Income tax: business expenses, special expenses and extraordinary burdens

Income tax covers income from earnings, profits and property. The legal basis is the Income Tax Act. It contains seven types of income and specifies the calculation steps for income tax (also known as wage tax for employees).

Composition of income tax

The profit income relates to companies or self-employed. The surplus income includes the wages, salaries and training allowances of the employed and other types of income. If income is generated from different types of income, all of them are taken into account when calculating income tax. In a first step, the profit income can be reduced by operating expenses and the surplus income by the income-related expenses. This gives the total amount of income.

Advertising expenses

They serve to acquire, secure and maintain income. They can be invoked if they are not replaced by others. In the case of income from employment, there is a flat-rate amount for income-related expenses. It is taken into account from the outset by the tax offices regardless of the actual amount of income-related expenses. This means that if you have no higher expenses, you do not need to provide evidence of advertising expenses, as this lump sum is automatically offset.

Advertising costs include, for example:

  • Costs for commuting to work
  • Work equipment
  • Training costs for the practiced occupation
  • work-related moving costs
  • work-related double housekeeping
  • Union dues

Special editions

Special editions werden unterschieden in unbeschränkt abzugsfähig (in voller Höhe) und beschränkt abzugsfähig (nicht in voller Höhe). Unbeschränkt abzugsfähig ist die gezahlte Kirchensteuer. Beschränkt abzugsfähig sind Vorsorgeaufwendungen wie Arbeitnehmer/-innenbeiträge für gesetzliche Sozialversicherungen und Privatversicherungen zur persönlichen Vorsorge (beispielsweise Haftpflicht-, private Unfall-, Kranken-, Pflege- und Lebensversicherungen). Außerdem Unterhaltsleistungen an geschiedene / dauernd getrennt lebende einkommensteuerpflichtige Ehepartner/in, Aufwendungen für Berufsausbildung oder Weiterbildung in einem nicht ausgeübten Beruf und steuerbegünstigte Spenden und Mitgliedsbeiträge.

For regular special expenses that exceed a lump sum, an allowance is entered in the income tax card. This does not apply to social insurance, for which a fixed flat rate pension per person is included in the income tax tables.

Exceptional costs

They can be claimed for tax purposes for social reasons. These include, for example: costs for medical treatment that are not reimbursed by third parties or costs for a cure, unless insurance companies cover the costs; Support for first-degree relatives (parents for children and vice versa). The amount of the reasonable burden, that is, the personal share to be paid, depends on the total amount of income, the marital status and the number of children.

Tax amount

Die Höhe der zu zahlenden Steuer hängt von der jeweiligen Steuerklasse und dem Income tax rate ab. Die Besteuerung beginnt ab einem Einkommen oberhalb des Grundfreibetrags mit dem Eingangssteuersatz. Danach steigt der Steuersatz in den Progressionszonen unterschiedlich stark an bis zu einem Spitzensteuersatz und bleibt dann gleich hoch (linear) in der Proportionalzone.

The curve for the average tax burden shows the actual average tax burden after the deduction options have been taken. The respective amounts and thus also the percentage tax burden can be changed by politics at any time. The solidarity surcharge is calculated from the determined income tax, i.e. the income tax to be paid. The church tax (it can be different depending on the federal state) is calculated from the determined income tax.

The amount of income tax to be paid is calculated in the income tax tables for the respective income levels. For marginal employment (mini-jobs), a lump sum is paid that includes a tax component and a contribution component for statutory pension and health insurance.

The municipalities must provide employees with a tax card free of charge for each calendar year. The employees have to hand them over to the company. The tax office or the municipality are responsible for any necessary changes to the income tax card. The tax office is responsible if the income situation changes. The municipality is responsible for changed living conditions. If there are several employment relationships, the municipality must issue the necessary cards free of charge.

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