Self-employed | FIV | Magazine

Reduce your tax burden: What you should know about business expenses as a self-employed person

Laura — Sun, 24 Oct 2021 08:31:31 +0000

Reducing the tax burden – The idea is tempting: spending money and saving taxes at the same time. However, the legislator does not make it quite so easy for the solo self-employed. Because although as your own boss you enjoy some tax freedoms that, for example, a salaried employee doesn’t have, you can’t claim all your costs as business expenses for tax purposes. There are binding rules that you should not only be aware of, but that you should also adhere to if you want to deduct your expenses. Otherwise you risk that the tax office estimates or refuses the recognition – in both cases to your disadvantage. What you should know about the different types of business expenses can be found in the following article.

What exactly are business expenses?

The income tax law regulates in § 4 quite clearly what is meant by the term business expenses: It is all expenses that are necessary to make your business functional and to keep it. In other words, all purchases and expenses that are caused by your entrepreneurial activities and without which you would not be able to run your business. You can enter these necessary expenses in your tax return, they reduce your profit and therefore your tax burden. However, tax law does not accept all business expenses equally, immediately or even in full.

What types of business expenses are distinguished?

The legislature has sorted all conceivable business expenses into four different categories which are mandatory and decide the respective tax reduction status. These are as follows:

Anticipated operating expenses

The most important rule for all solo self-employed people: Carefully collect all receipts – and start doing so before you even get started with your business. All costs incurred in the preparation phase, i.e. before you are officially registered, can be claimed later as anticipated business expenses. This includes, for example, travel and financing costs, expenses for seminars and the like.

Immediately deductible business expenses

This drawer includes all the bills you need to pay in order to run your business at all. Classically, these include:

Occupancy costs (rent, electricity, water and heating, cleaning and maintenance),
Telephone, fax, Internet connection,
Office supplies (paper, postage, pens) and office equipment (printer, copier, scanner),
Insurance and car expenses, costs of travel by public transport,
Training costs,
Bank Charges.

The acquisition of an asset, such as a company car, is an immediately deductible business expense, but the costs are split over the expected useful life. Here, the so-called depreciation for wear and tear (Afa) applies.

Limited deductible business expenses

Not all costs that you incur in principle but not exclusively in connection with your business are recognised by the legislator as tax-reducing. This is especially true if there is no clear dividing line between private living and business. Thus, in the case of a study in one’s own living quarters, small details often make the difference. The same applies, for example, to the cost of meals while travelling (additional expense) or the expenses for coffee and biscuits that you offer your business partner.

Non-deductible operating expenses

Anything under this heading doesn’t reduce your tax payment. The catalogue is long, here are the most important points:

Gifts over 35 euros (if 35.01 euros is on the invoice, the whole amount is void!),
Travel expenses between home and work,
Entertainment expenses “for business reasons” are accepted at 70 percent, the remaining 30 percent are not,
Penalties and warnings, reminder fees or interest for evasion.

How can I deduct my business expenses from my taxes?

You simply enter your business expenses in your tax return. They reduce your profit and thus your tax liability. But be careful: In order for the tax office to recognize your costs, you have to prove them meticulously. You should therefore always and consistently keep all receipts and sort them regularly. If you lose an invoice or receipt, the tax officials can estimate the item or cancel it altogether – both are usually bad for you.

If you deliberately or even accidentally declare private expenses as business expenses, then you risk not only a “hefty” penalty payment in the event of a tax audit, you can also rely on the fact that the tax officials will henceforth keep a particularly critical eye on your tax return.

Who can claim business expenses as a lump sum?

Some self-employed people are granted the right by law to have their business expenses credited at a flat rate. These include:

Childminders (flat rate 300 euros per month),
Self-employed midwives (25 percent, maximum 1,535 euros per year),
Freelance journalists and writers (30 percent, maximum 2,455 euros per year).

Members of these professions can, of course, still choose to itemise their business expenses if this is more favourable to them.

Bottom line: how can you lower your tax burden?

All costs and expenses that you incur in direct or indirect connection with your business are part of your business expenses. You should keep all receipts and invoices carefully and sort them regularly so that you can enter these expenses correctly in your tax return. There, they will then reduce your profit and thus reduce your tax liability. With smart accounting software, this is all a little easier to do. You can claim even the smallest amounts, because the proverbial little things save taxes. Just don’t forget to always separate private and business expenses – the tax office reacts very sensitively to such “inaccuracies”.

