Annual tax returns as a low-income freelancer

100 posts in this topic

I've just finished my first year 2008, freelancing (English and music teaching), and am awaiting to receive the special number I'll need from the Finanzampt.

 

My wife isn't a high earner, but is employed full time, we receive no state benefits, and will do a joint tax declaration for last year.

 

My question is, as I'm only a kleinunternehmer, not claiming VAT back, nor filling out monthly accounts (I'll only have turned over 2000E anyway), do I still need to

 

have a Steuerberater do my yearly account, or can I do my own calculations, based on what I've bought (deduct costs for batteries, paper, etc, I have receipts), and what can I claim per Kilometre for travelling?

 

Thanks in advance,

 

Steve

0

Share this post


Link to post
Share on other sites

You probably do not need a steuerberater. They are ungodly expensive for what they actually do. I would suggest getting a gepruefte Buchhalter(in) to help you. They can't advise on tax matters officially or fill out your forms but they are just as competent in tax as many tax advisers. They know what you can deduct and how much and will organize all the receipts for when you submit them to the Finanzamt. They usually charge anywhere from 20-35 euro an hour and unlike in the US or UK, bookkeepers in Germany are usually very competent.

 

Rhody

0

Share this post


Link to post
Share on other sites

 

have a Steuerberater do my yearly account, or can I do my own calculations, based on what I've bought (deduct costs for batteries, paper, etc, I have receipts), and what can I claim per Kilometre for travelling?

You will probably benefit from paid advice initially given that you don't know the rules yourself. The fee will pay for itself.

 

For your low level of turnover, you can submit a short form proft and loss statement (rather than Anlage EÜR or whatever). Nobody is obliged to do "monthly accounts" as such (VAT is a different matter). It's your choice whether or not you keep a record as you go along. You will though of course need an audit trail to support your submission - list of transactions, copies of invoices etc. Excel is probably enough, prehaps even a log.

 

There are some threads on this site about tax relief / deductibles on travel costs. Here's the guidance instructions you may need. Lines 35-37 refer to your own transport, and 63 to travel between home and workplace (but a recent legal decision seems to have impacted this part, as discussed on other threads here):

 

Anlage EÜR guidance instructions

0

Share this post


Link to post
Share on other sites

Thanks for replying,

 

I was hoping I could just fill in the income, work out the deductions...

 

Do I really need to hand in a yearly submision to the Finanzampt?

 

I hate forms!

 

Steve

0

Share this post


Link to post
Share on other sites

Yes, you have to file an annual tax return, even if you're on Hartz IV or other social benefits.

 

Which software does Berlin work with? Elster in Bavaria is absolutely brilliant once you've taken time to get into it. The EÜR works out your profit automatically, the program reminds you which forms you have to use, there's a credibility check that tells you where you forgot to check a box or made an illogical entry, and at the end it even estimates your taxes due.

 

It must be busted, though, it keeps saying I get a refund :D

0

Share this post


Link to post
Share on other sites

Thanks Sarabyrd

 

I know we have to do the tax return, my real question is do I need to submit (with all the paperwork, invoices, receipts etc) a separate profit/loss submission too?

I'm on a mac, which I don't think is Elster compatable?

 

Steve

0

Share this post


Link to post
Share on other sites

It's ususally worth getting help as there are tax deductibles you may not be aware of and the money you pay an accountant is also tax deductible. I have also heard that the finanzamt are less likely to be really nitpicky with your tax return if it arrives via an accountant.

 

I don't think a profit and loss statement is needed but obviously if everything is laid out clearly it can only help. It sounds as though you are a freelancer not a business.

0

Share this post


Link to post
Share on other sites

My Finanzamt yelled at me 11 years ago for not including the EÜR so I always included it even if my profit was less than €1000 p.a.

 

ElsterFormulare isn't Mac-compatible, ElsterOnline is. Their website is down right now so I couldn't get the system requirements.

0

Share this post


Link to post
Share on other sites

There are so many threads about freelance tax returns, I thought this one might be the best to ask my question... hope so, anyway. ;)

 

This may be a stupid question, but is there an online calculator or something where I could figure out how much I am likely to need to pay in taxes for freelance income? I will be getting my tax return done shortly by a Steuerberater, but I would like to know approximately how much I'll probably need to pay.

 

The freelance job was a one-off, but for a fairly large amount (EUR 17,000). I also have three months of employee income, and Arbeitslosgeld during the year 2012 as well.

