How to determine your tax class

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Ignore my question just had a meeting with accountant and says this is not needed yet as will be setting up as freelancer doh.

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Is it still correct that a single person without kids, employed or self-employed is tax class 1?

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It's correct for the "single, no kids" part.

 

If you're self-employed, you don't have a tax class. As a small business, you submit an Einnahmen/Überschuss-Rechnung (in essence, cash method of accounting statements) in lieu of a tax card. When you file your first tax return, in addition to the taxes for the previous year, the tax office will request quarterly payments based on your previous year's tax burden.

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If someone could help me with this question.

 

Can I remain in tax class I even after marriage? Or is it compulsory to change to class III?

 

My wife is in Germany and not working.

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Yes, you can remain in 1 if you like to pay more taxes :)

 

But if you are married and your wife does not work, better to change the tax class to 3 (less taxes than class 1)

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What tax you pay monthly is only a contribution. At the end of the year when you submit your tax return then the tax office work out what you owe and what you have paid is taken into consideration and you have to pay the difference owing or get a refund of the amount you have overpaid. Naturally I prefer to pay monthly as little as possible as overpaying means you are giving the tax office an interest free loan. Then again a nice tax rebate if you have overpaid is a pleasant surprise

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thanks for the replies...

 

The person from the local 'Bürgerbüro' told me they will automatically change the tax class as i'm married now.

I was thinking I had to apply for it.

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Hi

Can anybody help me in finding net salary from gross salary,

I am offered a gross salary of 100,000 euros per year.

I will be staying with my wife but children are studying in UK. My wife wont be working there.

What will be tax reduction and statutory deductions for state health and pension? So how much i will get to my bank account?

Thanks

Rao

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I am a British citizen, employed in Germany and married to a German woman. The complex bit is, she is doing a Phd in the UK right now, receiving about 13,000 a year from her University. She will be spending much of her time here writing up and suchlike over the next year(probably about 50 % of the time) before she moves here permanently .

 

I'm guessing the German tax authorities will take a hard line and just lump me into tax class I thus reliving me of about another 10% of my income, but I wondered if it was worth trying for tax class III? How do I apply for this at the burgerampt? Do I just show up with my marriage certificate and my work contract?

 

Thanks for any helpful replies in advance.

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I am entering into a contract assignment which is going through a German Payroll company.

 

As I am married, they said I have two options:

 

1. Not be registered as "Resident" in Germany. I would therefore be Tax Band I. But I could deduct expenses.

 

2. Wife and I registered as "Resident" in Germany. I would be Tax Band III. Unfortunately I COULD NOT deduct expenses.

 

Are they correct about this?

 

Or, is there another options which is more beneficial?

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Hi Everybody,

 

I have a question regarding German tax classes. Currently I am married with two children, my wife does not work, so I am class III. My wife has just got a job offer for a full time position with significantly less money than what I earn currently.

 

Some of the things I am not clear on:

 

1. Can I stay on the same class (III) in this situation?

2. Also, if I stay in class III, does this mean that the amount of tax I pay will not change (it will just effect the tax she will pay?)

3. Will she be put in class V ? Does this happen automatically when she accepts the job or she needs to apply for this to happen?

 

We do not want to be in the situation that the sum of what we earn both decreases after she got a job, as a result of me with the bigger salary moving into a different tax class...

 

Thanks in advance : Viktor

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1: YES

2: YES

3: YES

 

Assuming that you submit a joint tax return in Germany your tax classes have NO BEARING on the final amount of tax you jointly pay. ZThe tax classes are a "best guess" in advance - in particular to ensure that the Finanzamt owes you rather than you owing them...

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Hi,

 

My case , some advice please

 

1. I was in class 1 and got married in 2009 so i changed my class to Class 3 in August 2009 . On filling tax return 2009 i got the lumpsum money back from finanzamt as they calculated my Class as class3 for the whole 2009 . This is clear ,it is also mentioned by someone above

 

2. My question is , Is it same other way round. i.e till April 2011 i was in Class3 and my wife in class5 ,she started her job in April 2011 and we both got into class4 .so when i will fill tax for 2011 i have to pay lumpsum money back to finanzamt ( as they calculate me in class4 for whole 2011)??

 

MFG

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thanks for the replies...

 

The person from the local 'Bürgerbüro' told me they will automatically change the tax class as i'm married now.

I was thinking I had to apply for it.

 

They will change it from I, but you have to choose if you and your wife want to be IV/IV or III/V. I think IV/IV is the default setting.

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Thanks Hem! How is it decided whether you file a joint or an individual tax return? Can one choose the most beneficial? Or there are rules on that as well?

 

Many thanks! Viktor

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Hi

Can anybody help me in finding net salary from gross salary,

I am offered a gross salary of 100,000 euros per year.

I will be staying with my wife but children are studying in UK. My wife wont be working there.

What will be tax reduction and statutory deductions for state health and pension? So how much i will get to my bank account?

Thanks

Rao

 

Its difficult to say exactly without knowing what else would be a factor but assume 45% total reductions. Coudl be more depending on your state of residence and your health insurance but less if you add in your kids and get your tax class right.

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We do not want to be in the situation that the sum of what we earn both decreases after she got a job, as a result of me with the bigger salary moving into a different tax class...

 

Its irrelevant to your total tax who earns what - the whole point of "Splitting" is that your income is lumped together and taxed as one sum. The tax class determines how much you each have in your pocket each month and whether you get a refund at the end of the year or not.

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Thanks Hem! How is it decided whether you file a joint or an individual tax return? Can one choose the most beneficial? Or there are rules on that as well?

 

If you are married and not separated and both partners are fully liable for income tax you can choose between II/V and IV/IV but you will be taxed together. That only changes if one partner is non liable (usually to to non-residency).

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Its irrelevant to your total tax who earns what - the whole point of "Splitting" is that your income is lumped together and taxed as one sum. The tax class determines how much you each have in your pocket each month and whether you get a refund at the end of the year or not.

 

 

 

So we will pay the same amount of tax at the end of the year (after the tax return) regardless of me being III and my wife being V or both of us being IV/IV... It just determines the advance tax taken from us - but at the end we can get a refund or have to pay money back to them.

 

So how precise is this "advance tax estimation"? I have calculated (using the German tax calculator) how much my taxes would increase a month if I would be changed to class IV from current Class III and calculated also how much my wife's monthly taxes would decrease by being in class IV rather than in the punishing class V. To my shock I would loose about 3 times more in taxes by this move compared to what she will gain for us by paying less tax (on a monthly basis).

 

So which calculation will be closer to the tax we really need to pay at the end as a couple? Because depending on whether we chose IV/IV of III/V very different amount of tax will be taken from us as an advance.. Does that mean I have to prepare myself for paying back a huge amount of money to Finanzamt if I go with the (seemingly) more advantageous (at least in a monthly basis) III/V instead of the IV/IV combination?

 

- A confused foreigner (Viktor)

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Hi All,

 

Please help me in determining my Tax class.

I'm Non-EU. I came to Germany on Work permit for 2 years. I'm married but my spouse is in native place.

She doesnt hold a german dependent visa.

Will I be under "Tax Class 1" as i'm staying alone or can i get "Tax class 3".?!!

 

Thanks in advance.

Log.

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