For many married couples, the tax class combination III and V initially sounds like a clever move: more money remains in the account every month, especially for the partner with the cheaper tax class. But then the tax notice comes and the savings are canceled out by an additional payment.
More net – but no real profit
The logic behind the combination is simple: In tax class III, employees benefit from significantly higher allowances, while in tax class V there is little leeway. This ensures a higher net income on one side in the short term, but balances it out again when you file your tax return – that’s what it says t online.de. In many cases, this effect ends with a hefty additional payment, especially if both partners’ income fluctuates over the course of the year or the difference is smaller than expected.
When the combination makes sense
III/V is not completely useless. According to anwalt.org, this division is particularly worthwhile if one partner earns significantly more – roughly speaking, from a ratio of around 60 to 40 or greater. If the difference is smaller, the advantage is hardly significant and the risk of a high additional charge increases. In such cases, experts recommend leaving both partners in tax class IV or choosing the so-called factor method directly. This means that the splitting advantage can be distributed more evenly.
Tax returns are mandatory
Another point that is easily overlooked: Anyone who chooses III and V always has to submit a tax return. This is required by law, according to anwalt.org. The numbers speak for themselves – according to stb-web.de, almost every second tax return with this combination in 2020 resulted in an additional payment. The reason for this is that the monthly payroll tax does not reflect the actual tax burden. Additional income such as bonuses, overtime or salary increases exacerbate this problem.
Factor method as a way out
The factor method with tax class IV/IV offers one way to minimize the risk of additional payments. Here, the splitting advantage is distributed over both salaries during the year, which leads to more realistic deductions. According to steuerklasse.com, this variant is particularly suitable if the incomes of both partners are not too far apart. So there is usually no surprise at the end of the year.
Reform from 2030
As steueren.de reports, the federal government plans to gradually abolish combination III/V from 2030. The aim is to tax couples more fairly and simplify the process. In the future, tax class IV with a factor will be applied automatically, so that the splitting advantage will be distributed fairly.
Editorial team finanzen.net