One Thousand Euros Awarded
In the current economic climate, submitting an income tax return early can provide significant financial clarity and quicker access to tax refunds or adjustments, especially when dealing with short-time work allowance, tax-exempt supplements, and compensation payments under the Infection Protection Act.
The tax return submission deadlines for taxpayers seeking tax advice and those with income exceeding 410 euros remain unchanged, falling on 28 February 2022 and 2 August 2021 respectively. However, for taxpayers who received short-time work allowance or tax-exempt supplements exceeding 410 euros in 2020, the deadline is 2 August 2021.
The tax filing obligation also applies to those who received compensation payments under the Infection Protection Act. These payments, despite being generally tax-exempt, fall under the so-called progression reserve, increasing the tax rate for the remaining income.
Early submission allows you to promptly claim tax-exempt allowances and supplements, such as compensation payments granted under the Infection Protection Act, which might otherwise delay refund calculations if filed late. These compensations often have specific tax exemptions or relief that the tax office needs to integrate into your overall tax assessment.
Submitting your return early can ensure these amounts are properly accounted for in your income, potentially preventing unnecessary tax demands or enabling quicker reimbursement of overpaid taxes. Filing early can also help you meet the official deadline (typically July 31 of the following year), avoiding penalties or late fees and giving the tax office ample time to process complex income scenarios involving multiple benefits.
The tax return process is crucial for individuals to ensure accurate tax records and potential refunds. The Federation of Taxpayers has provided a "Checklist for Income Tax Return 2020" as assistance for taxpayers. The checklist offers guidance on various aspects of the tax return process, including the reporting of short-time work allowance, tax-exempt supplements, and compensation payments under the Infection Protection Act.
If tax advice is being sought, the deadline for tax return submission is extended to 28 February 2022. The impact of these adjustments varies based on factors such as tax class and tax class combination in the case of spouses or other income. Adjustments to wage tax deductions by employers due to unaccounted income may result in additional tax demands during the tax return process.
On average, taxpayers can expect over 1,000 euros in refunds from the tax office if a refund is due. The tax return process is not influenced by the receipt of short-time work allowance, tax-exempt supplements, compensation payments under the Infection Protection Act, or wage replacement benefits.
Participation in the tax office’s pre-filled return system (ELSTER) minimizes errors, expedites refunds, ensures correct application of tax exemptions on special allowances like Infection Protection Act payments, and provides financial certainty. Early submission of tax returns, coupled with the use of the Income Tax Return 2020 Checklist provided by the Federation of Taxpayers, can help taxpayers navigate the tax return process with ease and clarity.
- Prompt submission of tax returns is beneficial for personal-finance, as it ensures that tax-exempt allowances and supplements, such as those granted under the Infection Protection Act, are properly accounted for in one's income, potentially preventing unnecessary tax demands or enabling quicker reimbursement of overpaid taxes.
- For those who received compensation payments under the Infection Protection Act, early tax return submission is crucial to claim these payments, as they fall under the so-called progression reserve, increasing the tax rate for the remaining income, and might otherwise delay refund calculations if filed late.
