How do you choose the assessment type?

Married couples can decide each year whether to be individually or jointly assessed. You can enter your choice on the tax return or make a simple declaration. When using Lohnsteuer kompakt, the programme will recommend the most beneficial option for you.

Lohnsteuer kompakt assumes that joint assessment is usually the better choice for married taxpayers and also yields a higher tax refund. Therefore, all information for submitting the tax return for a jointly assessed couple will be requested on the following pages.

Once you have entered all the necessary data, access the "Calculation of your expected tax liability" page by clicking on "Tax refund" or "Additional payment" at the top. If you are married, you can then access the "Assessment check" on the calculation page.

When the result of the assessment check is displayed, you have the option to split the joint tax case of joint assessment into two separate tax cases for the husband/partner A and the wife/partner B and submit these two tax cases as part of the individual assessment for spouses/partners via ELSTER to your tax office.

The tax calculation overview shows the results of both separate and joint assessments. You can then choose how to submit your tax return. Select either "Continue to submit joint assessment" or "Continue to submit separate assessment".

Please note that with the individual assessment for spouses, technically two tax returns are submitted. In the first step, you submit the tax return for the husband. Once this has been transferred, you can submit the tax return for the wife.

How do you choose the assessment type?

How do you choose the right assessment type for married couples?

Married couples can decide each year whether to choose joint assessment or separate assessment for spouses. The decision is either indicated directly in the tax return or communicated to the tax office through an informal declaration.

Criteria for choosing the type of assessment

• Joint assessment: Advantageous if one partner earns significantly more than the other, as the spouse splitting leads to a lower tax burden.
• Separate assessment: Sensible if both partners have similar incomes or if individual tax benefits, such as work-related expenses or extraordinary burdens, are to be claimed separately.

Support from tax programmes

Choosing the optimal type of assessment can be complex. When using Lohnsteuer kompakt, the programme supports you by automatically calculating which type of assessment is financially more advantageous for you. This ensures that you do not pay unnecessary taxes.

Conclusion: A careful review of income situations and tax deduction options is crucial to choose the optimal type of assessment. Tax programmes or a tax advisor offer valuable assistance in this decision.

How do you choose the right assessment type for married couples?

Are married couples allowed to file separate tax returns?

Married couples who are both subject to income tax can choose between joint assessment and individual assessment. The choice of assessment type affects both the tax burden and the administrative effort.

Joint assessment

With joint assessment, both spouses submit a joint tax return. All income from both partners is combined, and the so-called spouse splitting is applied. This splitting method is particularly advantageous if one spouse earns significantly more than the other, as it can lead to tax relief.

Individual assessment

In contrast, with individual assessment, each spouse submits their own tax return. Income and tax deductions are considered individually. This type of assessment is useful if both partners have similar incomes or if certain tax benefits, such as work-related expenses or extraordinary burdens, are to be claimed separately.

Influence of a marriage contract

If there is a marriage contract, especially in the case of joint property, this should be indicated in the tax return. Joint property means that the separate assets of the spouses become joint assets. This can have tax implications, for example, the non-recognition of employment contracts between spouses by the tax office.

Conclusion: Married couples have the option to submit their tax returns separately or jointly. The optimal type of assessment depends on individual income situations and tax planning options. A tax advisor or appropriate tax software can help determine the best option.

Are married couples allowed to file separate tax returns?

What are the advantages and disadvantages of a joint assessment?

Joint assessment is a type of assessment for married couples where both partners submit a joint tax return. The incomes of both spouses are combined, and the so-called spouse splitting is applied. This procedure has advantages and disadvantages that vary depending on income circumstances.

Advantages of joint assessment

• Lower tax rate with income differences: Through spouse splitting, the combined incomes of the spouses are halved, the income tax for this halved income is calculated and then doubled. This leads to a lower average tax rate if the partners' incomes are different.
• Tax relief: Couples where one partner has a high income and the other has a low or no income benefit significantly from joint assessment.

Disadvantages of joint assessment

• No advantage with equal incomes: If both spouses earn roughly the same amount, joint assessment offers no tax advantage compared to individual assessment.
• Commitment to joint declaration: Both partners are bound to the joint tax return, which makes individual tax consideration difficult.

Requirements

• Both spouses are married to each other.
• Both are fully taxable.
• They have lived together for at least one day of the tax year.

Automatic choice of joint assessment

If no type of assessment is selected on the main form of the tax return, the tax office will automatically carry out a joint assessment.

Conclusion: Joint assessment is particularly advantageous for couples with significantly different incomes. For equal incomes or specific tax situations, individual assessment may be more sensible. A tax advisor or tax software can help make the optimal choice.

What are the advantages and disadvantages of a joint assessment?

How does the submission of the individual assessment for spouses work with Lohnsteuer kompakt?

If married couples wish to file separately, this is also possible with Lohnsteuer kompakt. In this case, enter all data for both the husband and wife on the input pages as you would for joint assessment.

Once you have entered all the necessary data, go to the "Submit tax return" page. There you will see the expected tax liability for both individual and joint assessment. When the assessment check result is displayed, you have the option to split the joint tax case of joint assessment into two separate tax cases for the husband and wife and submit these two tax cases as part of the individual assessment for spouses to your tax office.

First, submit the tax return for the husband. Once the tax return has been transferred, you can submit the tax return for the wife.

For individual assessment for spouses, both partners must submit the tax return together, as processing at the tax office will only occur once both tax returns are available. Furthermore, separate assessment can only be submitted electronically.

How does the submission of the individual assessment for spouses work with Lohnsteuer kompakt?

Can I revoke the assessment option?

