If you are employed you are not obliged to fill in your tax return papers because it is considered that your tax debt was fully paid by the withholding tax on your salary every month.

Also, when you get your net salary every month, the government is already considering automatically that you have 1.000€ of deductable work-related expenses per year, so unless you had more than 1.000€ deductible expenses last year you don’t have to fill in tax papers or prove any expenses.

However if you had more than 1.000€ of deductible expenses and want a tax refund on the rest, you have to fill in the tax forms. (note that it’s not the total value of the expenses that is deductible, only a part).

On the contrary, if you have a company or are a freelancer, it is mandatory for you to send the income tax forms to the Finanzamt.

Below is what I found out about doing your income tax in Germany:

What is considered Income:

  • Salary
  • Unemployment Benefits (and other work related benefits received from the government)
  • Illness benefits
  • Interest received over 801€
  • Compensation received after being fired
  • Pensions received

What can be deducted (keep receipts during the year):

  • travel costs from home to work
  • training costs (including language course if you need the language for work) and travel costs to training
  • bank account costs (if you need an account to receive your salary)
  • costs related to job interviews (travel expenses, etc)
  • costs related with work (stationary, computer, work travels ) not reimbursed by your employer
  • church tax paid
  • donations
  • illness costs (part that won’t be reimbursed by the health insurance and only if prescribed by a doctor)
  • cleaning woman
  • handymen work (plumbing, electrician, garbage, …) except costs with materials used
  • petsitter
  • wages received abroad
  • wage received for working for a non-profit organization
  • professional association fees
  • second house needed to work (rent + utilities like water, electricity, etc)
  • travel expenses to and from the second house
  • disabilities
  • living costs for the first 3 months after taking a job in a new city
  • pension contributions
  • health insurance contributions (if you have a private health insurance you can only deduct the comparable cost of the public health insurance)
  • unemployment insurance contribution
  • other insurance contributions
  • work uniforms including cleaning expenses (normal suits are not deductable)
  • Labour court expenses
  • internet costs (if needed for work)
  • studying costs (university)

If you are a freelancer you can also deduct the following:

  • All expenses (travel, food) incurred when you were working absent from  your office more than 8 hours per day (ex: in another city or country) – make sure you note down how long you were away when you had that expense
  • Books related with your profession
  • Member fees of your professional association (IHK, Industrie-, Handelskammer)
  • If you work from home, you can deduct the part of the rent and nebenkosten (utilities) that corresponds to the room you use, calculated as a % of the total m2 size of the house (as long as the room is used mostly for working so you are not allowed to have fitness equipment or guest beds in it)
  • Furniture that you bought for your office
  • Accounting software
  • Stationary (paper, pens, etc)
  • Telephone and cell phone bills (but you have to estimate how much is private and professional expenses)
  • Anti-virus software
  • Restaurant bills
  • Presents to clients or business partners up to 35€ individually
  • Meals you pay to clients or business partners

More info on deductions and maximum amounts here

When to do it?

The forms are usually published in mid-January. The deadline for delivery is 31 of May if you do it by yourself or 31 of December if you hire a tax advisor.

Where to do it?

First you need to get a digital signature here. You will receive the log-in details in two parts: one per email and the other per post. When you receive the code per post, click on the link you received per email and download the security certificate (save it in your computer in a place you will remember later because you will need it often).

After you followed all the registration steps and are finally allowed to log-in on elsteronline.de, go to “Dienste” (menu on the left of the page) – “Belegabruf (vorausgefüllte Steuererklärung)” – ” Teilnahme am Belegabruf” so that they allow you to use the pre-filled forms (some forms will already be prefilled with some information like salary, insurances contributions, etc). You will then have to wait for your other password (abrufcode) that will be send to you per post.

Then download the Elster Formular Program to fill out everything with as much time as you need, offline.

As I wrote above, you can already use the pre-filled forms, which will already have a lot of information pre-filled for you. For that, open the Elster Formular program that you’ve downloaded, go to the menu “Belegabruf” – “Belege vom Finanzamt abrufen”.

