax. The 2024 tax changes will
make it tax-free.
To provide additional relief, a reduced sales tax rate of 7% will apply to gas and heating from October
2022 until the end of March 2024.

Inflation premium (Inflationsprämie)
From October 26th, 2022, to December 31st, 2024, employers have the option of paying their employ-
ees a tax-free inflation premium of up to 3,000 euros in addition to their wages in order to help com-
pensate for inflation.
Home office lump sum & Home offices

The home office lump sum (Homeoffice-Pauschale), previously applying to 2020, 2021, and 2022, now
applies indefinitely as of January 2023. The lump sum was also increased: 6 euros per day spent work-
ing from home can now be claimed (previously 5 euros) and a total of 210 days per year (previously
120 days). A maximum of 1,260 euros per year can be claimed with the home office lump sum (previ-
ously 600 euros).
Regulations on home offices (häusliches Arbeitszimmer) have also been revised: up until now you
could deduct up to 1,250 euros per year for your home office provided that no other professional
workspace was made available to you (limited deduction). To avoid unequal tax treatment from the
home office lump sum, you are also able to claim the home office lump sum as of 2023 – even if you
worked away from home or at your primary workplace on the same day. For example, a teacher can
claim the home office lump sum on a day that they both went to work at school and corrected exams
in their home office. The maximum amount of 1,260 euros per year also applies here.
If your home office is the core of your business and professional activity, you can continue to deduct
the expenses in full or a flat rate of 1,260 euros per year.
3 Saving taxes as a family

The German tax act entitles parents to certain allowances and tax benefits. A separate tax form
“child” must be completed for each child in the tax return.
Child benefits (Kindergeld)

Child benefits (Kindergeld) must be applied for through the family benefits department (Familien-
kasse) by parents who are either residents of Germany and or are subject to unlimited tax liability in
Germany.
Child benefits can be claimed for children up to 18 years of age. Once the child is no longer a minor,
child benefits can be granted if the child is studying, in training (Ausbildung), or volunteering (or if they
apply for one of these options).
Unless the child has a disability and cannot support themselves, child benefits can no longer be
claimed once the child reaches the age of 25.
Child benefits were increased for the years 2023 and 2024 to a uniform 250 euros per child. From
2025 onwards, a new type of support for children is planned to be introduced (Kindergrundsicherung)
which already includes child benefits.
Child As of July 1st, 2019 As of January 1st, 2021 As of January 1st, 2023
1st child 204 euros 219 euros 250 euros
2nd child 204 euros 219 euros 250 euros
3rd child 210 euros 225 euros 250 euros
Each additional child 235 euros 250 euros 250 euros

Child supplements (Kinderzuschlag) and Child bonus (Kinderbonus)
Families with little income can apply for a supplement to their child benefit. The amount is calcu-
lated individually and depends on income, number of children, and housing costs. The maximum
amount has been 292 euros per child per month since January 1st, 2024. The child supplement
(Kinderzuschlag) is always granted for 6 months and can then be reapplied for.
To ease the burden on families during the Coronavirus pandemic, parents entitled to child benefit
received a tax-free child bonus for each child in 2020 and 2021. In 2020, the child bonus amounted
to 300 euros per child. In 2021, there was an additional 150 euros on top of child benefit and in 2022
it was 100 euros.
Child allowances (Kinderfreibeträge)

Unlike child benefits, child allowances are not paid to you directly and you also don’t need to apply
for them. Instead, they are deducted from your taxable income when calculating your income tax,
thus, reducing your tax burden. Your child benefits (Kindergeld) can be considered advance payments
on your child allowances (Kinderfreibeträge) at the end of the year.
Tax-free child benefits and child allowances both exist to ensure that parents have enough funds to
secure their children’s existence.
Child allowances are divided into two parts:
• allowance to secure the existence minimum for children and

• the allowance for childcare, daycare, and education needs (BEA)
2022 2023 2024

Child allowance 5,620 euros 6,024 euros 6,384 euros
BEA 2,928 euros 2,928 euros 2,928 euros
total 8,548 euros 8,952 euros 9,312 euros
If each parent files an individual assessment, they each receive half of this amount. Single parents,
widowed parents, and parents not subject to unlimited tax liability are also eligible for child allow-
ances. The child’s age limit is the same for child allowances as it is for child benefits, with the same
exceptions.
Child benefits or child allowance: which is more beneficial?

Before you start worrying about whether child benefits or child allowance provide you with a tax ad-
vantage, you should know that the tax office (Finanzamt) automatically carries out a “more favorable
tax assessment” (Günstigerprüfung) and applies the option that is most beneficial to you.
First, your tax burden on your taxable income is calculated, then, your tax burden is reduced by your
child allowances. If the difference between these two amounts exceeds the amount of child benefits
that you’ve received, then the result is beneficial – this means child allowances are most beneficial for
parents with higher income.
Relief amount for single parents (Entlastungsbetrag für Alleinerziehende)

Single parents are entitled to the tax relief amount for single parents. It is an allowance that is de-
ducted from the single parent's income and thus reduces tax. The tax relief amount is already taken

into account in tax class 2 in the monthly wage deduction. However, you can also apply for it within
your tax return.
The coronavirus pandemic and ongoing inflation has been especially tough on single parents trying
to care for their child(ren) alone. For this reason, the second Corona Tax Relief Act (Corona-
Steuerhilfe-Gesetz) raised the relief amount from 1,908 euros to 4,008 euros for single parents. This
applies to 2020, 2021, and 2022. From 2023, the relief amount will increase to 4,260 euros. For each
additional child, you will continue to receive an additional 240 euros.
Please note: You are eligible to the relief amount if you a single parent and divorced, permanently
separated or widowed and do not share a household with another person of legal age. Exception:
This person is your adult child for whom you are still entitled to child benefit.
Childcare costs (Kinderbetreuungskosten)

Up to the child's 14th birthday, two thirds of childcare costs can be deducted from tax as special ex-
penses (Sonderausgaben), up to a maximum of 4,000 euros per child per year. Childcare costs in-
clude, for example, the costs of crèches, day nurseries, kindergartens or childminders.
School fees (Schulgeld)

If your child attends a private school for which a fee is charged, you can deduct 30% of the school
fees from your tax bill as special expenses (Sonderausgaben). A maximum of 5,000 euros per child
per year is deductible. If the school is a boarding school, the costs for accommodation, care and
meals must be deducted from the school fees.
Education allowance (Ausbildungsfreibetrag)

If you are entitled to child benefit for your adult child who is in a course of study (Studium) or in vo-
cational training (Berufsausbildung) and does not live at home with you, you can claim the education
allowance. Up to and including 2022, it is 924 euros per year. As of 2023, the education allowance
will increase to up to 1,200 euros per year. For each month in which the requirements for the educa-
tion allowance are not met, the total amount is reduced by one twelfth.
Children’s sick days and children’s sick pay (Kinderkrankengeld)

Employed parents often have to care for their children and call off work on short notice when their
children become sick. They can apply to their statutory health insurance (gesetzliche Krankenkasse)
for children’s sick pay (Kinderkrankengeld) as compensation for lost wages - even if they work from
home. Typically, you receive 90% of your lost net wages in children’s sick pay. To claim this sick pay,
you and your child must have statutory health insurance and your child must be under 12 years of age.
Due to coronavirus, the number of children's sick days (Kinderkrankentage) has been increased until
the end of 2023: each parent could claim 30 days per child, single parents could claim 60 days. Couples
and single parents with at least two children could take up to 130 children's sick days. The following
applies for 2024 and 2025: Each parent has up to 15 children's sick days per child, single parents have
30 days. If there are several children, single parents and both parents together can claim a total of 70
days of children’s sick days per year.
Please note: Children's sick pay is subject to the so-called Progressionsvorbehalt. If you receive more
than 410 euros in wage replacement benefits per year, you must submit a tax return in the following
year.

