Some employers also contribute to relocation if, naturally, it is due to work. They can even pay all costs in full. But not every boss is so generous. Then incurred expenses can still be deducted in your tax return. Now, you’ll find out what you should look out for.
Did you buy a laptop or a mobile phone?
Did you move last year for work?
Did you work less than 12 months last year?
Was your work commute more than 30 minutes?
Are you married with tax class III/V?
Did you pursue a further education?
Did you receive self-employment income?
You are required to file a tax return.
Filing your tax return is worth it! You will most likely get a very high tax refund.
You can expect a high tax refund.
What needs to be taken into account?
First, it should be clarified whether it is a private or a professional move. Depending on the starting position, the expenses are applied later in the tax return (Steuererklärung). In general, relocation costs can be assigned to different categories:
Moving costs can be
- Special expenses (Sonderausgaben)
- Operating expenses (Betriebskosten)
- Advertising expenses (Werbungskosten)
- Exceptional charges (außergewöhnliche Belastungen)
- Household services (haushaltsnahe Dienstleistungen)
If someone relocates for professional reasons, the expenses can be stated as advertising costs (Werbungskosten) in the tax return (Steuererklärung). However, there are certain conditions, at least one of which must be met in order for the costs to be recognized by the tax office (Finanzamt).
- Moving as part of professional double household management (doppelte Haushaltsführung)
- Relocation is at the request of the employer
- Travel time (round trip) is shortened by at least one hour
- Starting a new job
- Change of job
Moving costs and lump sum (Pauschale)
The actual incurred removal costs can be stated in the tax return (Steuererklärung). There are certain items that are readily recognized by the tax office (Finanzamt).
Deductible costs include
- Travel expenses for relocation preparation
- Rental compensation for up to six months if there is a double rental charge
- Tutoring costs for children
- Registration fees
- Telephone costs
- Kitchen installation
- Lamp installation
- Moving company
- Realtor fees
- Viewing costs
In Germany, there is also a removal fee (Umzugskostenpauschale), which is € 764 for 2018. The amount is doubled for married couples and another € 337 for each additional person in the household.
What can’t be deducted from taxes?
There are also items related to relocation for a job that the tax office (Finanzamt) does not recognize.
- Capital losses and expenses for the previous residence
- Realtor fees when buying a new house near the place of work
- Storage costs
- Expenditures for renovation and equipment in the new residence
Additionally, removal costs can be deducted in other ways. The reason for the move plays an essential role.
Depending on the initial situation, these include
- Special expenses (Sonderausgaben) if someone has moved due to their first vocational training
- Extraordinary expenses (außergewöhnliche Belastungen), if a move is necessary due to health reasons or natural disasters; reasonable burden limit must be exceeded (zumutbare Belastungsgrenze)
By the way: Some expenses incurred for a private move may be tax-deductible within the context of household services (haushaltsnahe Dienstleistungen).