If you did your taxes last year, you can automatically fill out most of the information using last year’s tax return. For that, click on the button right to the saving button in the tollbar “Eingabe daten aus dem Steuerfall des Vorjahres uebernehmen”

Note: if you loose your security certificate, log-in on elsteronline.de and select the menu “Registrierung” (menu on the left of the page) to download it again.

Which forms to fill out:

Below are the most used forms and fields to be filled in by persons with no kids, using the Elster Formular Program (so that most fields will already be automatically filled in). For more info on these and the other forms available, check here.

Hauptvordruck

  • line 1 – select Einkommensteuerklärung
  • line 3 and 4 – press the button to fill them. If you don’t have a Steuernummer (it’s a different number than the Steuer Identifikationsnummer), you can select to be given a new one. The Finanzamt name and number is usually the first 3 digits of your Steuernummer (you can also check it here).
  • line 7 – Tax  Identifikationsnummer
  • line 8 – Surname
  • line 9 – Name
  • line 11 to 13 – address, birthday and religion
  • line 14 – profession
  • between line 23 and 24 – telephone number (optional)
  • line 24 – select “zusammenvaranlagung” if you are married and you are making your taxes together with your spouse
  • line 25 to 27 – bank details
  • line 28 – select “It. Zeilen 8 und 9” (if you are single or if the account is in the name of the husband)
  • line 46
    • write in the line “Spenden an Misereor e.V.” (example for a donation) or “Mitgliedsbeiträge Arbeiter-Samariter-Bund e.V.” (example for the membership fees of a charity organization)
    • in front, in the first square, below “lt. Bestätigungen EUR”, write the amount you donated
  • line 67 (page 3) – health expenses (with doctor prescription). Write “Krankheitskosten”, put the total expenses value in the first square and the amount that you expect to get back (or already got) from the insurance company (or others) in the second square.

Anlage N (if you are employed)

  • first page – fill with the info your employer gave you in December
  • line 31 (second page) – address where you work regularly
  • line 35
    • “arbeitstage je woche” = number of days you work per week;
    • “Urlaubs- und krankheitstage” = sum of the days you were sick and on hollidays;
    • “aufgesucht an” = number of days you actually worked;
    • “einfache entfernung” = distance between your house and your workplace (one way) ;
    • “davon mit … PKW zurückgelegt” = part of the before mentioned distance that you travel with your car ;
    • “Aufwendungen für Fahrten mit öffentlischen Verkehrsmitteln (ohne Flug- und Fährkosten)” = travel expenses by public transports (excluding flights and ferries):
  • between line 39 and 40 – labor union costs
  • between line 43 and 44 – add expenses with work related courses: Kursgebühren = course fees ; Fachliteratur = expenses with books
  • use this Anlage to fill out also your other work related expenses

Anlage VL

  • Use this Anlage to fill out the details of your VL savings account (a special savings account that some employers pay you). You only need to fill it out if you’re entitled to government benefits (check here to see if you are).  Fill it out with the info your bank/insurance company sent you per post.

Anlage Vorsorge

  • line 8: sum of all of your private retirement insurance premiums
  • line 11:
    • select “Ya” if you’re an employed person and your employer pays part of your Health Insurance
    • select “Nein” if you are a freelancer
      • you’re case might be different, make sure you choose the correct option
  • line 24 to 29: fill out with the information from your private health insurance tax statement
  • line 49 (page 2): Private Disability Insurance (Berufsunfähigkeit)
    • in the description write the name of the insurance company (ex: Canada Life Assurance)
  • line 50: add each insurance in a separate line
    • Liability insurance – Haftpflichtversicherung (including the car liability insurance, but not other car insurances like vollkasko).
      • under “Versicherungsbezeichnung” you write the name of the insurance company (ex: Europa Versicherung AG) and on the right square the amount you paid
    • Private Accidents Insurance (Unfallsversicherung)
      • under “Versicherungsbezeichnung” you write the name of the insurance company (ex: Generali) and on the right square the amount you paid
  • line 51: life insurance premiums
    • under “Versicherungsbezeichnung” you write the name of the insurance company (ex: Bayern Versicherung LV) and on the right square the amount you paid
  •  if you have extra private insurances, add them also to this Anlage
    • Exception: pension funds offered by your employer are already automatically reduced from the salary that your employer declares to the Finanzamt, so you don’t need to add them anywhere.

