Do I need to do a German tax return this year?

More people than usual will have to file taxes this year, thanks to corona. And the forms are getting more complicated. Here's the key info.

Self-employed? It's gotta be on Elster.
Self-employed? It's gotta be on Elster.dpa/Marijan Murat

Berlin-Filing a tax return can be well worth your while. On average, full-time workers get a €1,027 refund when they file. For 2020 returns, everything's different though, thanks to the virus. 

For example, during the spring 2020 lockdown almost 6m people benefited from the pandemic-related short-time work allowance. As a rule, these workers are obliged to file a tax return, according to the Taxpayers' Association in Berlin. Below, all the main FAQs on doing your German taxes for 2020.

Do I have to file?

It depends. If your salary is your only source of income, it's optional. Any additional income above €410 must be declared. The same applies to "wage-replacement benefits" such as unemployment benefits, parental leave benefits or the aforementioned short-time work allowance.

If you had several employers in the past year you'll also have to do the paperwork. Even if both spouses earned wages and one of them was taxed according to tax class V or VI or the couple had chosen the so-called factor method, filing is mandatory. Freelancers, the self-employed and tradespeople must also file - as they always have.

How do I file my taxes?

Income tax return can be submitted electronically or in paper form. However, there are restrictions on the latter, explains the Taxpayers' Association. Only employees and senior citizens may still use the paper form if they have no other income from profits. For a moderate fee, companies like Wundertax will prepare tax returns for employees via an all-English interface.

Entrepreneurs, freelancers and self-employed people must file everything over Germany's online system, Elster - which has no English info whatsoever, though we think this would be a good idea.

Where can I find the forms?

If you prefer to file on paper, the Finanzamt only accepts official forms. These can either be downloaded or picked up at your local Finanzamt. If you want to go paperless, it's Elster or an app - or a tax advisor or Lohnsteuerhilfeverein, a non-profit association that helps workers do their taxes. Here's a directory of local associations. 

Also new for 2020 are a corona aid section (Anlage Corona-Hilfen) and a section for deductions related to energy-saving upgrades made by property owners (Anlage für energetische Maßnahmen für Immobilieneigentümer). There are also new forms for pensioners, explains the federation of Lohnsteuerhilfevereine: Section R which consists of Anlage R, Annex R-AV/bAV and Annex R-AUS.

Do I have to send my receipts?

No, the tax return no longer has to be accompanied by receipts, says the Taxpayers' Association. However, you should hold on to the documents and be able show them to the Finanzamt upon request. Receipts for donations no longer need to be submitted, but must be kept for a year from the date of your Steuerberscheid  (tax assessment).

One exception: Anyone who has improved the energy efficiency of their property in the past year and claims these costs in their tax return must enclose the documentation from the company that carried out the work and the energy consultant.

What are the tax deadlines?

Those who file their tax returns voluntarily - mostly employees with no side income - have four years to do so, explains consumer report group Stiftung Warentest. In other words, you could still file your 2017 taxes  this year, specfically by midnight on 31 December 2021.

If you belong to those obliged to file a return, the deadline is 31 July but since that date falls on a Saturday this year, Monday 2 August is fine, too.

For those using the services of a tax advisor or Lohnsteuerhilfeverein, the deadline for 2020 taxes has been extended until the end of February 2022.

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