Welcome to our blog! If you are a US citizen living or working in Germany, you may be faced with the challenge of filing a German tax return. This guide will help you understand the most important aspects of filing a German tax return and make the process as easy as possible.

Who has to file a German tax return?

In principle, all persons living or working in Germany are liable to pay tax. This also applies to US-Americans who are resident in Germany. A tax return is required in particular if:

You have income from non-self-employed work and earn other income in addition to your salary.
You are self-employed or self-employed.
You have income from renting and leasing or capital gains.
You would like to claim special tax benefits or deductions.

Tax brackets and allowances

There are six different tax brackets in Germany, which may vary depending on your personal situation. Choosing the right tax bracket can have a significant impact on the amount of tax you pay. There are also various tax-free allowances that can reduce your tax burden, such as the basic tax-free allowance, the child tax-free allowance and the employee tax-free allowance.

Important documents

You will need various documents to prepare your German tax return, including

• Income tax certificate: You will receive this from your employer and it contains all the relevant information about your salary and the taxes withheld.
• Receipts for other income: This includes, for example, income from self-employment or rental income.
• Proof of income-related expenses: These can be, for example, travel expenses, work equipment or work-related relocation costs.
• Receipts and vouchers for special expenses and extraordinary expenses: These include donations, medical expenses or childcare costs.

Double taxation agreements

As a US citizen in Germany, you benefit from the double taxation agreement (DTA) between the USA and Germany. This agreement is designed to prevent you from being taxed twice on the same income. It is important to be aware of which income is taxed in which country and which tax obligations exist in both countries.

Deadlines and penalties

The regular deadline for submitting your tax return is July 31 of the following year. If you hire a tax advisor, the deadline is usually extended to February 28/29 of the year after next. Late filing may result in late payment surcharges and penalties.

Electronic submission of tax returns

In Germany, the electronic submission of tax returns is preferred. You can use the official ELSTER (electronic tax return) software for this purpose. You can use ELSTER to complete your tax return online and send it directly to the tax office. It is important to register with ELSTER in good time, as the registration process can take several days.

Support from a tax advisor

The German tax return can be complex and time-consuming, especially for foreigners. An experienced tax advisor can help you compile all the relevant documents, optimize your tax burden and ensure that your tax return is filed correctly and on time.

Conclusion

Preparing a German tax return can be a challenge, especially for US residents. However, with the right knowledge and resources, you can ensure that you meet your tax obligations while minimizing your tax burden. If you have any questions or uncertainties, do not hesitate to seek professional assistance.

We will be happy to provide you with further information and individual advice.

Michael Schroeder, Tax consultant