How do some people get 3K tax returns?

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I heard from a few people with similar jobs and family statuses as me that they receive around 2.5K to 3K euros as tax returns every year!

They are married, have kids, and not receiving salaries higher than mine. But my tax return is always between 1000 and 1500, whether trying a steuerberater or doing it online. So, is there some untold secret they know but never reveal? Or do they simply exaggerate it for fun?

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There are many ways for this to happen: Large daily commutes, tax class 4-4 instead of 5-3 with dissimilar incomes, children expenses (kiga, school), expenses with ailing parents, declared business losses, etc. Add a few of those up and you get those numbers easily. I got over €5000/year back when my wife was on elternzeit.. never bothered to change the tax class. 

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Haha, 1500? I could only wish to get a few cents back. Usually i must even pay additionally because of a capital income from outside DE. 
And everyone was saying we’ll pay less  Solidaritätszuschlag for last year, because they decrease the rate. Well, in my case i have to pay a few 100€ more. It seems, my employer didn’t correctly calculated it over the year. Bummer…

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37 minutes ago, SpaceOne said:

Haha, 1500? I could only wish to get a few cents back.

A few cents? Nice. This year I had to pay an extra 3500 €. And 1500 € for 2020. Turns out we somehow had a tax classcombination of 3 & 4.

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13 hours ago, mtbiking said:

There are many ways for this to happen: Large daily commutes, tax class 4-4 instead of 5-3 with dissimilar incomes, children expenses (kiga, school), expenses with ailing parents, declared business losses, etc. Add a few of those up and you get those numbers easily. I got over €5000/year back when my wife was on elternzeit.. never bothered to change the tax class. 

Not that it will matter now but in case anyone else is reading...it would generally be advisable for the sole earner to be class 3. It makes no difference to tax paid as you get it back but it does make a difference should the sole earner become unemployed and receive ALG1. This is calculated on your net salary, not gross. If you are in a bulletproof job it may not matter to you but there are not that many of those these days.

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5 minutes ago, murphaph said:

Not that it will matter now but in case anyone else is reading...it would generally be advisable for the sole earner to be class 3. It makes no difference to tax paid as you get it back but it does make a difference should the sole earner become unemployed and receive ALG1. This is calculated on your net salary, not gross. If you are in a bulletproof job it may not matter to you but there are not that many of those these days.

 

I have read the same for having a child. The parent who will take Elternzeit should switch to class 3 to ensure the Elterngeld they recevies is higher, as Elterngeld is calculated using the previous 12 months net salary.

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2 minutes ago, jamiegw said:

 

I have read the same for having a child. The parent who will take Elternzeit should switch to class 3 to ensure the Elterngeld they recevies is higher, as Elterngeld is calculated using the previous 12 months net salary.

Yep it's the same basis for calculation so most married couples would let the primary care giver take class 3 for the year or so before taking maternity/paternity leave and then once on leave let the other parent take it. If no kids are expected, the person with the least secure job and who may most likely end up needing ALG1 should take class 3.

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2 hours ago, murphaph said:

Not that it will matter now but in case anyone else is reading...it would generally be advisable for the sole earner to be class 3. It makes no difference to tax paid as you get it back but it does make a difference should the sole earner become unemployed and receive ALG1. This is calculated on your net salary, not gross. If you are in a bulletproof job it may not matter to you but there are not that many of those these days.


yes, we were in a privileged situation: enough income regardless and solid jobs. I have to add, though, that I know a couple families in our situation that had a bad surprise one year after changing tax classes with the wife in Elternzeit. The Elterngeld is tax free but counts for the income progression: they received an unexpected tax bill of €2000 or so.

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Checking that the Finanzamt has done its job properly is a challenge. They do make mistakes. The wizards in many administration offices can beggar belief. I know because I worked with a few. Not a rare species and free to do their own thing if un(der)supervised. For a few years I was a beneficiary of the ignorance of the jobsworths on my case. Then it went the other way and I was scoring a loss. I didn t bother to fight it either way and in the end, I believe, was still quids in. (I could also be kidding myself.) Some you win, some you lose.

 

Same in France. The EPO pensioners on the same footing compare and contrast their returns and there is quite a variance according to who is on their case.:wacko:

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I usually get 2-3.5k back.

One of the (legal) tricks is that I have been able to claim home office expenses for years, despite not being in remote contract. And before anyone raises suspicion, yes, it's 100% legal, because I do off-schedule customer support, and the company's building is closed at that time. And yes, everybody told me it was very hard to get authorities to accept it, and indeed they raised questions, but all was properly explained. 100% legal, and some good money back!

