I would like to understand how much of what we pay for pension, health insurance, and other insurances can actually be deducted (offset) from our income for tax purposes. I've read the explanation in German but the amounts don't match the estimate I got from my tax accountant, and she doesn't seem to be able to explain why. Can anyone help?
As I understand it (from this website: http://www.steuertipps.de/lexikon/vorsorgeaufwendungen ), in 2009 68% of regular, statutory pension contributions are tax deductible, as long as they don't exceed 40,000 euros for a married couple or 20,000 euros for a single person. So if the total pension contributions are P then we should be able to deduct .68(min(P,40000)), right?
For other expenses what I understand is that in 2009 other insurance costs (like health insurance) seem to be deductible up to 1500 euros for employees and up to 2400 for freelancers. So if I'm a freelancer and paid F for health insurance and my husband is an employee and paid E for health insurance then we should be able to deduct min(1500,E) + min (2400,F), right?
But when I take them together .68(min(P,40000)) + min(1500,E) + min (2400,F) the number I get out is about 30% higher than the number the tax accountant estimated for Vorsorgeaufwendungen.
Anyone have any ideas what I did wrong? Could it be that only part of our health insurance costs count as we have private plans not statutory insurance?
I know that this doesn't matter as the tax office will just calculate it themselves, but I would really like to understand where the numbers come from.
I'd also love to know how these calculations will change for 2010. As I understand it from this website: ( http://www.steuertipps.de/?softlinkID=14367 ) the percent of pension that's deductible will increase to 70% and more of the health insurance will be deductible (with the limits increasing to 1900/2800 for employees/freelancers). Or are the changes more complex than that?