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Tax advisor: Good to know

Tips & Tax changes 2017

bullet Filing deadline for 2016 income tax return

The deadline for filing an income tax return 2016 is 31 May 2017. When instructing a tax advisor the deadline is extended until 31 December 2017.

bullet Change of tax class

Married couples or registered partners should check whether they can benefit from changing their tax class. When having clearly different income it is more favorable when high-income-earners apply for tax class III and the partner for tax class V. Tax class IV is for partners earning nearly the same.

bullet Application for tax-exempt amount – Higher net income

Besides the possibility of change of tax class it is possible to apply for a so called tax-exempt amount because of an high amount of expenses, special expenses or extraordinary expenses. This tax-exempt amount reduces the monthly wage tax withheld by the employer. It is possible to apply for that amount at the tax authorities until 30.11 of the current year.

bullet Increase of statutory minimum wage

As of 1 January 2017 the statutory minimum wage increases from 8,50 € to 8,84 € per hour. Therefore it is necessary to check the monthly working hours of 450 € mini-jobber to ensure that the mini-job still keeps free of social security contributions.

bullet Pension

Since 1 July 2016 the pension level increased by 4.25 % in the West and by 5.95 % in the East. Consequently many pensioners get tax liable by this increase. This should be checked.

bullet Expenses

For each employee a lump sum with the amount of 1.000 € is automatically deducted in one’s tax return. However when having further additional expenses the tax burden can be reduced.

Example:
When the distance from home to the workplace is 20km and assuming that the employee has worked 220 days, an amount of 1.320 € is deductible as commuting allowance.

Household-relateed services

20% of household-related services are deductible, maximal 4.000 € per year. Please note that the service should not be paid in cash as the tax authorities do not accept cash payments. Therefore it is important to pay via bank transfer and to keep the invoice.

Medical expenses
Medical expenses which have not been reimbursed by the health insurance provider also can reduce the tax burden. However it depends on the amount of expenses and on one’s individual reasonable self-retention.  

This should be checked.

bullet For entrepreneurs – cash registers

As of 2017 cash registers must have the following functions: single recording, saving and export. Entrepreneurs with older cash registers not having these functions should modernize their system. Otherwise it might come to unfavorable estimations by the tax authorities as accounting principles are no longer guaranteed.  

bullet For entrepreneurs – Small amount invoices

As of 1 January 2017 the limit for small amount invoices should be increased from 150 € to 200 €. This legislation process will probably be completed in February 2017. This law would be valid retroactively.  

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