There are several ways to save taxes in Germany. Here are a few tips:
- Take advantage of tax allowances and deductions. Germany has several tax allowances and deductions that can help you to reduce your taxable income. Some of the most common allowances and deductions include:
- Basic tax-free allowance: €10,347 (2023)
- Income-related expenses lump sum: €1,200 (2023)
- Commuter allowance: 30 cents per kilometer for the first 20 kilometers and 38 cents per kilometer thereafter
- Home office lump sum: €600 (2023)
- Special expenses, such as childcare costs, medical expenses, and education expenses
- File a tax return. Even if you are not required to file a tax return, it is often a good idea to do so. This is because you may be eligible for a tax refund if you have overpaid your taxes during the year.
- Invest in retirement savings. Contributions to retirement savings plans, such as the Riester pension or the Rürup pension, are tax-deductible. This means that you can reduce your taxable income by contributing to one of these plans.
- Make charitable donations. Charitable donations are also tax-deductible. You can deduct up to 20% of your taxable income in charitable donations.
- Take advantage of tax breaks for businesses. If you are a business owner, there are a number of tax breaks that you may be eligible for. For example, you can deduct the cost of business expenses, such as travel expenses and office supplies.
Here are some additional tips for saving taxes in Germany:
- Plan your taxes ahead of time. By planning your taxes ahead of time, you can identify opportunities to reduce your tax liability.
- Keep good records. It is important to keep good records of your income and expenses. This will make it easier to file your tax return and to claim any deductions that you are eligible for.
- Seek professional advice. If you have any questions about your taxes, you should seek professional advice from a tax advisor.
Please note that this is not an exhaustive list, and there are many other ways to save taxes in Germany. The best way to save taxes is to consult with a tax advisor who can help you to develop a personalized tax strategy.