Deducting maintenance payments (Unterhaltszahlungen)
Maintenance payments for dependent relatives to whom you are legally obliged to pay maintenance
is tax-deductible. These are, for example, ex-spouses and adult children in vocational training or in a
course of study. In addition to the maximum deductible amount, you can also deduct the contributions
to basic health and long-term care insurance (Kranken- und Pflegeversicherung) for the person you
support.
You can deduct maintenance payments for ex-spouses as special expenses (Sonderausgaben) or as
extraordinary expenses (außergewöhnliche Belastungen). The deduction as special expenses is limited
to 13,805 euros per year. The deduction as extraordinary expenses is linked to the annual basic tax-
free allowance (Grundfreibetrag). In 2023, the maximum deductible amount is 10,908 euros and will
rise to 11,604 euros in 2024.
The deduction as special expenses is therefore more tax-efficient, but it is only possible with the con-
sent of the ex-partner. That’s because they have to pay tax on the maintenance received as other
income (sonstige Einkünfte). This is called Realsplitting. The person liable for maintenance can deduct
the maintenance payments from taxes, but in return undertakes to compensate for any tax disad-
vantages incurred by the person receiving support.
Consent to the deduction of special expenses can also be given for only part of the maintenance pay-
ments. It is effective until it is revoked with the tax office.
You can deduct child maintenance payments as extraordinary expenses under certain conditions: if
you are no longer entitled to child benefit or child allowance for the child and the child is not wealthy,
you can deduct up to 11,604 euros (2024) plus basic contributions to health and long-term care insur-
ance. No reasonable burden (zumutbare Belastung) is taken into account, i.e. the maintenance is
taken into account from the first euro.
Please note: Alimony payments for minors (according to Düsseldorfer Tabelle) are not tax-deductible.
4 Income-related expenses (Werbungskosten)

Income-related expenses (Werbungskosten) include all expenses that arise from your profession. In-
come-related expenses are legally defined as “expenses incurred to acquire, secure, and maintain in-
come” (§9 EStG).
Income-related expenses include:
• Relocation costs for work-related moves Umzugskosten)

• Double household management (doppelte Haushaltsführung)
• Telephone and internet costs (Telefon- und Internetkosten)
• Business trip expenses (Dienstreisekosten
• Job application costs (Bewerbungskosten)
• Contributions to professional associations (Berufsverbände)
• A home office (Arbeitszimmer)
• Work equipment (Arbeitsmittel)
• Training and further education costs (Fort- und Weiterbildungskosten)
• Home office lump sum (called “daily allowance” (Tagespauschale) as of 2023)
• Trade union fees (Gewerkschaftsbeiträge)
• Professional insurances

The income-related expenses lump sum (Arbeitnehmer-Pauschbetrag/Werbungskostenpauschale) is
automatically deducted each year by the tax office (Finanzamt). As of 2022, the lump sum was in-
creased from 1,000 to 1,200 euros per year and in 2023, this will be increased again to 1,230 euros.
No evidence is required for this lump sum. If you wish to claim more expenses that exceed this lump
sum, you can claim them individually on your tax return and hold on to proof.
Note: Even if you had minimal professional expenses throughout the year or you were only employed
for a part of the year, the tax office still recognizes the entire lump sum automatically.
Commuting expenses (Fahrtkosten)

For many employees, commuting expenses rack up the majority of their income-related expenses.
Until January 1st, 2021, the commuting allowance (Entfernungspauschale/Pendlerpauschale) allowed
you to deduct 30 cents per kilometer traveled to work each day (one-way), regardless of which type
of transport you use. As of January 1st, 2021, the commuting allowance raised to 35 cents per kilome-
ter and as of January 1st, 2022, until the end of 2026 it will be raised again to 38 cents per kilometer
(from the 21st kilometer one-way).
The commuter allowance, a part of your income-related expenses, has a deduction limit of 4,500 euros
per year with a few exceptions. Proof is required for these exceptions:
• Journeys to your primary home if you have a second residence for work (double household)
• Public transportation costs that exceed 4,500 euros per year
• Trips in your own car or company car
Long-distance commuters whose income doesn't exceed the basic tax-free allowance (Grundfreibe-
trag) don't benefit from the commuter allowance as they aren't required to pay taxes. For this reason,
the mobility premium (Mobilitätsprämie) was introduced on January 1st, 2021. This must be applied
for within your tax return and applies from 2021 to 2026.
The mobility premium amounts to 14% of the increased commuter allowance. To be eligible, your
income-related expenses (Werbungskosten) must exceed the income-related expenses lump sum (Ar-
beitnehmer-Pauschbetrag) of 1,200 euros (2022) or 1,230 euros (as of 2023). The assessment basis
for the bonus is limited: at most, the difference between your taxable income and the basic tax-free
allowance can be used for the calculation. The mobility bonus is transferred directly to your bank ac-
count.
Note: The increase in the commuter allowance as well as the mobility premium apply regardless of
means of transportation and for double household management (doppelte Haushaltsführung).
Work equipment (Arbeitsmittel)

All equipment that you require for your professional activities can be deducted as income-related ex-
penses (Werbungskosten). The costs can only be deducted in full if they’re almost exclusively (90%)
used for work-related reasons – if you also use them privately, you will have to split up the costs and
only deduct the professional portion.
Tip: In addition to purchase costs, you can deduct repair, cleaning, and maintenance expenses for your
work equipment.
You have two options: you can either claim the work equipment lump sum (Arbeitsmittel-Pauschale)
of 110 euros, or you can prove your costs individually if they exceed the lump sum amount.

