Berlin - Thanks to the pandemic, taxpayers can expect new rules and allowances while filing their 2020 German tax return - which ultimately could save them some money.
The filing deadline this year is 31 July. Because that's a Saturday, the Finanzamt is giving people until 2 August to get everything submitted.
For those who use a tax advisor, the deadline is the end of February 2022.
Since a lot of people received short-time allowance (Kurzarbeitergeld) in 2020, more employees are obliged to file a tax return than usual. Anyone who received more than €410 in "wage replacement benefits" has to file. Parental and unemployment benefits also count as "wage replacement benefits".
Here's what else you need to know:
Higher tax-exempt amounts
- The basic allowance has increased from €9,168 to €9,408 - meaning gross earnings up to €9,408 are tax-free. The child tax allowance has gone up by €192 to €7,812 per kid, up from €7,620 in 2019.
- Single parents with at least one child living with them will benefit from an additional allowance of €4,008 for 2020 (up from €1,908). "For each additional child, the allowance increases by €240," says Jana Bauer of the Federal Association of Income Tax Assistance Associations (BVL).
"Home office" allowance
- People who had to work from home in 2020 due to the pandemic can claim the new "home office" allowance. For each day they worked from home, taxpayers can claim €5 as income-related expenses - up to €600 per year.
- There's a catch. The "home office" allowance does not come on top of the standard €1,000 allowance for income-related expenses aka the Werbungskostenpauschbetrag. So only people with income-related expenses above €1,000 per year can actually benefit from the "home office" bonus.
- Similarly, you can't claim the "commuter's allowance" on days that you worked at home.
- "A daily €5 home office allowance may only be claimed if you worked exclusively from home on that day," says BVL Managing Director Uwe Rauhöft. And if you travelled to work just to pick up mail you can't claim the €5 home office allowance on that day but can claim the commuter allowance for the trip.
Short-time work allowance
- People who received short-time work allowance (Kurzarbeitergeld) in 2020 do not have to pay taxes on it. However, the short-time allowance is subject to the progression proviso. This means that the tax rate for other income goes up. "Often this will ultimately result in a tax refund, as too much tax was deducted from the salary," says Klocke.
- In some cases, however, an additional tax payment could be possible - for example, if the employee has worked fewer hours per week than normal and his or her salary has been supplemented with the short-time work allowance. "In this case, it makes sense to set aside money for an additional tax payment," Klocke recommends.
- Since 1 March 2020, taxpayers have been able to claim a higher allowance for moving expenses. The lump sum increased to €820 for singles (up from €811), and to €1,639 for married couples or single parents (previously €1,622).
- Business travellers can deduct higher daily meal expenses for work-related trips. Those who travelled more than eight hours in a day on business can claim €14 per day in their tax return (up from €12). If a business trip lasted at least 24 hours, €28 can be claimed.