What is the Advantage of a Tax Audit by the Tax Office?

Taxpayers usually do not have a good opinion of the tax office – it is associated with the obligation to give money, reminders, and a lot of paperwork. However, few are aware that these authorities often act to our advantage – among other things, they use beneficial tax audits. In this article, we will attempt to explain their purpose and applications in more detail – you are invited.

Why does the office conduct a beneficial tax control?

Using all available data, the officers conduct a detailed audit and look for the most cost-effective option – not for the tax office, but for the taxpayers. If the tax office positively evaluates the situation, the most advantageous tax option is determined for the affected parties. In practice, beneficial tax control means comparing various regulations to find the best solution for taxpayers.

Of course, this doesn’t mean that no taxes have to be paid, but it can mean that the tax rate is adjusted so that lower amounts are paid. For example, it is checked whether it is more worthwhile to receive child benefits or to benefit from a tax exemption.

It is not necessary to perform complicated calculations yourself and consider all variables – you can be sure that the option proposed by the tax office is the most advantageous. Nothing is imposed, and there remains the right to choose from the available options.

The beneficial control by the tax office relates to child benefits, capital gains, and Riester pensions – thereby offering the most favorable tax option for certain groups.

Beneficial tax control at the tax office for child benefits

In Germany, there are two types of support for parents – child benefits, which are paid throughout the year and amount to 255 euros per child, and the child allowance, which can be claimed in the annual tax return. Unfortunately, one can only choose one of these options, and sometimes it is not easy to determine which option is more advantageous, as the form of these benefits differs significantly.

Therefore, after submitting the tax return with the child supplement, the tax office will conduct a beneficial audit to check whether, in this specific case, child benefits are more favorable. After reviewing the submitted return, you will be informed.

Generally, the higher the income of the parents, the more likely it is that the child allowance represents the better tax solution. But thanks to the office’s measures, you don’t have to worry about it – the best choice will be presented.

Beneficial tax control of capital gains for Riester pension recipients

The Riester pension is a voluntary and private, but state-subsidized additional pension. Providers for this additional insurance can be banks or insurance companies – contributions are paid here until retirement according to the concluded agreement.

As a person investing in Riester, you have the option to deduct the contributions you paid yourself as well as the amounts granted by the state as part of the annual allowance as special expenses in the tax return. However, the maximum amount is only 2100 euros. The final confirmation of whether the tax office recognizes the contributions as a special expense is only given after a beneficial assessment.

Beneficial control of capital gains – withholding tax or personal income tax rate

If income from capital gains exceeds the allowance of 1000 euros, 25% withholding tax must be paid. However, this can be lower if the individual tax rate on income is lower.

Therefore, the tax office checks in a beneficial income tax audit (advantageous assessment of income tax) for the affected parties whether it is more advantageous to pay the withholding tax or to calculate the income from the investments and tax it with the income tax. You have the guarantee that the more beneficial solution is applied, and any overpaid taxes will be refunded by receiving a tax refund from Germany.

Capital gains tax calculator

The audit is conducted by the tax office – however, there are useful tools on the internet that allow you to perform the necessary calculations yourself. This way, you can find out if you can save money.

This is particularly important in connection with capital gains because, in contrast to the previously mentioned cases, you have to request a beneficial control from the office. This is by no means complicated and does not require submitting an application – it is sufficient to express such a wish on a special attachment on which the capital gains are specified in the annual reconciliation.

Beneficial tax control of the tax return – what can you gain?

There is no point in wondering whether an audit would be useful in a specific case, as it is almost always useful and is usually automatically conducted by the tax authorities. You can therefore expect a financial benefit when submitting the annual tax return.

Do you want to fill out the tax return as best as possible and secure the chance for the advantages of a positive tax audit? Use the Taxando tax app from Germany – with this program, you can handle all the formalities in a simple and quick way, taking into account all deductions and allowances.