As of: January 19, 2024, 5:18 a.m
By: Anne Hund
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Press
Split
New year, new rules.
The Bavarian Income Tax Aid provides an overview of the most important changes that affect the income of many citizens.
The new year brought with it numerous innovations.
This also includes legal revisions that impact the financial situation of many consumers.
In the area of income tax and family support, there are “positive adjustments due to inflation,” explains the
Bavarian Income Tax Aid (Lohi)
.
“In return, due to the strained federal budget and in order to achieve climate protection goals, life will become more expensive for consumers due to tax increases.” The tax experts provide an overview of important changes in taxes and finances.
Reductions in income tax rates
According to the Inflation Compensation Act of 2022, the basic tax allowance increased from 10,908 to 11,604 euros per person.
Taxes are only due from this income level.
“Married people benefit from double the basic allowance of currently 23,208 euros, regardless of whether both spouses are working,” explains
Lohi Bayern.
“The exemption limit for solos increases to 18,130 euros.
It will only be due for higher earners if the income tax burden is this high." The federal government is currently in discussions about increasing the basic tax allowance to 11,784 euros retroactively to January 1, 2024, according to the
Lohi announcement (as of January 16).
.
“But much is unclear about this and the government will have to consider how this can be financed.”
In 2024, many reforms came into force that also affect the incomes of many citizens.
(Symbolic image) © Christin Klose/dpa
New funding contribution levels for families
The child allowance was increased from 6,024 to 6,384 euros per child for both parents together for 2024.
“Due to high inflation and the increase in citizens’ money, the increase is larger,” says the
Lohi
statement .
Separated parents each receive “half the child allowance” of 3,192 euros.
“In addition, there is an allowance for the care and upbringing or training needs of a child of 2,928 euros, or 1,464 euros per parent, which remains unchanged.” Parents with low incomes can also apply for the so-called child allowance.
As of January 1, 2024, the child allowance has been increased to up to 292 euros per month and child.
Previously it was up to 250 euros.
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Changes to parental allowance
There are also new regulations regarding parental allowance.
From April 2024, the parental allowance that mothers and fathers receive as a wage replacement benefit if they stay at home after the birth of a child will only go to couples who have a maximum taxable annual income of 200,000.
For single parents, the limit will be 150,000 euros from April.
A significant change - because there is currently an income limit of 300,000 euros for couples and 250,000 euros for single parents.
In addition, the option for parents to receive basic parental allowance at the same time will be reorganized from April.
According to the Bundestag resolution, it is still possible to receive parental allowance for up to 14 months - but staying at home together and receiving parental allowance at the same time should only be possible for one month within the child's first twelve months of life.
There are exceptions for multiple births and premature births.
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Increased contribution assessment limits
“The contribution assessment limits for statutory pension and unemployment insurance have been raised for employees subject to social security contributions,”
Lohi Bayern also informs.
“Contributions are now due in West Germany up to a monthly salary of 7,550 euros and in East Germany up to 7,450 euros per month.
This means that social security contributions for higher earners increase.
However, the contribution rate remains constant at 18.6 percent.” For statutory health and nursing care insurance, the new contribution assessment limit has been 5,175 euros nationwide since January 1st.
“The obligation to have statutory health insurance now ends at an annual income of 69,300 euros.
If you have a higher annual income, you are free to take out private health insurance,” the statement continues.
Rising cost of living in 2024
Many citizens have had more money in their accounts since January 2024.
For example, the minimum wage increased this year, as did some social benefits.
At the same time, consumers have to expect higher costs elsewhere.
In the catering industry, the regular VAT rate of 19 percent has been in effect again since January 1st, instead of the temporary 7 percent.
The fear is that eating out could become more expensive here or there as a result.
In addition, the CO2 price rose to 45 euros per ton on January 1st, which made refueling and heating with oil or gas more expensive, according to Lohi.
Higher network fees must also be expected when it comes to electricity prices.