More money in the account: When does a tax class change pay off?

This is how the control class assignment works

In Germany there are six tax classes that are assigned to the taxpayer by the tax office. Each tax class has its own criteria. Each single employee is automatically assigned to tax class I without children. Tax class II is intended for single parents, the single parent has to tax less tax here. The tax classes III and V are linked because they can be combined with each other if a couple who wants to do so because of a tax advantage. If a couple does not make this application, it is automatically assigned to tax class IV by the tax office. The last tax class, the tax class VI, applies if a taxpayer does several jobs. The taxpayer must then tax a second job over 450 euros in tax class VI, this class has the highest payments. As usual, the first job remains in the respective tax class I, II, III, IV or V. The tax class VI, as well as the tax classes III and IV, is a tax class that is combined.

Why should you change?

What many do not know is that you get your tax class assigned from the responsible tax office, but you can have changed once a year in the event of corresponding circumstances. This is worthwhile in that the net content increases due to the change. A tax change can therefore bring more money to the account every month without additional work.

When is the tax class change for singles worthwhile

For singles, a change in tax classes is actually only an option if your living conditions change, i.e. you will become a single parent or marry. Otherwise they are bound to tax class I. If a single single parent becomes, it can switch to tax class II. This pays off because this class provides for lower payments and higher allowances, and a relief amount can also be claimed. In order to qualify for switching to tax class II, the single parent alone must conduct a household and must not live in any marriage -like or registered partnership. In addition, the child must live in the same household at the single parent.

For example, couples benefit from a tax class change

In any case, a couple should register a spouse splitting at the tax office. The annual income of both spouses is added and then halved. The taxes are then calculated according to the amount of the associated control classes. As good as in every case, it is cheaper than being taxed individually.

As already mentioned, married couples are classified by the tax office in tax class IV after their wedding, both in this case pay the same wage tax rate. This is often also profitable if both partners receive an approximately the same income. If the couple wants to stay in tax class IV, since it has only lower income differences, it is still worth taking a look at the tax variant IV with a factor. The spouses are not equally taxed by the factor, which can become an advantage. Nevertheless, this option is more recommended for less large wage differences.

If one partner earns significantly more than the other, the couple can apply for a switch to the tax classes III and V, which will be profitable about a 60:40 ratio. The less earning person is assigned to tax class III and thus pays a higher percentage income tax rate, while the partner is assigned to the higher income of tax class V and has to pay less income tax. In the end, the couple benefits from an overall lower tax burden and, as a result, has more money in the account. This combination regulation for married couples also makes sense if one of the partners will soon receive unemployment benefits, which should then be entered in tax class III.

If a couple only decides for the combination model from the control classes III and IV after the wedding, this can be entered retrospectively by the date of the wedding, so the couple receives money back. A regulation that has existed since January 2018 also states that a partner can apply for a tax class change to tax class IV alone, he no longer needs the partner’s consent. This should prevent a partner from being unintentionally in a higher tax class. This regulation can become useful if the couple lives in a separation year, for example.

Editor finance.net