Taxes in retirement: You can deduct these expenses as a pensioner
Created: 01/01/2023 04:48
By: Steffen Maas
If the pension is above the basic allowance, part of the sum is taxable.
However, pensioners can deduct various expenses.
Hamburg – Worked all your life and then finally get your well-deserved pension?
What sounds fair isn't necessarily the case.
In principle, German consumers also pay taxes on their pensions.
But the amount of the pension, the pension allowance and the basic allowance turn the question of whether you are taxable as a retiree into a calculation game with the clear answer: maybe.
The bottom line could be what expenses pensioners can deduct from their taxes.
24hamburg.de summarizes.
Surname: | tax declaration |
|---|---|
Purpose: | Information from a taxable person |
Addressee: | competent financial authority (usually: tax office) |
Contents: | Sales, assets, income, deductible expenses |
Taxes as a retiree: on which pensions do you pay taxes?
But before a possible tax return as a pensioner there are a few cornerstones that you have to consider.
This includes, for example, that more specific pensions are generally not taxable, such as: pensions from statutory accident insurance, compensation pensions (e.g. pensions under the Federal Compensation Act or ghetto pensions) or war and severely disabled pensions.
Pensioners only have to pay taxes on the classic forms of pension:
retirement pension
disability pension
widow's pension
Pension allowance and basic allowance: Many pensions are not taxable due to deductions
But even as a pensioner you don't necessarily have to put on your reading glasses and pull out a pen for your tax return.
Because the magic word “free allowance” has two additional benefits.
First of all, the pension allowance states what percentage of the pension would have to be taxed at all.
The pension allowance melts every year until it should end up at zero percent in 2060 and pensioners have to pay tax on their entire withdrawal.
The decisive factor, however, is the year of retirement: people who retired in 2022 have a pension allowance of 18 percent, new pensioners in 2023 still have 17 percent.
Conversely, this means that only 82 (or 83) percent of the pension payment is relevant for tax purposes.
Finally, the basic tax-free allowance is decisive, which gives all potential taxpayers a clear limit below which they are exempt from tax liability.
For the assessment year 2022, the basic allowance is 10,347 euros.
A rudimentary calculation example shows the interaction of the allowances:
Pensioner Ewald went into well-deserved retirement in 2021.
His pension allowance is therefore 19 percent.
He gets a gross pension of 1000 euros per month, which means that 810 euros are taxable per month.
If that is his only income, it is 9720 euros.
This means that he is below the basic allowance and does not have to pay any taxes.
Extraordinary burdens are, for example, costs for medical aids – such as a wheelchair.
Pensioners can deduct them from their taxes.
© Zoonar/Imago
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Tax-deductible expenses: Pensioners can deduct these expenses from their taxes
If Ewald's gross pension were 1,500 euros a month, after deducting the pension allowance, he would end up with 14,580 euros a year - and would have to pay tax on the 4,233 euros above the basic allowance.
That means: tax return.
But here you can still reduce the taxes to the state to zero - if you made expenses in the assessment year that can be deducted from the tax.
For example, pensioners can deduct the following expenses from their taxes:
Income-related expenses
– for example: account management fees, costs for tax, pension and insurance consultants or union dues;
Special expenses
- for example: contributions to health and nursing care insurance, donations, church tax or party contributions;
Household services
and
handyman
costs - for example: costs for care services, costs for cleaning staff, costs for gardening or costs for pet care;
Extraordinary burdens
(general and special) - for example: costs for old-age or disabled-friendly (residential) equipment, costs for medical aids, costs for medication;
Maintenance payments, disability allowance, care allowance or survivor's allowance.
Many of these expenses are not unusual for retirees and can be claimed as a tax reduction.
This not only reduces a possible tax burden, but maybe even reclaims a small sum from the state.
In general, the financial pressure on pensioners can be relieved not only by the tax return, but also by other institutions: These 8 grants for pensioners can bring several hundred euros.