Some examples of work equipment include:
• Computers
• Smartphones
• Work attire
• Technical literature
• Briefcases
• Tools
• User software
• Office furniture
• Office supplies
You can deduct up to 800 euros net (952 euros including VAT) in work equipment purchases per year.
If you make a purchase that exceeds this limit, you have to depreciate it over the course of multiple
years. The number of years varies depending on the device, the Federal Ministry of Finance (provided
a full list in their “AfA-Table“ (depreciation for wear and tear).
New: In February 2021, the Federal Ministry of Finance reduced the fixed “operating life”
(Nutzungsdauer) of a computer from 3 years to 1 year. This means that, as of 2021, computers, appli-
cation software, and all “peripheral devices” (printers, scanners, monitors, keyboard, etc.) that exceed
costs of 952 euros can be fully deducted in the same year of purchase. The previous 3-year operating
life will still apply to equipment purchased before 2021. Ensure you hang on to all invoices and re-
ceipts!
Working from home

Until the end of 2022, strict criteria applied to the deductibility of a home office (häusliches Ar-
beitszimmer). Due to the coronavirus pandemic, many employees switched to working from home -
without having a tax-deductible home office. This is why the home office lump sum (Homeoffice-
Pauschale) was introduced. It acts as a tax relief for all employees who work from home and cannot
claim a home office.
The lump sum will apply indefinitely from 2023. At the same time, the regulations on home office have
been aligned.
Home office room (Häusliches Arbeitszimmer)

Until the end of 2022, an office in your home (häusliches Arbeitszimmer) could only be deducted if no
other workstation was provided to you by your employer (deduction of up to 1,250 euros) or when
the core of your work activity took place in the room (full deduction).
The room had to meet a few requirements:
• It must be a separate room that is integrated into the domestic sphere of your apartment or
home.
• It should be equipped like an office.
• It must be used at least 90% of the time for professional activities.
• All residents of the home must have sufficient living space outside of the office room.

The home office lump sum from 2020 to 2022
For each calendar day on which you work exclusively from home, you can claim a lump sum of 5 euros
on your tax return. The lump sum is limited to 600 euros per year for 2020, 2021 and 2022. This means
you can claim a maximum of 120 days working from home.
The home office lump sum is included in the income-related expenses lump sum (Arbeitnehmer-
Pauschbetrag) of 1,200 euros (1,230 euros from 2023 onwards). Employees who exceed the income-
related expenses lump sum can claim their expenses individually.
As of 2023: adjustment of regulations on home office

The home office lump sum (Homeoffice-Pauschale), previously applying to 2020, 2021, and 2022, now
applies indefinitely as of January 2023. The lump sum was also increased: 6 euros per day spent work-
ing entirely from home can now be claimed and a total of 210 days per year. A maximum of 1,260
euros per year can now be claimed with the home office lump sum.
Regulations on home offices (häusliches Arbeitszimmer) have also been revised: up until now you
could deduct up to 1,250 euros per year for your home office provided that no other professional
workspace was made available to you by your employer (limited deduction). To avoid unequal tax
treatment from the home office lump sum, you are also able to claim the home office lump sum as of
2023 – even if you worked away from home or at your primary workplace on the same day. The max-
imum amount of 1,260 euros per year also applies here.
Example: A teacher can claim the lump sum for a working day on which she both worked at school
and corrected exams in her home office. She can also claim the commuting allowance (Entfernung-
spauschale) for the journey to or from work.
If your home office is the core of your business and professional activity, you can continue to deduct
the expenses in full or a lump sum of 1,260 euros per year.
Job application costs (Bewerbungskosten)

All expenses that arise from job applications are deductible as income-related expenses regardless of
whether the application is successful. If they are not covered within the income-related expenses lump
sum, the costs must be individually proven.
There are also job application lump sums: the tax office calculates an average of 8.50 euros per written
application and 2.50 euros per electronic application.
Deductible application costs
Job application materials Costs for self-marketing

· Application folders · Application photos
· Printer cartridges · Advertisements
· Envelopes · Websites
· Transparent folders · Proportionate telephone costs
· Writing paper · Proportionate internet costs
· Writing utensils · Resume/CV designs
· Adhesive utensils · Application videos
· Postage · Online advertisements
· Copies

Research and training costs Travel expenses
· Courses · Travel to interviews
· Seminars · Overnight stays
· Books, guides & journals · Parking fees
· Translations · Room & board
· Notarizations · City maps
· Police clearing certificates · Costs for accidents on a trip
Telephone and internet costs

Telecommunication and internet costs can be deducted as long as they were used for professional
purposes. There is a flat rate of 20% of the costs with a limit of 20 euros per month.
You also have the option to provide the tax office (Finanzamt) with individual proof of the costs and
information on the percentage of personal and professional use. If you do this, there is no limit.
Note: Proving these costs individually is worthwhile for those whose internet/telephone professional
expenses exceed 20 euros per month or if the tax office rejects a flat rate calculation.
Double houshold management (Doppelte Haushaltsführung)

There are many expenses that can be claimed on your tax return when maintaining two households.
Requirements Tax-deductible costs

· You have a second apartment/home · Rent and utility costs
(including a room in a shared apart- · Additional board costs (Verpflegungs-
ment) for professional reasons mehraufwand)
· Your second residence is closer to your · Second residence taxes (Zweitwoh-
job than your main residence nungsteuer)
· You have a primary residence outside · Broadcasting fee (Rundfunkbeitrag)
of your place of work (Please note: you can be exempted for
one of the two residents!)
· Your primary residence is the center of · Costs for journeys back home (Fami-
your life, family, etc. lienheimfahrten)
· Your make a financial contribution to · Moving costs (Umzugskosten)
your primary residence (more than 10% · Furniture and equipment
of your double household expenses)
5 Special expenses (Sonderausgaben)

Deductible expenses contributing to your personal life that cannot be claimed as income-related ex-
penses (Werbungskosten) or business expenses (Betriebsausgaben) are called special expenses
(Sonderausgaben). Unlike income-related expenses, the amount in special expenses that one can
claim is regulated according to their income and sometimes limited to maximum amounts.
Special expenses can be divided into four categories:
• Expenses for retirement provisions (Altersvorsorge)

• Other provident expenses (Vorsorgeaufwendungen)
• General special expenses (allgemeine Sonderausgaben)
• Other special expenses (sonstige Sonderausgaben)

A lump sum of 36 euros (single taxpayers) or 72 euros (married taxpayers) for general special expenses
is automatically deducted from your income for general special expenses – of course, most taxpayers
can deduct much more if they list their expenses individually in their tax return. The extra effort is
worthwhile as it can contribute towards a larger tax refund!
Expenses for retirement provisions (Altersvorsorge)

The deferred taxation (nachgelagerte Besteuerung) of pensions (Renten) was introduced in 2005. In
return, contributions are tax-deductible during the pay-in phase. The sum of deductible contributions
to retirement provisions increases by 2% each year and should reach 100% by 2025.
The federal government brought this forward by 2 years: 100% of your contributions will already be
tax-deductible as of 2023. In 2022, 94% of the contributions made were still deductible.
However, an annual maximum amount applies for the deduction of contributions to retirement pro-
visions. In 2023, this maximum amount is 25,527 euros. For married couples with a joint tax return,
double the maximum amount of 53,054 euros applies. In 2024, the maximum amount is 27,566 euros
and 55,132 euros respectively.
Expenses for retirement provisions include

· Statutory retirement insurance (gesetzliche Rentenversicherung)
· Certain private retirement insurances (private Rentenversicherung)
· Occupational pension schemes (berufsständische Versorgung)
· Riester pensions (Riester-Rentenversicherung)
· Rürup pensions (Rürup-Rentenversicherung)
· Agricultural old-age insurance (landwirtschaftliche Altersklasse)
Information on retirement and life insurance policies

Contributions to retirement (private Rentenversicherung) and life insurance policies (Lebensversicher-
ungen) can be deducted from your taxes as long as they meet a few requirements. Annuity insurance
policies with or without a lump-sum option (Kapitalwahlrecht) as well as all life insurance policies must
have at least a 12-year term. The first premium payment must also have been made before January
1st, 2005.
Riester Pensions
All employees are typically eligible for Riester pensions as long as they are also making contributions
towards their statutory retirement insurance (gesetzliche Rentenversicherung). The state subsidy is
always the same regardless of which Riester pension option is chosen. It consists of tax savings and
direct allowances – the maximum allowance (Zulage) amount being 175 euros a year per employee.
If you are a parent, this allowance is increased to 185 euros with an increased allowance of 300 euros
for children born after 2007. A one-time “career starter bonus (Berufseinsteigerbonus)” of 200 euros
can be received by those under 25 years of age.
Tax savings consist of a separate special expenses deduction for Riester pension contributions: Up to
2,100 euros per year in Riester pension contributions can be deducted per year from your taxes.

