How to determine your tax class

94 posts in this topic

Hi to all,

 

I hope this topic is still active, since I'd really like to receive your appreciated thoughts on the following:

I'm starting a full time job from January. Until now I was unemployed and I advised my husband to change his previous class I(he had before I moved in Germany from abroad) to III, so we did that and I got class V. Now, when I start to work, I want to have the class IV with a factor, because I believe it's the fairest class for married people. My husband doesn't want to change to IV. He is relatively new to Germany and knows nothing about taxes, he only knows that tax III is the best for him and he thinks that I want him to change to IV with a factor so that I can get more Netto. I did my homework, I was reading a lot about taxes before posting here, I also called the Finanzamt. I find it very very stupid that also my husband should agree for class IV otherwise I will work in class V until the rest of my life because my husband wants that! If I knew this I wouldn't sign for him to get class III and I would have gotten class IV automatically. I know that at the end of the year and only if I submit separate tax return application I will get my money back like I had class IV with a factor and he will have to pay money back. But, as I understood there are other disadvantages which are irreversible - if I get pregnant or become unemployed my payments depend on my net salary, I'm not sure if also my pension depends on it, I do not get Freibeträge, my credit allowance depends on my net salary, so it's really totally discriminating rule especially that I read that in 93% of the married couples the man earns more. I don't say I know more than the law makers, but wouldn't be fair that the class IV with a factor is given on a request of any of the husband or wife and for the combination III/V both the wife and husband should sign because it affects the one very positively and the other one very negatively?

So it really bothers me now that I have to explain to him the tax law which he'll understand as me wanting to convince him to ALLOW me the tax IV so that I can get more Netto, or I have to make him speak to a tax consultant, or I have to wait a whole year so that he's asked to pay money back to the Finanzamt and realizes by himself that I'm really baring the consequences the whole year of his bigger Netto.

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So it really bothers me now that I have to explain to him the tax law which he'll understand as me wanting to convince him to ALLOW me the tax IV so that I can get more Netto, or I have to make him speak to a tax consultant, or I have to wait a whole year so that he's asked to pay money back to the Finanzamt and realizes by himself that I'm really baring the consequences the whole year of his bigger Netto.

 

So I suppose you have separate finances, my money vs. your money? Maybe you need to tell him that his bigger netto is at the cost of your netto and he can pick and choose, either he lets you change the tax class or you will just wait the whole year at which point you get the money back and he has to pay.

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Thanks for the reply! I guess we do have separate finances, although we are married for only little more than one year and I'm not sure what separate finances mean:). He has his account and I can just ask money from him when I need it, but I can't just withdraw money from his account, I also don't have my own card for his account.

Regarding getting the rest of my Netto at the end of the year, it really wouldn't have bothered me this issue, if it was the same to have my Netto the whole year around or just get the rest of it at the end of the year, if it was the same, but it's not, because of the other benefits that are related to the Netto. So it is not right for my Netto to depend on my husband's will or the other way around. I guess I'll have to live with this law in Germany :) and not let it be an arguing issue for us.

Frohe Weihnachten!!!

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[adminmerge][/adminmerge]

Hi,

 

For a couple, when both of them are working and have tax class 3 and 5. Who should be having tax class 3? Is it the person who earns more?

 

Thanks

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It only makes sense to choose 3/5 if one partner earns at least 30 percent more than the other. In that case, the partner with the higher income takes class 3. Otherwise you should take 4/4.

 

It's all the same in the end, though, because your actual tax liability is assessed when you file your tax return at the end of the year.

 

NB: Please use the search box before starting a new thread. I was able to find this one easily by searching for "tax class". Thank you.

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Does anyone know if i can change steuerklasse with my wife and daughter living abroad and not declared as living here? if yes, can this be done electronically?

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No, sorry, you cannot change your tax class from tax class I (single).

In the eyes of the German Finanzamt, you are single, until your wife applies to be taxed with all her Greek income in Germany. If you do this when submitting your tax return, then you will be taxed as married.

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A technical question on how taxes are calculated. A single person (class 1) and married person (class 3)both earn the same wage yet netto is different. Is that due to different tax rates or the use of deductions to reduce the tax liability?

