Minimise your combined income tax for
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Minimise your combined income tax for
Joint assessment is a tax procedure in which spouses or civil partners submit a joint tax return. It allows for more favourable taxation through the so-called spouse splitting, which is particularly beneficial for couples with different incomes.
How does joint assessment work?
This procedure ensures that the higher income of one partner is tax-relieved by being offset against the lower income of the other partner.
Who can use joint assessment?
Joint assessment is generally only available to married couples or civil partners. The following rules also apply:
Advantages of joint assessment
Joint assessment is particularly advantageous for couples with large income differences. The splitting procedure results in the total income of a couple being taxed lower than if both partners were assessed separately.
Example: One partner earns 60.000 Euro a year, the other 20.000 Euro. Through spouse splitting, the income is more evenly distributed between both partners, resulting in a lower tax burden.
When is individual assessment more beneficial?
In some cases, individual assessment may offer advantages, for example:
Conclusion: Joint assessment offers spouses and civil partners a way to save taxes through spouse splitting. It is especially beneficial when the partners' incomes are very different. However, couples should check whether individual assessment is more favourable in their specific case.
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.
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
Disadvantages of joint assessment
Requirements
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.
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
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.
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
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.
The solidarity surcharge (Soli) is a supplementary levy on income, wage, and corporation tax. It was originally introduced in 1991 to finance the costs of German reunification and to balance economic differences between East and West Germany.
Who pays the solidarity surcharge?
The solidarity surcharge is levied on taxpayers whose income tax or corporation tax exceeds a certain allowance. Since 2021, the Soli has been abolished or reduced for around 90% of taxpayers. Only taxpayers with high incomes continue to pay it in full.
Rate of the solidarity surcharge
The solidarity surcharge is 5.5% of the assessed income tax, wage tax, or corporation tax. Taxpayers with lower incomes are protected by an allowance.
Use of revenue
The revenue from the solidarity surcharge goes to the federal government and is used to cover general budget expenses. It was originally used to finance German reunification and for economically weak regions.
Criticism and outlook
The solidarity surcharge remains controversial despite its partial abolition. Critics call for its complete abolition, as the original purposes, such as the reconstruction of East Germany, have largely been fulfilled.
Conclusion: The solidarity surcharge was a significant contribution to financing German reunification for decades. Since 2021, however, only taxpayers with high incomes pay it. Tax programmes such as Lohnsteuer kompakt automatically indicate whether and to what extent the solidarity surcharge is due.
The church tax is a tax paid by members of certain religious communities in Germany. Its rate varies depending on the federal state:
How is the church tax calculated?
The church tax is calculated based on the income tax assessed after deducting all applicable allowances and tax benefits. It increases accordingly with rising income.
Special features of the church tax
Exemption from church tax
Members can avoid the church tax by leaving their religious community. The withdrawal must be officially declared at the registry office or a comparable authority and is automatically reported to the tax office. However, this usually means that church services such as weddings, baptisms, or funerals are no longer available.
Conclusion: The church tax in Germany is 8% or 9% of the income tax, depending on the federal state. It is an important source of income for the churches but is individually adjusted to the members' tax burden. Tax programmes such as Lohnsteuer kompakt automatically take the church tax into account when calculating the tax burden.