German income tax returns - the easy way

The tax system in Germany is known and notorious worldwide 😓. There are innumerable regulations for the most diverse individual cases and you need to have a burning passion for legal texts and tax-saving tricks if you want to dare to do your tax return alone. In this article, we would like to describe briefly how you can make it easy for yourself with your tax return.

If you have worked as an employee in a calendar year, you do not have to file a tax return.

Do you even need to file a tax return? 🙄

First things first. Do you have to file a tax return i.e., is there an obligation to file a tax return?

The answer is No. If you have worked as an employee in a calendar year, you do not have to file a tax return. But, in many cases, it is worth filing a tax return, as you often get money back from the tax office 💸.

If there is no obligation to file a tax return, you have 4 years to do so. Calculations are always made from the end of the tax year. For the tax year 2019 this would be 31.12.2023.

Are there cases where you have to file a tax return as an employee? 📝

Yes. These cases are listed in § 46 of the Income Tax Act. For example, if you have received unemployment benefit (Arbeitslosengeld) or parental benefit (Elterngeld, not to be confused with child benefit or Kindergeld), you must file a tax return.

There are deadlines for these cases ⌛. So if you are obliged to file a tax return, you must do so by 31 July of the following year. This means that the tax return for 2019 must be submitted to the tax office by 31.7.2020.

However, if you have your tax return filed with the help of a tax advisor or an income tax assistance association (Lohnsteuerhilfeverein), the deadline is extended. In this case, you have a little more time and you don't have to file your tax return until the year after next, and that too on the 28th of February. The tax return for the year 2019 must therefore be submitted by 28.2.2021.

We would recommend that you always make your tax return with the help of a tax consultant, an income tax assistance association or using a DIY mobile app, like Wundertax.

As you can see, the various deadlines alone are a bit confusing and therefore we would recommend that you always make your tax return with the help of a tax consultant, an income tax assistance association or using a DIY mobile app. Each of these options is explained below.

Tax accountants are highly recognised, but their services are quite expensive.

Tax Accountants

A Tax Accountant (Steuerberater) will advise you on all tax and business issues and represent you before the tax authorities. Tax accountants have to pass a very demanding state accreditation examination and the profession is highly recognised. Many people in Germany do their tax declaration with the help of a tax consultant, but the services are also quite expensive. If you decide to do so, check with people you know if they can recommend a tax accountant to you or searching online. Some of the tax consultants might even offer their service in English. For example, you can find a list of English-speaking Tax Consultants in Berlin here.

An Income Tax Assistance Association is a good and inexpensive alternative to a tax consultant.

Income Tax Assistance Associations

An Income Tax Assistance Association (Lohnsteuerhilfeverein) is a special institution in Germany. It is a self-help organisation set up by employees for employees so that they can afford appropriate tax advice regardless of their income, without having to use the considerably more expensive services of a Tax Consultant. However, the associations only advise employees and not self-employed individuals. Income Tax Assistance Associations exist in Germany in every city. To use their services, you first have to join the association. The annual fee depends on your income. For example, if your gross salary is between 60,000 and 70,000 EUR, the annual fee is about 200 EUR. In return, an employee of the association will do your tax return and you can contact the association in all tax-related questions.

An Income Tax Assistance Association is a good and inexpensive alternative to a tax consultant.

Do it yourself mobile apps

A great option for doing your tax returns yourself is to use an app, such as Taxfix and Steuergo, which are developed specifically with expats in mind. This brings several advantages. For example, you can do your tax returns in English using Wundertax. It lets you enter your data and expenses step by step and saves you a lot of time and hassle in return for a small fee.

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