Freelance side job
May 15, 2012 | 40,00 EUR | answered by Michael Herrmann
Dear Sir or Madam,
In addition to my regular office job, I am planning to earn a monthly supplementary income through freelance writing, with varying monthly amounts (approximately 10-200 EUR per month).
Do I need to report this secondary activity and the income/expenses to the tax office before the annual tax return?
Are there earning limits?
What should I consider regarding social security contributions?
Where else do I need to report this secondary activity or income?
Thank you!
Kind regards,
G.
Dear inquirer,
First of all, thank you for your inquiry, which I am happy to answer based on the information you provided and in the context of your involvement in an initial consultation. The response is based on the facts described. Missing or incorrect information about the actual circumstances can influence the legal outcome.
Writing activities are generally not required to be registered as a freelance activity. You may/should inform the tax office so that a new tax number can be issued and the determination of advance payments can be reviewed. Tax liability applies to the profit from the activity, i.e. the surplus of income over expenses, not just the income. Secondary income (no other income besides the employee salary) of up to 410 euros per year is tax-free. If it exceeds 410 euros but is below 820 euros per year, the tax office only sets reduced taxes. This regulation is independent of the total income level. Quarterly advance payments are set if the tax repayment is 400 euros or more.
For low income levels, it is recommended to take advantage of the option of small business status for VAT purposes. You will then not have to pay VAT and submit monthly VAT advance returns, or file the annual declaration.
Regarding social security issues, you should contact your health insurance company, as only tax-related issues can be discussed here for legal reasons.
I hope that these details have provided you with a sufficient overview of the situation in the context of your involvement and this initial consultation.
Sincerely,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax consultant
