Guides. Guides for living in Germany. For many people in Germany cutting costs is definitely something you need to employ from babysitters to moving costs. Here are some ways to get some tax deductions when filing your taxes in Germany:
Kinderfreibetrag and Kindergeld
Parents in Germany receive money every month from the government to help with costs. We wrote about it here:
Parents need to apply for this payment through their nearest Familienkasse, and can only claim the monthly payments stretching back six months.
If you receive Kindergeld, you also claim a Kinderfreibetrag (child allowance), which guarantees that the parents’ income remains tax free up to a certain amount.
Childcare
Parents in Germany are encouraged to document their child care costs from acquiring baby sitters to a nanny for date night.
Parents can deduct up to two-thirds of their annual childcare expenses per child (up until the age of 14) per year, capped at €6,000. That means the most you can expect to deduct is €4,000 per kid annually.
READ MORE: How to apply for child sickness benefit (Kinderkrankengeld) and how much you are entitled to
Kindergeld allowance in 2022: How much is it and who can apply for it?
Tuition Fees
Even though a good portion of schooling is subsidised in Germany when you pay for private tuition out to pocket you can claim u to 30 percent of tuition expenses at a maxim of €5,000 per child per year.
Single Parents (Alleinerziehende)
According to thelocal.de, The government recognises the particularly high financial burden they also bear with a special Entlastungsbetrag (tax credit). As of 2021, single parents can deduct €4,008 from their income plus €280 a month for each additional child.
In some cases, single parents can also deduct Unterhaltszahlungen (maintenance payments) of up to €8,820 per year. This could the cost of a room for the child to stay if they travel between two residences.
The maximum deduction to this could be enforced if the parents is not also receiving Kindergeld or Kinderfreibetrag.
Health and medical care
These particular expenses can be claimed as long as the Finanzamt perceives them as ‘medically required’. This does not apply to drugs acquired over the counter.
Moving costs
Should a family relocate and have to forfeit on their rest of their rent agreement then the rest of their rent can count as a tax deduction.
Finanzamt allows families to factor in the costs of accommodation for the family member who has moved, plus travel expenses back and forth and for this there is not limit to what one can claim. You can however only travel once a week.
The cost of accommodation in Germany can also be deducted, but capped at €1,000 per month.
If the partner staying back with the children is not working or has a low income in another EU country, their setup is treated with Ehegattensplitting – a mechanism for taxing married couples.
READ MORE: Moving with your children? Here are 5 tips on transitioning to life in Germany