Anyone who has ever settled their taxes with the German tax office on their own knows that this is often not so easy and pleasant. For this reason, many people decide to seek the help of specialists, most often tax advisors. Their services are, of course, subject to a fee – however, part of these costs can be claimed via the tax return. Who can deduct the costs of a tax advisor? How can tax advisor fees be deducted in Germany? You will find out in today’s post – enjoy!
Deduction of tax consulting costs – worth considering
If you work legally in Germany, you are probably liable for taxes. Fortunately, the current tax system also provides various deduction options, which at least partially allow you to save on taxes. For example, you can use the services of a tax advisor.
Can you then deduct the tax advisor fees in the tax return? Yes – employed individuals have the option to claim these expenses as tax-deductible costs. This applies to the submission of forms:
- N,
- R,
- KAP,
- SO,
- AUS.
On the other hand, the tax consulting costs related to the forms: G, S, L, and EÜR can be deducted as business expenses..
A simple tax return in 12 minutes?
Choose Taxando!
What do tax advisors actually cost?
Before you decide on a tax advisor, you should know the costs involved. The fees are legally regulated in the Tax Advisor Remuneration Ordinance (StBVV) and depend on the value of the matter. Detailed information on the costs of a tax advisor and how they are calculated can be found in our comprehensive guide.
What counts as tax consulting costs?
If you want to deduct tax consulting costs in Germany, it is worthwhile to know in advance what they actually include. Only tax advisor costs that are directly related to the taxable income are deductible.In other words, these expenses must be distinguished as to whether they belong to the professional or private sphere, as they have not been deductible since 2006.
What is considered tax consulting costs in Germany?
- Fees for tax consulting – this refers to advice on tax matters by an advisor, a lawyer, including those specialized in tax law, or an auditor.
- The costs for purchasing software, depreciation of hardware, and the Internet – costs for the tax advisor – also include the purchase price of tax software. Part of the annual depreciation of the computer (used for preparing the tax return) can also be included in these expenses. If the device is used 100% privately, tax consulting costs cannot be claimed in Germany in this case. In addition, the costs also include consultation fees for obtaining information online and the signature card for the submission of the e-declaration via Elster.
- Purchase of tax literature – expenditures for books, e-books, or brochures on tax topics can also be claimed as tax consulting costs. It is important, however, that business magazines do not qualify.
- Travel expenses – this refers to trips to the tax office to discuss tax matters with an official. The same applies to trips to the tax advisor and the income tax assistance association. Note that travel costs for the tax consulting are not travel costs for the sole purpose of submitting a tax return at the tax office.
- Court and legal protection costs – costs for tax advisors or lawyers involved in litigation before the finance court or a federal court are also part of the tax advisor costs..
If you hire a tax advisor, good preparation not only facilitates their work but also saves time and costs. Find out in advance which documents are needed for the tax declaration. With complete and well-organized documents, your tax advisor can work more efficiently and make the most of all savings potentials.
Deducting tax advisor costs in Germany – what amounts are involved?
The German tax office recognizes all expenses for tax consulting as deductible an, provided they do not exceed 100 €.If they are higher, e.g., 200 €, only half of this amount is considered. It is important to note that these expenses do not need to be separated because they are so-called mixed expenses (they cannot be clearly assigned to the private or professional sphere).
Theoretically, in such a case, an estimation should be made of how much of it can be used to determine the income – in practice accepts the German tax office however usually cases where you simply deduct 50% of the tax advisor costs.
Where do I need to enter my tax consulting costs in the tax return?
Tax consulting costs that are deductible must be specified in the annual tax return. Depending on your source of income, you must fill out a different form. An example: As a landlord, you calculate advisory costs with the rent. In this case, you must use form V in your tax return. For pensioners, form R is suitable.
If you are not sure which form to choose or if you have problems preparing your tax return in Germany, try our new tax return software Taxando. This way, you can be sure that all your data is entered correctly and that the costs for the tax advisor are entered correctly in your tax return. The preparation of the tax return with Taxando takes only a few minutes – it couldn’t be easier and faster! If you rely on the help of an experienced tax advisor, you should consider our PREMIUM package !
Maciej Szewczyk
He gained experience as a consultant on IT projects for many international companies. In 2017, he founded the startup taxando GmbH, where he developed the innovative tax app Taxando, which simplifies the filing of annual tax returns.
Maciej Szewczyk combines technological expertise with in-depth knowledge of tax regulations, making him an expert in his field. In his private life, he is a happy husband and father and lives with his family in Berlin.
