Can I change my tax class during the year?
November 30, 2023 | 30,00 EUR | answered by Yvonne Schreiber
Dear tax advisor,
My name is Renata Richter and I am currently working full-time as an employee in a company. I am married and my husband is self-employed. We have chosen tax class IV/IV so far, as we assumed that this would be the most advantageous for us. However, there have been some changes that lead me to consider changing my tax class.
My husband has had a very successful business year and is expected to earn significantly more than in previous years. Therefore, it might make sense for me to switch to tax class III in order to pay less taxes overall. Additionally, we are expecting a baby this year, which will bring additional financial challenges.
My concern is that we may be paying too much taxes due to the current tax class, which could financially burden us. I am wondering if it is possible to change my tax class during the current year and if this would be beneficial for us. What steps would we need to take for this and what would be the implications of a change on our tax burden?
I look forward to your expert advice and thank you in advance for your help.
Sincerely,
Renata Richter
Dear Mrs. Richter,
Thank you for your inquiry regarding a possible change in your tax class. It is understandable that you are thinking about your tax situation, especially in light of the changes in your life such as your husband's successful business year and the expected arrival of a new family member.
First and foremost, it is important to know that a change in tax class is generally possible, even during the current year. In your case, where your husband's financial situation has improved, a switch to tax class III could indeed be advantageous for you. By combining tax classes III and V, you may pay less tax overall, as the tax burden is split between both spouses and your husband, as a self-employed individual, already makes high tax prepayments.
To change your tax class, you will need to submit an informal request to the relevant tax office. It is important that both spouses sign the request and that you can provide evidence of changed circumstances, such as income statements or other relevant documents. The tax office will then review your request and decide on the change in your tax class.
A change in tax class will have an impact on your tax burden, as it may lead to a change in the amount of your monthly tax prepayments. With tax class III, less tax is deducted, resulting in higher net wages. However, it is important to keep in mind that when filing your tax return at the end of the year, the actual tax burden will be calculated and additional payments may be required.
Overall, a switch to tax class III in your case may be beneficial in improving your financial situation. However, I recommend seeking advice from a tax advisor beforehand to consider all possible consequences and alternatives.
I hope this information is helpful to you and I am happy to assist if you have any further questions.
Best regards,
Yvonne Schreiber
