How can I reduce my taxes as a freelancer?
April 1, 2022 | 50,00 EUR | answered by Robert Lehmann
Dear tax law attorney,
My name is Anneliese Schönecker and I work as a freelancer. In recent years, my income has increased and I am thinking about how to reduce my taxes as a freelancer.
Currently, I am paying a high tax rate and would like to know what options are available to reduce my tax burden. I have already carefully documented all my expenses and operating costs, but I still feel overwhelmed when it comes to tax matters.
I have heard that there are various tax optimization opportunities for freelancers, such as depreciation of work equipment, using tax benefits for self-employed individuals, or creating reserves for unforeseen expenses.
My concern is that I may overlook or misinterpret tax benefits and end up paying unnecessarily high taxes. Therefore, I would like to know from you what specific actions I can take as a freelancer to reduce my taxes and which tax options are specifically relevant to my situation.
Can you help me optimize my taxes as a freelancer and what steps should I take next to reduce my tax burden?
Thank you in advance for your assistance.
Sincerely,
Anneliese Schönecker
Dear Mrs. Schönecker,
Thank you for your inquiry regarding optimizing your tax burden as a freelancer. It is understandable that you are thinking about how to reduce your taxes, especially if your income has increased in recent years. I will now show you various ways in which you can optimize your taxes as a freelancer.
First of all, it is positive to hear that you have already carefully documented your expenses and operating costs. This is an important basis for tax optimization. As a freelancer, you have the opportunity to claim various expenses for tax purposes, such as work materials, office rent, telephone and internet costs, further education, professional literature, insurance, and much more. It is important that you keep all relevant receipts and invoices to be able to prove these expenses to the tax office.
Furthermore, as a freelancer, you can benefit from tax advantages for self-employed individuals. These include, for example, the small business regulation, the VAT exemption for small businesses, the use of actual taxation, the lump-sum determination of profits according to § 4 para. 3 EStG, or the regulations regarding input tax deduction entitlement. It is advisable to familiarize yourself with these tax options and, if necessary, seek professional support to find the optimal solution for you.
Additionally, as a freelancer, you can set aside reserves for unforeseen expenses to be financially secure in difficult times and reduce your tax burden. Furthermore, you can reduce your taxes through the use of tax-favorable investments, such as the acquisition of depreciable assets or the use of special depreciation.
To further optimize your taxes as a freelancer, I recommend regularly reviewing your tax situation and making adjustments if necessary. It may be sensible to seek advice from a tax advisor or a lawyer specializing in tax law to fully exploit all possibilities for optimizing your tax burden and not overlook any tax benefits.
I hope that this information will help you in optimizing your taxes as a freelancer. If you have any further questions or need professional support, please feel free to contact me.
Best regards,
Robert Lehmann
Tax Lawyer
