Most people living in Germany have to file their tax returns(Einkommensteuererklärung) every year. Yes, most people – Not everyone has to. In most cases even if you do not need to. However, I would advise you to. According to the Federal Office of Statistics, the average refund in Germany is about 1027 Euros.
What is the Einkommensteuereklärung
The Einkommensteuererklärung is your personal tax declaration. At the end of every calendar year, it is your and the Finanazamt’s way of making sure you paid the right amount of taxes on your income.
The Finanzamt is the Federal Tax Office. You will get a lot of letters from them
Tax deadlines in Germany
The deadline for submitting your tax return in Germany is the 31st July for the last calendar year.
In Germany, the financial year ends on the 31st of December. So you can do your tax returns from the 1st of January. If for any reason you are not able to, you can apply for an extension with your Finanzamt.
How do I file my taxes in Germany?
You can file your taxes in Germany yourself or with the help of the tax advisor. There is no one right way to do your tax returns.
In the past few years, there has been a lot of software startups – both web and apps for filing taxes in Germany. For people with uncomplicated income streams, it can be a fairly straightforward way to do your taxes on a weekend. This includes for example students and employees.
People with multiple income streams, freelancers, and entrepreneurs, can still file themselves but in my experience, most people have opted to engage the services of tax advisors. Especially if you are not only paying income tax but also corporate tax and sales tax. It can get complicated very quickly. You will save yourself time and nerves by outsourcing it to a professional.
Tax advisors are liable for everything if anything goes wrong with your tax returns.
English Tax Software for filing taxes in Germany
I love doing my tax myself. After 7 years in Germany, I have used different software for filing my taxes. Currently, my software of choice is in the German language. You will find out why I like this software in the last section but we are talking about English software now. Here are a few:
- Smart Steuer
- Wundertax (Also known as Steuerklärung.de)
- Taxfix
Is there a best way to file my taxes – My Experience and Opinion
Currently, I use Wiso Steuer Web from the company Buhl. It’s really for one reason. They have another software called Finanzblick which is a personal finance software.
Basically, the added value is that I can tag my expenses in Finanzblick throughout the year. At the end of the year, it is already available in the tax software. I like the convenience. If you speak some German and do your taxes yourself, it’s worth checking out.
My tips
- Keep your documents and receipts
- File yourself if you can
- The price of the tax advisor or software is included in your declaration so don’t think about it too much
- Get a tax advisor if you are not comfortable with the topic or do not have enough time
- Use the Flat rates (Pauschals) as much as you can
- Do not try to cheat on your taxes – They will find out
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