Your German tax return: who has to file, what you can deduct, and where expats lose money

Who must file – and who should

You are obliged to file an income tax return (Einkommensteuererklärung) if, among other cases, you

• are married and one spouse is taxed in class III or V, or you chose class IV with a factor

• had more than one employer at the same time (tax class VI)

• received wage-replacement benefits above 410 € – parental allowance, short-time work pay, unemployment benefit

• had other income above 410 € that was not subject to wage withholding – rental income, freelance work, capital income not fully covered by withholding

• had foreign income that is exempt in Germany but affects your tax rate (Progressionsvorbehalt) – typically salary earned abroad in the year you moved

• registered a tax allowance with your employer (Freibetrag on your wage tax card)

If none of that applies, filing is voluntary – and usually worth it. Single employees with one German employer and no other income often get money back because the monthly withholding ignores most deductions. Voluntary returns can be filed for four past years: in 2026 you can still file for 2022.

Deadlines

Voluntary returns have no annual deadline – only the four-year window. If you were obliged to file and miss the date, a late-filing surcharge of at least 25 € per month starts automatically (§ 152 AO). Engaging an advisor after 31 July moves you into the later deadline, provided the tax office has not already demanded the return.

How your German return works

The return consists of a main form and annexes (Anlagen) by type of income: Anlage N for employment, Anlage KAP for capital income, Anlage V for rental income, Anlage S or G for freelance or business income, Anlage AUS and N-AUS for foreign income, Anlage WA-ESt for the year you arrived or left. Married couples resident in Germany can file jointly (Zusammenveranlagung) and benefit from income splitting – usually the better choice when incomes differ. The result is an assessment notice (Steuerbescheid) with a one-month objection period; after that it is final.

Deductions internationals miss

• Relocation costs. Moving to Germany for a job is a work-related expense: transport, travel to find a home, double rent for a transition period, plus a lump sum for other moving costs. If your employer reimbursed you tax-free, nothing further; if not, claim it.

• Double household (doppelte Haushaltsführung). If you keep your family home abroad and rent a flat in Germany for work, rent up to 1,000 € per month, furniture, weekly trips home and a meal allowance for the first three months are deductible – for as long as the home abroad remains the centre of your life.

• Home office. 6 € per day worked at home, up to 1,260 € per year, without proving a separate room. A dedicated home office room can be deducted in full if it is the centre of your professional activity.

• Commuting. 0.30 € per kilometre of one-way distance for each working day, 0.38 € from the 21st kilometre – regardless of how you travel.

• Work-related costs. Professional literature, training, equipment, work clothing, tax advice for your employment income, application costs. A flat 1,230 € is granted automatically; above that, receipts count.

• Childcare and school fees. 80 % of childcare costs up to 4,800 € per child, and 30 % of tuition fees for private schools up to 5,000 € per year – including many international schools in the Frankfurt area.

• Insurance and pension contributions. Statutory pension contributions are fully deductible; health and long-term care insurance largely so; liability, disability and other insurances within limits.

• Church tax. If you registered a religion when you arrived, 9 % of your income tax goes to the church in Hessen. It is deductible as a special expense – and if you did not intend to pay it, deregistering (Kirchenaustritt) stops it going forward.

Foreign income: the part that goes wrong most often

German residents are taxed on worldwide income. Which country actually taxes a given item is decided by the double taxation treaty – and Germany then either exempts the income (typically with Progressionsvorbehalt, raising the rate on your German income) or taxes it and credits the foreign tax. Three situations recur:

• The year you moved. Salary earned before arrival is not taxed in Germany, but it must be declared and raises the rate applied to your German income for that year. Omitting it is a frequent error – and an easy one for the tax office to spot.

• Equity compensation. Restricted stock units and options granted abroad and vesting after arrival are taxable in Germany in proportion to the vesting period spent here. The employer’s payslip rarely gets this right; the return has to.

• Foreign accounts and investments. Interest, dividends and fund income abroad are taxable in Germany at the flat rate of 25 % plus surcharge, with a credit for foreign withholding tax within treaty limits. Foreign investment funds are taxed under German rules, which differ from the fund’s home country. Property rented out abroad is usually exempt in Germany but affects the rate.

ELSTER in English?

ELSTER is the tax administration’s online portal for filing. It is free, it works, and it is in German – there is no English interface for the return itself. It also assumes you know which annex applies and how a treaty position is entered. For a straightforward employee return with no foreign elements, a German-speaking friend and an afternoon will do. For anything involving the year of arrival, equity compensation, property or income abroad, the cost of getting it wrong exceeds the cost of getting it done.

How we work

• Initial call. You describe your situation – employer, arrival date, other income, family. We tell you whether you must file, what a return is likely to yield, and quote our fee in writing.

• Documents. You upload payslips, the annual wage statement (Lohnsteuerbescheinigung), foreign income records and receipts to our secure portal. With your power of attorney we retrieve the data the tax office already holds.

• Return. We prepare the return, explain the positions in plain English, and file it electronically after your approval.

• Assessment. We review the tax office’s notice against the return and lodge an objection within the one-month period if it deviates.

Advice is given by Steuerberater Florian Enders and the tes tax team – a German-licensed tax advisor, in English, fully remote or at our offices in Frankfurt and Liederbach.

Note: This page provides general information on German tax law. A binding assessment of your situation is only possible after engagement and review of your documents. We quote our fees in the initial consultation, before you commit.