What does tax without tax mean
Basic tax allowance - what is it?
There are things that everyone needs to live. This includes at least food, clothing, housing and emergency medical care. So that every German can really afford these things, the state has set a so-called subsistence level. This means that when you go to work, there must be enough money left over at the end of the month that you can afford the essentials.
What is the subsistence level?
In 2021, the state assumes that singles will need 9,744 euros a year to secure the subsistence level - that is 812 euros per month. Double the amount of 19,488 euros is available to married couples. So that every German really has this money safe, there is the so-called basic tax allowance.
How does it work with the basic tax credit?
The state says: Anyone who earns money should be able to keep part of their salary a year without having to pay taxes on it. This part of the salary is the basic allowance of 9,744 euros. Many people earn more than 9,744 euros, but certain expenses such as advertising expenses can depress income.
An example: Marie is a trainee and earns 840 euros per month - i.e. 10,080 euros per year. But she also has costs for gasoline and specialist books in the amount of 1,500 euros - for this reason she should definitely file a tax return and enter these costs as income-related expenses. The tax office deducts the business expenses from Marie's salary. This leaves Marie with a so-called taxable income of 8,580 euros. This means that Marie is below the basic tax allowance and does not have to pay any taxes.
What if my income exceeds the basic tax credit?
If you still earn more than 9,744 euros after deducting business expenses, special expenses and extraordinary expenses, then you are still guaranteed the basic tax-free allowance. You only have to pay taxes from the 9,745th euro. Our Tax ABC explains in detail how much taxes are due. How does our income tax system work?
By the way:
Our advisors will help you save on taxes. Find a counseling center near you here: Consultant search.
Do I have to apply for the basic tax credit?
No, every taxpayer is automatically entitled to the basic tax allowance. You neither have to submit an application nor tick a tick anywhere in your tax return.
Is the basic allowance increased regularly?
The Federal Cabinet has to deal with the topic of subsistence wages every two years and submit a report. Politicians then determine whether and, if so, how much the basic tax credit must increase. As a rule, the basic tax-free allowance is then increased, since essential things such as food are also becoming more and more expensive.
The development of the basic tax credit:
|Basic tax allowance 2022||9,984 euros||19,968 euros|
|Basic tax allowance 2021||9,744 euros||19,488 euros|
|Basic tax allowance 2020||9,408 euros||18,816 euros|
|Basic tax allowance 2019||9,168 euros||18,336 euros|
|Basic tax allowance 2018||9,000 euros||18,000 euros|
|Basic tax allowance 2017||8,820 euros||17,640 euros|
|Basic tax allowance 2016||8,652 euros||17,304 euros|
|Basic tax allowance 2015||8,472 euros||16,944 euros|
|Basic tax allowance 2014||8,354 euros||16,708 euros|
|Basic tax allowance 2013||8,130 euros||16,260 euros|
|Basic tax allowance 2012||8,004 euros||16,008 euros|
|Basic tax allowance 2011||8,004 euros||16,008 euros|
|Basic tax allowance 2010||8,004 euros||16,008 euros|
|Basic tax allowance 2009||7,834 euros||15,668 euros|
|Basic tax allowance 2008||7,664 euros||15,328 euros|
|Basic tax allowance 2007||7,664 euros||15,328 euros|
This is an editorial text from the VLH editorial team. There is no advice on topics that are outside the tax advisory powers of an income tax aid association. Consulting services in specific individual cases can only be provided within the framework of the establishment of membership and exclusively within the advisory authority according to § 4 No. 11 StBerG.
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