Tax Tips and Tricks Videos: Recommendations from experts

Lisa-Marie — Tue, 06 Oct 2020 05:00:51 +0000

Tax tips and tax tricks – Almost everyone knows it, it comes the time in the year there it is called: The tax return is due. For many, this is still a vexing topic, but it doesn’t have to be! With the right tax return and the appropriate tips, you can often get a lot of money back. We have compiled the most important and exciting tips and tricks for you, so that you too can save money and look forward to your next tax assessment in the future! If you are interested in the topic of tax tips and tricks, then perhaps the topic of videos taxes & capital gains is also relevant for you.

Tax tips & tricks: families, students, employees and the self-employed

For many, the world of taxes is a maze of terms and phrases that no one seems to understand. But actually, it’s not all that complicated. We bring light into the darkness and show you how you can save a lot of money on your next tax return, even without a lot of know-how. For families, students, employees and self-employed – tax tips bring you extremely much. Just filing your tax return will bring you back an average of 1,027 euros. With a little practice, you can do the tax return yourself, in one day. A good hourly wage, right? If you know the basics, your private assets will increase as an employee and especially as an entrepreneur.

Here’s another tip for you! Online you can find a lot of articles and tips on Lukinski.de. Here you can learn everything: from tax basics for asset accumulation, to real estate as a capital investment through renting, to saving taxes with real estate (external). Everything free of charge from the expert.

Tip! Overview Taxes XXL

Taxes are often a vexing topic, especially in Germany. Wage tax, value added tax, real estate transfer tax and much more: it is not easy to keep track of everything. But if you’re not interested in employing a tax consultant, who can be quite expensive, you need to get to grips with the subject of taxes. We want to help you with that! Here you will find an overview of guides as well as book and video tips on the subject of taxes. Whether we introduce you to individual types of German taxes or you watch a video on the subject of tax returns, all your questions about German taxes will be answered here.

Book & Video Tips Overview: Taxes

Find a tax consultant: near you

Are you still looking for the right tax advisor in your area? Then take a look at our lists: We have compiled the best-rated tax consultants for you for almost every city in Germany, where you should always receive good advice. You can find more information about tax advisors in your area here.

Tax tricks: Saving money at every turn

Save taxes legally – with these 3 tax tips and tricks you can get more money out of your tax return and get it back from the tax office. In this video, 3 completely legal tax tricks are revealed to you, which can be easily applied in the tax return with little effort.

Tax trick: deduct longer journeys
Tax trick: schedule payments
Tax trick: Off to the registry office

Watch the video to learn the details of these tax tips to increase your own tax refund.

Tips from the tax advisor

Here, a professional tax advisor reveals 6 tips on how you can save even more on your taxes in the future, so you can use that money wisely in the future or maybe even (re)invest it.

Tax tips for employees

Saving taxes as an employee made easy. In this video, you’ll learn how you can save on your next tax return as an employee with 5 explicit tricks to help you afford more next year.

More net from gross – tax tips

Here are 6 tips presented to you on how to save on your next tax return. Among other topics such as: Change health insurance, agree on benefits in kind, leave the church, allowances can be entered, prepare the tax return or capital-forming benefits.

Tax return: tips that are worthwhile

Not done your tax return yet? Then get going! Here’s how you can get up to 1,000 euros out of it with simple tips. And don’t worry: the tips are very simple and can be implemented quickly.

Tax return as a student

A tax return as a student? That can really pay off! Even if you don’t have one yet. This video explains how it works and what terms like “tax deduction”, loss carry forward, income-related expenses or special expenses mean.

Tax tips for the self-employed

Did you know that you probably pay too much tax, especially as a private entrepreneur? In this video you’ll get 13 legal tips on how you can save taxes as a self-employed person in the future!

The most common mistakes and traps

In a tax return, you can do many things wrong and the bad thing is, as a rule, each of these mistakes costs money or you can even be held liable for it – which 8 mistakes are the most common and how to avoid them, that is shown to you in this video. For example, it’s about accepting the tax assessment without complaint, forgetting your special expenses or not collecting receipts.

Tax traps for private individuals

There are several tax traps when filing your tax return and if you are not careful, you can quickly fall into such a trap. So that this doesn’t happen to you, this video shows you the three most common sources of error and explains how to deal with them.

Tax deductions?

Anyone who has one or more children and makes a tax return, is confronted with many terms, so it is about child benefit, child allowance, care costs or the education allowance and you have to find your way in this jungle of terms. In this video, the most important points are explained so that you can make your tax return easier. This is about how children affect the tax return and how you can save taxes with one or the other information.

