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Found 13 results

  1. Hi all – new year, so, alas, time to think about my tax return again. I have a hopefully fairly straightforward question, and wondered if anyone could help out. The question is - can I offset university tuition fees against my German taxes? To give more information - I work full time as a freelance graphic designer here in Germany. I’m doing my first degree part-time with the Open University in the UK (started before I moved over here), for which I pay about £3500 a year in tuition fees. It’s an English Literature degree, so not really associated with my work. I’ve read some information on the internet about this, and seem to think it’s possible to put the tuition fees down as a deductible - but it’s unclear as to whether the degree has to have a connection with my work or not. Thanks very much in advance.
  2. Apologies if this was answered before and I couldn't find it on the forum.  My mother has passed away a year ago and has left me a house in a non-EU country that has a double tax treaty with Germany. As a German resident, I wonder how should I go about declaring this to the authorities, so that if I happen to want to sell and move the money to Germany, everything is legal. The inheritance tax for this property is already paid in the country of origin.   I understand that the children's inheritance allowances are up to a €400k threshold. The value of this property is way lower than this. However, I wonder how the value evaluation works considering that the property is located outside EU.    I also wonder if this tax-free threshold is a one-time thing, or can be further used in case of future inheritances. Would appreciate your guidance.      
  3. Regular job as a side hustle

    So I’m self employed, and make a reasonable living. But I’m getting a little bored, and have been thinking about getting a “real” job as a “side hustle”. Mostly for the stimulation and socialising. And obviously more money is never a bad thing.   I own my own small company, and it’s running mostly on autopilot, and pay myself as a contractor, when work needs to be done.   Does any one have experience with how taxation would work in this case? Would it be perhaps better to just pay myself a company distribution, rather than payment for services as a contractor?   Any help would be appreciated.
  4. I work in Germany and get regular RSU awards into an account in US (Etrade). When they vest, ETrade applies a tax rate of 51.53% and sells shares to cover the tax to withhold. These 51.53% are supposed to be the maximum possible tax rate in Germany. On my next salary, my actual tax rate is applied and the difference is returned to me, so I'm not complaining (except that this causes too many shares to be sold).   I can't figure out where the 51.53% comes from; the maximum I can reach would be 45% income rate plus Soli, which results in 47.475%. Can anyone explain?   Thank you in advance.
  5. Finanzamt says they want to see my Arbeitszimmer because they are not convinced it's eligible for tax deduction. We agree on a time for them to visit, but then they just don't come. I phoned them but I can't get the responsible person and get told to call again. Emails go unanswered. What do I do now? They still haven't given me a Steuerbescheid for 2020.
  6. Hi, My wife and I are currently living in Germany, but she is planning to go for studies to the UK for a year. I am currently on Tax class 3. I was wondering how this would change once she goes for her studies. Should I change back to tax class 1 ?
  7. I started a second employment in November 2019, with a monthly pay below 450 Euros, and I don't have any other second employments. I'm now doing my tax declarations, and I have just realized that all this time, the employer actually classified the job under Steuerklasse 6 instead of Minijob! If this goes unchanged, I'll not only not get the full pay, but I'll have to pay a huge amount of Nachzahlung (> 1500 Euros) to the Finanzamt, due to Steuerklasse 6 being taxed really harshly.   I know that I'm a total idiot for not realizing the issue for so long. I just assumed that the employer would do its job and classify the employment correctly. I didn't even know that it was still possible for a job below 450 Euros to be technically classified into one of the Steuerklassen. And whenever I received the pay at the end of the month, I just thought the Pauschal amount was deducted from it. I didn't even look into the issue when I received the Lohnsteuerbescheinigung earlier this year, thinking that since it was another employment after all, it would be natural for me to receive such a document, even though it should have been a Minijob. Only now that I go through a Steuererklärung software, did this issue dawn on me, and I realized what Steuerklasse 6 really means after doing a search online.   Can I still do something about it? From what I saw somewhere around the web, e.g. https://www.datev-community.de/t5/Personalwirtschaft/Minijob-r%C3%BCckwirkende-%C3%84nderung-Steuermerkmal/td-p/183948#_=_ and https://www.haufe.de/personal/haufe-personal-office-platin/minijob-geringfuegig-entlohnte-beschaeftigungen-in-der-en-332-wechsel-nach-ablauf-des-kalenderjahres_idesk_PI42323_HI2812335.html, it's apparently possible to retroactively say that the job should be treated as a Minijob, as long as it is communicated to and discussed with the Minijobzentrum and the Finanzamt. I guess I'll need to contact the employer and tell them to do so as soon as possible?   If for some reason the past tax classification cannot be changed anymore, is there any benefit for me at all for the job to be classified under Steuerklasse 6 instead of under Minijob? From what I see, there seem to be pure disadvantages (since even for a Minijob the employer still pays into Rentenversicherung anyways), and I can't believe the current situation is actually something possible.
  8. When you've worked for a company for many years and they want to make you redundant and give you a big 6-figure settlement, that's normally immediately taxable at I believe near-as-dammit 50%. If you then decide you're not going to work for the next few years and plan to retire early (or just take a few years off), can tax on that redundancy payment be offset somehow?   I heard talk of someone who knows someone who took their payout and invested it into some kind of startup company and thereby avoided the immediate tax liability. I assume that if they got that money out of that investment with or without some change in its value, they'd then be liable for that taxation they avoided.   I wondered whether an alternative would be to start up a freelance business doing whatever you were doing before (for your employer), and pay yourself a fixed salary from it, like 20-30,000 which shouldn't incur too high a tax percentage. You'd keep that freelance business going until the investment funds ran out. You've then converted that one-off lump into a number of smaller lumps that are regular income and benefit from the 8k or so that you get tax-free and the 8-20 (or 8-30) would be at a lowish rate too.
  9. Hi, I have a full-time job and do freelance, writing text for e-commerce shops using Fiveer as main platform to sell my services. The sale happens on the platform, and I get paid by Fiveer, which hold a %. 1. Should I register as Freiberufler? 2. How should I declare this income? 3. Do I have to invoice clients? Even though I get paid through the platform? 4. What about VAT? Thanks!
  10. Hi, I have a Full-Time Job and want to open a Shopify store on the side, doing drop-shipping, selling furniture worldwide, like lamps and chairs.  1. Should I register as a Small Business or Freelance? 2. Where should I declare my 2 income streams in the tax declaration? 3. How will my income be taxed (differently for the two streams, or all together?  Which rate will be applied?)
  11. Hi, I am a Pakistani national married to a German national. I have a German Permanent residence (Niederlassungserlaubnis) and am due to apply for a German nationality next year. I am recently offered a job as a Software Engineer in a big multi-national firm in London. My wife is still a student in University in Cologne. Now we will keep our primary residence (hauptwohnsitz)  here in Germany and whereas I will have a small apartment in London as well. I will be living in London for 5 days a week and visiting back my home in Germany over the weekend. Additionally my wifef will also be visiting me in London frequently (mostly during the working days). I know that I will be paying taxes in UK and will be insured by NHS, but will my wife also be covered by NHS? If yes, will she be able to see the doctor here in Germany? I called my current health insurance company (TK) and they said that an NHS covered person can visit a GP here in Germany as well.   Looking forward for your advices.   Kind regards, Obaid
  12. US expat tax filing and German pension funds

