How does the tax deductibility of special expenses work?
October 22, 2022 | 50,00 EUR | answered by Robert Lehmann
Dear tax lawyer,
I am reaching out to you with a question regarding the tax deductibility of special expenses. I have heard that certain expenses, which do not fall into the category of business expenses or operating expenses, can be claimed for tax purposes. As I am currently working on my tax return for the past year, I am very interested in understanding how these special expenses work and which expenses are included.
In my current situation, I have incurred various expenses that I believe could be deductible as special expenses. These include donations to charitable organizations, contributions to retirement savings, as well as expenses for health and long-term care insurance. However, I am unsure of whether and to what extent these expenses can be taken into account in my tax return.
My concern is that I may be missing out on tax benefits by not correctly reporting the special expenses. Therefore, I would like to know from you how I can best take advantage of the tax deductibility of special expenses and what specific steps I need to take in my tax return.
Could you please explain to me how the tax deductibility of special expenses works and which expenses fall into this category? Are there specific requirements that I need to meet in order to claim special expenses for tax purposes? And what documents do I need to provide to prove the deductibility of special expenses?
I thank you in advance for your assistance and advice.
Sincerely,
Wilhelm Hoffmann
Dear Mr. Hoffmann,
thank you for your question regarding the tax deductibility of special expenses. I am pleased to be able to provide you with detailed information on this matter.
Special expenses are expenses that are not considered as business expenses or operating expenses, but can still be claimed for tax purposes. This includes donations to charitable organizations, contributions to retirement savings, as well as expenses for health and long-term care insurance. These expenses can reduce your tax burden and result in lower tax payments.
In order to take advantage of the tax deductibility of special expenses, certain requirements must be met. Firstly, the expenses must have actually been incurred and can be proven. This means that you must provide receipts and evidence of the expenses incurred. Secondly, the expenses must meet certain legal requirements in order to be recognized as special expenses. This includes, for example, the maximum limits for deductible amounts and the recognition of the respective types of expenses by the tax office.
For donations to charitable organizations, only donations to tax-exempt organizations are deductible as special expenses. It is important that you receive a donation receipt from the organization in order to claim the donation for tax purposes.
There are also specific regulations for contributions to retirement savings, particularly regarding maximum amounts and the type of retirement plan. Contributions to health and long-term care insurance can also be deductible as special expenses under certain conditions.
In your tax return, you must report the special expenses in the corresponding annex (such as the annex for retirement savings, donations, etc.) and attach the relevant receipts. It is important to accurately and completely report all relevant expenses in order to benefit from the tax advantages.
I recommend that you familiarize yourself with the current legal regulations and consult a tax advisor if necessary to ensure that you correctly report all special expenses and do not miss out on any tax benefits.
I hope this information is helpful to you and I am happy to assist you with any further questions.
Best regards,
Robert Lehmann
