What do I need to consider regarding the tax deductibility of craftsman services?
June 24, 2024 | 40,00 EUR | answered by Christine Witzelmann
Dear tax consultant,
My name is Erika Wittik and I have a question regarding the tax deductibility of craftsman services. Over the past few years, there have been several renovation works in my house for which I have hired craftsmen. Now, I am wondering which costs I can deduct for tax purposes and what I need to consider.
Currently, I have collected all the invoices for the craftsman services and would like to include them in my tax return. However, I am unsure if all the services are actually tax-deductible and how to correctly report them in my tax return.
My concern is that I may overlook costs that I could actually deduct, resulting in unnecessary tax payments. I would like to take advantage of all possible tax deductions for craftsman services to reduce my tax burden.
Could you please explain to me what requirements need to be met for craftsman services to be tax-deductible? Are there certain works that are not deductible? How exactly should I report the costs in my tax return and what documents do I need to provide?
I would greatly appreciate your support and advice on this matter so that I can fill out my tax return correctly and optimally.
Thank you in advance for your help.
Sincerely,
Erika Wittik
Dear Mrs. Wittik,
Thank you for your question regarding the tax deductibility of craftsman services. It is good that you are thinking about which costs you can declare in your tax return to reduce your tax burden. I will now explain in detail what requirements must be met for craftsman services to be tax deductible and how you can correctly declare them in your tax return.
In principle, you can claim craftsman services as household-related services in your tax return. The prerequisite for this is that the services are related to renovation, maintenance, or modernization measures carried out in your own household. Also, work that serves the renovation of rented properties can be deductible.
On the other hand, purely cosmetic work such as painting the facade or laying carpets are not deductible. In addition, the craftsman services must have been paid in cash or by bank transfer to be tax deductible. You should also ensure that the invoices are correctly issued and contain all the necessary information.
To declare the costs in your tax return, you can either claim the actual labor costs incurred or a lump sum of 20% of the labor costs. In addition to labor costs, you can also deduct travel expenses or material costs. Make sure to keep all receipts and invoices carefully and be able to present them when needed.
I recommend that you seek advice from a tax advisor before submitting your tax return to ensure that you are taking full advantage of the tax deductibility of craftsman services. Your tax advisor can also help you to correctly declare the costs in your tax return and avoid any potential errors.
I hope that this information has been helpful to you. If you have any further questions or need assistance, I am happy to help.
Sincerely,
Christine Witzel
