Save taxes

Many taxpayers are keen to reduce their annual tax liability as much as possible and thus save tax. There are various ways to do this. In addition to tax-saving tips and tricks for tax returns, expenses and investments can also be used to save taxes. We will show you the best way to achieve the greatest possible tax savings.

Tax return tricks

Various tricks can help you save money on your tax return.

  • So it makes sense to take advantage of deadlines. If you are not obliged to submit a tax return but do so voluntarily, you have until December 31, 2023 to submit your 2019 tax return, for example. The longer you wait to submit your return, the higher the interest on refunds.
  • Additional expenses for meals are also one of the tax return tricks. When traveling on business, additional meal expenses are incurred, which are covered by various meal allowances. While this amounts to €14 on the day of arrival and departure and for 8 hours of absence, you are entitled to compensation of €28 for 24 hours of absence. This means you can reduce your taxes when you are on a business trip and deduct the cost of meals.
  • It is also a good idea to collect receipts from the beginning of the year as part of the flat-rate advertising allowance. Collecting receipts early can help to ensure that the flat-rate advertising allowance of €1,000 is exceeded at the end of the year. You can claim all costs in excess of this amount for tax purposes and thus save tax.
  • The same applies to travel costs. For business travel costs of 15 kilometers per day, 30 cents are charged for each kilometer of one-way travel. With 230 working days per year, this brings you to an amount of €1,035 and thus above the €1,000 lump sum for advertising costs. Long-distance commuters, on the other hand, benefit from a commuting allowance from a distance of 21 kilometers to the workplace. This amounts to 38 cents per kilometer of the one-way journey, so that with 230 working days an amount of €1,835.40 comes about. This means that you are already €835.40 above the flat-rate advertising allowance and can claim this amount for tax purposes.
  • There is a trick to getting as much out of the commuter allowance as possible: Regularly take the most direct route to work, but not the shortest. If there is a Faster route If there is a route that is a little further in terms of mileage, it may still be worth driving this route. This is because you can save more tax. An example illustrates this:
    Shorter route Faster route
    Kilometers 6 km 10 km
    Minutes traveled 23 min. 17 min.
    Working days 230 230
    Deductible from income-related expenses (6 x 0.30) x 230 = 414€ (10 x 0.30) x 230 = 690€

    So if you regularly drive the faster but longer route, you can deduct a higher amount of income-related expenses thanks to the commuter allowance and thus reduce your taxes. In this way, you come closer to the €1000 allowance and benefit from being at work faster.

Reduce taxes: allowances and wages

If you can prove these and other expenses as listed above, you can also receive an individual allowance on your income tax. This allowance is possible because many employees pay more income tax in a year than they should, as this is an advance payment. In this way, you can reduce your taxes.

In order to pay less tax directly over the year, you can save tax to a certain extent with an individual tax allowance. The basic requirement for this is that you have at least €600 per year in expenses such as special expenses, extraordinary expenses, trade costs or similar. Only expenses above the lump sum of €1,200 are taken into account for income-related expenses.

If the written or electronic application for income tax reduction is submitted to the relevant tax office by November 30, the tax-free allowance will be applied to the pay slip in the following month. The full tax-free amount for the current year is divided over the remaining period of the year - i.e. if the application is not submitted until November, the full tax-free amount is applied to December.

Save taxes

Reduce taxes with spending and investments

Another option is to save tax with expenses and investments. Make larger expenditures, such as self-financed training courses, the purchase of a laptop for professional use, etc. in the same year in order to exceed the €1,000 lump sum for advertising costs, as this can reduce your taxes.

You can also save on taxes when buying a property. However, only commissions from estate agents, real estate appraisals or labor costs for renovations or energy efficiency measures can be deducted. The purchase price of the property, land transfer tax and other acquisition costs, on the other hand, are not tax-deductible.

If you rent out the property you have purchased, you can only save taxes by depreciating the acquisition costs on a straight-line basis. Estate agent, lawyer and tax advisor costs, as well as loan interest incurred in connection with the property, can also be deducted. However, the rental income that you generate from the property must be taxed.

You can save taxes with expenses and investments. However, these ways of saving tax only reduce the tax burden slightly and can only be used selectively. So you can use them to reduce your taxes, but there is a better solution for saving taxes completely.

Save more tax: the optimal solution

In order to save more tax, you should therefore make expenses or investments. However, expenditure involves costs that you have to incur yourself just to save a small amount of tax.

Investments, on the other hand, often involve risks and can usually only be depreciated to a small percentage. So not only do you have to spend a lot of money in order to invest, but you also take a certain amount of risk. This does not significantly reduce your tax burden, let alone give you a promising, secure return on your investment.

You want to save more tax: the optimal solution is a direct solar investment.

Not only can you write off up to 60% of the acquisition costs in one year with a photovoltaic system on a leased roof area, but you also make a profit from feeding the electricity generated into the public grid.

