Myths about filing a tax return in Germany
Myth 1: Filing a tax return once means filing it every year
When filing a tax return in Germany, you’ll fall into one of the two categories.
- Mandatory to file a tax return
- Can voluntarily file a tax return
If you are in the first category, you must file a tax return each year. You don’t have a choice. You can check if you are required to file a tax return here.
Everyone else falls in the second category. In this category, filing a tax return is optional. Moreover, if you filed the tax return once, you don't have to file it every year.
Usually, people in the second category have income from employment only. In this case, filing a tax return is simple, and you can do it yourself with the help of tax software.
There are many tax software programs you can use. We find Wundertax*, SteuerGo*, and WISO Steuer* (German) among the best tax software out there.
NOTE: The tax office may send you an automatic reminder next year to file the tax return. But you can notify the tax office in writing that you’re waiving voluntary assessment (freiwillige Veranlagung).
Myth 2: You might end up paying taxes if you file a tax return
You don’t pay more taxes if you file a tax return VOLUNTARILY.
Suppose you voluntarily filed a tax return. Instead of getting a tax refund, the tax office asks for additional tax payments. What can you do in this situation?
Don’t worry, you don’t have to pay any taxes.
According to §46 Abs. 2 Nr. 8 EStG, you have the right to withdraw your tax return retroactively. All you have to do is write an objection letter to the tax office stating that you withdraw your voluntary tax return.
Myth 3: Filing a tax return is not worth it
Only after evaluating your situation can you know if filing a tax return is worth it.
Of course, sometimes filing a tax return doesn’t result in a tax refund. However, statistically, 90% of the tax filers received a tax refund from the tax office.
The German tax office refunded an average of 1063€ in 2020.
Myth 4: You need a tax advisor to file a tax return
Filing a tax return yourself may seem scary, especially when you don’t know the language. However, it’s not hard once you know how to do it.
Nowadays, several tax software programs (in English) further simplify tax filing. It’s like answering some questions.
You must answer these questions even if you hire a tax advisor and provide all the information and documents. So, why not enter that information yourself directly into the tax software and save thousands of euros in tax advisor fees.
Of course, getting support from a tax advisor is useful for complex tax returns (rental income from multiple properties, income from outside Germany, etc.).
However, we believe people with simple use cases, such as income from employment only or capital gains, can file their tax returns themselves.
Myth 5: The tax office is always right
Many expats believe that the tax office is always correct. However, this is not true.
Every one in three tax assessments is incorrect in Germany.
Thus, you should always check your tax assessment carefully to ensure all expenses have been considered. If you find something unfavorable, object to it with an explanation and supporting documents.
