Joint or Single Tax Return Benefits

3 posts in this topic

Apologies if this has been covered before - I searched but no answer was conclusive.


My wife and I are freelancers here. She earns a very good amount - I earn very little. What is the benefit of us doing a joint tax return? 


The tax free allowance seems to be the same for each individual when combined together. 


Would love is someone can shed some light on this for me cause I've read a few places it's best practice, and especially if one person earns significantly more than the other (which is the case for us) but I can't see why...


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You have the choice each year.


Normally, joint taxation is much better than separate taxation, but there are circumstances where separate is better. This can arise for example when there is a special tax charge that only affects the lower earner, where joint taxation would apply it to both.


One example where separate taxation can be better is where the higher earner is not subject to church tax but the lower earner is. Under joint taxation, you pay church tax on a separate mixed scale which (roughly) applies half the church tax rate to the joint income.


Another example might be where the lower earner is subject to Progressionsvorbehalt (resulting in a higher tax rate on German income) in respect of income taxable in another country.


My Steuerberater told me he calculates our tax on both bases, and then decides what to do.


I would suggest doing an approximate calculation of your tax on both bases (using the online tools) and then things might seem clearer.



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