Tax deductible insurances

Which insurance premiums should you definitely declare on your tax return and which insurance premiums can you save on declaring here? What are the maximum limits? You can find out all this in this video.

Deduct travel expenses from tax

Do you regularly commute to work and spend a lot of time in the car or on the train? You can get this money back! In this video you will learn how you can get the most reimbursement for your travel costs to work, keyword: commuting allowance.

Tax tips and tricks book: Save taxes – Recommendations

Lisa-Marie — Tue, 06 Oct 2020 05:00:51 +0000

Tax tips and tax tricks – Almost everyone knows it, it comes the time in the year there it is called: The tax return is due. For many, this is still a vexing topic, but it doesn’t have to be! With the right tax return and the appropriate tips, you can often get a lot of money back. We have compiled the most important and exciting tips and tricks for you, so that you too can save money and look forward to your next tax assessment in the future! If you are interested in the topic of tax tips and tricks, then perhaps the topic of book tips basics tax books is also relevant for you.

Tax tips and tax tricks

For families, students, employees and the self-employed – tax tips bring you an extremely high return. Just filing your tax return will bring you back an average of 1,027 euros. With a little practice, you can do the tax return yourself in a day. A good hourly wage, right? If you know the basics, your private assets will increase as an employee and especially as an entrepreneur.

If you are looking for tips online, we can recommend Lukinski.de. Here you will find everything. From Basics: Understanding Taxes, to Real Estate as an Investment through Renting, to Saving Taxes with Real Estate (external). All free of charge from the experts.

Tip! Overview Taxes XXL

Book & Video Tips Overview: Taxes

Find a tax consultant: near you

Tax tips for start-ups and young entrepreneurs

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Konz: 1000 legal tax tricks

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Conc. 1000 completely legal tax tricks – the standard work under the tax councellors and the guarantor for highest tax refunds of the tax office.
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Tax knowledge to go: Crash course in taxes

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In this crash course you will learn – even without previous knowledge – everything you need to know so that none of your hard-earned euros will be accidentally transferred to the tax office. You get everything worth knowing explained around:

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With the right tax strategy to wealth and prosperity

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Why do rich people and large companies pay so little in taxes and duties? And why does the taxman collect so much from middle-income earners? The answer is: The “big ones” manage their taxes themselves and the “small ones” are not even asked. This book uses the “3-pillar strategy” to show you how even average earners can sustainably reduce their personal tax burden. In addition, there are tips on investing money and protecting assets.

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Tax lexicon of the basics

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This unprecedented tax encyclopedia is the 1st of its kind and is specifically designed to help beginners understand everything about taxes.
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Tax for entrepreneurs, self-employed and start-ups

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Businesses and the self-employed minimize tax liability with these pro tips:

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The Tax Bible for Investors: Saving Taxes

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Self-employed | FIV | Magazine

Reduce your tax burden: What you should know about business expenses as a self-employed person

What exactly are business expenses?

What types of business expenses are distinguished?

Anticipated operating expenses

Immediately deductible business expenses

Limited deductible business expenses

Non-deductible operating expenses

How can I deduct my business expenses from my taxes?

Who can claim business expenses as a lump sum?

Bottom line: how can you lower your tax burden?

Tax Tips and Tricks Videos: Recommendations from experts

Tax tips & tricks: families, students, employees and the self-employed

Tip! Overview Taxes XXL

Find a tax consultant: near you

Tax tricks: Saving money at every turn

Tips from the tax advisor

Tax tips for employees

More net from gross – tax tips

Tax return: tips that are worthwhile

Tax return as a student

Tax tips for the self-employed

The most common mistakes and traps

Tax traps for private individuals

Tax deductions?

Tax deductible insurances

Deduct travel expenses from tax

Related links about the topic Taxes

Taxes Basics

Taxes Capital gains

Back to overview Taxes XXL: Tax return, tips & more

Tax tips and tricks book: Save taxes – Recommendations

Tax tips and tax tricks

Tip! Overview Taxes XXL

Find a tax consultant: near you

Tax tips for start-ups and young entrepreneurs

Konz: 1000 legal tax tricks

Tax knowledge to go: Crash course in taxes

With the right tax strategy to wealth and prosperity

Tax lexicon of the basics

Tax for entrepreneurs, self-employed and start-ups

The Tax Bible for Investors: Saving Taxes

Related links about the topic Taxes

Taxes for real estate/home ownership

Tax return

Back to overview Taxes XXL: Tax return, tips & more