Who can’t profit from Riester Riester pension variants
· Students who are not subject to retire- · Fund savings: recommended for
ment insurance younger people
· Those compulsorily insured with occu- · Riester insurance
pational pension schemes who are ex- · „Wohn-Riester“
empt from statutory pension
· Marginally employed persons (mini- · Bank savings: recommended for older
jobs) who do not pay retirement insur- people
ance
· Those who already receive pension/re- · Unit-linked (fondsgebundene) insu-
tirement insurance payments rance
Rürup pension
Rürup pensions are fully funded, not pay-as-you-go. Instead of being paid out in one lump sum, they
are paid out monthly and earn interest over time. Rürup pensions are colloquially called “basic pen-
sion,” in which the state provides special support for the policyholder.
Note: Rürup pensions are primarily intended for self-employed persons that cannot take out state
subsidized Riester contracts.
Other provident expenses (sonstige Vorsorgeaufwendungen)

Up to 1,900 euros in other provident expenses can be deducted per year (2,800 euros for freelancers).
Basic contributions to health insurance and nursing care insurance (Basisbeiträge zur Kranken- und
Pflegeversicherung) can be deducted in full even if they exceed the maximum amount – however, in
this case, you cannot deduct any additional provident expenses.
Other provident expenses include

· Unemployment insurance (Arbeitslosenversicherung)
· Health insurance (Krankenversicherung)
· Nursing care insurance (Pflegeversicherung)
· Accident insurance (Unfallversicherung)
· (Occupational) disability insurance (Erwerbs- und Berufsunfähigkeitsversicherung)
· Liability insurance (Haftpflichtversicherung)
· Risk insurance (Risikoversicherung)
· Life insurance (Lebensversicherung)
General special expenses (allgemeine Sonderausgaben)

The maximum deductible amount for general special expenses varies based on what the expense was
for.
General special expenses include

· Maintenance payments (Unterhaltszahlungen) for an ex-spouse when divorced or perma-
nently separated (max. 13,805 euros plus contributions to health and nursing care insur-
ance)
· Expenses for childcare (Kinderbetreuungskosten, 2/3 of the costs, max. 4,000 per child)
· Church tax (Kirchensteuer, no limit)
· School fees (Schulgeld, 30% of the costs, max. 5,000 euros)
· Donations (Spenden, see below)
· Expenses for first apprenticeship (Berufsausbildung) or first degree (max. 6,000 euros)

Donations (Spenden)
Money donations and donations in kind can both be deducted as special expenses if they meet certain
conditions. The maximum deductible amount varies on their purpose:
A sum amounting to 20% of your annual income can be deducted for donations to tax-privileged or-
ganizations. Donations up to 300 euros can be claimed without a donation receipt (simplified proof).
Up to 1,650 euros in donations to political parties and voters associations (as well as membership fees)
are tax-deductible. 50% of the donation is directly deducted from your tax liability. A further maximum
amount of 1,650 euros can be deducted from your taxable income for higher donations.
Donations are deductible if… You can submit a simplified proof for...
· non-profit organizations benefit from · donations following disasters (dona-
them tions in unlimited amounts)
· they support tax-privileged purposes · non-profit organizations (up to 300 eu-
ros)
· they are made voluntarily without a · government agencies (up to 300 euros)
promise of compensation
· they can be proven with donation re- · political parties and independent voter
ceipts associations (up to 300 euros)
Other special expenses (sonstige Sonderausgaben)

Costs for the restoration or renovation of historical monuments and cultural artifacts which are occu-
pied for your own residential purposes are tax-deductible as special expenses. 9% of these costs can
be deducted annually over the course of 10 years.
6 Extraordinary expenses (außergewöhnliche Belastungen)

Extraordinary expenses are costs that exceed the ‘reasonable burden’ (zumutbare Belastung) that tax-
payers with a similar income, family status, and assets face. These expenses can be claimed on your
tax return if they are unavoidable and necessary – more specifically, they cannot be avoided for legal,
moral, or factual reasons.
The purpose of extraordinary expenses is to prevent unreasonable hardships for those paying income
tax, but this does not mean that they are unconditionally recognized by the tax office (Finanzamt).
Extraordinary expenses are divided into two groups:
Special extraordinary expenses

Special extraordinary expenses (besondere außergewöhnlichen Belastungen) are limited to:
• Maintenance payments (Unterhaltsleistungen, deductible up to the limit of the basic tax-free

allowance)
• Educational allowance for adult children pursuing a degree/apprenticeship (Ausbildungs-
freibetrag, up to 1.200 euros)
• Disability allowance (Behinderten-Pauschbetrag, maximum amount varies based on severity
of disability)
• Nursing care allowance (Pflege-Pauschbetrag, maximum amount varies depending on the de-
gree of care)
• Survivor allowance (Hinterbliebenen-Pauschbetrag, 370 euros one-time)

There are lump sums and allowances for special extraordinary expenses, they are deductible from the
first cent.
General extraordinary expenses

General extraordinary expenses (allgemeine außergewöhnlichen Belastungen) refer to expenses that
arise from extraordinary life events such as illnesses or environmental disasters. These can include,
but are not limited to:
• Medical expenses
• Travel costs to the doctor
• Care costs for your parents
• Funeral costs
• Equipment costs to make a residence suitable for handicapped persons
• Damage to your own occupied dwelling as well as the cost of replacing household goods and
clothing after a natural disaster
General extraordinary expenses can only be deducted if they exceed the “reasonable burden”
amount.
Reasonable burden (zumutbare Belastung)

Your individual “reasonable burden“ amount varies based on your income and marital status. This
amount is then deducted from your extraordinary expenses and only the costs that exceed this
amount can be deducted from your taxes.
Total income
Marital status Up to 15.340 euros From 15.340 euros From 51.130 euros
to 51.130 euros
Singles and individually as- 5% 6% 7%
sessed spouses without chil-
dren
Jointly assessed spouses 4% 5% 6%
without children
Singles and married persons 2% 3% 4%
with 1 or 2 children
Singles and married persons 1% 1% 2%
with 3 or more children
Note: Your reasonable burden is calculated in steps. Only the part of your income that falls into the
next income bracket is subject to the next higher percentage.
Medical expenses
Medical expenses due to an illness can be deducted as extraordinary expenses if they meet certain
conditions:
Your proof of your medical expenses must have been issued before the treatment/remedy started. A
prescription from a doctor or practitioner is required as well a certificate from a public health officer
(amtsärztliches Gutachten) or from your insurance. To prove travel expenses when travelling to your
spouse or child receiving medical treatment, a certificate from the hospital’s physician (where they’re
being treated) is required.

