Olli’s Saturday School – Einkommensteuererklärung

This was sort of what I did today. Except, being German, my taxes are different. I guess.

Let’s start with a few explanations: I am working full time, so my employer deducts my taxes directly from my salary. Taxes, payment for some social security stuff. They don’t deduct health insurance stuff because I’m in private healthcare. So in fact they pay me a little more because they’re obligated to pay half of my health insurance costs. To a certain degree.

The biggest chunk they keep from my salary is the earnings tax or Lohnsteuer.
They give that directly to our equivalent of the IRS, the Finanzamt.

Since the taxes of employees are paid in advance, we have up to four years to file our taxes, depending on the exact situation, which I wont bore you with. But because I hate keeping track of documents and want it to be done as soon as possible, I usually do it end of February every year.

My Einkommensteuererklärung (literally income tax statement). I could do it by hand, filling in forms the Finanzamt provides, but I prefer to do it via a software that costs me 15 bucks a year. If I wasn’t so bad at keeping track of certain invoices, I could claim a refund for that, too.

The software tells me where to find the information on the paperwork I get from my employer, so most of it is pretty easy to fill.
I tell the Finanzamt how much money I made. How much in income tax and church tax my employer already paid. How much money went into benefits. How much money they gave me to cover costs driving to and from work.

Then I have to tell them (and in some cases file receipts) about my professional expenses or Werbungskosten. Which is a nasty words because it translates to advertising cost and should be Erwerbskosten. Costs related to me making a living.
Clothes or work materials I have to by, travel expenses for business trips, that sort of stuff.
Any other tax allowable expenses like certain types of insurance, maintenance costs for my living arrangements, costs related to the care of sick or old relatives, etc etc etc.

Why we do that? Well, in my case, in a few weeks or months, depending how busy the Finanzamt will be, I will get what we call a Lohnsteuerrückzahlung. An income tax refund. I’ll probably get mine in April or May.

This year I’m expecting something in the very low four figures, which is pretty good.

 

Oh, and you should totally check out Goat Milk Stuff on Youtube or Twitter. Don’t forget Brett Jonas herself, singer and star of the video this blog post started with. ;-)

Olli’s Saturday School – Buying things in Germany

As we covered tipping or “Trinkgeld geben” in last week’s lesson, I figured we’d continue the money-centered theme this week. Who knows, maybe it will come in handy when you plan your next vacation.

So here’s a few words.

cash = Bargeld ((literally and etymologically bare money))

The adjective ((or is it an adverb)) that goes with that is “bar”

debit card = EC Karte (EC = Euro cheque)
While the term “Debit Karte” would be logical to use in Germany, it’s not actually used and will confuse people. Other terms are Geldkarte (money card) or Bankkarte (bank card).

credit card = Kreditkarte

Now the following will be a hard truth to swallow for most Americans. You will not use your credit card in Germany a lot. Get used to carry a little cash around. If you have a debit card, make sure it will be valid in Germany, not all ATMs or payment terminals will take every card. If your card has a Maestro symbol on it, you’re probably good.

Wait, what did he say? No credit card?

Yup. When I’ve been to the states, I’ve used my credit card a lot. Booking into a hotel? Getting my rental car? Paying at a fast food restaurant, a souvenir shop or a pharmacy? Pretty much everything apart from hot dog stands, I guess.

That won’t happen in Germany. Most places accept debit card, but you still should ask first. It wasn’t that long ago that even some supermarkets wouldn’t. ((I am not joking. Ok, it’s been maybe a few years, less than five))

In any event you will not be using your debit card to pay for amounts smaller than say 10 Euro.

I’d list the places that likely won’t accept credit cards, but it’s easier to list places that I am certain will.

Large hotels in cities.
Car rental agencies.

And that’s pretty much it. Restaurants? Maybe, but make sure to ask first.
Supermarkets, electronic retail stores, McDonalds, most non-fancy shops? Nope.
Gas stations? I wouldn’t count on it. The so called “free” ((non-chain)) stations: Most probably not.

You know what’s a common thing to buy with large a mounts of cash? A car. Yup. You can always ask for a discount when buying a car at a dealership and paying cash. There’s no actual reason behind that anymore, it’s a weird sort of tradition.

Something else, by the way: Sales tax. Or Mehrwertsteuer (Value add tax)) as the common term in German is.

Americans are used to a tax added to the price tag. In Germany, if you go shopping, eat at a restaurant or order something from an online shop, the price you see on the price tag or in the brochure or wherever will be the final price.
In fact, it is illegal for business who advertise to consumers, to NOT include the sales tax in the price designation.

In case you are interested: It’s 19% on most common things and less on books and things you buy in restaurants and hotels to eat in.

So, happy shopping, I guess.

And as always, if you have questions or suggestions for the next post, feel free to send me a comment, tweet or use the contact form on this website.