How can I find out which tax class is best for me?
May 7, 2022 | 40,00 EUR | answered by Babette Schneider
Dear tax advisor,
My name is Sofia Rademacher and I am currently looking for the optimal tax class for me. I was recently promoted and now earn significantly more than before. I have been in tax class I so far, as I am single and have no children. However, I am now wondering if it would be beneficial to switch to a different tax class in order to save taxes.
My current situation is as follows: I earn a gross monthly income of 3,500 euros and am classified in tax class I. I have no children and no other tax-related peculiarities. Since my partner also earns well, spousal splitting and similar regulations do not apply to me.
My concerns are that due to my promotion, I now have to pay significantly more taxes and I would like to know if there is a way to reduce my tax burden. I have heard that a different tax class might be more favorable for me, but I am unsure which tax class would be the best choice in my situation.
Can you please help me determine which tax class is most suitable for me? What criteria should I consider and what are the advantages and disadvantages of switching tax classes? Are there other ways to optimize my tax burden?
Thank you in advance for your assistance.
Sincerely,
Sofia Rademacher
Dear Ms. Rademacher,
Thank you for your inquiry regarding the optimal tax class in your new professional situation. It is understandable that you are concerned about your tax burden, especially after your promotion and the associated increase in your income. I am happy to provide you with my expertise to help you make a decision regarding your tax class.
In your current situation, you earn a gross monthly income of 3,500 euros and are classified in tax class I. Since you are single and have no children, you have chosen the most favorable tax class for singles so far. Now you are considering whether a switch in tax class would be beneficial in order to reduce your tax burden.
In your case, switching to tax class II for single parents or tax class III for married individuals with higher incomes could be an option. However, since you have indicated that joint taxation with your spouse and similar regulations do not apply to you, we will focus on tax class II. This tax class is intended for single parents and results in a lower tax deduction, as the relief amount for single parents is taken into account.
However, it is important to note that tax class II is only applicable to single parents with children. Since you have stated that you do not have children, a switch to this tax class would not be possible. In your case, tax class I remains the best choice.
There are other ways to optimize your tax burden. These include utilizing work-related expenses, special expenses, or extraordinary burdens to reduce your taxable income. Using tax-free allowances and tax reductions can also help lower your tax burden.
It is important that you seek individual advice from a tax advisor to develop the optimal strategy for tax optimization. I am available for a personal consultation to work together with you on finding the best solutions for your tax situation.
I hope that my explanations are helpful and I am happy to assist you with any further questions.
Sincerely,
Babette Schneider, Tax Advisor
