Coming up is an article about filing tax returns to the finanzamt.

Covered sections of people: Students, Employees.

We are coming up with some how to sections for filing tax returns . Stay tuned..!!

Most of you have been concerned of this with queries like how to apply for tax returns? whom to contact? which tax consultants etc?

Before you take any action here are some things you might be interested to know.

STUDENTS 

Students have the option of paying pension insurance(rentenversicherung)  during their part time jobs. However one can opt for not paying it also ,by informing the accounting dept of the company/univ/organization they work for.

When you work on Tax class I, you are paying a minimum tax but  if you work on tax class VI, it is  high. Nevertheless you can get it at the end of the year from the finanzamt, if you are a student. Students are free from paying taxes on income ( don't confuse with health insurance or pension insurance deducted from the income) , the Lohnsteuer to a certain level and then a minimum tax is deducted. At the end of the year one has to apply to the finanzamt to get a part of the deducted tax back, if you think is appropriate.

Note: Up to 400+ euros a month , no deductions are made however, according to a friend . 

Normally a student cannot afford to pay a tax consultant to file the tax returns as the money you are supposed to get back may not worth to go for it.

Some Thumb rules:

Apply only if you see the Lohnsteuer (income tax) is deducted from your salary and you can see the total amount for a year in a column of your tax card.

If you apply an year then one must continue further to next year though one has not paid income tax ( didn't work or wt ever reason ) , failing so the finanzamt will charge you around 140 to 160 euros as penalty for not declaring.

 One can attach  the expenses inccured on traveling/commuting to the place of work if different.

A simple equation:

Consider a student earned 2000 euros in an year and paid a tax of 300  euros

Net income would be 1700( assuming health insurance paid by individual). The tax must be declared by applying to finanzamt of your residing town to claim the income tax 300€ , as a student's income is tax free to an extent. Hence one can declare the transportation costs or other expenses incurred to make him/herself  able to work. After the finanzamt makes its processing you will be getting the money to your bank account.

Tips for new graduates taking up jobs: 

 Here are some things you must know to have maximum tax savings.

Any thing you spend for the work ( if not paid by company)  eg: Notebook, equipment you need to work or wt ever, keep the bills of purchase.

If you support your parents from your income produce the documents in German or German-English documents. This means a declaration as required by finanzamt proving that your parents cannot live without your support. Students ! remember that if you had a support of affidavit or statement from your parents for your studies  and now after taking up job, it is that your are supporting them for their daily bread, hmm, seems logical? think about it.

Commuting expenses between home and workplace.

Expenses on an on site visit which is part of your job( if company doesn't pay, one needs to prove it by a statement from the company)

Any German language courses attended on your own which is necessary for your workplace or social life. 

Companies usually pay them as they can claim for tax benefits, quite logical..ain't it?

 Note: All the expenses you claim are not returned in full but they are exempted from the tax calculation for that  year. Eg: One earns 27000(nett income) euros per year , pays an income tax of 7000 euros and claims tax returns for 3000 euros. Wt will happen is... the tax is calculated for the total tax calculated for - 3000 and  recalculated. The difference amount is given back. Hope this is clear.

Bonus paid is taxable.

Every benefit is taxable except for the work hours on weekends or holidays etc.

 Not applicable:

Travel to home country on a holiday.

 There are many issues still which are different in different cases. Generalizing is often very difficult. But one can make his/her own conclusions from many inputs.

Discuss this on our/any forums and any open general questions can be found on FAQs

As usual the disclaimer goes here. Nothing is official and do not depend on this article. 

However as it is actually against the law for anyone who is not qualified to offer tax ADVICE in Germany so refrain from doing this. See a Tax Adviser.

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