What does "tax deduction" mean?
Unfortunately, no citizen can avoid paying taxes. Of course, everyone tries to keep these taxes as low as possible. In order to achieve this, certain expenses can be deducted from tax. Here you can find out what that means and what options you have.
That means "dropping off"
- Every private person and every company has to pay tax on their income or profits. There is no uniform tax rate for this, but it rises, depending on the level of income. In addition, a certain amount is not subject to tax - the so-called basic allowance. It is currently € 8004.
- With an annual income of 20,000 euros, for example, a tax of approx. 2700 €, which is a tax rate of approx. 13.5%, with an annual income of € 40,000, on the other hand, the tax deduction is around € 9,000, which equates to around 22.5%. How high the tax is depends on the annual earnings.
- Now it is not the gross earnings that are used to calculate the tax, but "the taxable income". This income is calculated by reducing the gross income by certain expenses. This shortening is called "deduct" or, in a technical term, "claim for tax purposes".
- So if you have a gross income of € 40,000 per year, you have to deduct the expenses that you can deduct from this tax. For example, if the total of these expenses is € 5,000, the taxable income would be € 35,000. Deduction therefore means that you reduce the amount on which the tax deduction is calculated.
You can declare this with the tax
From the tax, you can deduct work-related expenses, personal peculiarities and special expenses or discontinue extraordinary loads. The tax can by the amount of deductible costs affect certain expenses. For example, mobility to the workplace through lowering or lowering the mileage allowance or the retirement provision through improved Deductibility crank etc.
Work-related expenses are the so-called advertising expenses. These can be set at a flat rate of € 1000 and € 102 for the pension payments or higher if they can be proven accordingly. This includes, for example, trips to work, so-called additional meal expenses, travel costs or other work-related costs for further training, application, study, etc.
When it comes to personal characteristics, the allowances for children are taken into account, as are insurance, old-age provision and the like. Of course, you cannot deduct all expenses. For example, you cannot claim your rent for tax purposes. Even interest charges or the depreciation for a house of one's own can no longer be deducted for a number of years. In addition, so-called household-related services have been included and are even subsidized directly through a partial tax refund.
Special expenses or extraordinary burdens are understood to mean, for example, expenses for maintenance, illness-related costs or increased costs for a severe disability. Donations or other permanent burdens can also be indicated here.
Travel expenses incurred in connection with the exercise of the profession, employees, ...
The list of what expenses you can deduct from tax is long and as individual as every citizen. If you want to take advantage of all possibilities, you have to deal intensively with the topic or go to an expert.
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