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Save taxes

Advantages of saving taxes with a PV investment

  • Maximum tax savings

    The investment deduction allows you to claim 50% of the acquisition costs of your photovoltaic system against tax in one year. In addition, you can deduct a further 20% from tax within the first 5 years thanks to the special depreciation allowance. This allows you to reduce your taxable income in the year you purchase the solar system to such an extent that you ideally have to pay €0 income tax.

  • High return

    By purchasing a PV system, you can not only save a lot of tax, but also generate high profits from the investment itself. You can expect a secure return of over 6.5% per year. If you market the electricity generated directly, a double-digit return is possible.

  • Safe investment

    By purchasing a photovoltaic system, you not only benefit from high returns, but also invest your money safely and risk-free. Thanks to the Renewable Energy Sources Act (EEG), you can count on a minimum remuneration guaranteed by the state on the electricity fed into the grid for 20 years.  

Tax-free income - reduce taxes to €0

In order to save taxes, you can reduce your tax burden to 0 euros with a PV direct investment so that you no longer have to pay taxes. This way you can save money. In the table below, we show you the tax burden of a single person and a married couple, including 9% church tax and solidarity surcharge. We also show you that it is possible to reduce the tax burden to 0 euros. This is possible at any salary level.

Save taxes

The following calculation illustrates the tax savings from a direct photovoltaic investment once again. The employee in this example will have an annual income of €62,000 in 2022, of which €18,206 will go to the tax office after income tax and church tax. However, if he decides to invest in a solar system, he can reduce his taxable income to €0. In this way, you receive your income tax-free:

Jahreseinkommen 2022: 62.000€
➔ Einkommensteuer inkl. Kirchensteuer: 18.206€

Acquisition costs of photovoltaic system 100.000€
Investment deduction amount (IAB) of 50%: €100,000 x 0.5 = 50.000€
Special depreciation 20%: 50,000€ x 0.2 = 10.000€
Straight-line depreciation 5% of the residual value: €40,000 x 0.05 = 2.000€
Zu versteuerndes Einkommen mit PV Investment:
62.000€ - 50.000€ (IAB) - 10.000€ (Sonder-AfA) - 2.000€ =

0€

➔ New income tax on €0 = €0

➔ Tax savings = €18,206

In addition to the tax savings of €18,206, photovoltaic system operators currently generate a return of over 10% per year from their electricity yields !

With a term of 40 years and a return of 10% p.a., this results in income of €400,000 + €18,206 tax savings = €418,206

Would you like to pay tax of €18,206 to the tax office on an annual income of €62,000 or keep your money and earn an additional €400,000?

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Which expenses to make and when?

The last few weeks of the year are crucial: this is when you can make significant tax savings. Because it is often in these final weeks that you decide whether to invest in the old year or postpone expenses until the coming year.

The respective maximum amounts play an important role here. If it is foreseeable that your expenses in the coming year will be lower than in the current year, it is a good idea to make purchases before the end of the year. These can then have a tax-reducing effect and reduce your taxes. The current life situation also plays a role here: Are you retiring soon, taking parental leave or are you at risk of unemployment? If so, you should still incur expenses in the current year that might have been incurred next year.

The situation is different if you can foresee that your income will be higher next year: Due to the progressive tax rate, tax payments are likely to increase in this case. If you only incur expenses in the coming year, you will benefit from being able to save more tax.

Save taxes

Save taxes for employees

The above calculation clearly shows that investing in a photovoltaic system is also worthwhile for employees. Employees with an annual income of €62,000 and an investment in a photovoltaic system save a total of €18,206 in taxes. In addition, you benefit from income from the investment itself and earn a total of €400,000.

The PV system is financed by tax savings on the one hand and by equity on the other. Solar financing is also available, some of which is handled by the company's own building societies.

If you decide to invest in a photovoltaic system as an employee, you are the system operator and therefore an entrepreneur when you purchase and fully feed the electricity into the public grid. This allows you to benefit from both the investment deduction and the special depreciation allowance.

This makes it easy to save taxes as an employee! If you invest in photovoltaic systems through Solar Direktinvest GmbH, you can take advantage of all the associated tax benefits, expect a high and secure return and rely on fast and reliable processing.

Save taxes: Also for the self-employed

If you want to save taxes as a self-employed person, you need to consider similar aspects as an employee. A photovoltaic system is also the best solution for you to efficiently and sustainably save as much tax as possible - up to and including tax exemption.

Would you like to find out more about how you can save taxes as a self-employed person with a direct solar investment? Click here.

Disclaimer: Solar Direktinvest GmbH does not provide tax advice on this sub-page. Whether the tax savings mentioned here can be applied to your individual case can be explained to you in more detail by your trusted tax advisor. 

Contact us if you would like to save taxes with a PV investment!

Are you interested in reducing your tax burden and also securing a high income? Then you should consider a photovoltaic investment.

Solar Direktinvest specializes in the construction of photovoltaic roof systems and solar parks. Thanks to our many years of experience, we can provide you with the best advice and explain how you can save taxes with a solar system.

Wenn Sie mehr wissen möchten, wenden Sie sich einfach mit einem Klick hier unten an uns. Unsere Experten werden sich schnellstmöglich bei Ihnen melden.

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