What are the tax implications of capital income?
May 15, 2024 | 40,00 EUR | answered by Lilli Reuter
Dear Sir or Madam,
my name is Selma Seiler and I work as a freelance writer. In recent years, I have increasingly invested in stocks and funds to profitably invest my savings. Now I am thinking about the tax consequences of these capital gains and would like to learn more about them.
Currently, I regularly generate profits through my investments, which I have not yet taxed. I wonder if I have to report these capital gains in my tax return and what impact this could have on my tax burden. Additionally, I am unsure about how I can claim advertising costs or losses from capital investments.
Since I am not familiar with tax law, I am worried that I may make tax mistakes or suffer financial disadvantages. Therefore, it would be very helpful for me if you could explain in more detail what tax consequences capital gains have and how I should correctly report them in my tax return.
Can you give me tips on how to optimally report my capital gains for tax purposes and whether there are ways to save taxes or claim losses for tax purposes? I would be grateful to learn more from you so that I can handle my capital investments correctly in the future.
Thank you in advance for your support.
Sincerely,
Selma Seiler
Dear Ms. Seiler,
Thank you for your inquiry regarding the tax implications of capital gains as a freelance writer, which you generate through investments in stocks and funds. It is understandable that you are concerned about how to correctly report these income in your tax return in order to avoid possible tax errors and optimize your tax burden.
In principle, all capital gains must be reported in your tax return. This includes not only profits, but also dividends, interest, and capital gains. These income are subject to a flat tax rate of 25%, which is withheld directly by the bank. If your income exceeds the tax-free allowance of €801 (for singles) per year, you must also pay church tax and solidarity surcharge.
If you have losses from capital investments, you can offset them against other capital gains and thus reduce your tax burden. Additionally, you can claim deductible expenses related to the management of your capital investments, such as custody fees, consulting fees, or travel expenses to meetings with your financial advisor.
To report your capital gains in a tax-efficient manner and take advantage of potential tax benefits, I recommend that you carefully collect and review all relevant documents such as account statements, loss certificates, and receipts for deductible expenses. You can also seek advice from a tax advisor who can provide you with individual tips on how to minimize your tax burden and potentially save taxes.
It is important to accurately report your capital investments in your tax return to avoid tax errors and prevent any disadvantages. If you have any further questions or need assistance, I am at your disposal.
I hope that this information has been helpful to you and wish you success in handling your capital gains tax effectively.
Best regards,
Lilli Reuter
