Do I need to provide proof that the costs were work-related for smaller amounts?
You should be able to prove your tax consultancy costs with invoices. However, there are expenses that are related to both income generation and the private sector, and where it is difficult, if not impossible, to separate them. This particularly applies to expenses for:
- Tax literature
- Tax software
- Income tax assistance association
Such mixed tax consultancy costs can be deducted for tax purposes as follows for simplification:
- For amounts up to 100 Euro, the tax office readily accepts your chosen allocation, i.e. you can claim the full amount as income-related expenses or business expenses.
- If the costs are between 101 and 200 Euro, you can deduct 100 Euro as income-related expenses or business expenses, the rest is disregarded.
- If the costs exceed 200 Euro, you can allocate half to income-related expenses or business expenses without proof, the other half is unfortunately disregarded.
Do I need to provide proof that the costs were work-related for smaller amounts?
Which tax consultancy fees are deductible?
Private tax consultancy costs have not been deductible as special expenses since 2006. Now, tax consultancy costs can only be deducted as business expenses or operating costs if they are related to income generation. Tax consultancy costs must therefore be allocated to deductible business expenses or operating costs and non-deductible private living expenses.
Tax deductible are:
- Advice on income and business expenses for employment, rental, capital income, pensions
- Costs for determining expenses and income, preparing summaries, filling in the relevant forms
- Preparing income statements for the tax office
- Answering income-related questions
- Determining income and expenses for profit income
- Creating and monitoring bookkeeping
- Preparing income surplus calculations or balance sheets
- Purely private costs for a tax advisor cannot be deducted as they are living expenses.
Not deductible are, among others:
- Filling in the income tax return
- Determining special expenses and extraordinary burdens
- Costs related to questions about
- Income tax rates and assessment
- Household employment and services
- Childcare costs
- Inheritance and gift tax
- Child benefit and home allowance
Tip: For contributions to income tax assistance associations, expenses for tax literature and software, it is not objected if these expenses are allocated 50 percent to operating expenses or business expenses. Regardless, for simplification purposes, the taxpayer's allocation for mixed tax consultancy costs up to an amount of 100 Euro in the assessment period should be followed. Example: The taxpayer pays a contribution to an income tax assistance association of 120 Euro in 01. They allocate 100 Euro to business expenses; this allocation is not objected to (BMF v. 21.12.2007, BStBl 2008 I p. 256).
The same applies to programmes for preparing your tax return.
Which tax consultancy fees are deductible?