    Hi, I am a US american/german dual citizen that has been living in germany for 20 years. recently I found out about my tax filing obligations in the US and am planning on applying for the streamlined offshore procedure soon and have a few questions related to that. I know that many questions on tax returns for US americans abroad have already been asked and solved in these forums so I hope I haven't missed the answers! The main problem is that I am VERY confused about my pension plan and how to report it. I have a "fondsgebundene Rente", which means that it is a private pension scheme (no employee contributions) whereby I make monthly payments to the company (Ergo versicherung) who invests the money in various stocks, bonds whatever (apparently a company secret). The idea is that hopefully the money will grow that way and I will get a larger pension than if I put it away in a savings account. I have the option of buying back the account prior to reaching pension age, but at a huge loss. Otherwise, there is no option for me to withdraw any partial amount of the savings before retirement. From my reading, I guess this would be some kind of an IRA, though I think a requirement for designating it as an IRA is that the managing company has to be in the US or part of an international company with a branch in the US? but not sure about that.Or is it a foreign trust? I am also muddled about whether I need to declare anything at all about this as I do not receive any payments from it but am only paying in at the moment. I understand that with an IRA, people would want to declare the payments as a deduction from income. because my income is so low, the foreign earned income exclusion gets rid of all my taxable income so I don't have any taxable income. So, I'm not interested in taking advantage of any further deductions at the moment. I just want to make sure that I'm declaring what I need to by law. if it is indeed a foreign trust, then there are apprently potentially serious consequences for not declaring it as such in the FBAR and for not filing the 3520 form on foreign trusts. Anybody have any ideas about this? I'd be extremely grateful for any help! or maybe someone has a reference for somebody with reasonable rates that could just advise me on this one issue? I'm trying to get most things done by myself to save money, but have not been able to figure this one out!
  13. Hi,   I have a work visa and I'm allowed to have a formal full-time job and soon also to do freelance in my spare time. My question is regarding declaring both incomes.   - In the Ausländerbehörde they mentioned I might have to file 2 separate tax returns, is that correct? - Does one income affect the other or are they completelly independent? For example, if I earn 100k on my full-time job, does it count for the 22k revenue limit for freelancers to be exempt from charging VAT? Does the income tax affect the combined income or individually on each income? - Since I'll only be doing freelance in my spare time and probably not earn a lot, do I pay income tax if I earn less than 9k (considering I already earn more in my main job)?   Thank you, Luis Mesquita