If you’re a salaried employee, filing an income Steuererklärung is a necessary part of fulfilling your tax obligations. This allows your employer to deduct the appropriate amount of tax from your monthly salary based on the information provided to them by you. It also helps you claim various expenses & investments as deductions from your taxable income.
As per the income tax law, the declaration is mandatory for individuals earning above a certain slab rate. This includes employees working at private companies, organizations and government entities. Salaried individuals, freelancers, small business entrepreneurs, physicians and other professionals are required to submit their tax declarations to the respective authorities.
For a salaried individual, the declaration is based on their gross income which includes the taxable wages received. It also includes other sources of income such as interest earned on savings or tax-saving investments into instruments like insurance, provident fund (PF) and annuity plans. Apart from these, it may also include deductibles like medical and transport costs, interest paid on loans or mortgages, etc.
The declaration is essentially a form that allows employees to declare their tax-saving investments and expenses as deductions from their taxable income. In turn, this enables them to reduce their tax burden and claim benefits from the government. However, it’s important to note that claiming investments & expenses isn’t a guarantee that you’ll get any benefit from the government.
If you choose to file your tax declaration online, you’ll receive an e-mail at the address specified in your personal account as soon as the notice of your assessment becomes available. This enables you to consult, download and print the document at any time. Alternatively, you can submit your tax declaration by paper and you’ll find the forms on the Ministry of Economy and Finance website or at your local SIP in Gex.
You’ll also have the option of submitting a declaration through your employer. This is a more straightforward process since your employer will be handling all the paperwork and submissions for you. It’s recommended that you consult your tax adviser if you have any questions or doubts.
Although submitting an annual tax declaration isn’t mandatory for employees working full-time within the same company, it’s worth doing so since you might be entitled to a refund. Moreover, submitting a declaration is essential for freelancers and self-employed individuals who charge VAT. It’s also a good idea for those receiving wage replacement benefits (Lohnersatzleistungen) from the district tax office (Finanzamt). The declaration can be submitted from January to April 1 each year.