Save Tax on Relocation
Deductible removal costs can arise for several reasons. The right approach to tax avoidance is needed.
When relocation costs are deductible
The tax office recognizes professional and health reasons for relocation which justify a deduction of the cost of the tax. There is also the possibility of selling part of the costs as a so-called household-related service.
Professional reasons are a move that shortens the workload by at least one hour. The change of place of work or the return from abroad to work in Germany are also among the professional reasons.
Depending on the occupational activity, an improvement in working conditions may be recognized, for example a move to the vicinity of the clinic to be available as a doctor more quickly in emergencies.
A health-related removal is required if due to illness or disability, living space on the ground floor or a move to a handicapped accessible apartment is required. A doctor must certify this reason.
If none of these reasons exist, it is possible to deduct part of the costs as a household service.
Moving for professional reasons
If there are professional reasons, the costs of the move can be deducted as income tax expenses. Advertising costs must always be related to the profession. Therefore, the following applies only to occupational relocations.
Married or single parents can apply for a lump sum of € 1,429 since March 2014, without supporting documents. Married a flat rate of 715 euros, plus 315 euros for each additional person. This lump sum includes, for example, the costs of renovating the old apartment, tips and food for relocation helpers, re-registration of the car or changing the telephone line.
Additional costs can also be deducted with receipts: 30 cents are per kilometer driven deductible for trips to apartment tours. Brokerage fees are deductible only for rental property, not condominiums or home ownership,
Furthermore, you can deduct a double rental payment for up to six months and also the cost of the removal company. If children need tutoring due to the change of school, the costs are deductible up to an amount of € 1,802.
These costs are to be stated in detail in the tax declaration, under the heading of income-related expenses. In addition, the corresponding invoices must be submitted.
Removal for health reasons
If health reasons exist, the costs can be deducted as an extraordinary burden because the move is not related to the profession. Since these are isolated cases, there are no fixed lump sums and no rules on which costs are deductible. The tax office checks whether the costs are reasonable. In addition, it applies a so-called reasonable own share.
Who moves for health reasons, should collect and cancel all bills for craftsmen, helpers, the moving company and the purchase of furniture. The tax office can demand the presentation of the documents. The sum of the expenses included in the cover sheet of the tax return must be entered as an extraordinary charge.
Dismantling household services
Domestic services are jobs that do not require a specialist firm because they can be carried out by themselves. Anyone who commissions a company or a self-employed person to do such work can pay the costs. Companies that help with packing or carrying, for example, count as such a service. Withdrawal is subject to strict rules.
The work must be carried out legally. For this reason, an invoice must be present and this must be paid by bank transfer. The tax office does not recognize cash payments to prevent undeclared work.
Important: When making a transfer, make sure that there is a clear reference to the bill. The invoice number and the date of the invoice must be on the receipt. For collective transfers, it must be ensured that the invoices are listed individually.
The annual maximum limit for deductible household-related services is € 20,000, of which only 20% is deductible, ie a maximum of € 4,000. If, for example, you only have invoices of more than 10,000 euros, only 2,000 euros can be deducted.
The total costs of these services must also be entered in the cover sheet. On an extra sheet all individual items are listed. In addition, the invoices and bank statements supporting the transfers must be attached.
Moving can save a lot of tax. It is important to set aside invoices and receipts and in general to provide proof of their payment. Everyone should think about this when planning the move.
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