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Hans-Jürgen Wiedl / dpa
For many, the Christmas market is canceled this year.
Unfortunately.
Make the most of it, for example take care of your money on the weekend.
You can still save a lot of taxes until the end of the year if you just tackle the matter right away.
The right decisions and the right timing have a big impact on your tax burden, you can get a lot of money back from the tax office.
In principle there are two basic rules.
One rule is: if you deduct more, you pay less tax.
The other basic rule has to do with deadlines, allowances, lower and upper limits, new and expiring laws.
The right strategy is required for this.
In principle, deducting costs always brings something.
How much, exactly, depends on how much money you've made.
If 2021 was a good year for you financially, it is worthwhile to put as many costs as possible into December.
2021 was a rather poor year and the next one should get better, then it will be worthwhile if the costs are not incurred until January.
Moving pending expenses is then a good idea.
The date of the transfer is always decisive.
This also applies to donations.
If you donate in years with a high income, the tax office will contribute even more to the donation through more tax savings.
I myself have only been able to post large donations in the following year due to my own slowness.
For donations of up to 300 euros (up to 2020: 200 euros), proof of the transfer receipt is sufficient; for donations that are higher, you need a donation receipt from the non-profit organization to which you are donating.
Advertising expenses
These rules will have the broadest impact in 2021 on
advertising expenses
for large city dwellers. Many do not have a long commute to work, which is why traditionally they have waived tax-deductible income-related expenses. In any case, 1,000 euros in business expenses will be credited as a flat-rate amount for employees. If you want to deduct expenses, you have to cross this threshold first.
Taxpayers with long commutes were able to
claim
the
distance
flat rate and have already reached the 1000 euro flat rate from a distance of 16 kilometers. Long-distance commuters reach this limit much faster, especially because this year, for the first time, the increased distance flat-rate of 35 cents applies from the 21st kilometer. Once the lump sum is reached, every euro saves additional documented expenses for work equipment (pencils, pads, books, mobile phone bills, computers, printers, training costs) in taxes.
City dwellers
who had to be
constantly in the
home office
have already achieved 600 euros this year through the home office flat rate alone, even at their own kitchen table.
If you add a new screen, desk, shelves or desk chair, the 1000 euros are quickly cracked.
In the past, you could only fully deduct devices with a net cost of up to EUR 800 (plus VAT) in the year of purchase.
From this year you can also write off computers and software for more than 800 euros within twelve months.
Even if you have to move for professional reasons (closer to the company), you can claim this as income-related expenses.
Medical expenses and other extraordinary burdens
Similar considerations should
guide
you on the
subject of extraordinary loads
.
Here, too, you first have to cross a threshold in order to withdraw something.
The keyword is "reasonable burden".
If you had to go to the
dentist
this year
for a bridge or an implant and have already reached this reasonable level, then it is worthwhile
to buy
the new
glasses
this year
.
And if it takes until the New Year with the frame of your choice or the new glasses, your optician will certainly accept it if you pay in advance.
A colleague at Finanztip has just tried this very successfully for his family of five.
The heading of encumbrances also includes replacement costs for household items if you have lost your household items.
Or the cost of moving if you have to move for health reasons - for example to a house with an elevator.
Depending on income and marital status, these costs must reach between one and seven percent of your income before they are reduced in taxes.
Craftsman and service provider invoices
Timing issues are also important if you've paid handyman bills for the house or are constantly using household services.
You can claim up to 6,000 euros in wages and travel expenses per year from the transferred tradesman's bills and deduct a fifth - up to 1,200 euros - from your tax liability.
If the new bathroom is to devour more than 6,000 euros in labor costs in the coming year, it helps to start preparatory work in December and, above all, to make a first down payment in December.
Important: The money must be transferred.
The tax office does not accept cash payments.
Household services
This one-fifth rule also applies to household-related services such as caring for a sick person in the household, childcare, the cleaning company, the neighbor's son mowing the lawn, winter service or such work that appears in the ancillary rental costs.
The list of things you can specify here has grown to many pages.
Taking care of cats and walking dogs are also part of it.
Here you can claim costs of 20,000 euros if you paid for the service by bank transfer.
And here, too, the following applies: this year you may even make up the 20,000 euros with sensible expenses.
And if you want to redesign your entire garden for a lot of money in the coming year for even more money, let the preparatory work begin now and pay the first bills before New Year's Eve.
However, you can only credit wage and travel costs.
In addition to the points that are directly relevant for tax, you should urgently complete three points before the end of the year that will ensure more net income in the long term.
Adjust your Riester contract.
If you have earned more or you no longer receive child benefit for one of your children, you may have to pay more in order to receive the full support and you may also be able to deduct higher special expenses.
Check whether it makes sense to pay even more into your company pension or your Rürup contract, here the tax savings play an important role in the return on the contract.
If your investment was successful in 2021, check whether you have distributed your exemption requests correctly so that as little as possible of the investment success is transferred to the tax office.
Construction advertisement in a hurry
And then there are two other things that need to be done in a hurry.
2021 was the ideal year for planning construction projects that create new living space. The tax office allows you to deduct more of the cost of new rental accommodation from tax than usual for four years, i.e. a high depreciation as a start-up. Prerequisite: The building application or the building notice had to be submitted between September 1, 2018 and December 31, 2021. Completion can take place later. The new living space has to be rented for ten years. With the building application in December this is certainly difficult, but it could still be enough for the building notice for the conversion of the top floor into a rental apartment.
The model is particularly worthwhile for baby boomers who will still earn well in the years to come.
They can write off the costs more easily now than later when they are retired.
The traffic light does not currently intend to extend the application deadline.
Get married quickly
Finally, a note on the romantic Advent: The timing effects on the tax can be really big if you make very personal decisions.
If you get married this year, you can still use spouse splitting for the whole year.
If the partners earn very differently, thousands of euros in tax savings are possible.
My colleagues at Finanztip explain how you can find the right tax class combination for wage tax deduction and the optimization of any wage replacement benefits.
They are really late though.
A key point research at some registry offices showed: The examination of the papers before the marriage - mandatory at the residence registry office - currently usually takes until the new year.
If you still manage to get married, you can get married at any registry office in the republic, if you can still find one.
The registry offices at the castles in my homeland on the Lower Rhine are fully booked well into the coming year.
Conversely, the dates for the separation apply.
If you are considering separating from your partner, it is also worth looking at the tax implications and perhaps not going through the separation until sometime in the coming year, then you can still use spouse splitting for both years.
And now I wish you every success.