I also easily max out work related expenses. Both me and my wife.

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That's quite a range Mike. What could cause the amount to differ so much year to year? 

 

I thought the home office had to be the "Mittelpunkt der Tätigkeit" (i.e there is no office to go to and you don't work "on the road") to be able to deduct expenses of more than €1250. Teachers etc. that normally work somewhere else but do a "fair bit" of work from home are still only allowed up to this €1250 deduction.

 

We get nothing back because I have to pay a quarterly Vorauszahlung on unearned income that means the whole thing is usually +/- 0 for us. I kind of like it this way. Much better than a Nachzahlung every year anyway.

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Technically, if you get money back it means that you have been paying too much every month (aka giving a free loan to the Finanzamt for a year or more...) and that they give it back to you only when you file the return.

 

So there is nothing good about it... if you have friends saying that they got 3K€ back it means they were getting 250€ too little of their monthly salary. In a perfect world you would ask the Finanzamt for a "Freibetrag" which would mean that you get more monthly but get nothing back at the end of the year.

Some folks push it even in the other direction, by paying too little monthly and paying it back only at the tax return (this way they get a free loan from the Finanzamt), but of course long term the Finanzamt is going to complain about it and make sure that you pay enough monthly.... So again, as much as it may feel good to get a high tax return, it is actually not such a great idea... :-)

 

 

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5 hours ago, MikeMelga said:

I usually get 2-3.5k back.

One of the (legal) tricks is that I have been able to claim home office expenses for years, despite not being in remote contract.

I'm also not sure how to claim home office expenses. I'm on a remote contract and work from home all year. But, I do not have an office room in the flat. My office desk is in the living room, but no one except me is there during my office hours. The kid is also at school till 4 pm. I'm not sure what I can claim. Also, the company doesn't pay me extra for my home office situation.

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2 minutes ago, bobMorane said:

I'm also not sure how to claim home office expenses. I'm on a remote contract and work from home all year. But, I do not have an office room in the flat. My office desk is in the living room, but no one except me is there during my office hours. The kid is also at school till 4 pm. I'm not sure what I can claim. Also, the company doesn't pay me extra for my home office situation.

https://germantaxes.de/tax-tips/work-room-homeoffice/

 

I found this guide useful in the past because i have a dedicated office at home

 

"According to a 2016 ruling by the Federal Court of Finance (Bundesfinanzhof / BFH), a work room is a room that is almost exclusively used for professional activities and is integrated into the domestic sphere of your apartment or house."

 

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2 minutes ago, jamiegw said:

"According to a 2016 ruling by the Federal Court of Finance (Bundesfinanzhof / BFH), a work room is a room that is almost exclusively used for professional activities and is integrated into the domestic sphere of your apartment or house."

Practically, my living room is exclusively used for my professional activities during my office hours, and I have the same level of productivity as if I was in the company. But, I think it's difficult to make it pass their bureaucratic filters. :D

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20 minutes ago, jamiegw said:

https://germantaxes.de/tax-tips/work-room-homeoffice/

 

I found this guide useful in the past because i have a dedicated office at home

 

"According to a 2016 ruling by the Federal Court of Finance (Bundesfinanzhof / BFH), a work room is a room that is almost exclusively used for professional activities and is integrated into the domestic sphere of your apartment or house."

 

Remove the ironing board and guest bed!😂

Nice link!❤️

I am a professional independent insurance broker and authorised advertiser. Contact me.
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7 minutes ago, john g. said:

Remove the ironing board and guest bed!😂

Nice link!❤️

I am a professional independent insurance broker and authorised advertiser. Contact me.

I know, no one working from home needs an ironing board!

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I have a bed near my computer! I move the camera direction when I skype or zoom or whatever! I am self- employed and work from home! 

I am 70 and appreciate a lie down between calls!😂

Give it a couple of years and I'll need a lie down during a call!😩😴❤️

I am a professional independent insurance broker and authorised advertiser. Contact me.
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1 hour ago, john g. said:

I have a bed near my computer! I move the camera direction when I skype or zoom or whatever! I am self- employed and work from home! 

I am 70 and appreciate a lie down between calls!😂

Give it a couple of years and I'll need a lie down during a call!😩😴❤️

I am a professional independent insurance broker and authorised advertiser. Contact me.

There are some simple calf exercises you can do even lying down, John.   I know it is tempting but really being so immobile is very aging.  There was a news article the other day.  Will link when I find it.  We need muscle as we age.  I know you get out with the doggies but being so immobile in between is not good.  

 

Ha, am writing this lying down in bed.  

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