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Deferring retirement leads to tax disadvantage - dispute ended up in court

2021-01-21T20:55:28.051Z

Old-age pensions are subject to taxation. But there is a tax-free part that depends on the year of retirement. What if the pension is postponed?



Old-age pensions are subject to taxation.

But there is a tax-free part that depends on the year of retirement.

What if the pension is postponed?

In

principle, seniors have to

pay

income

tax

for their

pension *

.

However, a certain proportion remains tax-free.

Decisive for the tax-free portion is the year of

retirement

s

how the German Press Agency (dpa) reported.

"The later you retire, the lower the tax-free portion," explains Isabel Klocke from the taxpayers' association, according to the dpa.

For senior citizens who retired in 2005 or earlier

, the tax-free portion was still 50 percent of the first

annual

pension,

according to the report.

Seniors who retire in 2021,

on the other hand

,

would only get 19 percent tax-free.




Decisive here is the year of the actual annuitization date

by which, according to dpa

Finanzgericht Schleswig-Holstein

(Az .: 2 K 159/19).

Also read:

More and more retirees have to file a tax return.

Tax return: Deferring the pension leads to a tax disadvantage

According to the report, this is what the

dispute was

about: The plaintiff was entitled to

a pension from the lawyers' pension scheme when he reached the

age

of

65

.

He applied to

postpone

his

pension

and continued to work for three years


until 2012.

In his

income tax return

for 2012, he asked to determine the tax-exempt portion for his pension with the percentage for 2009, reports dpa on the background to the dispute, because this is the year of actual retirement.



The

tax office

and also the

Finanzgericht Schleswig-Holstein

, however, according to the report attracted the

lower percentage

approach of 2012, because the applicant had actually gone only this year in pension.

The report goes on to say that senior citizens who continue to work longer and retire later are disadvantaged in tax terms, which is why the plaintiff appealed to the Federal Fiscal Court (Ref .: XR 29/20).

Also read

: Experts warn: You should have done this urgently before retirement.

Objection to tax assessment or too low a tax-free portion an option

Isabel Klocke from the Association of Taxpayers advises according to the dpa: "Pensioners in a comparable situation can rely on the ongoing procedure and

appeal against their tax assessment

and

the too low tax-free portion

." Then, the report goes on to say, your own case open until a final judgment.

However, the taxes set by the tax office must first be paid.

A correction would then be possible with a positive judgment, so the conclusion.

(ahu) * Merkur.de is part of the nationwide Ippen-Digital editors network.

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This article contains affiliate links.

Source: merkur

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