Once you have chosen a type of assessment when submitting your tax return, it is not final: if, for example, joint assessment would be more favourable, you can appeal against the notice and apply for the other type of assessment.

In the case of joint assessment, each spouse can revoke their decision until the notice addressed to both spouses becomes legally binding. If one spouse revokes the joint assessment, separate assessment will apply, even if a joint assessment notice issued to the other spouse has already become legally binding.

If, in the case of separate assessment, only one spouse has applied for it, their revocation is only effective if the partner does not object. If both spouses have applied for separate assessment, both must object.

Can I revoke the assessment option?

Why might separate assessment be beneficial for wage replacement benefits?

In certain cases, individual assessment for spouses may be more advantageous, especially if only one spouse receives tax-free wage replacement benefits (e.g. unemployment benefit, parental benefit or sickness benefit), while the other partner receives only taxable income.

The impact of the progression clause

With joint assessment, the tax-free wage replacement benefit increases the tax rate for the total income of both spouses, even though this benefit itself is tax-free. This leads to a higher tax burden on the taxable income.

Advantages of individual assessment

• No impact of the progression clause: The spouse without wage replacement benefits is not affected by the higher tax rate.
• Individual tax calculation: Each spouse pays only the tax on their own income.

Important consideration

Although the splitting tariff of joint assessment is not available with individual assessment, the relief from avoiding the progression clause may outweigh this disadvantage. It is advisable to calculate both options to find the most tax-efficient solution.

Conclusion: If one spouse receives tax-free wage replacement benefits, individual assessment is an option worth considering. Tax programmes such as Lohnsteuer kompakt or advice from a tax expert can help make the optimal decision.

Why might separate assessment be beneficial for wage replacement benefits?

What should be considered in the case of individual assessment for spouses?

With this type of assessment, both spouses submit separate tax returns. The spouses are treated as single for tax purposes. The so-called "spouse splitting" does not apply in this case. If one spouse chooses this type, the other spouse is automatically required by the tax office to submit a tax return.

In the case of individual assessment for spouses, expenses are allocated to the spouse who incurred them. However, there is an exception for extraordinary burdens: these are attributed to both partners as in joint assessment and then halved. This can be avoided if both partners submit a corresponding application. Child allowances are granted half each for joint children. Otherwise, they are only taken into account for the spouse who has a "parental relationship with the child". Separate assessment can be worthwhile if one spouse wants to claim losses from their employment and the other spouse has a low income.

For newlyweds, choosing individual assessment for spouses can be beneficial if one of the spouses can still claim the single parent allowance.

Once you have chosen a type of assessment when submitting your tax return, it is not yet final: if it turns out that, for example, joint assessment would be more favourable, you can appeal against the notice and apply for the other type of assessment.

Even if one spouse primarily receives wage replacement benefits, such as unemployment benefit, parental benefit or short-time work benefit, which are subject to the progression clause, individual assessment for spouses may be more favourable. This avoids the tax-free wage replacement benefits being added to the other spouse's income and thus increasing their tax rate.

Individual assessment for spouses is also useful if both partners have additional income. This is tax-free up to 410 Euro and partially up to 820 Euro. However, the amount is not doubled in joint assessment. This is different in separate assessment.

In the case of individual assessment for spouses, both spouses must submit the tax return together, as processing at the tax office only takes place when both tax returns are available. Furthermore, individual assessment for spouses can only be submitted online when processed via Lohnsteuer kompakt.

What should be considered in the case of individual assessment for spouses?

Living Apart Together: Joint Assessment Despite Living Separately?

Today, more and more couples are choosing to live apart, enjoying space and autonomy, yet still live together. "Living Apart Together" is the lifestyle that is becoming increasingly popular, especially in cities. According to a representative study by the German Institute for Economic Research, in 2006, 13.4 percent of couples lived in separate households. Almost one in six couples in Germany now enjoy the luxury of two homes.

If spouses live apart, the question arises whether they can still choose joint assessment for tax purposes or whether only individual assessment is possible. Since the "Living Apart Together" lifestyle is not yet well known in tax offices, many tax officials believe that a permanent separation exists and refuse the requested joint assessment.

Currently, the Münster Finance Court has ruled against the tax office that "living apart together" spouses can meet the requirements for joint assessment despite long-term physical separation. This is the case if the spouses maintain their partnership in the form of a personal and intellectual community, e.g. have sexual contact, visit each other, go on trips and holidays together, spend a lot of time together, share expenses for household and children, and easily settle expenses for the economic community among themselves.

The fact that the spouses generally keep their income and assets separate does not preclude an economic community. (FG Münster of 22.2.2017, 7 K 2441/15)

The case: The spouses have been married since 1991 and have a son born in the same year. In 2001, the wife moved out of the previously shared family home with the son, first into a rented flat and later into an owner-occupied flat. For the year in dispute, 2012, the tax office concluded that the conditions for joint assessment no longer existed and assessed the spouses individually for income tax.

Whether spouses live permanently apart is to be assessed - according to the tax judges - based on the overall picture of the mutual relationships in the specific individual case. The spouses' attitude towards the marital partnership is also decisive. If spouses live apart for an indefinite period and maintain the marital economic community by jointly handling economic matters and deciding together on the use of family income, this can - possibly together with other circumstances - lead to the assumption that they are not permanently separated.

The burden of proof for the condition of not living permanently apart lies with the spouses who claim this in their favour. Joint assessment with the splitting tariff is more advantageous the more different the spouses' incomes are. If both earn equally well, the spouse splitting does not bring any benefit. Therefore, spouses should only apply for joint assessment if their incomes are different.

Living Apart Together: Joint Assessment Despite Living Separately?