Practical tips for filing the Steuererklärung in Germany

Published May 16, 2026·Updated May 26, 2026

Transcript

Read along, German & English, side by side

Did you know that many people pay too much tax every year? Just because they don't file a tax return? That's really crazy, isn't it? It’s like giving away money without even realizing it.

Yes, and the best part is: it often doesn’t take long at all. Many think it’s super complicated, but a lot of it is actually quite simple. You just have to get started.

And honestly, the biggest problem with taxes isn’t the topic itself, but the fear of it. So today, we’ll help you get over that fear, I promise.

Hello everyone, great to have you here. I’m Julia and of course I have my coffee here. Today we’ll chat casually about taxes in Germany.

I'm Tim. Hi, no worries, we’ll keep it relaxed and practical. We’ll share examples from everyday life to make it really clear.

So, let's keep it short: What are taxes anyway? That's money we pay to the state so that there are schools, roads, police, and hospitals. None of this works without taxes.

Exactly. And there are many types of taxes. The most important ones in daily life are, I think, income tax, payroll tax on your salary, and VAT when shopping.

In short: payroll tax is the tax that gets deducted directly from your salary according to the income tax, calculated at the end of the year on everything you’ve earned.

And VAT is what you pay when you make a purchase in a store, already included in the price.

VAT is usually 19 percent in the price. For some items, it’s 7 percent, like many groceries or books. You don’t always notice it because it’s already included in the price.

Many people ask: Do I even need to file a tax return? If you only have one job and everything is normal, you often don't have to. But it’s often worth it anyway, because you get money back.

Yes, for example, I once filed a return just like that and got back 300 euros. That was really a good day. I thought: Why didn’t I do this sooner?

Aha, I know that. And if you're unsure: A tax return is just a form with your data. You tell the tax office: This is what I earned, this is what I’ve already paid, and these are my costs.

A small but important word: tax allowance. This is a part of your income that you don’t pay tax on. There are also flat rates, so fixed amounts that you often receive automatically.

For example, the flat rate for work-related expenses. This means you can claim expenses for your job, like travel costs or work materials. If you don’t claim anything, you’ll still get a small standard amount, that flat rate.

And for your commute, there’s the commuting flat rate. You declare the kilometers, or simpler: How far is it from home to work? You get money back for that. Well, less tax to pay.

Many people also have days working from home. There’s now a home office flat rate for days when you work at home without extra receipts.

Speaking of receipts: Please, folks, keep your receipts. Not everything, but what is really for work, like a new headset or a professional book. A folder helps or just a photo on your phone.

Oh yes. And a big topic for freelancers and small businesses: don’t mix personal and business expenses. A common problem is that people claim a private meal as a business meal. That creates real stress.

I have a story that’s uncomfortable. Someone wanted to deduct a huge trip as a business trip, but it was actually a vacation. The tax office caught that. There was a back payment and a hefty fine.

Ouch. Yes. So here's a tip: If it's personal, then it’s personal. And if you’re unsure, it's better to write down why an expense was for work and keep the receipt.

Another word that often comes up: tax assessment. That’s the letter that states how much you owe or get back. Read it carefully, and if something seems odd, ask about it.

And here we are with deadlines. Without an advisor, there’s usually time until July 31 of the following year. With a tax advisor, it often goes until the end of February the year after next. But yes, that can change.

I’d say: Starting earlier is better. Then nothing's missing and there’s no stress. A few evenings and you're done.

Many do their taxes online via Elster. That’s the official portal. It’s free, but a bit dry at first. Others use software that makes a lot of things easier.

Another classic: gross and net. Gross is the money before deductions. Net is what you see in your account. Many are shocked with their first job because net is simply much less.

Exactly, and a part of that is the payroll tax. There are also social contributions for retirement and health insurance. It’s all listed on your pay slip. So take a good look at it.

There are also tax classes. These are categories for payroll tax. They are important if you're married or have a second job. The class determines how much is deducted monthly.

If the tax class doesn’t match, you may pay too much. You can have that changed. And in the end, the tax return balances it all out anyway.

A small but good tip: You can often deduct donations. So if you give money to a recognized organization, take the donation receipt. It lowers your tax a bit.

