Full-time job plus freelance job taxes?
Hi guys, I have a question:
If I earn €1,800 net in my full-time job and do freelance work that earns me €900 a month, how do I file my tax return?
Because theoretically, at €900 a month, I'm below the annual allowance. But do I have to declare my full-time job as well? Then I'd be above the annual allowance and pay taxes again, wouldn't I? So, of the €900 that would actually be tax-free, wouldn't I have to declare a portion? It feels like a rip-off.
And what about a part-time job plus freelance work? Does that change anything?
Unfortunately, I have no idea and the nice lady at the tax office couldn't really help me.
I would be happy if someone could enlighten me here.
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First, you must submit the tax registration questionnaire electronically to the tax office within one month of your first activity, Section 138 AO.
If the activity is also to be classified as commercial, a business registration with the municipality is also necessary, Section 14 of the German Trade Regulation Act (GewO).
After the end of the year, you must then submit your income tax return, including your profit calculation (EÜR/balance sheet), sales tax return and, if applicable, trade tax return electronically.
There is no such allowance for fee income.
Yes. The basic allowance applies to all income, including your wages.
Correctly.
Fee income is generally not tax-free within the meaning of Section 3 of the Income Tax Act.
No. There is also a registration requirement and a tax obligation, and all income is lumped together.
Thanks for your painstaking answer! But theoretically, what would I have left each month? If I get a nice €1,800 and then have to pay taxes on it again because I earn €900 as a freelancer (this is student support).
You also pay taxes on your gross income. The withheld wage tax is credited against your income tax due at the end of your tax return.
anTTraXX has already written to you about how exactly the calculation is done.
Nobody here can give you a precise figure because nobody knows the amount of your business expenses, special expenses, extraordinary burdens and tax reductions.
Simply put: You always get more out than you pay in taxes. There is no 100% tax rate in Germany.
Your paid work is either commercial or freelance.
This is how it is calculated
Income from employment + any other income (fee-based work) = sum of income and presumably also = total amount of income
Total income – special expenses – extraordinary expenses = taxable income
The taxable income forms the basis for your income tax burden, which is calculated according to the tariff in accordance with Section 32a of the Income Tax Act.
Any wage tax withheld by the employer will of course be credited against the income tax liability
The basic allowance is always only available for all types of income combined.
Thanks for your painstaking answer! But theoretically, what would I have left each month? If I get a nice €1,800 and then have to pay taxes on it again because I earn €900 as a freelancer (this is student support).
The 1,800 are already "adjusted for income tax"
The 900 will only be assessed through assessment.
Without knowing your advertising costs, business expenses and special expenses, etc., it is difficult to answer
If you want a rough estimate, add up your gross salary and fees (minus any benefits) and deduct your social security contributions (calculated on an annual basis, of course).
Enter the result into the Federal Ministry of Finance's calculator and see what it comes up with. That way, you'll have a rough estimate. And if anyone tries to tell you something about a marginal tax rate, ignore them.
Great, thank you again :))
If you earn income from self-employment, you cannot avoid filing a tax return.
You also have to declare and pay taxes on the €900. The basic allowance applies to all your income, regardless of the source. If your employment relationship is not taxed under tax class 6, the allowance will already be included.
If you are single, you can easily calculate your additional income tax burden from your freelance work based on your marginal tax rate: https://www.socialpolitics-aktuell.de/files/socialpolitics-aktuell/_Political-fields/financing/data-collection/PDF-Files/abbIII21a.pdf
Example: your current taxable income (ie without your fee-based work) is approximately €20,000. According to the tax table for a single person, this results in a marginal tax rate of approximately 25% and thus your additional tax burden on your annual profit of approximately €10,800 x 25% = approximately €2,700 per year.
Why should the €900 be tax-free? The tax-free allowance is €11,604 per year on total income.
This is not a tax-free allowance
Correct. Tax allowance, of course.
You always have to pay taxes on all income.
You are not below the tax-free allowance!
All income is added together and must be taxed