When is life insurance tax deductible?
Until December 31, 2004, life insurance policies were tax deductible. The prerequisite, however, was that it was not a unit-linked solution.
The tax privilege of life insurance has fallen
- Most taxpayers assume that they will make the contributions for their own Life insurance can claim as part of the tax return.
- Should you take out endowment insurance before the 1st January 2005, this is quite possible under certain conditions. In addition, there was no taxation of income at all.
- The contract must be completed at least until the age of 60. Age of the policyholder and the duration of the contract must be at least twelve years.
- Unit-linked life insurance is an exception, however. These have never been tax deductible.
- With the amendment to the law on 1. January 2005 came into force, are contracts that after 31. December 2004, but no longer tax deductible.
- Since then, a new regulation has been in force for endowment life insurance, namely the half-income method.
- The contributions can no longer be deducted from tax, but a small privilege still applies when they are paid out. Half of the difference between the contribution amount and the expiry benefit is now still taxable.
Pension insurance with lump-sum option - worth knowing about the tax implications
A private pension insurance always includes a lump-sum option. Since the ...
Subsidized pension insurance is tax deductible
- As an alternative to the statutory provision that life insurance policies are tax deductible, the legislature has decided with the Rüruppension and the Riester pension introduced two options.
- The contribution to the Riester pension is tax-deductible if the tax advantage from the contributions exceeds the direct subsidy. This is dated Tax office determined as part of the cheaper test.
- Another alternative to life insurance is the Rürup pension. The contributions are part of the gradual annual increase from currently 74 percent in 2012 to 100 Percentage in 2025 of a maximum of 20,000 euros for single persons and 40,000 euros contribution for married persons for tax purposes deductible. In the case of employees, however, the contribution to the statutory pension insurance be deducted.
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