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This is how the rich and poor are segregated in Germany. The system is to take too much from you, and let you reclaim that, theoretically once you've proven tha
by klingonopera 7y ago
This is how the rich and poor are segregated in Germany. The system is to take too much from you, and let you reclaim that, theoretically once you've proven that you had tax-deductible expenses.
But it's enough to just "talk" to the "Finanzamt" to already get a baseline €1000 tax-deductible expense, without even needing to show them anything. Which makes me wonder, why not just deduct this from all income taxes, if you're willing to grant it to everyone, without any proof.
Sorry for sounding cynical now, but "dumb" and "busy" people are naturally disadvantaged from this system. That's not exactly... helping anyone. Except those who profit from the motto "A sucker born every minute!". But even they'd have more advantages, if their "suckers" had more cash at their disposal...
- marcus_holmes 7y agoAustralia has the same system. They'll give you $1000 without proof. I worked out that it's utterly pointless hoarding receipts and doing all the paperwork, because the difference between what I could claim with paperwork and without paperwork is maybe a couple hundred bucks. Not worth the effort.
- dannyw 7y agoI'm an Australian, how can I claim this $1k deduction?
- marcus_holmes 7y agoPut a tax return in. Don't claim any deductions. They give you $1K back. Happened to me three years in a row.
- girvo 7y agoAnd yet my partner got $7k back this financial year. It’s certainly not as simple as all that. I’ll be getting a decently large sum, though that’s because of a mistake I made!
- marcus_holmes 7y agonice :) I'm not saying it's not possible, and sometimes beneficial. But for me, it wasn't worth it.
- germanier 7y agoThe 1000€ standard deduction is already accounted for in the monthly income tax withholdings. For most people, the withhholdings match exactly the actual income tax or the December deductions are automatically adjusted so that they are (Lohnsteuerjahresausgleich) so there is no benefit in filing taxes. Of course the system could be much better but I don't agree with the assessment that they keep money from the poor either purposefully or by negligence.
- klingonopera 7y agoWhat? I always paid the same taxes each month, even in December, it never changed. You're sure we're talking about the same €1000 "Werbungskosten" and not the minimum wage after which income taxes become effective? Furthermore, I did file my taxes as an employee once, and got some €80 back, so I considered it a waste of time. My student friends at the time swore that I should do this, because of the 1k€ "Werbungskosten", and they also got about €80 out of it, but they were earning far less, so I don't know how the maths behind that is all supposed to work out. I'm in an entirely different situation now, I run my own company, but no employees, and have yet to talk to a tax advisor. I'll know more by the end of the year, but trust me that there is some (in my subjective opinion, of course, objective) truth in the sentence, that "rich and poor are segregated by tax systems" and this is no coincidence.
- germanier 7y agoYes, I'm talking about the 1000€ Arbeitnehmerpauschbetrag (also known as Werbungskostenpauschale). This is already deducted while calculating your monthly payments, see § 39b Abs. 2 S. 5 Nr. 1 EStG. If you have the same income each month (and there haven't been changes in law during the year) each monthly payment covers exactly 1/12 of your income tax. So in that case, the December payment is the same. Do to different circumstances you might still get small sums back, as you noticed
- klingonopera 7y ago...everything makes sense now! Thanks.
- w23j 7y agoYeah, that's just not true.