Basic general tax advice for self-employed workers

I have recently done some work for a language school as a summer camp counsellor, and they do not tax at source. I have no experience of paying my own taxes in Germany, until now it's always been down to my former employers. So first of all, when is the end of the tax year? What paperwork will I need to keeo (receipts etc), also, as I want to avoid spending the portion of cash that's in my bank account that will have to go towards paying my taxes, can anyone recommend any personal systems that they use to avoid panicking when the time comes?

The tax year is the calendar year and if you do your own tax return, then it must be in by the end of May (IIRC). If you use a Steuerberater, which I would strongly recommend, then he has until the end of the following year.

Collect every conceivable receipt you get in your hands, note every journey (km and duration) you make that could remotely be considered to be related to your work - for self-employed work, there's a heck of a lot that you can offset, which is not available to "normal" employees.

By the way, don't be put off by the thought of the bill you'll get from the Steuerberater (but do ask around to make sure you get a good (=creative ) one. Their fees are regulated and although I assume there will be a flat rate base, it's basically related to the "Umsatz". As a rule they usually save you significantly more money than the few 100€ for their fee. I used to pay between 500€ - 600€ on turnover of about 80- 100k€.

Did you do this work in Germany or outside the country?

Thanks RMA, some good info there. When you say "Umsatz", you're talking about my gross earnings I guess? So the Steuerberater will only charge according to how much I earn?

In Germany.

The Finanzamt are legally required to give you advice. I would call them, if you speak German. Self-employed there's a whole mess of things you may or may not have to do.

Yes, this is true, but they are not legally required to help you optimise your tax situation.


I don't know all the ins and outs of the details, but in principle, yes, that's what I mean. The only slight problem could be, that it may not be possible to just get the Steuerberater to handle the self-employed bit, which I assume will not actually amount to all that much, if it was basically just a summer job, on the side. Obviously, if you get him to do the whole tax return, then your employed income flows into the equation as well which may not be desirable if this is significantly (say five or ten times) more than your self-employed income. I'd discuss the situation with him and try and persuade him just to do the self-employed bit, after all, this is a separate form on its own which can easily be filled out separately.

On the other hand, if your self-employed earnings only amount to 1000€ - 2000€, then he may not be very interested in taking it on anyway. However, in that case, then you probably can get by by doing the return yourself and, as KäptnKnitterbart says, take advantage of whatever help you can get from the Finanzamt, contrary to the general impression/assumption, they're not all bastards out to screw you, approached in the right way they can be quite friendly and helpful.

Ok, well I won't be earning that much money so you may have a point about the Steuerberater not being interested in taking the job. My (German) girlfriend has just told me that it should be fairly straightforward for me to do it myself. I don't have a full time job at the moment so that other part won't be a problem anyway.
Thanks very much for your help.

@RMA,
you said you paid around 600 euros for an 'Umsatz' of 80-100k. Could you please tell me who your steuerberater is? My steuerberater (in munich) charged me 1000 euros for an 'Umsatz' of 40 k. So I guess he ripped me off.

Perhaps it's easy for me to say (in the accountancy field) but don't get too worked up about it. Certainly get professional support if you need it. Remember that, at the end of 2008, you will have to fill out a bunch of long German tax return forms. And an adviser can also help you to identify what you can offset from your income.

You might find that our networks help you - what do the other teachers in your school or other self-employed people you know do to keep track of their finances, who do other teachers use for tax advice and so on???

I keep my records on Excel: one sheet shows income, another my expenses, and one the overall position (net income and how much tax I may expect to pay on current rates and allowances). I keep copies of all my invoices to clients and the bills for things I have bought.

As to tax, you probably won't be asked to "pay as you go" in your first year. However, if you end up as a net taxpayer for 2008, you'll have to settle that bill as a one off payment. Then, they will probably ask you to pay each quarter for 2009 an amount equivalent to your 2008 bill. Your actual bill will then again be settled at the year end.

Avoid panicking by doing sweet fa & waiting until the finanzamt block your bank account. That's always worked for me