Do I have to pay income tax

Income tax - What are the taxes on your income

Updated on by Michael Mühl

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The most important questions about income tax

  • 01.
    Who has to pay income tax at all?

    In Germany, income tax is levied on the income of natural persons. The assessment basis for income tax is the taxable income, legal framework conditions are set out in the Income Tax Act (EStG). Partnerships do not have to pay income tax, whereas the partners of a partnership have to pay income tax on their share of the profits.

  • 02.
    What forms can income tax take?

    There are different forms of income tax. These include wage tax, which is levied on income from non-self-employed work, capital gains tax and the withholding tax introduced in 2009 as well as the less important forms of building withholding tax and supervisory board tax.

  • 03.
    Does everyone have to pay income tax?

    In principle, income tax must be paid on all income if it is not expressly tax-exempt. However, there is a so-called basic allowance for which no taxes at all have to be paid. This exemption is 9,744 euros for 2021 (2020: 9,408 euros) per taxpayer. Income that is higher than this basic allowance must first be taxed at the entry tax rate; for higher income, the applicable tax rates must be paid to the tax office.

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  • 04.
    For which income is there no income tax?

    There is no income tax for so-called 450 Euro jobs or similar employment relationships, as this is paid by the employer. So it is not necessary to file an income tax return. In addition, income earned as a youth leader, as an exercise leader in a sports club, as an employee of a public institution, as a supervisor or the like is not taxable if it does not exceed EUR 2,400 per year.

  • 05.
    When does it make sense to submit an income tax return to the tax office?

    Basically, you should fill out an income tax return if you can expect a tax return. This is the case with many employees and the self-employed, but one should consider the individual case. In some cases you should submit an income tax return in any case, for example if you have not earned more than the basic tax allowance in the entire calendar year because you only worked a few months and paid wage tax during this time.

  • 06.
    By when does an income tax return have to be submitted?

    If you are required to submit an income tax return, this must be submitted to the tax office by May 31 for the previous calendar year. Since the declaration was postponed in 2018, this deadline has been postponed to July 31. An extension of the deadline can be requested informally. If the income tax return is submitted voluntarily, this must be done no later than four years after the end of the tax year. The tax return for 2017 can therefore be submitted by December 31, 2021 at the latest.

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  • 07.
    How long does the tax office take to process the income tax return?

    The period between submission of the income tax return and receipt of the tax assessment is very different and among other things depends on the respective tax office and the time of year, as a particularly large number of tax returns are submitted around the end of May. There is no legal entitlement to a specific processing time.

  • 08.
    What regulations apply to income tax in the event of death?

    For the period from the beginning of the year to the day of death, the heirs or the executor must prepare an income tax return for the deceased if he was obliged to do so. A declaration of assessment is required for income that accrues after the date of death. This is where the income is reported, and the tax office then divides it among the heirs.

  • 09.
    When do I need a tax advisor?

    Going to the tax advisor is worthwhile in certain individual cases, but there is no general formula for this. In general, think about it when it comes to large amounts of taxes or government allowances.

  • 10.
    What is the share of income tax in total tax revenue?

    The share of income tax in the total income of the Federal Republic has remained constant at a little more than a third in recent years. The income tax is divided between the city or municipality in which the taxpayer is domiciled and the federal state and the federal government. The municipality receives 15 percent, the state and federal government 42.5 percent each.

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References

In particular, we used the information from the following sources for the topic of "income tax":

Last update on April 12th, 2021

The pages of the topic "Income Tax" were last editorially checked on April 12th, 2021 by Michael Mühl. They are all up to date.

Previous changes on 11/13/2020

  • November 13th, 2020: Adjustment of the income tax calculator and the examples to the income tax rate 2021
  • 04/11/2019: Adjustment of the income tax calculator and the examples to the 2020 income tax rate
  • Editorial revision of all texts in this subject area