Deductible medical expenses
· Expenses for inpatient or outpatient treatment
· Hospital costs
· Illness-related accommodation in a nursing home (for yourself)
· Laser eye surgery
· Healing remedies that are not recognized by your health insurance
· Cures that heal or relieve an illness
· Prescribed medicines, remedies, and aids
· Travel costs to the doctor or pharmacy
· Treatment for reading/writing disabilities
· Costs for an outpatient nurse
Note: If your health insurance did not already refuse to cover your medical costs, they cannot be
claimed on your tax return.
7 Household-related expenses (Haushaltsnahe Aufwendungen)

Household-related services (Haushaltsnahe Dienstleistungen) are services/activities in your house-
hold for which you hired a company or self-employed service provider. This can include domestic help,
nursing services, and tradespeople services.
Tradesperson labor and travel costs as well as consumables and machinery can be deducted from your
taxes, while material costs cannot. There is a distinction between tradespeople services (Hand-
werkerkosten) and other household-related services (haushaltsnahe Dienstleistungen): up to 20% of
the costs for household-related services can be claimed per year (with a maximum limit of 4,000 eu-
ros), an additional 20% of labor costs can be deducted for tradespeople services (maximum limit of
1,200 euros).
Deducting tradespeople services from your taxes is limited to maintenance, repairs, or renovations –
the service cannot create something new.
You are required to have an official itemized invoice from the company or freelancer that you paid
with a bank transfer, direct debit, or credit card. You cannot claim services that were paid for in cash.
Your household-related service expenses and tradespeople costs are deducted directly from your cal-
culated tax liability, which can help result in a large tax refund.
Note: Many don’t know that part of your landlord’s utility bill can also be claimed on your tax return.
Simply review your utility bill, but keep in mind that you can only claim labor costs (chimney sweep,
gardener, etc.), not material expenses.
· Home cleaning
· Meal prep
· Childcare / care for people in need
· Renovation costs
· Garden maintenance
· Repair costs
· Snow removal services
· Animal care and dog walking services
· Janitorial services
· Window cleaning

8 Capital gains, rental income, and foreign income – how are they taxed?
In this chapter we summarize for you which tax regulations apply to other income, for example in-
come from renting and leasing, foreign income, and capital gains.
Capital gains (Kapitalerträge) and savers‘ allowances (Sparerpauschbetrag)

Profits from financial investments, also known as capital gains, are subject to withholding tax (Kapital-
ertragsteuer/Abgeltungsteuer) which is deducted directly from the source. This means that the bank,
insurance company, etc. will automatically deduct the tax from your capital gains and forward it to
the necessary financial authority.
Examples of capital gains

· Share sales
· Income from funds
· Income from certificates
· Interest on checking or savings accounts
· Dividends
The savers‘ allowance (Sparer-Pauschbetrag) exempts up to 1,000 euros of your capital gains per year
from being taxed, this amount is doubled (2,000 euros) for married couples who are assessed together
(Zusammenveranlagung). Before 2023, the saver’s allowance amounted to 801 euros and 1,602 euros
respectively. Find out more about the savers’ allowance here.
Rental income (Mieteinnahmen)

Rental income, a part of “income from renting and leasing“ (in the Income Tax Act: Einkünfte aus
Vermietung und Verpachtung) must be declared in your income tax return and taxed accordingly.
The amount of tax that must be paid on rental income varies depending on your individual tax rate
(Steuersatz). Claiming allowances (Freibeträge) and income-related expenses (Werbungskosten) can
help reduce the tax burden.
Examples of rental income

· Renting a house
· Subletting an owned apartment
· Subletting an apartment in your home
· Subletting a vacation home
· Renting property
· Subletting a room in your apartment
Note: Income from renting and leasing is taxed domestically in the country where the property is
located. Therefore, if you are renting out a vacation home in Spain, you have to declare the rental
income and related expenses on your Spanish tax return.
Foreign income (ausländische Einkünfte)

Anyone registered as a German resident with their primary residence in Germany are subject to un-
limited income tax liability. As a result, all income (whether domestic or abroad) is liable to German
taxes.
In addition, the country where you’ve received your foreign income will also deduct tax – this is not
unusual and is referred to as the “source principle” (German: Quellenprinzip).

Germany has signed a double tax treaty (Doppelbesteuerungsabkommen) with 70 countries so far to
help taxpayers avoid double taxation. This can be avoided with two different methods:
Exemption method (Freistellungsmethode):

This is the most typical method. This ensures that income earned abroad is tax-exempt in Germany,
however it is still subject to the Progressionsvorbehalt – meaning the amount is added to your taxable
income to calculate your tax rate, and your tax rate is then applied to your income without the foreign
income.
Imputation method (Anrechnungsmethode):

Your foreign income is recorded in Germany and the tax you paid abroad is deducted from your Ger-
man tax burden.
9 Lump sums (Pauschalen) and allowances (Freibeträge) you need to know

To simplify the tax return and its processing, the Income Tax Act (Einkommensteuergesetz) intro-
duces lump sums and allowances. As soon as you meet the respective requirements, you are entitled
to be granted the corresponding lump sums and allowances.
Some are taken into account automatically, others you must apply for in your tax return. For exam-
ple, the lump sum for special expenses (Sonderausgaben-Pauschbetrag) and the income-related ex-
penses lump sum (Arbeitnehmer-Pauschbetrag) are automatically taken into account.
However, you must apply for the disability allowance (Behinderten-Pauschbetrag), nursing care al-
lowance (Pflege-Pauschbetrag), and survivor allowance (Hinterbliebenen-Pauschbetrag) within your
tax return.
Lump sums (Pauschalen)

Lump sums are used to make a portion of your income tax-free, and your local tax office (Finanzamt)
recognizes them without requiring you to provide individual proof. If certain expenses exceed the
lump sum amount (e.g. income-related expenses or specific special expenses), you can write them off
individually on your taxes; otherwise, if your expenses do not reach the lump sum amount, they are
deducted automatically.
The income-related expenses lump sum for employees and retirees as well as the special expenses
lump sum are always automatically taken into account.
Lump sum examples

· Work equipment lump sum (Arbeitsmittelpauschale): 110 euros
· Nursing care lump sum (Pflege-Pauschbetrag): care level 2: 600 euros, care level 3: 1,100
euros, care level 4 and 5: 1,800 euros
· Savers’ allowance (Sparer-Pauschbetrag): 1,000 euros (from 2023, previously: 801 euros)
· Home office lump sum: 6 euros/day, max. 1,260 euros/year (2020 – 2022: 5 euros/day,
max. 600 euros/year)
· Moving costs lump sum (Pauschale für sonstige Umzugskosten): As of April 1st, 2022: 886
euros for the entitled person and 590 euros for each additional person. From March 1st,
2024: 964 euros and 643 euros respectively
· Commuter allowance (Entfernungspauschale): 30 cents/km (from the 21st km: 35 cents,
from 2022: 38 cents)

