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How to save with a tax allowance in ELStAM!

Individuals with high income-related expenses, special expenses, or losses from other types of income (e.g. rental income, business operations, capital assets, etc.) pay too much income tax from their salary each month.

Only when the income tax return is completed can you reclaim the overpaid income tax from the tax office as part of the tax return.

With an application for income tax reduction, you can have the tax office enter an allowance for various tax deductions and your anticipated expenses in the electronic income tax deduction features (ELStAM). During payroll processing, your employer will then reduce your gross salary by the monthly allowance. As a result, income tax is calculated only on the reduced gross salary. This means you pay less tax, as well as less solidarity surcharge and church tax, during the year with an allowance.

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