 

In other words both have a marginal tax rate of 43% (each additional dollar earned is taxed at 43%) but the married person has more deductions which reduces their taxable income or different tax classes have different tax rates.

 

Note taxable income is a technical term meaning that your gross income is reduced by certain deductions (most common pension contributions eg RRSP) the remaining amount is then taxed according to the tax tables, thus taxable income. This is how it works in Canada not sure if the US or UK are the same.

 

Thanks

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It has nothing to do with deductions. It's about the Ehegattensplitting, which effectively doubles the size of each tax band.

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  • Tax class I: taxation starts after the first 8,130€, according to the tax table for single people (= Grundtabelle).
  • Tax class III: taxation starts after the first 16,260€, according to the tax table for married people (= Splittingtarif).

 

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Hi Friends, I am new to this forum. For the year 2013 I had tax class 3 till October & later it was changed to 1 after my wife went back to home country for 5 months. She will be back in Feb 2014. Can anyone advice what will be my tax class for year 2013??

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If you really meant 2013:

You know what tax classes you were in.

If you are anxious about the tax return, you will be treated as married for the whole of 2013.

 

If you meant 2014:

Tax class I until she moves back to Germany, as soon as she is back, you can apply for tax class III again.

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a follow-up on rk1981's question. In my case, I have been in Germany since April and my wife will join me in September. I am current assigned to tax class 1. Will I be treated as tax class 3 for whole year 2014 after my wife join me or just for the rest of 2014 after September? Also, do I have to report my tax change to my company so that they apply a lower tax withholding on my payroll or there will be an automatic update from the tax authority to my company? Thank you very much!

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As a bump to this thread...

 

Can anyone tell me what level is "lower income" in relation to Tax Class 3:

 

  • Class III = married and spouse has no income or lower income

 

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Lower than your income.

 

Example:

You have a salary 50,000€ gross, your spouse's gross salary is 30,000€.

You should choose tax class 3, your spouse will then get tax class 5.

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Hi everyone,

 

I am (almost) been offered a job from next February in Berlin that requires me to submit some info while signing the contract. Among this, they ask me about my tax class. So the short question (which is probably written somewhere online, but I really can't figure it out) is:

  • Who should I ask to have my tax class for 2016 computed? And how can they know which class I (will) have if I can't still produce my and my wife's salaries? (as a matter of fact, I more-or-less know both salaries, but we haven't signed any contract yet - and she will work abroad for a few months, more details below)

I have seen on this thread that I should have it computed before starting earning my first salary, otherwise I would probably not have bothered.

 

One possible answer is that I just give my best guess, and in 2017 when I declare my taxes the Finanzamt will give me back / ask me something, but that seems not too legal. But even if it was legal, my situation is bit confused right now, so I wouldn't know the right answer. I will work in Germany from February on; my wife (we are both EU nationals) will work and pay taxes in the Netherlands from January to around August, then come to Berlin with me and start a postdoc with a stipendium, which is tax-free.

 

I guess that from September on I will be class III and she will be V (anyway, she pays 0). But before September, I really don't know. I read somewhere that since we have different residences, I should get class I (btw, is it possible to have different classes in different months of the same year?). However, the following link says that this is not the case if we both live and were born in the EU:

http://www.expatica.com/de/finance/Tax-reductions-in-Germany_105721.html

 

What I have done so far: going to the Finanzamt and, with the few words of German that I know, try to interact with the guy at the reception. This clearly failed since he gave me a frighteningly long "Fragebogen zur steuerlichen Erfassung", but fortunately I then discovered that it is only for self-employed (phew!). He also gave me a perhaps useful "Antrag auf Steuerklassenwechsel bei Ehegatten/Lebenspartnern", which at least has a promising name. However this requires a Steuernummer, which I don't have, as yet. This raises another question:

  • Should I get a Steuernummer already, or is it something that comes when starting the job?