· Exercise leader lump sum (Übungsleiterpauschale): 3,000 euros
· Income-related expenses lump sum (Werbungskostenpauschale): 1,200 euros (2022),
1,230 euros from 2023 (Retirees: 102 euros)
· Additional board lump sum (Verpflegungspauschale): 14 euro for 8+ hours absent, 28 eu-
ros for 24 hours absent
· Volunteering lump sum (Ehrenamtspauschale): 840 euros
· Special expenses lump sum (Sonderausgaben-Pauschbetrag): 36 euros for single persons,
72 euros for married persons
· Disability allowance (Behinderten-Pauschbetrag): 384 to 2,840 euros; For those in need of
constant care according to §33 Paragraph 6 of the Income Tax Act: 7,400 euros (values
valid from 2021)
Allowances (Freibeträge)
There are allowances (German: Freibeträge) that exempt a certain amount of income from taxation,
and those who exceed this amount must pay tax on the excess income. The most notable is the basic
tax-free allowance (Grundfreibetrag) which is automatically deducted from your taxable income to
secure the minimum subsistence level.
Note: An exemption limit (Freigrenze) behaves differently: if the limit is exceeded the entire amount
is taxed.
Important allowances
· Basic tax-free allowance (Grundfreibetrag): 10,908 euros (as of 2024: 11,604 euros)
· Education allowance (Ausbildungsfreibetrag): 1,200 euros (from 2023, previously: 924 eu-
ros)
· Child allowance (Kinderfreibetrag): 3,012 euros per parent (as of 2024: 3,192 euros)
· BEA-Allowance (Allowance for childcare, daycare, and education) 1,464 euros per parent
· Discount allowance (Rabatt-Freibetrag): 1,080 euros
· Age relief allowance (Altersentlastungsbetrag): 665 euros max. (14% of income) in 2023
(2024: 13.6% of income, 646 euros max.)
10 Monetary benefits and one-fifth method
Monetary benefits (Geldwerter Vorteil)

Monetary benefits can be awarded by your employer in addition to your salary and must be taxed the
same way. There are a few exceptions to this rule that allow you to receive tax-free monetary benefits:
Discount allowance (Rabatt-Freibetrag)

Employees who receive discounts on wares and services that their company provides are entitled to
1,080 euros in tax-free company savings, any discounts above this tax-free limit are subject to tax. This
includes discounts on (or free) hotel rooms for hotel employees, cars for auto salespeople, etc. Fre-
quent flyers can also use their bonus miles from business travels for a personal vacation if their em-
ployer approves it – but the rule remains the same, if the received benefits extend above the 1,080-
euro limit, the excess amount will be taxed.

De minimis or exemption limit (Bagatell- or Freigrenze)
Tax-free benefits in kind are limited to a value of 50 euros per month (as of 2022, previously 44 euros).
Contrary to allowances, the entire value of the benefits in kind must be taxed as soon as they exceed
the exemption limit – not just the excess value.
Some examples of benefits in kind include merchandise or gasoline coupons, high-quality promotional
gifts, a company Christmas party, company outings, job tickets for public transportation, or gym mem-
berships.
Note: Benefits in kind such as your employer taking over childcare costs for non-school age children,
or a work cellphone/laptop are generally tax-free if they are an employer loan.
Severance packages, anniversary bonuses and the one-fifth method

Since 2006, severance packages (Abfindungen) and anniversary bonuses (Vergütung für mehrjährige
Tätigkeit) have been treated as taxable wages, just like your typical salary. They are entered on your
tax return as extraordinary income (außerordentliche Einkünfte). Extraordinary income can be taxed
according to the one-fifth method (Fünftelregelung) in Germany which divides the taxation over a
course of five years, as if you had received the payment in five installments. The tax office automati-
cally checks if it is more beneficial for you to tax your severance package according to the one-fifth
method (Günstigerprüfung). If this method is applied, you’re required to file a tax return in the follow-
ing year.
Note: From 2025, the one-fifth rule can no longer be applied by employers, but only by the tax office
as part of processing your tax return.
11 2024 tax changes at a glance

As of January 1st, 2024, several tax changes will come into force. We give you an overview of the most
important tax changes for 2024 and tell you how they will impact your 2024 tax return!
Tax return deadlines

If you are required to file a tax return, the following deadlines apply:
• 2023 tax return: due on September 2nd, 2024

• 2024 tax return: due on July 31st, 2025
Employee savings allowance: income threshold raised

The income threshold for eligibility for the Employee Savings Allowance (Arbeitnehmer-Sparzulage)
will be doubled as of January 1st, 2024. With a maximum taxable annual income of now 40,000 eu-
ros ( individual assessment), or 80,000 euros ( joint assessment), you can apply for the allowance in
your tax return. Due to this expansion, approximately 14 million more employees are eligible.
The Employee Savings Allowance is a government subsidy for asset-building benefits (ver-
mögenswirksame Leistungen) that you negotiate with your employer.

Basic allowance, income tax rate and maintenance payments
Basic tax-free allowance increased
The tax-free basic allowance (steuerlicher Grundfreibetrag) secures the subsistence minimum and is
raised annually. As of January 1st, 2024, it is being increased by 696 euros from 10,908 euros (2023) to
11,604 euros. Only income exceeding this amount is subject to taxation, starting with an initial tax rate
of 14%. For married couples filing a joint tax return, the double basic allowance always applies,
amounting to 23,208 euros in 2024.
Income Tax Rate Adjusted

To mitigate the effect of the so-called cold progression (kalte Progression), tax rate thresholds (Steuer-
tarif-Eckwerte) are annually shifted to the right. In 2024, they will be raised by 6.3%. In 2024, the top
tax rate (Spitzensteuersatz) will therefore apply to an annual income of 66,761 euros (2023: 62,810
euros). Only the maximum tax rate ("wealth tax rate" or “Reichensteuersatz”) will continue to start at
an annual income of 277,826 euros.
Cold progression is a term used to describe the fact that taxpayers are taxed at a higher rate due to
an increase in income that is actually intended to compensate for inflation. The German tax system is
progressive: the tax rate increases with income. Without adjusting the basic parameters, the higher
income would be wasted.
Maintenance payments: deductible maximum amount increased

You can deduct maintenance payments (Unterhaltszahlungen) for ex-spouses or dependent persons
(e.g. adult children that are not entitled to child benefits (Kindergeld) anymore) either as special ex-
penses (Sonderausgaben) or as extraordinary expenses (außergewöhnliche Belastungen). Different
maximum amounts apply.
The deduction as special expenses is possible up to 13,805 euros. The deduction as extraordinary ex-
penses is linked to the basic tax-free allowance. It therefore increases from 10,908 euros (2023) to
11,604 euros (2024). In both cases, you can also deduct contributions to basic health and long-term
care insurance (Basiskranken- und Pflegeversicherung).
Please note: The deduction as special expenses is only applicable for ex-married couples.
Child allowance (Kinderfreibetrag) increased

Child allowances consist of two components:
• Child allowance (Kinderfreibetrag) and

• Allowance for care, education, and training needs (Betreuungs-, Erziehungs- und Ausbildungs-
bedarf, short: BEA)
As of 2024, the child allowance will be increased by 360 euros to a total of 6,384 euros per year. Per
parent, it amounts to 3,192 euros. Including the BEA, the total child allowance for 2024 is raised to
9,312 euros. Child benefits (Kindergeld) remain consistently at 250 euros per child.
Nursing care allowance & nursing care services increased

Those with at least care level 2 (Pflegegrad 2), who are cared for by family members, friends, or vol-
unteers, are entitled to care allowance (Pflegegeld). The care allowance is staggered according to the
level of care and is paid monthly by the care insurance fund (Pflegekasse) to the insured person.