Anlage KAP

  • It’s not mandatory but if your yearly income is lower than 16.050 Euro (for singles) and 32.100 Euro (for couples) or if you’re retired, than it might be worth it (more here)
  • Fill it out with the bank account interest and capital gains you received (see your bank tax statement)

If next to be employed, you’re also registered as small businessman/woman (Klein Unternehemer), you will also need to fill out the following forms:

Anlage G

  • line 4: description of your company (ex: Online Hygieneartikeln-Handel) and profit (in case of loss, put a minus before the value).

Umsatzsteuererklärung

  • It is sent separatly, so it will open in a new window. If it’s not installed, you must install it first
    • go to the tab “new” – open “Unternehmer und Selbständige” – click on “Umsatzsteuererklärung” – click on the button “neu erstellen” in front of the year in question
  • line 1 and 2: click the button and fill it
  • line 7: your complete name
  • line 9: description of your company (ex: Online Hygieneartikeln-Handel)
  • line 11 to 13: your address, phone and email
  • line 17: only fill out in case last year you didn´t have the company the whole year – it’s the period you had your company last year (ddmmddmm – ex:19033112 for 19th March to 31st December)
  • line 28 and 29: If you sold to other EU-countries or if you bought from other EU countries tax free (by giving your vat number), then choose 28 (you must also fill the Anlage UR). If not, choose 29.
  • line 33 and 34 (page 2): fill in the amounts for the 2 years in question
  • line 108 (page 4): amounts already declared (even if not paid yet)

Anlage EÜR 

  • It is sent separatly, so it will open in a new window. If it’s not installed, you must install it first (Einnahmenüberschussrechnung)
  • Under “Allgemeine Angaben” put your Steuernummer and Finanzamt
  • Under “Angaben zum Betrieb”:
    • click on the button on the right “Steuernummer und Finanzamt übernehmen”
    • In front of “Bezeichnung” put your full name (first row)
    • In “Anschrift” put your address
    • In “Art des Betriebs” write what is written in the form you got when you registered your business in the Kvr (ex: Handel, Sonstiges). You can also write something that summarizes your business like Online Handel for ex.
    • In “Rechtsform des Betriebs” choose in “Group 1” – “Sonstige(r) Einzelgewerbetreibende(r)”
      • your business may have a different legal form though, make sure you choose the correct one
      • Hausgewerbetreibende is only when “your company or business” is hired by another company
    • In “Wirtschaftsjahr” choose “entspricht dem Kalendarjahr YYYY”
  • line 7: “Gewerbebetrieb”
  • line 8:
    • if you’re single or the husband choose the first square
    • second square if you’re the wife
    • third square if both spouses are responsible for the company
  • line 10: choose “Nein” (unless you sold or gave away land)
  • line 11: Write your Revenues
  • line 25 (page 2): Cost of and with merchandise bought
  • line 90: sum of all the private expenses that were charged to the same bank account or credit card that you use for your business as well as:
    • merchandise that you used privately
    • goods that you made as a company and used privately
    • values of lines 19 and 20 as well as the corresponding vat

If you are a freelancer:

