All you need to know about paying taxes in Germany
As an expat, you’ve probably wondered about the rules when it comes to paying taxes in Germany. Taxes for expats can be especially complicated, but we’ve broken down the basics to help you understand the process.
Taxes are a foreign concept to most people, no matter the country. But the system for paying taxes in Germany is pretty straightforward, making the lives of expats in Deutschland just a bit easier.
Before jumping through all the hoops to file a tax declaration, it’s important to do your research. First, consider if you actually need to file. Once you’ve decided that you need to, or that you’d like to, then you can figure out which tax class you belong to. Finally, think about whether you’re ready to file them yourself, or if you’d like a little professional help. Keep reading to find out everything you need to know about the tax system in Germany.
Extra tips: The best deductions for your taxes in Germany
Depending on how you travel to work and how far your home is from your workplace, you may be able to deduct your transportation costs from your income tax. Save your public transportation passes or receipts.
Education and training
If you’ve taken any classes, seminars, or online courses this year, you can deduct them. The same goes for any other training materials you may have purchased, e.g. textbooks, workbooks, etc.
Did you purchase a new laptop? It could be deducted. Did you upgrade your phone? That could be deducted. When deciding whether something you use privately counts as a work expense, the rule is: did you use this tool professionally more than 50% of the time? If you can defend this claim, write it off.
Job search costs
If you traveled within Germany while pursuing a new job, those travel costs can be written off. This includes train tickets, rented cars, flights, and hotels.
When your children are being cared for while you’re at work, daycare or Kita are considered deductible expenses.
Your home office
Working from the couch? Calculate how much of your total flat is used as a “home office” – maybe your living room, for example – and use that to determine the price of your rent for your home office. Additionally, don’t forget to add in the cost of utilities for that square footage!