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Tax-Class Updation

(Steuerklasse Aktualisieren)

Navigating marriage taxes and financial considerations in Berlin involves understanding the intricacies of the German tax system. Here’s a detailed guide to help you through the process:

Step 1: Legal Marital Status

Before delving into tax considerations, ensure your legal marital status is recognized in Germany. If you were married abroad, register your marriage at the Registry Office (Standesamt) to be officially recognized.


Step 2: Joint or Separate Tax Assessment

Germany allows married couples to choose between joint or separate tax assessment. Joint assessment can be beneficial, especially if one partner earns significantly less. This may result in a lower overall tax liability.


Step 3: Tax Classes

German tax system assigns different tax classes to individuals based on their employment status and income. For married couples, tax classes III/V or IV/IV are common. Class III is usually assigned to the higher-earning partner, while Class V is for the lower-earning partner. Class IV can be chosen for equal income distribution.


Step 4: Changing Tax Classes

Changing tax classes can be done by submitting a tax class change application to the local tax office (Finanzamt). This can be particularly advantageous in cases of significant income disparity. 


Step 5: Marriage Allowance (Ehegattensplitting)

Ehegattensplitting is a tax system that benefits married couples with disparate incomes. It involves calculating the tax as if both partners have equal incomes, potentially resulting in a lower overall tax burden.


Step 6: Income Tax Return

Married couples are required to file a joint income tax return. This involves declaring all sources of income and claiming applicable deductions and credits.


Step 7: Child Allowances and Benefits

If you have children, you may be eligible for child allowances and benefits. This includes child benefit (Kindergeld) and child allowance (Kinderfreibetrag), both of which can positively impact your overall tax situation.


Step 8: Health Insurance Considerations

Health insurance contributions may change after marriage. Explore the most suitable health insurance option for your family, considering both statutory and private health insurance.


Step 9: Inheritance and Gift Tax

Understand the implications of inheritance and gift tax. In Germany, spouses are often exempt from inheritance tax, but this may vary based on circumstances. Seek advice on estate planning to optimize tax implications.


Step 10: Seek Professional Advice

Given the complexity of tax regulations, consider seeking advice from a tax advisor or accountant. They can provide personalized guidance based on your financial situation and help you make informed decisions.


Step 11: Update Personal Information

Notify relevant authorities, such as your employer and the tax office, about your change in marital status. Ensure that your personal information, including your address, is updated to avoid any discrepancies.


Step 12: Utilize Online Resources

Take advantage of online resources provided by the German tax authorities and financial institutions. Online platforms can help you understand your tax obligations, file returns, and stay informed about changes in tax laws.


Step 13: Plan for the Future

As your financial situation evolves, periodically reassess your tax strategy. Consider making adjustments based on changes in income, family size, or other relevant factors.


Remember that tax laws may undergo changes, so staying informed and seeking professional advice can be crucial for optimizing your financial situation as a married couple in Berlin. This guide provides a foundation, but consulting with a tax professional is recommended for personalized guidance.