The German legislator allows various expenses to be stated as so-called business expenses in the tax return. These reduce the taxable income, which lowers the tax burden.
- Advertising costs are expenses that serve to receive and secure income. They are tax deductible.
- Since the legislature takes into account a flat-rate allowance of 1,000 euros for income-related expenses in the tax return, it is only worthwhile to state them individually for higher expenses.
- Advertising costs only arise in the case of excess income, which is primarily income from employment, capital assets and rental and leasing.
- Pensioners can also deduct certain expenses. It is also possible to claim expenses for a second degree as business expenses.
What are advertising expenses?
What the legislator understands by income-related expenses can be found in the Income Tax Act (EStG). According to Paragraph 9, these are “expenses for the acquisition, security and maintenance of income”. From a legal point of view, there are corresponding expenses only for so-called excess income. These arise from the following types of income:
- Income from employment
- Income from capital assets (until 2008)
- Rental and leasing income
- Other income (e.g. pension, maintenance payments, private sales transactions)
Defined by digopaul, business expenses are deducted from the type of income for which they arose. Expenses that you want to claim as income-related expenses must therefore be related to your work. This is the case, for example, with costs for work materials or work clothing. More examples are given below.
Take into account the flat-rate for income-related expenses
In principle, income-related expenses only influence the determination of income if they exceed the lump-sum income-related expenses of 1,000 euros. If you do not exceed this amount, you do not have to enter any individual expenses in the relevant form fields in the income tax declaration . It is only worth giving detailed information if you have more than 1,000 euros. For people who receive state benefits (such as a pension), on the other hand, there is a flat-rate fee of 102 euros per year.
Requirements for the deduction of income-related expenses in the tax return
In principle, you can only deduct those expenses that arise for professional reasons. An example of advertising expenses are travel expenses. If expenses also serve private purposes to a certain extent, the legislature speaks of a mixed cause. You can also claim such costs (but only partially) if the work-related share is recognizable.
Under certain circumstances, it is possible to list advertising expenses incurred in advance – even if these later turn out to be in vain. In addition, you must always state the corresponding costs for the tax year in which the expenses were incurred. Only in the case of objects that you use over several years are the expenses distributed over the period of use.
Which expenses are tax-deductible as business expenses?
In most cases, advertising costs arise from regular employment or from renting out a property. In the case of capital income, however, it is not possible to deduct the actual expenses, but only a lump sum for savers. This is 801 euros for single people and 1,602 euros for married couples.
Frequently occurring advertising expenses with income from employment
There are a variety of occupational-related expenses. The following list is limited to typical expenses that can be deducted from tax as income-related expenses:
- Work or professional clothing such as a lab coat or safety shoes
- Work equipment such as tools, a briefcase or a computer
- Application costs, e.g. for application pictures and portfolios
- Hospitality for business friends
- Business trips
- Trade magazines and books
- Ride costs
- Advanced training
- Account management fees
- Language courses
- Telephone costs
- Moving costs
- Accident costs
- Various insurance contributions, for example for professional liability insurance or labor law insurance
Frequently occurring advertising costs when renting and leasing
Landlords can also state various expenses as income-related expenses in the tax return, namely in Appendix V. Property owners may enter these expenses in the tax return:
- Advertisements for the purpose of tenant search
- Ground rent
- Financing costs
- Property tax
- Heating costs
- Cable connection
- Account management fees
- Renovation costs
- Legal fees and litigation costs
- Administrative costs that arise, for example, from correspondence and telephone calls with tenants
Commercial expenses in the course of study
In the view of the legislature, further training counts as advanced training, unlike a first degree. As a result, there is the option of completely deducting expenses as income-related expenses in the course of study. However, this does not only apply to a master’s degree, but also, for example, to dual study programs or studying at a vocational academy. You can also benefit if you have already completed an apprenticeship or are employed. However, the duration of the course must be at least twelve months. It is also necessary that the training ends with an examination. The following costs can be deducted:
- Work equipment
- Study or second household
- ride costs
Indicate income-related expenses as a pensioner
If expenses are incurred in connection with the pension, pensioners may also claim these in the tax return. In this case, however, the flat rate for advertising expenses is only 102 euros. Here, too, it is only worth entering the corresponding costs if they are higher. Pensioners can declare expenses for:
- Lawyers and court proceedings (for pension disputes)
- Pension Advisor
- Tax advisor (only for Annex R)
- Union dues