Filing your German tax return: a basic guide to the Steuererklärung

What the tax return is for

The Steuererklärung is the annual tax return. It exists to work out the tax you actually owe: during the year your employer withholds an estimate (income tax), and with the return the tax office recalculates. If you paid too much, you get a refund.

For many employees it's therefore an opportunity: expenses that reduce your taxable income translate into money back.

Who must or should file

Mandatory in cases such as:

• two employment relationships or additional income above the threshold;
• couples in tax classes III and V;
• parental leave, sick pay or benefits received;
• claiming allowances such as child benefit through a return.

Optional but advisable for everyone else: if you have deductible expenses, filing is almost always worth it.

What you need

Step by step

1. Register on ELSTER. You need your Steuer-ID and usually a second identity confirmation with an activation code.
2. Collect documents during the year. One folder is enough.
3. Complete the main form N plus the annexes you need (N, Vorsorgeaufwand, household services).
4. Submit online and keep the receipts. The tax office can ask for the original evidence.
5. Wait for the assessment notice. If something doesn't look right, you can object within one month.

The most common items

• Income-deductible expenses: commuting (per-kilometre allowance), a daily flat rate for a home office up to an annual cap, computer, work clothing, courses.
• Special expenses: pension contributions, health insurance, donations.
• Household services: cleaning, gardening, maintenance: you get a direct reduction of a percentage of the cost.
• Medical and extraordinary expenses: when they exceed a threshold linked to your income.

Reading your assessment notice

The assessment notice is the official calculation: it shows taxable income, tax already withheld and the result (a refund or an amount owed). Check that the figures used are correct. If the amount doesn't convince you, you have one month to object by writing to the tax office.

Common mistakes

• Never filing at all. You give up refunds that are often substantial.
• Forgetting deductible expenses. Every documented item counts: collect them during the year.
• Losing the income tax certificate. Get it from your employer or the portal.
• Ignoring the assessment notice. Errors can only be corrected by objecting within the deadline.