This relieves taxpayers with children

by time news

BerlinParents have a lot of expenses. During the Corona period, there were expenses for homeschooling and often also for tutoring for the children. If you file a tax return for 2020, you can take advantage of some tax advantages. Taxpayers without a tax advisor do not even have to submit their 2020 tax return until October 31, 2021 instead of the end of July. The deadline has been extended. Taxpayers with a tax advisor have until May 31, 2022 instead of the end of February 2022. Those who voluntarily submit a declaration can even do so until December 31, 2024. We explain what information families and single parents in particular can look out for.

Child benefit or allowance

In order to support parents or single parents, the state offers them two different types of financial support up to the age of 18: On the one hand, they pay child benefit and, lastly, because of the special requirements during the pandemic, a child bonus. On the other hand, a child allowance can be claimed with the tax return.

In 2020, legislators paid 219 euros a month for the first and second child, 225 euros for the third and 250 euros per month for each additional child – tax-free. In addition, a child bonus of 300 euros was transferred to parents or single parents for every child who was entitled to child benefit for at least one month. In total, they received 2928 euros from the state for one child last year.

Alternatively, parents can take advantage of the child allowance (7812 euros for couples, 3906 euros for people in tax class 1 or 2). The prerequisite is that a tax return is submitted. Stiftung Warentest has calculated what is cheaper: If married couples with one child earn more than 77,500 euros in income, they benefit more from the tax exemption than from the child benefit and child bonus. This applies to single parents if they have an income of more than 39,000 euros. The deductible costs must be deducted beforehand.

The tax office determines what is more advantageous for the taxpayer during the cheaper test. If the tax exemption is better, the child benefit and the child bonus are deducted. It is not possible to cross in both.

What many do not know: “The child benefit and child allowance can be extended beyond the age of 18,” says Dennis Konrad from ExpressSteuer, an online service provider for tax returns. However, if the child goes to school, completes an apprenticeship or studies, the state continues to pay. This also applies to the dual study program. The extension must be requested. When the son or daughter celebrates their 25th birthday, the support ends.

Care allowance

Children need to be looked after. The state recognizes expenses for this purpose – regardless of whether they are used for daycare, kindergarten, after-school care, a childminder or an au pair. Two thirds of the expenses can be claimed – a total of 4,000 euros per year. It is important to document the costs. This also applies to a caring grandma or other relatives. So: issue an invoice and transfer the money. The tax office then usually recognizes the payment as care costs.

Homeschooling expenses

Anyone who has bought a laptop or tablet for their children to make learning at home easier cannot deduct these costs from tax. “Tax law does not offer any possibility of claiming costs for the technical equipment of one’s own children,” explains the United Income Tax Aid on its website. The same applies to electricity, gas, telephone and internet. As a financial support, the child bonus was paid by the state.

Tax class

Married couples often feel confronted with the problem of whether they should choose tax classes 3 and 5 or 4 and 4 as a couple. Konrad explains that the decision basically has no financial consequences. “The tax office calculates the tax due at the end of the year. This is independent of the choice of tax class, ”he says. The difference is that for couples who are both in tax class 4, the employer pays more money to the tax office over the course of the year. “This can lead to a repayment sooner.” For couples who are in tax classes 1 and 3, the situation is reversed: They have fewer deductions, but may have to make repayments after the end of the year. Konrad emphasizes that there is no one-size-fits-all solution. Each case is assessed individually.

Relief amount

Konrad recommends that single parents register in tax class 2. “Then they can get the relief amount directly through the payroll,” he says. A total of 4008 euros for the first child in 2020, plus 240 euros for each additional child. If you want to change the tax class and take advantage of the relief amount, you can inform the tax office of this with the help of the “Insurance declaration for the relief amount” (formulare-bfinv.de).

Konrad points out that many companies group single parents in tax class 1. “I advise you to check the salary slip accordingly.” If you correct the tax bracket, you can also receive the relief amount retrospectively.

According to the law, a single parent is someone who lives alone in a household and looks after his or her child or children alone. According to tax law, a partner may not be permanently resident there. “If the partner is registered in the apartment, the tax office can check it,” says Konrad.

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