Topic: Capital gains in the tax return 💸

Level: ▰▰▰▱▱▱▱▱▱▱

Final opponent: tax return! 😈 (everything half so wild 😇)

The year is over, the raclette from New Year's Eve lies heavy in the stomach and the booming headache is not only the firecrackers to blame. 🥂

You check your broker and discover that he has given you the tax certificate. 📑 for the past year. Greedily you click through the mailbox and after a tense download you discover good news: capital gains: 4.200,00€!

But what is that? Savers' lump sum? Capital gains tax? And that's when it happens: You think of the next tax return!
😖

Fortunately, the raclette in you does not decide for a spontaneous rally against the direction of travel 🤢, as you calmly know that you have read the following post! 😅

Capital gains are generally subject to a separate tax rate according to § 32d EStG. This amounts to 25% for taxpayers not subject to church tax. The capital gains tax is a so-called "withholding tax"since the tax is withheld and paid at source (simplified: by your bank). 💡

Each taxpayer has an "allowance", the so-called "saver's lump sum" of currently € 1,000, - available, which covers all costs in connection with the income from capital assets in the tax return as a lump sum. 📊

There are two ways to be able to use this allowance:

Option 1 🔵

Tax return at the end of the year.

In the tax return, you enter all investment income, capital gains tax and solidarity surcharges from the tax certificate for the past assessment period. When calculating the income tax, the tax-free amount of 1,000.00 is then taken into account, which reduces your tax burden.

Variant 2 🔴

Send an exemption order to the bank.

Banks are generally obliged to withhold the withholding tax. You can inform your bank with an exemption order from this obligation! But be careful! The amount of this exemption order is limited to the amount of the saver's lump sum (i.e. 1,000.-) across all your building society contracts, depository banks, etc.! So be careful never to give too high exemption orders to your bank! As soon as you have earned capital gains from which no tax has been withheld due to the exemption order, you are obligedto declare these capital gains (or distribute exemption orders) in your tax return! 🛑

Okay! So far you have understood everything. But now you think: That's totally unfair! I as a student, with a mini-job and a few thousand euros capital gains have the same tax rate as a top earner! 😪

✨✨ § 32d para. 6 EStG - Günstigerprüfung! ✨✨

With the income tax return, every taxpayer can apply for a favorable tax treatment review! And the best: this is even calculated by the tax office! 🤝

First it is calculated how high your personal income tax rate is. Due to the progressive income tax rate, the personal income tax rate (average tax rate) is below 25% for a taxable income of up to around 38,000! 😄 If this is the case, your capital gains will be subject to your personal tax rate, which is below 25%!

Calculation example: 🤓

Student, 22 years young, mini-job in a bar and 2,500€ capital gains. Exemption order was not issued, so full 25% capital gains tax (625,-) and 5.5% solidarity surcharge (34.37) were withheld.

The basic exemption amount according to §32a EStG is 10 908,- in 2023 (up to this amount no taxes are due). Thus, the personal tax rate for our student is 0%! 😯

So, if our student does not file a tax return for the year 2023, he will lose a whole 659,37! 😥 Don't be that student! 😏

Do you want more calculation examples? E.g. with higher income and partially granted exemption order?

🏁🏁🏁🏁 Post end! 🏁🏁🏁

I'm sure this is not news to many of the readers. But if I could help a handful of people a little bit with this, I'm already happy!

I look forward to your reactions!

👍 - I know everything already!

🦍 - Roughly known, but still learned something!

🆘 - Huh?! There's that?

🚀 - I evade everything anyway!