Anlage EÜR 

  • It is sent separatly, so it will open in a new window.
  • Under “Allgemeine Angaben” put your Steuernummer and Finanzamt
  • Under “Angaben zum Betrieb”:
    • click on the button on the right “Steuernummer und Finanzamt übernehmen”
    • In front of “Bezeichnung” put your full name (first row)
    • In “Anschrift” put your address
    • In “Art des Betriebs” write your profession (ex: Web-Entwickler)
    • In “Rechtsform des Betriebs” choose in “Group 1” – “Angehörige(r) der freien Berufe”
    • In “Wirtschaftsjahr” choose “entspricht dem Kalendarjahr YYYY”
  • line 7: “Selbständige Arbeit”
  • line 8:
    • if you’re single or the husband choose the first square
    • second square if you’re the wife
    • third square if both spouses are responsible for the business
  • line 10: choose “Nein” (unless you sold or gave away land)
  • line 14: sum of the netto values you receive from your clients
  • line 16: vat that you received from your clients
  • line 17: vat that you received from the Finanzamt
    • what matters is the date you received the amount, not the period it refers to (if you received something in March even if it’s referent to October the year before, it counts as an amount for March)
    • there is a 10 day rule, i.e., vat received from the Finanzamt during the first 10 days of the year still count as an income for the year before (this means also that you should check your bank statement for the first 10 days of the year afterwards)
  • line 33 (page 2): items bought (stationary, furniture, computers and machines, cell phones, software that you own yourself, etc) that individually were up to 410€ without vat (from the fiscal year 2018 on it will be 800€)
    • it’s to use the Netto (net) values
    • here you put the software that you actually own (that you can use and is yours after finishing paying it in full). If you are “renting” a software, i.e. if you need to pay a license monthly or in a certain interval of time, and are not able to use it if you stop the payments, than you don’t add it here, but in line 52
    • If you create a Sammelpost in the Anlageverzeichnis, you have to include there all the expenses that individually were between 150,01€ (from the fiscal year 2018 on is 250,01€) and 1000€, which means that in line 33 of the Anlage EÜR you can only add expenses up to 150€ (250€ from the fiscal year 2018 on)
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for payments with credit card, is the date of the receipt)
  • line 40: Netto (net) values of your expenses with internet, phone bills, mobile phone bills, etc.
    • if you paid vat in another country, you consider the brutto (gross) value.
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for payments with credit card, is the date of the receipt)
  • line 41: costs during business travels (including sleeping, etc)
    • public transports go to line 61
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for payments with credit card, is the date of the receipt)
  • line 43: costs with fiscal adviser, accountant, lawyer
  • line 45: professional association fees, etc
    • insurances that only cover your business and not your private life also belong here (otherwise they belong in the vorsorge anlage)
  • line 46: costs with advertising (ex: Xing)
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for payments with credit card, is the date of the receipt)
  • line 48: negative interests from overdraft (dispozinsen) of your bank account
    • if it’s more than 2050€ there are special rules you have to consider
  • line 49: vat that you paid on your expenses (the amount on the receipts)
  • line 50: vat that you paid to the finanzamt during the year in question
    • it matters the date of payment, not the period it refers to (ex: you consider a payment done in March even if it’s referent to the vat of october of the year before)
    • there is a 10 day rule, i.e., vat paid to the Finanzamt during the first 10 days of the year still counts as an expense for the year before (this means also that you should check your bank statement for the first 10 days of the year afterwards)
  • line 52: other expenses like software licenses, bank account management fees, credit card fees (including for business purchases in foreign exchange), etc.
    • but not the negative interests from overdraft (dispozinsen) of your bank account, that goes to line 48
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for payments with credit card, is the date of the receipt)
  • line 61: public transports or business vehicle
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for credit card payments, is the date of the receipt)
  • line 90: it’s the use of business things and business money for your private life
    • it’s the expenses from your (business) bank statement and (business) credit card statement that you didn’t include in the EÜR form (so, that aren’t business expenses but instead private)
      • Remove the values charged to your bank account to pay your credit card bills (because you are considering them already separately)
    • you also include here the expenses that were charged to your bank account and that you used in the Einkommensteuererklärung forms like your insurances (because this are considered private expenses)
    • this also includes income tax paid to the account during the year (but not vat)
      • because income tax is a private tax and vat is a business tax
    • values of lines 19 and 20 as well as the corresponding vat (private use of business vehicle or goods)
  • line 91: private money and private goods that you used for your business
    • all the positive values on your bank statement (and credit card statement) that you didn’t use in the EÜR form (so all the money that you received in your business account that were deposited/transferred privately by you or others but that aren’t a business income)
      • this also includes income tax received in the account during the year (but not vat)
        • because income tax is a private tax and vat is a business tax
      • consider all the bank accounts and credit card statements that you (also) use for your business
    • value of line 62 (use of a private vehicle for your business)
    • expenses that are not reflected on your business bank statement (or credit card statement), i.e, business expenses that you paid either in cash or using your privat bank account
  • Anlageverzeichnis (Teil 2)
    • don’t forget to check also the credit card bill of January of the following year to see if there is any business expense that belongs to the year in question (what matters, for credit card payments, is the date of the receipt)
    • line 9-12: Depreciating items
      • they must be depreciated over the years according to the AfA table
      • let’s say you bought a monitor in february of 2015 for 900€ (without vat). It will be depreciated for 3 years (300€/year) but in 2015 it will only be depreciated 300€/ 12 months * 11 months (includes the month of purchase) = 275€. Then the next 2 years it will be depreciated for 300€ and on the 4th year for the remaining amount (25€)
      • line 9: software
      • line 11: computers, computer parts, modem, etc
        • Bezeichnung = Description of the item (ex: Macbook Air)
        • Anschaffungsdatum = date of purchase
        • Herstellungskosten = netto price of purchase (without vat)
        • Buchwert = remaining value after last years depreciations (see your income tax from the year before)
        • Afa = depreciation of this year
    • line 14: Sammelposten
      • this summ called Sammelposten must be depreciated over 5 years (20% per year)
      • if you create a Sammelpost, you have to include here all the expenses (stationary, furniture, computers and machines, etc) that individually were between 150,01€ (from the fiscal year 2018 on is 250,01€) and 1000€ without vat, which means that in line 33 of the Anlage EÜR you can only add expenses up to 150€ (250€ from the fiscal year 2018 on)

