There are a number of benefits to tax filing in Germany, even if you are not required to do so.
Some of the benefits include:
- Getting a tax refund. If you have overpaid your taxes during the year, you may be eligible for a tax refund. The average tax refund in Germany is over €1,000.
- Claiming deductions and allowances. Germany has a number of tax deductions and allowances that can help you to reduce your taxable income. Some of the most common deductions and allowances include:
- Basic tax-free allowance
- Income-related expenses lump sum
- Commuter allowance
- Home office lump sum
- Special expenses, such as childcare costs, medical expenses, and education expenses
- Improving your credit score. Filing your tax return on time and in full can help to improve your credit score. A good credit score can make it easier to get approved for loans and credit cards, and it can also help you to get lower interest rates.
- Meeting legal requirements. Even if you are not required to file a tax return, there are some cases where you may be required to do so by law. For example, if you have income from abroad or if you are self-employed, you may be required to file a tax return.
- Avoiding penalties. If you do not file your tax return on time or in full, you may be subject to penalties. The penalties for late or incomplete tax returns can be significant.
Overall, there are a number of benefits to tax filing in Germany. Even if you are not required to file a tax return, it is often a good idea to do so, as you may be eligible for a tax refund or you may be able to claim deductions and allowances that can reduce your taxable income.
Here are some additional tips for tax filing in Germany:
- Start early. Don’t wait until the last minute to start preparing your tax return. This will give you more time to gather your documents and to complete the return accurately.
- Use tax preparation software. Tax preparation software can help you to complete your tax return quickly and easily. There are a number of different tax preparation software programs available, so you can choose one that is right for you.
- Seek professional help. If you have any questions about your taxes or if you need help completing your tax return, you should seek professional help from a tax advisor.