Individuals who are not cared for by relatives but by a professional care service (Pflegedienst) are
entitled to nursing care services (Pflegesachleistungen) instead of care allowance. The same require-
ments apply. Both benefits - care allowance and nursing care services - will be increased as of January
1st, 2024.
Care level Care allowance Nursing care services

Care level 2 332 euros (before: 316 euros) 761 euros (before 724 euros)
Care level 3 573 euros (before 545 euros) 1,432 Euro (before 1,363 euros)
Please note: Are you taking care of relatives and applying for the long-term care lump sum? In that
case, you are not allowed to receive care allowance from the person being cared for as a financial
compensation. You are only permitted to keep their care allowance to buy them medical devices, for
example, but you cannot keep the care allowance for yourself.
Gastronomy: value added tax for food returns to 19%

To alleviate the restaurant industry during the COVID-19 pandemic, a reduced value-added tax rate
(Mehrwertsteuersatz) for food was in effect from July 2020 until the end of December 2023. As of
January 1st, it will be increased from the previous 7% back to the regular VAT of 19%.
Minimum wage & mini-job threshold increase

The Federal Government follows the decision of the Minimum Wage Commission (Mindestlohnkom-
mission): as of January 1st, 2024, the statutory minimum wage (gesetzlicher Mindestlohn) increases
from the current 12 euros to 12.41 euros per hour. From January 1st, 2025, it is set to rise further to
12.82 per hour.
Simultaneously, the earnings threshold for mini-jobs increases from 520 euros to 538 euros per
month.
Solidarity surcharge: exemption limit increased

In 2021, the solidarity surcharge (Solidaritätszuschlag) was abolished for 90% of taxpayers after 30
years. However, those exceeding the annual exemption limit (Freigrenze) still need to pay the solidar-
ity surcharge. As of January 1st, 2024, this exemption limit was raised from previously 17,543 euros to
18,130 euros. In case of joint assessment, the exemption limit is doubled.
Energy
CO² price rises
As of January 2024, the cost for a ton of heating oil, gas, and fuel will be 45 euros. Due to the energy
crisis, the price had remained at 30 euros per ton in 2023. Therefore, refueling and heating will be-
come more expensive in 2024. The increase in the CO² price aims to support the shift to eco-friendly
heating and fuel.
Electricity and gas price cap expires

The government subsidies for electricity and gas will end on January 1st, 2024, which is three months
earlier than the government had yet decided in November. The energy price cap (Energiepreispremse)
was introduced on March 1st, 2023, as a response to the energy crisis due to Russia’s invasion of
Ukraine. The price cap had limited the electricity price at 40 cents per kilowatt hour and the gas price
at 12 cents per kilowatt hour.

December aid 2022 becomes tax-free
Due to the sharply increased gas prices, the German government took over the advance payment for
gas and heat in December 2022, providing relief to private households and small to medium-sized
businesses. Originally intended to be taxed, the Bundestag has now decided that this Dezemberhilfe
will be tax-free.
Reform of pension taxation

Pensions (Rente): full taxation only from 2058
To avoid double taxation (Doppelbesteuerung) of pensions, pensions will be fully taxed only from
2058 instead of from 2040 onwards. Starting in 2023, the taxable portion of retirement benefits will
increase annually by only 0.5% instead of 1%. Those retiring in 2023 therefore need to de-
clare 82.5% of their pension income for taxation instead of previously 83%.
Altersentlastungsbetrag decreases more slowly

Parallel to the slower increase in the taxable pension component, the Altersentlastungsbetrag is also
decreasing more slowly. The Altersentlastungsbetrag (Old-Age Relief Amount) is a tax allowance
(Freibetrag) that individuals aged 64 and above receive for their fully taxable income. The calculation
is based on a fixed percentage and an annual maximum amount, both decreasing by 0.8% each year.
As of 2023, the percentage is decreases by only 0.4% annually. Consequently, the maximum amount
will decrease by only 19 euros per year from 2023 on, instead of previously 38 euros.
Pension allowance and supplement to pension allowance

In line with changes to retirement taxation and old age relief amount, the pension allowance (Ver-
sorgunsgfreibetrag) and the supplement to pension allowance (Zuschlag zum Versorgungsfreibetrag)
are also adjusted. As of 2023, the percentage used to calculate the pension allowance will decrease
by 0.4% annually, instead of the previous 0.8%. Consequently, the tax-free maximum amount de-
creases by 30 euros annually starting from 2023, and the supplement to the pension allowance de-
creases by 9 euros annually.
This adjustment will only be reflected in the monthly income tax deduction (Lohnsteuerabzug) starting
from 2025. The changes for 2023 and 2024 will only be considered by the tax office in the context of
your tax return!
The pension allowance is an income tax exemption for pension benefits (Versorgungsbezüge), such as
civil servant pensions (Beamtenpensionen) and company pensions (Betriebsrenten), corresponding to
the tax-free portion of statutory pensions (gesetzliche Renten).
One-fifth method: only applicable within your tax return

For extraordinary earnings (außerordentliche Einkünfte) such as a severance payment (Abfindung)
or compensation for multi-year activities (Vergütung für mehrjährige Tätigkeit), the so-called one-fifth
method can be applied, which is often more favorable for tax purposes than a taxation at once. How-
ever, as of 2025, the one-fifth method can no longer be applied within the wage tax deduction proce-
dure, but only within the tax return.
Threshold for private sales transactions increased

The annual threshold (Freigrenze) of 600 euros for income from private sales transactions (private
Veräußerungsgeschäfte) is raised to 1,000 euros. Married couples filing separately are entitled to
1,000 euros of tax-free gains each.

