Tax on interest income
March 28, 2011 | 20,00 EUR | answered by Dipl.BW/SB Ulrich Stiller
Hello!
I have a pension of approximately €5,000 per year and interest income of approximately €20,000 per year. After applying for a favorable examination, the tax office assesses the taxable income at €25,000 according to the table.
Is that okay?
My objection would be that at a taxable income of approximately €16,000, the marginal tax rate is above 25% and therefore higher than the flat tax rate. This means that my interest income exceeding €16,000 will be taxed more heavily than under a comparable flat tax.
How should I proceed?
Dear client,
Thank you for your inquiry, which I would like to answer based on the information you provided and in the context of your initial consultation as follows:
You cannot calculate it like that.
Pension income is not fully taxed. If it is a pension from the statutory pension insurance that existed on January 1, 2005, the taxable portion is 50%. After deducting the lump sum deduction of €102, the pension is subject to taxation with an amount of €2,398. For capital income, there is a lump sum deduction of €801, so €19,199 should be used here.
The total amount of income is then €2,398 + €19,199 = €21,597. You can still deduct special expenses such as health insurance, nursing care insurance, etc. If we estimate these (I do not know your detailed payments) at €1,500, deduct the lump sum deduction of €36 for special expenses, then the taxable income is €20,061, which will result in an income tax of €2,717 for the year 2010 according to the basic table. The paid flat tax will be deducted from this, resulting in an income tax refund, i.e. the taxation will be lower within the framework of joint assessment. There are likely to be additional allowances, such as the age relief amount, which can lead to further benefits.
The exact tax burden can only be calculated by examining and presenting detailed documents, which is not possible for the minimum fee of €20.
I hope I could be of assistance to you.
Sincerely,
Ulrich Stiller
Tax consultant / Graduate in Business Administration
