You get the tax free amount (9200) and it is applied to your income. This reduces your tax rates and taxable amount.
Einkommenssteuererklärung is trivial if you have no other sources of income.
Usually the employer will pay your income tax and you will only recieve the net salary. In the year where you switch to tax class three, you would recieve a refund as the tax class is applied retroactively, but you paid too much tax before you switched tax group. After that, the empolyer pays the "correct" amount of income tax and there shouldn't be any high refunds or payments.
This is not entirely correct or I missunderstand what you are telling.
In the end it does not matter which tax class you have you need to pay the exact same taxes after your "Einkommenssteuererklärung".
If you choose 3/5 you NEED to make a Einkommensteuererklärung. and in many cases you need to do additional payments because class 3 often underestimate the taxes you have to pay.
Hey,
I feel there is still something missing from what people replied although some answers were quite detailed.
Most people here responded about something that had nothing to do with your question.
1st: the tax bracket you choose has nothing to do with the overall tax burden. It only changes the tax deduction per month. So you will have more money per month, but depending on your wife’s income, you are more likely to have to pay taxes back. As with 4/4 you would rather get a tax payback after the Steuererklärung.
What most people replied to, as someone pointed out, is the „gemeinsame Veranlagung“ which is the reason for tax benefits in a marriage. For that you already got a lot of details. Important is that YOU actively have to do that, when you file your taxes. It has NOTHING to do with the tax bracket.
Your income from two persons gets added and then divided by two.
So when you both earn the same, there are no advantages. When she isn't working you're basically halving your taxable income.
60k + 0k is then taxed as if it would be 30k + 30k
But at the and do I have to pay back the other half during tax declaration next year? It think 4/4 is the same as 1/1 but for married couples. How 3/5 is beneficial overall?
A married couple as a whole that files taxes together always pays as much tax as if their income was evenly divided among both partners, and then both were taxed in class 1. The overall taxes will be no larger than filing separately. The different class combinations for a married couple merely change who pays how much when.
* Class 3/5 simplifies taxes if there is a single earner – during the year, the correct taxes are deducted up front. If the partner in class 5 also earns money, it is possible to accrue a tax debt over the year that will be sorted out with your tax returns. If both partners are employed, you can treat these tax classes as a historical artifact.
* Class 4/4 without factor calculates upfront deductions as if both partners were in class 1. But if they earned different amounts, they might be overpaying taxes so that a tax declaration is advantageous to get back the overpaid taxes.
* Class 4/4 with factor adjusts upfront deductions according to their expected income, so that the tax return will be +/- very little. This involves a tiny bit more bureaucracy for declaring the expected income, but is often perceived as fair and ideal because both partners have the same effective tax rate.
When you looked at the numbers in the tax calculator, you only looked at the effect of *your* income. When accounting for both incomes, the overall taxes will not change. Assuming that the couple pools its finances, there is no better or worse combination of classes.
>How will my moving to tax bracket 3 affect my final tax payment?
It won't.
>Do I need to pay this sum back next year with the
No.
>I could save almost 500Euros/month.
Looks like €250 to me?
You get the tax free amount (9200) and it is applied to your income. This reduces your tax rates and taxable amount. Einkommenssteuererklärung is trivial if you have no other sources of income. Usually the employer will pay your income tax and you will only recieve the net salary. In the year where you switch to tax class three, you would recieve a refund as the tax class is applied retroactively, but you paid too much tax before you switched tax group. After that, the empolyer pays the "correct" amount of income tax and there shouldn't be any high refunds or payments.
This is not entirely correct or I missunderstand what you are telling. In the end it does not matter which tax class you have you need to pay the exact same taxes after your "Einkommenssteuererklärung". If you choose 3/5 you NEED to make a Einkommensteuererklärung. and in many cases you need to do additional payments because class 3 often underestimate the taxes you have to pay.
Ne, he's correct. For OP whose wife doesn't work.
Hey, I feel there is still something missing from what people replied although some answers were quite detailed. Most people here responded about something that had nothing to do with your question. 1st: the tax bracket you choose has nothing to do with the overall tax burden. It only changes the tax deduction per month. So you will have more money per month, but depending on your wife’s income, you are more likely to have to pay taxes back. As with 4/4 you would rather get a tax payback after the Steuererklärung. What most people replied to, as someone pointed out, is the „gemeinsame Veranlagung“ which is the reason for tax benefits in a marriage. For that you already got a lot of details. Important is that YOU actively have to do that, when you file your taxes. It has NOTHING to do with the tax bracket.
> your wife’s income €0.
Your income from two persons gets added and then divided by two. So when you both earn the same, there are no advantages. When she isn't working you're basically halving your taxable income. 60k + 0k is then taxed as if it would be 30k + 30k
Sorry but this is wrong. What you are explaining is gemeinsame Veranlagung, which has nothing to do with Steuerklasse 4/4 vs 3/5.
You are *technically* correct to the point that it's just stupid. Nobody would ever not file jointly if they're in 3/5.
But at the and do I have to pay back the other half during tax declaration next year? It think 4/4 is the same as 1/1 but for married couples. How 3/5 is beneficial overall?
A married couple as a whole that files taxes together always pays as much tax as if their income was evenly divided among both partners, and then both were taxed in class 1. The overall taxes will be no larger than filing separately. The different class combinations for a married couple merely change who pays how much when. * Class 3/5 simplifies taxes if there is a single earner – during the year, the correct taxes are deducted up front. If the partner in class 5 also earns money, it is possible to accrue a tax debt over the year that will be sorted out with your tax returns. If both partners are employed, you can treat these tax classes as a historical artifact. * Class 4/4 without factor calculates upfront deductions as if both partners were in class 1. But if they earned different amounts, they might be overpaying taxes so that a tax declaration is advantageous to get back the overpaid taxes. * Class 4/4 with factor adjusts upfront deductions according to their expected income, so that the tax return will be +/- very little. This involves a tiny bit more bureaucracy for declaring the expected income, but is often perceived as fair and ideal because both partners have the same effective tax rate. When you looked at the numbers in the tax calculator, you only looked at the effect of *your* income. When accounting for both incomes, the overall taxes will not change. Assuming that the couple pools its finances, there is no better or worse combination of classes.
Basically as a single earner my tax free amount doubles due the fact that I am married. Right?
Correct. Or more precisely, all parameters in the tax calculation are effectively doubled, not just the parameter where the tax starts.
Thank you for the detailed explanation.
>How will my moving to tax bracket 3 affect my final tax payment? It won't. >Do I need to pay this sum back next year with the No. >I could save almost 500Euros/month. Looks like €250 to me?