Anlage S (in the Einkommensteuer forms)

  • You have to open again the Einkommensteuer file
  • line 4:
    • Left line: Your profession (ex: Web-Entwickler und Programmierer)
    • Right square: put the amount from line 84 of the EÜR form

Umsatzsteuererklärung

  • It is sent separatly, so it will open in a new window.
    • go to the tab “neu” – open “Unternehmer und Selbständige” – click on “Umsatzsteuererklärung” – click on the button “neu erstellen” in front of the year in question
  • line 1 and 2: click the button and fill it
  • line 7: your complete name
  • line 9: Your profession (ex: Web-Entwickler)
  • lines 10 – 13 : your address, phone and email
  • line 28 and 29: If you sold to or bought from other EU-countries tax free (by giving your vat number), then choose 28 (you must also fill the Anlage UR). If not, choose 29.
  • line 38 (page 2): sum of the netto values you receive from your clients
    • should be the same as line 14 of the EÜR form
    • the amount that then results on the right square should be the same as line 16 of the EÜR form
  • line 122 (page 5): vat that you paid on your expenses (the amount on the receipts)
    • should be the same as line 48 of the EÜR form
  • line 108 (page 4): sum of values of field 83 in the übertragunsprotokoll of the umsatzsteuervoranmeldung you printed throughout the year
    • the resulting value in line 109 should correspond to the vat that you forgot to declare throughout the year

How to send the form(s) to the Finanzamt (using the Elster Formular Program):

  1. save it
  2. go to the menu “Prüfen” – “Prufüng auf Plausabilität” to check for errors.
  3. Press the calculator button right of the printer button on the tool bar “Berechnung…” to see if you are intitled to a refund or if you need to pay taxes. If you’re not obligated to present a tax return form (see begining of the post) and the calculator shows a positiv amount (pay intead of receive), then simply don’t send it.
  4. Otherwise, to send it, go to the menu “Datenübermittlung” – “Steuerklärung an das Finanzamt übermitteln”
  5. select “ya” and add your email address
  6. select “Datenübermittlung mit Authentifizierung”
  7. choose your security certificate
  8. add your pin (your password that you got when you first registered)
  9. select the second option if you’re going to send receipts per post/email or the first option if you’re not.
  10. select “weiter”

Tax advisors – non-profit organization:

The Lohnsteuerhilfeverein (wage tax help association) is a non-profit organization that charges you a fee depending on your income. Here are their fees.

Disclaimer: I’m not a tax advisor, what I wrote is based on what I read on the internet. Only tax advisors can give tax advice in Germany