Dental care costs can really rack up since statutory health insurance plans don’t cover all dental health expenses; for this reason, private supplementary dental insurances in Germany are growing in popularity. These private insurances can be extremely beneficial (whether for dentures or other dental needs) and help you save money in the case of a dental emergency. In this article, we will help you learn how to deduct these insurances from your taxes.
Deducting provisional expenses as special expenses
Tax authorities want to help those being proactive who pay provident expenses to help protect themselves against health risks and prepare for retirement; therefore, provident expenses (Vorsorgeaufwendungen) are deductible as special expenses (Sonderausgaben) and divided into:
- Pension expenses (Altersvorsorgeaufwendungen) which includes contributions to statutory pension plans, occupational pension schemes, as well as Riester, Rürup, and Eichel pensions
- Other provident expenses
The “other provident expenses” category includes:
- Statutory or private health and nursing care insurance (Kranken-/Pflegeversicherung)
- Unemployment insurance (Arbeitslosenversicherung)
- Employment and occupational disability insurance (Erwerbs-/Berufsunfähigkeitsversicherung)
- Accident insurance (Unfallversicherung)
- Foreign health insurance (Auslandskrankenversicherung)
- Liability insurance (Haftpflichtversicherung) including the liability potion of motor vehicle insurance (Kfz-Versicherung)
- Life insurance (Lebensversicherung) taken out before 2005
Supplementary dental insurance (Zahnzusatzversicherung)
Nowadays, there’s an abundance of supplementary insurance policies (Zusatzpolicen) to help taxpayers close the gaps in statutory health insurance. Luckily, not only contributions to private and statutory health and nursing care insurance are tax-deductible, many other insurance types are too!
Private supplementary insurance, such as supplementary dental insurance, is also tax deductible as a special expense (Sonderausgabe). These contributes can be entered on the “Provident expenses form” (Anlage Vorsorgeaufwand) – or when using wundertax’s simplified tax solution, just enter the values during our tax interview.
By the way: Co-pays are often due for artificial teeth even if you have supplementary dental insurance. These co-pays, or medical expenses, can be deducted as extraordinary expenses (außergewöhnliche Belastungen) on your tax return provided that the costs exceed the “reasonable burden limit.” This limit varies according to your income and family status.
Tip: Check out this article for a more detailed explanation of which insurances can be deducted on your tax return. For example, professional insurances can be deducted as income-related expenses (Werbungskosten)!
Deduction limits for employees and freelancers
There are limits when deducting special expenses: a maximum of 1,900 euros can be deducted for provident expenses – this also applies to retirees and civil servants. If you earn a gross salary of at least 20,000 per year, contributions to your statutory health, nursing care, and unemployment insurance will already exceed this limit, meaning no additional supplementary dental insurance expenses can be deducted.
Freelancers, on the other hand, have a higher deduction limit as they take on insurance expenses themselves – they can deduct up to 2,800 euros for provident expenses.
Tip: Students can benefit from deducting supplementary dental insurance as their normal insurance contributions are not as high. Students typically don’t reach the limit of provident expenses, leaving extra room to deduct their supplementary dental insurance.
Also important: Some dental policies for artificial teeth provide refunds if certain conditions are met, such as health-conscious behavior or good annual results for the company. If you receive a refund for any reason, it’s important that you deduct this from your paid insurance expenses when claiming it on your tax return. The amount you can deduct is always the amount of contributions you’ve made minus any refunds.
Tips for married couples
Spouses and civil partners have a higher deduction limit for provident expenses if they are assessed together (Zusammenveranlagung). If both spouses are traditionally employed, the limit is 3,800 and if both are self-employed, 5,600 euros. Couples can then use the amount that was not exhausted by their partner to deduct their own expenses. If spouses choose to be assessed individually (Einzelveranlagung), they can still benefit from higher limits if they apply for a split deduction for special expenses. In this case, both of their provident expenses are added together and divided equally, which can then be deducted from their individual limits.
In conclusion: is it worthwhile to claim your supplementary dental insurance?
Unfortunately, most employees will exceed the maximum limit for provident expenses: however, financial experts still advise entering all your values on your tax return – that’s the only way you can calculate whether you can deduct it or not! It’s especially beneficial for employees who haven’t worked all year to enter their supplementary dental insurance values. Just try it out!