Are there any special regulations for tax class 5?
April 16, 2024 | 30,00 EUR | answered by Babette Schneider
Dear tax advisor,
my name is Daniel Schmid and I work full-time as an employee. My wife is currently on parental leave and receives parental allowance. So far, we have both chosen tax class 4. However, soon my wife will be returning to work part-time and we are considering whether it would be beneficial for her to switch to tax class 5.
We are concerned that switching to tax class 5 could result in financial losses and would therefore like to learn more about any special regulations for this tax class. Are there specific requirements that need to be met in order to benefit from these special regulations? What are the implications of switching to tax class 5 on our total income, and how can we optimize possible tax advantages?
We want to make the best possible decision to optimize our financial situation. Therefore, it would be very helpful if you could provide us with more information about the special regulations for tax class 5 and suggest possible solutions. Thank you in advance for your support.
Sincerely,
Daniel Schmid
Dear Mr. Schmid,
Thank you for your inquiry regarding changing your wife's tax class to 5. I would like to provide you with detailed information so that you can make the best decision possible.
If your wife is working part-time and you are still employed full-time, it may indeed be beneficial to consider a switch to tax class 5. In tax class 5, less income tax is deducted, as your spouse with the lower income pays more income tax in this tax class than in tax class 4. This can result in a higher net payment.
However, there are also some special regulations to consider. For example, under certain conditions, you as a married couple can apply for the so-called "tax class combination." In this case, tax class 3 is chosen for the partner with the higher income and tax class 5 for the partner with the lower income. This combination can lead to tax advantages, as the partner in tax class 3 pays less income tax than in tax class 4.
Furthermore, you should check whether there are opportunities for your wife to use tax-free allowances to reduce her tax burden. This may include commuting expenses to work or work-related expenses.
It is important that you seek individual advice to find the optimal solution for you. A tax advisor can help you evaluate the different options and make the best decision.
I hope that this information is helpful to you and that you can make the right decision for your financial situation. If you have any further questions, please feel free to contact me.
Best regards,
Babette Schneider
Tax Advisor