Overnight allowance for truck drivers increased
For truck drivers who stay overnight in their vehicles, the lump sum increases from 8 euros to 9 eu-
ros as of January 1st, 2024.
Tax changes for companies and entrepreneurs

Asset depreciation (Abschreibung für Abnutzung, short: AfA)
Companies can again depreciate movable fixed assets (bewegliche Wirtschaftsgüter) acquired or man-
ufactured between April 1st, 2023, and December 31st, 2024, using a declining balance method (de-
gressive Abschreibung). The Corona Tax Relief Acts have already allowed for the declining depreciation
of movable assets for 2020, 2021, and 2022. However, this time the percentage rate is limited to a
maximum of 20%.
Gifts to business partners

As of January 1st, 2024, the tax-free threshold for gifts to business partners will be increased from 35
euros to 50 euros per person per year to offset inflation. Gifts up to 50 euros can be fully deducted as
business expenses (Betriebsausgaben) for tax purposes. Gifts exceeding the threshold must be fully
taxed.
Value added tax (VAT): higher threshold for Ist-Besteuerung

The turnover threshold (Umsatzgrenze) for applying Ist-Besteuerung (actual taxation) has been in-
creased: as of 2024, business owners can opt for actual taxation if their previous year’s turnover is be-
low 800,000 euros (previously: 600,000 euros). Actual taxation means that VAT is only paid to the tax
authorities when it is actually received by the entrepreneur. Therefore, the entrepreneur no longer
has to pay VAT in advance.
Please note: Freelancers using the Einnahmen-Überschuss-Rechnung (income-surplus calculation

method) are always eligible for actual taxation.
VAT return & advance payment

If your taxes as a business owner did not exceed 2,000 euros in the previous year, you will no longer
be required to submit a VAT advance notification (Umsatzsteuer-Voranmeldung) or make advance
payments (Umsatzsteuer-Vorauszahlung). Previously, the threshold for this exemption was 1,000 eu-
ros.
As of 2024, small business owners (Kleinternehmer) are generally exempt from submitting VAT re-
turns (Umsatzsteuererklärung).
Please note: This exemption applies only as long as the small business regulation (Kleinun-
ternehmerregelung) is applied.
12 The simplest way to file your taxes: wundertax

wundertax offers a simple, fast, and stress-free way to file your taxes – no prior knowledge required!
We designed interview questions tailored to different professional groups so that you don’t miss any
deductible expenses. While you enter your data into our easy-to-understand templates, our live tax
calculator is constantly updating to show you your estimated tax refund based on your entries.
Our tax tool is connected to ELSTER, Germany’s official state tax software. Therefore, your data
submission to the tax office is protected by the same high security standards.

In addition to numerous predetermined lump sums, you can deduct countless other expenses. This
includes:
• Insurances (Versicherungen)
• Moving costs and double household maintenance
• Costs for business trips
• Job application costs
• Commuting costs
• Union dues and membership fees for professional associations (Berufsverbände)
• Home office and remote work costs (incl. telephone & internet costs)
• Costs for volunteering
• Houshold-related expenses (Haushaltsnahe Aufwendungen)
• Child and pet care costs
• Retirement provisions
• Tradespeople and renovation costs
• Extraordinary expenses (Außerordentliche Belastungen) such as medical or disability costs
• Donations (Spenden)
• Maintenance payments to dependents
• Much more…
Other advantages that wundertax has to offer:
• Clever tax tips and integrated optimization checks

• wundertax’s online tools are cheaper than any tax consultant
• Simple interview questions instead of complicated tax forms
• Automatic submission of your official documents
• Good for those with little time to spare
• Good for those without prior tax knowledge or who are submitting their first tax return
• wundertax considers all professional costs and lump sums
• wundertax’s tools are recognized by all German tax offices (Finanzämter)
• Your tax return can be submitted up to 4 years retroactively
• Claim a loss carryforwards up to 7 retroactively
• Our customer support will assist you every step of the way
• BILD seal of approval - 1st place in the tax return section: “highest customer benefit”
Submit your tax return now and secure your tax refund!

About wundertax
We are wundertax and our goal is to provide you with your ideal tax solution by making taxes simple and
stress-free. With us, you can submit your tax return easily, fast, and inexpensively – without any prior
knowledge!
Our live tax calculator makes sure that you can always see your estimated tax refund and our app tells you
whether you are required to file. If you have any questions, our customer service is always happy to assist
you.
wundertax doesn’t only help traditional employees – we strive to provide a tax solution for everyone including
students, apprentices, expats, police officers, teachers, fire fighters, and soldiers. You can find the portal that
fits your needs on our website: www.wundertax.de/en
Legal imprint:
wundertax GmbH
Beliner Straße 80-82
13189 Berlin
[email protected]
https://wundertax.de/en
Updated: May 2024
Note from the publisher:

wundertax does not offer tax consultancy – wundertax is a service provider that assists you in completing your
tax return yourself. This guide should help you submit your tax return quickly and easily. For this purpose, we’ve
compiled the most important information for you and have tried to present the necessary facts as simply as pos-
sible.

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Tax Guide

Everything you need to know

wundertax GmbH | www.wundertax.de/en | Page 1 of 32

Tax number (Steuernummer)

Applying for a tax number

Your local tax office (zuständiges Finanzamt)

wundertax GmbH | www.wundertax.de/en | Page 2 of 32

You can find your local tax office here.

Tax classes (Steuerklassen)

List of tax classes

Changing your tax class (Steuerklassenwechsel)

wundertax GmbH | www.wundertax.de/en | Page 3 of 32

Requirements for joint assessment that must be met simultaneously

Types of income (Einkommensarten)

• Income from employment

wundertax GmbH | www.wundertax.de/en | Page 4 of 32

Wage replacement benefits and Progressionsvorbehalt

Wage replacement benefits include:

• Unemployment benefits (Arbeitslosengeld)

Mandatory Tax Assessment (Abgabepflicht)

wundertax GmbH | www.wundertax.de/en | Page 5 of 32

Deadlines (Fristen) / Extensions (Fristverlängerung)

wundertax GmbH | www.wundertax.de/en | Page 6 of 32

Obligation to provide proof (Nachweispflicht)

Tax assessment notices (Steuerbescheid)

• Income tax (Einkommensteuer)

Correcting your tax assessment notice

wundertax GmbH | www.wundertax.de/en | Page 7 of 32

Requirements and advantages Reasons for an amendment

Requirements and advantages Reasons for an appeal

2 2023 tax return: important tax changes

2023 Tax return deadline

wundertax GmbH | www.wundertax.de/en | Page 8 of 32

Retirement provisions fully deductible

Increases in allowances and lump sums

Income tax rates adjusted

wundertax GmbH | www.wundertax.de/en | Page 9 of 32

Reforms: Housing benefits & Bürgergeld

Basic retirement supplements

Price breaks for electricity, gas, and heating

wundertax GmbH | www.wundertax.de/en | Page 10 of 32

Home office lump sum & Home offices

3 Saving taxes as a family

Child benefits (Kindergeld)

wundertax GmbH | www.wundertax.de/en | Page 11 of 32

Child allowances (Kinderfreibeträge)

Child allowances are divided into two parts:

• allowance to secure the existence minimum for children and

2022 2023 2024

Child benefits or child allowance: which is more beneficial?

Relief amount for single parents (Entlastungsbetrag für Alleinerziehende)

wundertax GmbH | www.wundertax.de/en | Page 12 of 32

Childcare costs (Kinderbetreuungskosten)

School fees (Schulgeld)

Education allowance (Ausbildungsfreibetrag)

Children’s sick days and children’s sick pay (Kinderkrankengeld)

wundertax GmbH | www.wundertax.de/en | Page 13 of 32

4 Income-related expenses (Werbungskosten)

Income-related expenses include: