Save more tax with professional or service liability insurance?
Do not enter contributions to professional liability insurance or service liability insurance under special expenses.
You should claim these two types of insurance as income-related expenses. The advantage is that there is no upper limit on deductible contributions for income-related expenses, as there is for pension expenses.
This allows you to deduct higher contributions for insurance policies taken out for professional reasons.
Save more tax with professional or service liability insurance?
What types of accident and liability insurance can I claim?
Deductible liability insurance includes:
- Personal liability insurance
- Motor vehicle liability insurance
- Dog liability insurance
- Land liability insurance
- Property owner liability insurance
Accident insurance includes not only the actual accident insurance but also passenger insurance, child accident insurance, and travel accident insurance. It does not matter who is covered by the accident insurance. What is important is that you are the policyholder and pay the premiums. The tax office also requires proof of payments. Contributions to accident insurance can be claimed if these insurances only cover private risks. Insurances that cover both private and professional risks can be declared half as special expenses and half as income-related expenses or business expenses.
Term life insurance can also be declared, as well as contributions to widow's/orphan's pensions and funeral expenses. The contributions are considered as special expenses in the tax return. However, these contributions are only recognised if the deductible maximum amount of 1.900 Euro for employees and pensioners and 2.800 Euro for self-employed persons has not yet been exhausted with contributions to basic health and nursing care insurance.
Be sure to include these insurance contributions in your tax return. Lohnsteuer kompakt automatically checks for you whether you have already reached the maximum amount or if additional contributions can still be claimed.
Legal protection and household insurance are not considered special expenses.
What types of accident and liability insurance can I claim?
Is private accident insurance worth it?
On the way to and from work, and of course during work itself, employees are covered by statutory accident insurance; this also applies to pupils and students. However, two-thirds of all accidents occur during leisure time or in private settings, not at the workplace. For these areas, you need private accident insurance.
Private accident insurance is a good precaution. It does not protect the insured and their family from the accident itself, but from possible financial consequences.
The most comprehensive protection in the event of occupational disability is certainly provided by occupational disability insurance. However, not everyone who wants to can take out such insurance, for example, because they are rejected by the insurer due to a pre-existing condition or do not have a recognised occupation.
People who are not employed and children are generally not included in occupational disability insurance. For them, private accident insurance is definitely advisable and a sensible alternative. In the event of a claim, it compensates for the loss of working capacity with a lump sum payment and/or a pension.
What is covered: Private accident insurance covers all accidents in daily life, including occupational accidents, worldwide. Private accident insurance pays in the event of disability due to an accident, regardless of whether it results in occupational disability or not. This is the major difference from occupational disability insurance. A benefit for the death of the insured person can also be included in the accident insurance. However, to fully protect the family in the event of the main earner's death, term life insurance is far more suitable.
Is private accident insurance worth it?
Do I need term life insurance?
Term life insurance pays an agreed sum upon the death of the insured, regardless of how much has been paid into the policy up to that point. If the insured does not die during the term, they do not receive any money back at the end, unlike with endowment life insurance.
Statutory pension provision for surviving dependants is low. The full widow's or widower's pension amounts to only 55 per cent of the pension calculated up to that point due to full incapacity. However, surviving dependants are only entitled to this pension after an insurance period of five years, and it always represents only a portion of the pension entitlements accrued by the deceased up to that point.
Term life insurance is particularly useful for young families who still need to finance their children's education. Couples who are under significant financial strain, for example, due to building or purchasing a property, should also secure against the risk of death. The policy is unnecessary for those who have no dependants to support, such as singles, apprentices, and students.
Do I need term life insurance?
Can I declare insurance policies I pay for my child in the tax return?
Yes, parents who have taken out insurance for a child, such as accident insurance or private liability insurance, can declare the contributions in their tax return.
Policyholder are you yourself. The contract must be in your name; who is insured is irrelevant. The payment of contributions counts.
Can I declare insurance policies I pay for my child in the tax return?
How can I deduct the contributions for my car insurance?
The contributions to motor vehicle liability insurance can be declared in the tax return; they are deductible as special expenses under pension expenses. However, the portion of the contribution relating to comprehensive insurance is not recognised by the tax office.
The reason: Only policies that cover the taxpayer's personal life risks are considered and thus fall under the category of "other pension expenses". Partial or fully comprehensive insurance, on the other hand, is considered property insurance. Comprehensive cover cannot be deducted by private individuals for tax purposes.
If you want to declare at least the share for motor vehicle liability insurance in your tax return, you basically have two options.
Deduct motor vehicle insurance contributions as special expenses or business expenses
Contributions to motor liability insurance are generally special expenses if they are neither business expenses nor business-related expenses.
If you use the vehicle for journeys between your home and primary workplace and for journeys home as part of maintaining a second household, and you settle these journeys for tax purposes using the commuter allowance, the commuter allowance also covers the proportional liability insurance contribution. However, the tax authorities are generous here: You are allowed to deduct the insurance contribution in full as special expenses for simplification purposes (R 10.5 EStR).
How can I deduct the contributions for my car insurance?
What tax changes have applied to unemployment, liability and other insurance since 2010?
Since 2010, most employees can no longer claim contributions to unemployment, liability, and other insurance as special expenses for tax purposes. However, from 2010, private and statutory health insurance policyholders are in a better tax position. If you pay low contributions to health and nursing care insurance, you can still enter your expenses for unemployment insurance, liability insurance, and other insurance in your tax return.
Contributions to private and statutory basic health insurance and statutory nursing care insurance can be entered in the tax return at their actual amount. They are fully recognised.
For other insurance - except pension expenses - there is a maximum amount: This is 1.900 Euro for employees, civil servants, pensioners, retirees and their partners, and 2.800 Euro for the self-employed. For jointly assessed spouses, the joint maximum amount is the sum of the maximum amounts to which each spouse is entitled.
If the contributions to basic health insurance and compulsory nursing care insurance are higher than 1.900 Euro / 2.800 Euro, contributions to other insurance can no longer be deducted. However, if the contributions are lower, there is still "scope" for taking other insurance into account.
A labourer earns 1.500 Euro gross per month. He pays around 132 Euro per month, or 1.584 Euro per year, for his statutory health and nursing care insurance. The tax office deducts four per cent from this amount. Thus, it recognises 1.521 Euro as special expenses. The labourer has therefore not yet reached his maximum amount of 1.900 Euro. He can now additionally claim expenses for unemployment, liability, and other insurance up to the maximum amount of 1.900 Euro. To do this, he deducts the 1.531 Euro. For the labourer, this means: He can enter 379 Euro of further insurance contributions in the income tax return.
What tax changes have applied to unemployment, liability and other insurance since 2010?
