13.03.2023 – 13:15
United Income Tax Assistance eV – VLH
Neustadt a. d. W. (ots)
What insurance premiums are tax deductible? Which height? And which ones don’t? The wage tax assistance association United wage tax assistance e. V. (VLH) shows what is possible and how it works.
Tax law states: Certain costs of living that unavoidably reduce one’s own economic performance are considered special expenses. For this reason, insurance for pension provision or for the exercise of the profession are tax-privileged. Pure property insurance, on the other hand, cannot be stated in the tax return.
Which insurance premiums can be deducted?
a) Pension expenses (basic pension)
- Statutory pension insurance
- Professional pension schemes / agricultural old-age fund
- Private pension insurance: Rürup contracts
There is a maximum limit for pension expenses: For the tax year 2022, the maximum amounts are 25,639 euros for single people and 51,278 for married couples and registered partners (in 2021 it was still 25,787 euros and 51,574 euros respectively).
For 2022, however, the tax office only takes into account a maximum of 94 percent of these maximum limits, which are 24,152 euros for single people and 48,202 euros for couples. For those who are employed subject to pension insurance, the deduction is also reduced by the employer’s contribution. There is also a reduction for civil servants.
By the way: Contributions to pension insurance will be fully tax-deductible from 2023, as Federal Finance Minister Christian Lindner (FDP) announced in January 2022. This relief is intended to help avoid “double taxation” of pensions.
b) Riester contracts (additional pension)
Insured persons can deduct the annual Riester contributions up to a maximum of 2,100 euros as special expenses. This includes not only the contributions they pay themselves, but also the government allowance.
c) Other pension expenses
A selection of the most common:
- unemployment insurance
- Health insurance
- care insurance
- Supplementary health insurance (e.g. supplementary dental insurance)
- Sick pay insurance / daily hospital benefit insurance
- Foreign travel health insurance
- Supplementary care insurance
- Accident insurance (for leisure)
- Earnings/disability insurance
- liability insurance
- Motor vehicle liability insurance
- term life insurance
- Endowment life insurance (if taken out before January 1, 2005)
- Death benefit insurance (under certain conditions, e.g. benefit only in the event of death)
The following applies here: Employees and civil servants can state up to a maximum of EUR 1,900 in “other pension expenses” in their tax return; 2,800 euros for the self-employed. Double the amount applies to married couples.
Since the deduction limit of 1,900 euros or 2,800 euros is very low, taxpayers receive little relief: the maximum amount is often already reached with basic health insurance and statutory long-term care insurance. However, these two insurances are an exception and are always taken into account by the tax office in the actual amount, even if they exceed the maximum amount.
d) Professional police officers
- Accident insurance (pro rata for work)
- Professional Liability Insurance
- Legal protection insurance (proportionately for the area of work) or employment legal protection insurance
These insurances can be stated indefinitely as income-related expenses in the tax return.
What evidence is required?
All insurances that are entered in the income tax certificate do not have to be proven. The following applies to all other insurances: Insured persons may only deduct what they have actually paid for. One invoice is often not enough for the tax office. Insured persons should therefore keep the relevant transfer receipts or account statements.
Where do you enter the insurance?
Most insurance policies are to be entered in the pension expense appendix of the income tax return. Occupational policies, on the other hand, are listed under income-related expenses in the tax return – Appendix N of the tax return. For Riester contracts there is also Appendix AV.
These insurances are NOT deductible:
- Private / tenancy legal protection / traffic legal protection insurance
- Household insurance
- Comprehensive car insurance
- Private pension insurance: capital investment products
- Endowment life insurance (if it was taken out after January 1, 2005, because then it is considered an investment)
No information is required in the tax forms for company pension schemes either. Reason: The contributions are already deducted directly from the gross salary.
The VLH: Germany’s largest income tax assistance association
The wage tax assistance association United wage tax assistance e. V. (VLH) is Germany’s largest income tax assistance association with more than a million members and around 3,000 advice centers nationwide. Founded in 1972, it also provides the most consultants certified according to DIN 77700.
The VLH prepares the income tax return for its members, applies for all tax reductions, checks the tax assessment notice and much more within the scope of the limited advisory authority according to § 4 No. 11 StBerG.
United Income Tax Assistance e. V. (VLH)
67433 Neustadt ad Weinstrasse
Tel.: 06321 4901-0
Fax: 06321 4901-49
E-Mail: [email protected]
Original content from: Vereinigte Lohnsteuerhilfe eV – VLH, transmitted by news aktuell