Especially before Christmas and between the years, few people think of it: the tax return. But if you still trade now, you can save a little money next year.
Some already count the days until the new year. Before 2020 starts, taxpayers can still do a lot to reduce their tax burden. Five tips:
1. Check tax class
With a favorable tax bracket, workers get a higher net wage. In order for the election to be valid for 2019, the application must be received by November 30 – otherwise it usually only counts in the following year, explains Uwe Rauhöft from the Federal Association of Wage Tax Assistance Associations (BVL).
2. Advance or postpone payments
In order to be able to take advantage of the subsidies for craftsman expenses or work equipment, taxpayers are best able to calculate which expenses have been incurred.
Up to 6,000 euros per year are recognized for household services. For gardening work and cleaning the apartment, however, the funding limit is 20,000 euros. Of this, 20 percent reduce the tax liability – i.e. a maximum of 1,200 euros or 4,000 euros, explains the BVL. Once the amount has been exhausted, clients will pay better for additional services in the new year. It is crucial when your own account is debited.
For employees, advertising costs of 1,000 euros are automatically deducted when determining income. Anything beyond that reduces the tax burden. It is conceivable, for example, to already pay for advanced training for 2020.
3. Check exemption orders
Whether current account, bonds or pension fund: The withholding tax is payable on investment income such as interest and dividends. However, 801 euros per year remain tax-free per person – if savers distribute their exemption orders correctly. You should check this at least once a year, advises the Stiftung Warentest in the magazine “Finanztest” (issue 12/2019).
For example, anyone who receives interest at a bank of 300 euros issues an exemption order for 300 euros. At another institute, 501 euros can then be exempt from tax.
If the saver’s lump sum is exceeded, the tax office keeps 25 percent of the income plus solidarity surcharge and church tax. With the KAP attachment to the tax return, however, excess withholding tax paid can be recovered later.
4. Apply for a loss certificate
If the securities account at one bank yields profits and that at another, losses are incurred, investors can apply for offsetting in the tax return. In the KAP annex, they provide the relevant information, according to the BVL. Retained capital gains taxes can be reimbursed.
To do this, you have to get a loss certificate in good time from the bank where the losses arose. The application must reach the bank by December 15, explains Erich Nöll from BVL. Since this year is a Sunday, the deadline will be extended until Monday (December 16).
Bank customers who plan ahead play it safe. If the cut-off period is missed, the loss offset in the tax return for 2019 is no longer possible. Losses certified later can be taken into account in the following year. The same applies if the profits are not sufficient to offset. “Uncertified losses can only be automatically offset against future profits by the custodian bank,” adds Nöll.
5. Special depreciation
Owners of newly built apartments have been able to depreciate more costs for a limited time and under certain conditions since August. Investors can claim up to five percent per year as special depreciation for tax purposes for four years. Together with linear depreciation, this is 28 percent of the acquisition and production costs – three and a half times as much as before.