Taxes, social security contributions etc.
What is there to consider, what applies to students and is there really that much money back here? A few tips
First things first: This page gives a rough overview and serves as an initial orientation. It has no claim to completeness and detailed correctness. Please contact us, if you have any questions.
Taxes are the main source of income for the state and serve to finance facilities and services in the interest of the community. They include the financing of public infrastructure (e.g. roads), education, health and defense. State universities and colleges are also financed from tax revenues. Jeder Studienplatz wird also in der Regel durch Steuern finanziert. As a rule, every place at university is financed by taxes. There are different types of taxes. The highest tax revenue is generated with income and wage tax as well as with sales tax. In principle, all citizens contribute to the state's tax revenues in this way. Depending on the type of tax, the tax revenues flow to the federal government, the federal states or the municipalities.
Taxes are used to finance services and facilities in the interest of the community. They accrue depending on the income earned. There are no tax payments for income below the basic allowance (in 2023 this is an annual gross income of 10,908 euros). Social security contributions, on the other hand, are a statutory compulsory insurance. They serve to protect a broad section of the population from risks that endanger the social livelihood of the individual and the community. Social insurance includes health, pension, long-term care, unemployment and accident insurance. The amount of social security contributions increases with income and is usually paid equally by the employee and the employer. In principle, the social security obligation begins at a monthly income of 520.01 euros. As a result, many students already pay social security contributions but not yet taxes.
In principle, a tax return makes sense if income or wage taxes have been paid in a tax year. For students, it is important whether their studies are a first or second degree: A master's degree is considered a second degree when filing a tax return.
In the first degree (e.g. in the Bachelor's degree program), special expenses of a maximum of 6,000 euros can be claimed in a tax return. It is worthwhile to file a tax return in your first degree if you already have a part-time job with a high salary. However, since most students have jobs below the tax allowance and do not pay wage or income tax, it is often not worthwhile to file a tax return in their first degree. The situation may be different in the year of graduation if taxable employment is pursued after graduation. However, in order to be able to claim special expenses of up to 6,000 euros, the income or wage taxes paid within a tax year must be correspondingly high. This is unlikely to be the case for many students.
In the tax return, the distinction between first and second degree is made differently than, for example, in the case of BAföG. A second degree is a course of study that is already preceded by a completed apprenticeship or a completed course of study. A master's degree also counts as a second degree. In the second degree, study costs can be recognized in full as income-related expenses in the tax return. If the expenses exceed the income, a loss carryforward can be formed and carried over to further tax years. A tax return can therefore be useful in the second degree even if no income or wage taxes have been paid in a tax year.
If the income-related expenses exceed the income in a tax year, these costs can be entered in the tax return and a loss carryforward can be formed. The loss carryforward is automatically carried over to further tax years. As soon as income is generated, the loss carryforward is dissolved.
Income-related expenses include, for example: Semester fees, travel expenses to the university or library, costs for computer or laptop, textbooks and writing materials.
Special expenses include certain costs of private living, e.g. pension expenses, donations and education costs. In the first degree, study costs can thus be deducted from tax as special expenses. However, this is only possible if taxable income was earned in the same year, because special expenses cannot be carried over to the next tax year.
The submission of a tax return is possible retroactively for 4 years. If a loss carryforward is claimed, there is even a period of 7 years.
If you have any questions about your tax return, you can contact the Lohnsteuerhilfeverein or, if necessary, a tax advisor. For example, the tax return can be prepared and submitted free of charge via the online program of the Elster tax office. The Taxfix app can also be a helpful support when preparing your tax return. However, if the tax return is submitted via this, costs will be incurred.
Please contact us if you have further questions.