Lexware QuickSteuer Deluxe 2021, für die Steuererklärung 2020, Download

Deadline for filing your 2020 tax return

If you are required to submit a tax return for 2020 and do not have it prepared by a tax advisor or an income tax assistance association, the tax office expects it to be submitted on 2 August 2021.

Rising basic allowance

The basic allowance will increase in 2020 from €9,168 to €9,408. For jointly assessed spouses/partners, the basic allowance will be double.

Tax advantages for home office

The strict rules on deducting income-related expenses for the use of a home office continue to apply even during the Corona crisis. Anyone who works in a home office and has another workplace in the company, or who only uses a work corner at home, is left empty-handed when it comes to deductible expenses for a home office.

Hesse's and Bavaria's finance ministers have therefore proposed that every taxpayer who has to work in a home office because of Corona should be allowed to deduct a flat rate of 5 euros for each day, up to a maximum of 600 euros per year, as income-related expenses. And this is irrespective of whether only a work corner was used or whether another workstation could have been used in the company.

Short-time allowance - tax allowance required

Anyone who received more than €450 in short-time allowance in 2020 will be required to file a tax return next year. In a press release dated 23.9.2020, the Bavarian Minister of Finance proposed to introduce a tax allowance of €6,000 for recipients of short-time allowance. This is intended to prevent short-time workers from having to make back tax payments because of the short-time allowance.

Higher relief amount

In the Second Corona Tax Relief Act, the relief amount for real single parents was increased by 2,100 euros for 2020 and 2021. The relief amount is only available to "genuine" single parents. These are taxpayers whose household includes at least one child for whom they are entitled to child benefit or the child allowance. The relief amount was previously 1,908 euros and is increased to 4,008 euros by the new regulation in the Second Corona Tax Assistance Act. For each additional child, the real single parent is entitled to a relief amount of 240 euros each.

More support payments deductible 

If you support your parents or your child (who no longer receives child benefit) financially, you may deduct these payments in 2020 up to a maximum amount of 9,408 euros as an extraordinary burden.
If you also assume the contributions to the health and long-term care insurance of the supported person, the deductible maximum amount increases by these additional payments. If the supported person has his or her own income, this income, which exceeds 624 euros, reduces the maximum deductible amount.

Reduction in the old-age relief amount

If you have celebrated your 64th birthday in 2019, you are entitled to an old-age relief amount for tax purposes for wages, for income from self-employment and for rental income from 2020. From 2020, this amounts to 16% of this income throughout your life, up to a maximum of €760 per year.

Higher deduction for household savings

If you had to live in a home in 2020 because of a disability, illness or need for care, you are allowed to deduct these home accommodation costs as an extraordinary burden . However, the expenses paid out of your own pocket are not only reduced by the reasonable burden, but also by a household saving if you have given up your home because of the institutional care.

Higher special expenses deduction for pension insurance contributions

If you make a contribution to a statutory pension insurance scheme or a Rürup contract in 2020, 90 percent of your contribution payments are generally deductible as special expenses. However, this only applies up to a maximum amount of 25,046 euros/50,092 euros (single persons/co-assessed spouses). If you pay these maximum amounts in 2020, 90 percent of them are deductible, i.e. a maximum of 22,541 euros for single persons and 45,082 euros for married couples assessed jointly or partners in a registered civil partnership.

Higher tax-free contributions to company pension schemes

Employers and employees will also have to take account of tax changes in 2020 with regard to company pension schemes. If the contribution payments to a direct insurance, a pension fund or a pension fund originate from a salary conversion, the following contribution payments will remain tax and duty-free in 2019:

• Tax exemption: according to § 3 No. 63 EStG, in 2020 contribution payments of the employee in the amount of 6,624 Euros remain tax exempt (8% of the contribution assessment ceiling of 82,800  Euros).
• Social security exemption: In 2020, contribution payments in the amount of Euro 3,312 remain exempt from contributions (4% of the income threshold of Euro 82,800).

Pension allowance for pensioners in 2020 

As with a company pension, the tax office will deduct the following amounts from a pension if the pension starts before or in 2005:

• Pension allowance: a pension allowance of up to €3,000 is deducted. The percentage and the maximum amount are reduced for each new pension year.
• Surcharge: In addition to the pension allowance, the tax office deducts a surcharge of up to 900 euros per year. This supplement is also reduced for each new pensioner cohort.
• Lump-sum allowance: Company pensioners receive an annual lump-sum allowance for income-related expenses of 102 euros if they have pension contributions.

The pension allowance and the supplement to the pension allowance are reduced for each new pensioner cohort. The pension allowance and the supplement decrease in percentage and amount for each additional retirement cohort from 2006 onwards. For retirements from 2020 onwards, the pension allowance is 16%, up to a maximum of 1,200 euros per year. The deductible supplement amounts to 360 euros.

Extension of the investment period

For profits from the sale of certain assets - including buildings - the Income Tax Act allows the creation of a reserve. The tax office normally expects a new building to be acquired or constructed within four years of the year of sale. If no investment occurs within that 4-year period, the reserve must be released and the gain taxed.

However, the Second Corona Tax Relief Act extended this investment period by one year. If the reinvestment reserve still exists at the close of the fiscal year ending after Feb. 29, 2020, and before Jan. 1, 2021, and would be required to be released, the reinvestment period will not end until the close of the following fiscal year.

Re-introduction of declining balance depreciation

In the case of investments in movable fixed assets, entrepreneurs were previously only able to calculate depreciation using the so-called straight-line method. For investments in the period between 1 January 2020 and 31 December 2021, entrepreneurs will benefit from the reintroduction of declining balance depreciation in the Second Corona Tax Assistance Act (Section 7 (2) EStG).
The declining balance depreciation is 2.5 times the straight-line depreciation rate, up to a maximum of 25% of the acquisition or production costs or the residual book value in subsequent years.

Higher trade tax credit for income from business operations

Entrepreneurs who are commercially active within the scope of a sole proprietorship or as co-entrepreneurs of a partnership will receive a credit for (part of) the trade tax payments against their income tax. Previously, the tax credit was 3.8 times the trade tax assessment amount. In the Second Corona Tax Assistance Act, the credit of trade tax against income tax is increased from 3.8 times to 4.0 times the trade tax assessment amount.

Additions to trade income in accordance with § 8 No. 1 GewStG - higher tax-free amount from 2020

When determining the trade income, the tax office adds expenses for interest, rents for movable and immovable assets and for licenses to the trade income on a pro rata basis. According to the previous wording of the law, an allowance of EUR 100,000 was deducted from the calculated additional amount. Of the amount remaining after this, only 25% is ultimately added to the trade income.  
The tax-free amount of EUR 100,000 has been increased in the Corona Tax Assistance Act for 2020 from the previous EUR 100,000 to EUR 200,000. As a result, small and medium-sized entrepreneurs in particular should be largely spared the additions for interest, rents & co