How does the deductibility of artisan services work in the income tax return?
December 11, 2022 | 40,00 EUR | answered by Andreas Stricker
Dear tax advisor,
my name is Xenia Meyer and I have a question regarding the deductibility of craftsman services in my income tax return. This year, I have had some renovation work done in my house and would like to know how I can deduct the costs for tax purposes.
The renovation work included the renewal of the roof, the installation of a new heating system, and the renovation of the bathroom, among other things. I have paid a substantial amount for these services and would like to know if and to what extent I can deduct these craftsman costs from my taxes.
I am concerned that I may be doing something wrong or not have important information about the deductibility of craftsman services. Therefore, I would be very grateful if you could explain to me how to correctly declare the craftsman costs in my income tax return and what requirements need to be met.
Could you please explain in detail how the deductibility of craftsman services works and what steps I need to take when reporting the costs in my tax return? Are there specific documents I need to provide in order to deduct the costs? And what are the maximum limits for the deductibility of craftsman services?
I would like to thank you in advance for your assistance and look forward to your response.
Sincerely,
Xenia Meyer
Dear Ms. Meyer,
Thank you for your inquiry regarding the deductibility of tradesman services in your income tax return. I am pleased that you are looking into this matter, as there are indeed some important points to consider.
In general, tradesman services carried out as part of renovation or modernization work in your owner-occupied living space may be tax deductible. This includes, for example, work on the roof, heating system, or bathroom, as mentioned by you. The costs for these services can be claimed as household-related services.
To correctly report the tradesman costs in your tax return, you should collect and keep the invoices and payment receipts. These serve as proof of the work done and the costs incurred. It is important that the invoices are issued in your name and clearly describe the services provided.
However, the deductibility of tradesman services is limited. For household-related services, you can deduct a maximum of 20% of the labor costs from your taxes, but up to a maximum of 4,000 euros per year. For tradesman services carried out as part of renovation or modernization work, there is an additional limitation of 1,200 euros per year.
To correctly report the costs in your tax return, you can enter the relevant amounts in the attachment AUS (Expenses for household-related services and tradesman services). There, you can also indicate how much you have already paid in advance, if applicable.
I recommend that you carefully inform yourself about the applicable regulations and limitations to ensure that you report the tradesman costs correctly in your income tax return. If you have any further questions or need assistance, I am happy to help.
Sincerely,
Andreas Stricker