 

Anyway, if there is a relatively simple way to get an estimate on taxes due, I would appreciate knowing how. :)

0

Share this post


Link to post
Share on other sites

You will need to work out what your profit is from your freelance work, that is the invoiced income less any business-related costs you incurred as part of your freelance work. You can then add it to your gross income as an employee and use one of the standard calculators (such as this one in English). For the purposes of tax you can ignore the insurance and pension deductions, as they are dealt with separately (but may have a small influence on the final tax bill, so the calculation is still only approximate)

 

Remember too, that if this is your first year in freelancing and you intend to continue to be registered that an tax due on your freelance work will be used to estimate pre-payments for the following year, to be paid quarterly in advance. If you don't expect to continue with freelance work you may have to apply the FA to have these pre-payments reduced or cancelled.

1

Share this post


Link to post
Share on other sites

Thanks, YL6, that was very helpful. Another question, if you don't mind...

 

In 2012, I also received a severance payment with my final pay. On my final payslip, for the severance amount (which is marked as 'Sonstiger Bezug', not 'Abfindung') the Lohnsteuer and Solidaritätszuschlag was deducted from the Brutto amount, but not anything for Krankenversicherung, Rentenversicherung, Arbeitslosversicherung and Pflegeversicherung. (I have public health insurance, btw.)

 

Does that mean I don't have to pay for all those things on the severance pay? Or was it just not withheld, and now I am going to get bitten for it when I do my tax return?

 

I know my Steuerberater will figure all this out, but I won't get an answer from him for a few weeks, and I'm kinda sweating this.

 

Thanks again.

0

Share this post


Link to post
Share on other sites

An Abfindung should be fully taxed before payout, but how it's taxed depends on the conditions of your severance, and there is usually a special way of taxing it called the "Fünftelregelung" (they take one-fifth of your payout, add it to your salary to determine the tax rate (%age) that is applied to the entire severance payment). Kranken-, Renten- Arbeitslos- and Pflegeversicherung are not normally taken from a severance payment to balance out the loss of a workplace.

 

In short, it's unlikely you will have anything else to pay, so go spend it...

1

Share this post


Link to post
Share on other sites

Hello

 

I started working as a freelance English teacher in Frankfurt in July 2015, but still havent made any tax declaration. As I understand it, I have until the end of this year if I use a Steuerberater. My income for 2015 is only around 6000 but I guess I still need to make a return- will I get fined if I try to do it myself through elsterwiki?

For 2016, my income is about 11000 and of course I havent made any prepayments but am wondering if i can just declare before May 2017 as my income is so low anyway

 

Any advice would be greatly appreciated.

0

Share this post


Link to post
Share on other sites

Go ahead and do it using the Toytown Elster wiki: https://www.toytowngermany.com/wiki/Elster

The only "fine" you will get will be a stern letter from the Finanzamt asking you not to be late with your declaration again.

 

You are only allowed to submit the 2016 tax return on 1. January 2017 at the earliest.

1

Share this post


Link to post
Share on other sites

Love it!!! Thanks a million 

 

I guess I am  Kleinunternehmer 

 

When I go to Tax return for the self-employed Kleinunternehmer (freelance or gewerblich=Gewerbetreibende) I see a blue link for the 2013 and 2012 forms- do you have a link for the most recent ones (maybe somehow through https://www.elster.de/elfo_down.php)

 

Am I right in saying I just need the Mantelbogen and maybe the Anlage S?

 

Thanks again

 

Kind regards

 

David

0

Share this post


Link to post
Share on other sites

Since you're self-employed, you will have to file completely electronically, i.e. not on paper at all.

Download the ElsterFormular software (version: "im Gesamtumfang") and apply for an Elster certificate with which to "sign" your tax return: http://www.toytowngermany.com/forum/index.php?showtopic=274811

 

Though you're not allowed to use them, here is the 2015 version of the paper forms: http://www.finanzamt.bayern.de/Informationen/Formulare/Steuererklaerung/Einkommensteuer/2015/

 

You will need to file via ElsterFormular (everything except the "simple paper profit/loss calculation", which send in a letter):

  1. Mantelbogen ESt1A
  2. Anlage Vorsorgeaufwand
  3. Anlage S
  4. a simple paper profit/loss calculation (that's the only thing you send by snail mail to your Finanzamt) or Anlage EÜR
1

Share this post


Link to post
Share on other sites

Thanks PandaMunich.

Shame you aren't a steuer consultantant, I think you would be very much sought after (correct me if I am wrong)

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now