Tax Return - Tips & Tricks

With the tax return, you provide your respective financial office with information about your income conditions. This helps determine whether the necessary taxes for the year have been paid or, conversely, if too much has been paid. Initially, this affects all taxpayers who are obligated to file a tax return. However, even voluntarily submitting a tax return is advisable.

Why is submitting a tax return important?

In most cases, voluntarily submitting a tax return has no disadvantages. On the contrary, it is often beneficial, as many voluntary submissions result in a tax refund. In 2019, for example, according to the Federal Statistical Office, out of 14.2 million taxpayers, 12.7 million received a refund, averaging €1,095.

Therefore, there is a high probability that you, too, could receive a refund. Nevertheless, millions are collected annually by the tax authorities from people who do not file their tax returns.

Tips and Tricks for a Successful Tax Return

You are wondering how you can maximize your tax refund and successfully handle your tax return? The following categories can be applied to deducted for tax purposes to receive the maximum refund.

Medical Expenses

Medical expenses can easily become extraordinary burdens. Once they exceed a reasonable threshold, they can be submitted to the tax office. The threshold is influenced by factors such as marital status, income level, and the number of children.

This includes for instance hospital costs, eye laser surgery, prescription medicines, and treatments prescribed by a doctor or alternative practitioner, as well as medical treatment costs.

Household Services

Craftsmanship, household, and care services can be reported in the tax return. To be eligible for a refund, those costs should be part of one of the following categories:

• Apartment cleaning
• Gardening
• Pet care
• Snow removal
• Renovation costs
• Janitorial services
• Care costs
• Child care costs
• Meal preparation

Important: To claim a deduction, both the invoice and the bank transfer document must be at hand in case the tax office asks for proof of payment. Therefore, it is advisable to not pay in cash and to always keep all receipts!

Commuting Allowance

If you commute between your residence and workplace, you can take advantage of the so-called commuting allowance.

Here's how it works:

• €0.30 per kilometer traveled
• Independent of the mode of transportation
• Maximum of €4,500 per year
• Can even be claimed by carpool passengers

However, travel expenses can also be fully deducted from taxes. Proof (receipts, tickets) is again required for this.

Business Expenses

Business expenses include ALL costs incurred to carry out a profession. The tax office refunds employees a lump sum of €1,000 per year as business expenses - and this goes without documentation! This amount is automatically deducted from the taxable income.

Other expenses that qualify as business expenses include:

• Business trips
• Further education
• Work clothing
• Work tools
• Relocation
• Professional insurance
• Telephone and internet costs
• Union contributions
• Donations

What to Watch out for in the Tax Return

If you decide to submit a tax return, consider a few factors to ensure a smooth process.

Deadlines and Extensions

The deadline for submitting the tax return this year is Monday, October 2, 2023. However, this deadline can be extended for taxpayers who seek help from a tax advisor or a wage tax aid association. In this case, an automatic 7-month extension applies.

Important: Due to the COVID-19 pandemic, the deadline for the 2022 tax return has been extended. Therefore, the deadline for advised cases is July 21, 2024!

Exceptional Cases

Those who know in advance that a timely submission will be problematic should request a written extension from the respective tax office. This request must be justified and include a new proposed deadline.

Approval of the request is not guaranteed, but the tax office usually accepts the following justifications:

• Relocation
• Illness
• Stay abroad
• Missing documents

Important: Once approved, the new deadline should be strictly adhered to. In case of delay, sanctions may be imposed.

Late Filing Penalty

Taxpayers who submit their tax return significantly late risk incurring a so-called late filing penalty. For the assessment period of 2022, this applies if the return is not submitted within 24 months after the assessment period.

This penalty amounts to 0.25% of the assessed tax and at least €25 per month started. Additional penalties such as tax estimates, late payment interest, and coercive fines can also be imposed.

Therefore: Seek professional help or request an extension to avoid such a situation!

In general, taxpayers are well-advised to seek professional help to avoid errors and complications. Even for voluntary submissions, using a tax program is beneficial to receive a successful tax assessment.

In this sense, we wish you good luck and a successful tax return!