The difference between advertising costs and special expenses is professionally explained
Would you like to prepare your income tax return yourself? Then you may be faced with the problem of correctly defining the difference between advertising costs and special expenses.
The sense of advertising expenses and special expenses
At first glance, both terms may mean one and the same thing:
- Both lead to the fact that one's own tax burden can be reduced.
- This explanation results from the fact that both terms are types of costs that you as an employee had to pay yourself, but afterwards with Tax office may submit and thus reduce your taxable income.
- And due to the existing tax progression, a reduced taxable income always leads to a lower tax burden.
What is the difference?
Even if both types of costs - advertising expenses and special expenses - lead to the same result, you should know the difference because both costs must be entered in different forms with the tax return:
German income tax law distinguishes between seven different ...
- Business expenses are the costs associated with the exercise of a professional activity. These income-related expenses must have arisen when receiving, acquiring and / or securing an activity. Example: ride costs and account management fees are clearly business expenses, since you would not receive a salary without a current account and of course you have to go to your employer in order to be able to work there. If you need special clothing to carry out your job, this of course also counts as income-related costs, as this clothing ensures that you can keep your job.
- Special expenses, on the other hand, are expenses that have arisen in the private sector, but which, according to the law, may still be taken into account in income tax. This includes all insurances, social security contributions as well as higher expenses that reduce your net salary: maintenance payments, donations and tax consultancy costs.
The difference between the two types of costs briefly explained: Advertising costs are all the costs that would not arise if you were not in a job or trying to find a new job (Application). Special expenses, on the other hand, occur even without exercising a professional activity (e. B. Maintenance payments to the ex-partner or to children).
