Taxpayers can submit their tax returns for 2021 to the tax office until July 31 or September 30. With these tips, taxes can be reduced.
Not a year goes by without innovations and changes in taxes. The following points should be considered by taxpayers in their 2021 declaration.
1. Basic Allowance
Since 2021, taxpayers have only had to pay tax on their income from an amount of 9744 euros per year. Before that, the limit was 9408 euros. In the case of married couples or registered partnerships, the double rate applies. From an annual income of 57,919 euros, the top tax rate of 42 percent is due. From 274,613 euros, the wealthy tax rate then applies at 45 percent.
2. Solidarity surcharge
The additional tax commonly known as "Soli" was abolished for the majority of taxpayers at the beginning of 2021. According to information from the Ministry of Finance, the solidarity surcharge for a family with two children only applies from an annual income of 151,000 euros. According to this information, single people have to pay the solos from an income of 73,000 euros.
3. Home office
In the past year too, numerous employees worked mostly or even entirely from home. Taxpayers can claim five euros per day working from home as a home office flat rate from the tax authorities. However, there is an annual upper limit of 600 euros in total, which corresponds to 120 working days. However, the home office flat rate only has a tax-reducing effect when the flat-rate income-related expenses of EUR 1,000 have been exhausted.
Alternatively, employees can also claim the actual proportionate costs for a study, for example for rent, electricity or heating. Anyone who worked in their own office for at least three out of five days can fully deduct the corresponding costs. If, on the other hand, the presence in the office has predominated, only a maximum of 1250 euros per year can be credited for the home office.
4. Advertising Expenses
The so-called employee lump sum of 1000 euros is automatically taken into account in the tax return. Up to this amount, professionally caused expenses are tax-free, regardless of whether they were actually made or not. The amounts that exceed the lump sum of 1000 euros can then still be claimed for tax purposes for this year.
Since the beginning of 2021, expenses for computers, printers or software can be written off immediately. The corresponding costs can be fully offset against the income-related expenses. In the past, they had to be spread over three years.
5. Commuter Allowance
The distance allowance has increased from 30 to 35 cents from the 21st kilometer. For the first 20 kilometers, 30 cents per kilometer continue to apply. The commuter allowance applies to the one-way trip from home to work and can be claimed as income-related expenses.
6. Company car with an electric motor
If an employee charges his company car at home, the employer can reimburse a flat rate of 70 euros per month for the electricity costs. For hybrid vehicles, the rate drops to 35 euros. In both cases, the prerequisite is that there is no charging facility at the workplace. If there is a charging point there, the maximum reimbursement contribution drops to 30 euros for e-cars and 15 euros for hybrid vehicles.
7. Road Tax
Since 2021, new cars will be taxed more if they emit more than 115 grams of carbon dioxide (CO2) per kilometer. On the other hand, there is a tax rebate of 30 euros per year for newly registered petrol or diesel vehicles with CO2 emissions of less than 95 grams per kilometer.
Since the beginning of last year, the bank statement has been sufficient as proof for the tax office for donations to non-profit organizations up to an upper limit of 300 euros. A formal donation receipt is only required for higher amounts in order to deduct the donation from your tax return. The upper limit used to be 200 euros.
dr Michael Bormann is a tax expert and has been a founding partner of bdp Bormann Demant since 1992
(This article was first published on Monday, May 16, 2022.)