Looking at the answer by PandaMunich on this other link:

it looks like I got it all wrong, that I can't have a Steuernummer because I never paid taxes yet and that what I need to do is a Antrag auf Ausstellung einer Bescheinigung für den Lohnsteuerabzug, where I can also fill in my wife's details and ask for a class. The only problem, then, would be to understand if I have right to the class III from day one or not.

 

(by the way, right now both me and my wife live and are registered in Germany and basically earn nothing, so if I just don't say to the German finance that she will be earning and paying something abroad for these 8 months I definitely would get level III... but that's not very legal or wise, I fear)

 

Sorry for the very lengthy post!!

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Tax classes are irrelevant, the final tax burden is only calculated in your yearly tax return.

So there is nothing illegal about doing a tax return ;-)

 

You didn't quite understand what the tax advisor Martin Brune was saying in that article, he's talking about the spouse who isn't living in Germany applying to be taxed in Germany. 

His article would mean that your wife would apply to be taxed again on her Dutch income in Germany. Doing this only makes sense for spouses who live in another EU country and who don't have any income at all, or only a very low income, otherwise this double taxation makes the construct financially unattractive.

For example, here on Toytown IvoMV was such a case, he was working in Germany, his wife in Portugal didn't have any income, so for him it made sense financially to have his wife apply to be taxed in Germany with her non-existent Portuguese income. 

 

The correct way to handle things for you would be:

  1. your wife should de-register from Germany (since she's in reality living in the Netherlands)
  2. you will get within 6 weeks of first registering in Germany a letter from the "Bundeszentralamt für Steuern" with your Steuer-Identifikationsnummer sent to the address at which you first registered. If you didn't get that letter you can apply to have it re-sent to your official registration address by filling in this form. You have to tell this Steuer-Identifikationsnummer to your employer. Since only you will be registered in Germany, you will be treated as a single person and get tax class I (one).
  3. In September your wife will join you and register her address in Germany. Only then do your submit the "Antrag auf Steuerklassenwechsel bei Ehegatten/Lebenspartnern" and ask for the tax class combination III/V (three/five). From that month your monthly wage tax deductions will consider that you are married.
  4. Any time after 1. January 2016 you do a tax return for the calendar year 2015, and by doing this tax return, because your wife will have joined you in Germany before 31.12.2015 and she will have registered here before the end of 2015, they will give you tax advantages of being married retro-actively till 1. January 2015.
    This is absolutely legal, for example, anyone who gets married before the end of the year gets the tax advantages of being married for that entire year. 

 

 

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Dear PandaMunich,

 

thanks a lot for your answer!! You have been extremely kind, thorough and useful.

 

Indeed, it wouldn't make any sense for us to have my wife doubly taxed, as you say; I have been having my Steuer ID number for a while now (I have lived for one year in Bonn before, but didn't bother about taxes so far since I had a Stipendium), so everything should be fine. Well, apart from having a part of my income deducted for taxes purposes when I would need it most, and then given back to me one year later when they grant me class III, but that's life (plus, I didn't even think I would have gotten anything back, so...)

 

Since it is usual to abuse of kindness, I'd like your advice on a related matter (maybe it's slightly OT, if somebody thinks so, please tell me, I'll move it elsewhere; but the problem is strongly related to the Steuernummer, so for now I leave it here). When registering in Germany, I was automatically assigned to "Roman Catholic" because I am baptized. As most Italians, I am baptized but would hardly define myself as a Catholic at all, so a couple of days ago I went to the Amtsgericht and obtained my "Austritt aus der katolischen Kirche".

 

When I have to fill in the religion form for my employer, can I now safely write "none" under religion, or is there a legal amount of time that is needed before this change takes action? And more importantly, the lady at the office told me that I had to bring a copy of the paper to the Finanzamt together with my Steuernummer, but since I don't have any such number, can I still bring it to the Finanzamt?

 

Thanks in advance to anybody who can help!!!

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Write "none", it doesn't matter since your employer will anyway query the EStAM database (which is automatically updated by the place where you did your "leaving the church" thing) every month to find out your current church affiliation.

 

You will still have to pay church tax for up to 2 months after the date that you left the church, for example, if you left the church on 4. December you will only stop getting church tax deducted starting with your February salary.

 

 

 

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