And work materials like a desk or a chair for the home office often count too. But, well, only if you really use them for work. Mixed purchases are tricky.

On the topic of accounts. For freelancers, I really recommend a separate business account. Then you immediately see what’s professional. If you mix everything, you lose track and make mistakes.

That’s one of the biggest mistakes at the start. Many think income is income, whether personal or business. But that’s wrong because the tax office separates them very clearly.

If you’re unsure about something, write notes for each expense. For example: lunch with client Müller, topic Project X. Then in three months, you’ll still remember what that was.

And don’t panic with the tax office. The people there are humans too. If you’re honest and ask questions, you usually get a clear answer.

Okay, a quick look at a bigger topic, like Europe and all that. There’s a discussion about common debts, sometimes called Euro-bonds.

Some say that’s good because everyone invests together. Others say it’s unfair for countries like Germany.

Yes, the idea is: if everyone guarantees together, interest rates might be lower. But opponents say that rewards countries that don’t save well.

I think: It’s important to talk openly about it and look closely at who pays for what.

In daily life, it doesn’t really change much for now.

Back to the practical side. Many ask: What if I earn something on the side, for example with tutoring or photos?

Then you need to declare that, so be honest. There are small tax allowances, but keeping it hidden is really not a good idea.

And students? They can often claim costs for example for their studies or for books.

Sometimes it doesn’t help much now, but later it does when you earn more.

That’s called loss carryforward, bringing losses into the future.

Speaking of losses. There’s a surprising tip for people with stocks.

If you have a gain and also a loss, you can often offset them.

So losses reduce the gain, and in the end, you pay less tax.

That doesn’t mean you should just sell everything.

But if something isn’t going well, selling at the end of the year can make sense.

This is sometimes called harvesting losses. Sounds funny, but it's a strategy.

Important: This isn’t a game. Investing remains risky. If you do it, educate yourself and ask someone knowledgeable if in doubt.

Another topic that often annoys: deadlines and reminders. If you're late, there can be fees. So better set a calendar entry and maybe a two-week buffer.

I have a recurring appointment on my phone: tax check in spring. I collect everything and take a look then. The actual appointment won’t be so bad.

Good idea. And if a letter from the tax office arrives, please don’t leave it lying around. A quick check of the mail once a week and reacting immediately saves a lot of stress.

People also ask: Is a tax advisor worth it? Hmm, it depends. If you're self-employed, have a lot of receipts, or no time, then yes, it can often be worth it.

If you're just employed and have little special stuff, often the software is enough. It guides you step by step. And you can see right away if you’re getting anything back.

Another word that often confuses: advance payment. Some have to pay a portion during the year if they earn a lot or are self-employed. It's like small installments for the tax.

And if things get tight, don’t hide. You can talk to the tax office and request an installment payment. Being honest really helps.

Topic of moving for work. Some costs can be claimed, like agent fees or transport. But yes, only if it’s really for work. Moving privately usually doesn’t bring anything.

Further education is also good. Courses that are important for the job can often be deducted. So collect invoices and write down why the course was necessary.

And don’t forget trips for training. The distance allowance applies again. Many small amounts add up nicely in the end.

One more small thing: Check your bank details on the form. If they're wrong, you wait forever for the refund. I typed it wrong once. Uh, that was embarrassing.

Haha. Yes, typos are nerve-wracking. And also check the name and the tax identification number. That’s the personal number for life, you often need it.

If you have kids, look into child tax allowance and child benefits. That influences the tax. There’s often more than you think.

And for commuting: train, bus, car, everything counts in some form. The important thing is the distance, not the actual costs per day. So state it honestly and good.

Okay. I think that was a lot of points now. Don't let yourselves get stressed. Just start, step by step.

Exactly. Collect receipts, use flat rates, ask if something is unclear. And don’t forget: An hour of work can save you money in the end.

If this helped you, well, feel free to leave a like and subscribe to the channel, so you don’t miss any episodes.

We do this here every week casually and helpfully.

Also, write to us if you have any more questions. We’ll cover that in the next episode.

Thanks for listening and see you next time. And yes, do your taxes a bit earlier this year.