Tax breaks for sending money back to parents

Hi guys,

I want to send some money back home to my family (mom and dad).
I've heard from someone that it may be possible to claim somehow a tax deduction for something like that.
It's this true? and if yes what kind of proof that I gave that money do I need?

I've searched the site but found nothing until now for this exact matter.

Thanks!

Unsurprised of Augsburg.

Yes it possible, my ex did this once. There is a limit on how much you can claim for, but best to ask a Tax Adviser on this one.

Wow! Tell us more!

I do not know the conditions, but I know it is possible ! She sent something like 400 EUR and then claimed tax relief on it !

How much does the tax adviser charge?

i inquired once at the Lohnsteuerhilfeverein when i got my taxes done there and the guy said it's possible, but i had to prove my mother was retired and and show proof of how much disposable income she had a month. in essence, he wanted to discourage me from all the hassle, because i was trying to find a way of writing off the money i sent to the u.s. each month for my student loans (at the time the DM was terribly weak & it was a "belastung").

there is something on the tax form called "außergewöhnlichebelastungen" or something like that & this (as far as I can recall) is where that falls under.

Yes it is possible. Support can be provided to parents, grandparents of both husband and wife. Money should be sent in each quarter of the year(4 times per year) and at the end of the year get the form 'Unterhaltserklärung' signed by a government agency where the parents or grandparents live.

This total amount sent can be used to reduce the taxable income. The amount allowed for support depends on the country in which they live. for indians as example it is 1800Euros /year/person.

forms can be downloaded from this link
http://www.bundesfinanzministerium.de/cln_...html__nnn=true

From what I recall "außergewöhnlichebelastungen" is not like "Werbungskosten"

The "außergewöhnlichebelastungen" has to exceed a certain percentage of your
income (percentage depends on number of kids you have for instance)
before it starts to help you.

I did have a welsh colleague in HH who managed to set his granny off against tax
for a number of years...

the way i was explained it was if there was somthing out of the ordinary that caused me hardship -- a disabled child, emergency surgery, etc.

This post peaked my interest, so I contacted my German tax accountant. Apparently, it is possible to get a deduction, but you have to EXCEED a certain limit of 'Sonderbelastung' (extraordinary expenses) deemed reasonable by the Finanzamt. This amount depends on your income. To simplify: if your income is up to EUR 15,000, you can deduct what you pay to your parents, but only for the amount that EXCEEDS 4% of your income (EUR 600 if you earn 15,000). In other words, if you earn EUR 15,000 and pay your parents EUR 1,000, you can deduct EUR 400 from your taxes (the amount that exceeds the 4% limit). The next income range is 15-50 thousand, where you can deduct what you pay which is over 5% of your income, and then 6% for above 50 thousand. I'm not sure if there's a limit on the deduction, but I don't think so.

Hope this helps!

If you have medical bills (which are not fully paid by health insurance, e.g. dental care), they also count towards your außergewöhnliche Belastung.

right, I forgot to mention that. Unfortunately, I don't believe paying off student loans counts, though, does it?

no.

I have done this for a couple of years. I can't remember the exact amount off hand. No more than a couple of grand, so u save your tax on that amount. I had to send in my fathers pension book and proof of savings (or rather lack of). Mz tax advisor said they didn't really like it, but had to sign off on it 'cos demz de rules. I was told it is better if you do it as more than 1 payment, but i know someone who sent money to her sister in Russia and i think she didn't even have an audit trail, just a proof her sister was not earning.