If there is one omnipresent term in the realm of tax law, then that is “special expenses.” Of course, that does not refer to your impulse shopping buys last month.
Rather, special expenses are compound items that include various costs of private life. Unless they are operating costs or income-related expenses, these expenses can have a tax-reducing effect.
Special expenses are a wide field from a tax law perspective and things can quickly get very complicated - another reason to delve more deeply into this topic.
WHAT ARE SPECIAL EXPENSES?
In principle, special expenses can only be deducted from tax if they were incurred for personal use. The only exceptions are marriages, for which it is irrelevant who paid special expenses. The costs can only be submitted to the tax office in the year of payment.
In principle, special expenses can be divided into 2 categories. These include on the one hand “precautionary expenses” and on the other hand “other special expenses”.
Pension contributions (insurance premiums)
In general, pension costs include costs for old-age provision, supplementary pensions, other pension expenses such as basic and long-term care insurance as well as contributions to the Riester pension insurance. These contributions can be deducted from taxes.
These are primarily:
- Statutory pension insurance
- Agricultural insurance
- Professional care institution
- Rürup pension
- Statutory health insurance
- Private health insurance
- Unemployment insurance
- Employment and disability insurance
- Accident insurance
- Liability insurance
- Life insurance
- Riester pension
OTHER SPECIAL EXPENSES
In addition, there are “other special expenses” that are clearly separate from pension expenditure.
- Spousal maintenance payments
- Church tax
- Childcare costs
- Costs for one’s own vocational training or that of one’s spouse
- School fees
- Charitable donations
There is a general lump sum for general expenses. This is currently € 36 for singles and € 72 for married couples per calendar year. The lump sum is automatically granted to the taxpayer and taken into account by the taxman. This means that no application has to be submitted separately.
The prerequisite for being able to benefit from this lump sum is, of course, that an income tax return is issued. As soon as the expenditure exceeds the lump sum, the respective expenditure should be indicated individually and accompanied by appropriate supporting documents.
Special expenses include church tax so any payments made are, therefore, deductible. This may be church taxes owed and paid, church tax paid by the employer, or the quarterly advance or overpayment of church tax and the special church allowance (general church money of parishes for those who do not pay statutory church tax).
Initial education expenses
In addition, costs for initial or initial studies can be taxed up to € 6,000 per calendar year. These include, for example:
- Tuition fees
- Course fees
- School fees
- Study materials
- Travel expenses
- Printing costs
Donations are voluntary benefits that are given to charities, relief organisations, but also to political parties or independent voters' associations. Income tax donations are also tax deductible.