In which tax bracket am I if I work as a self-employed person?
July 29, 2022 | 40,00 EUR | answered by Dirk Voigt
Dear tax consultant,
I am Dennis Krause and I work as a self-employed individual in my own business. In my current tax situation, I am unsure in which tax class I will be classified as a self-employed individual. I have heard that self-employed individuals are classified into a special tax class that differs from the tax classes for employees.
Currently, I am working as a sole proprietor and do not have any employees. I have heard that the tax class for self-employed individuals can have an impact on the amount of my tax burden and therefore want to ensure that I am classified in the optimal tax class. My concern is that I may be paying taxes in the wrong amount or not fully utilizing tax benefits, as I am not exactly sure which tax class is the right one for self-employed individuals.
Could you please explain to me in which tax class self-employed individuals are classified and how it differs from the tax classes for employees? Is there a possibility to change my tax class in order to optimize my tax burden? I want to make sure that I take advantage of all tax options and would appreciate your support and advice on this matter.
Thank you in advance for your help.
Sincerely,
Dennis Krause
Dear Dennis Krause,
Thank you for your inquiry regarding tax classes for self-employed individuals. As a tax advisor, I can help you and explain how self-employed individuals are classified in tax classes and how they differ from tax classes for employees.
In general, there is no specific tax class for self-employed individuals. Instead, self-employed individuals are taxed based on their profit from self-employment. This means that your profit will be declared as income from self-employment in your income tax return and taxed accordingly. Unlike employees, who are classified into tax classes I to VI, the tax burden for self-employed individuals depends on the taxable income and applicable tax rates.
It is important to keep detailed records of your income and expenses as a self-employed individual to accurately determine your profit and calculate the tax burden correctly. As a self-employed individual, you also have the opportunity to deduct certain business expenses from your taxes to optimize your tax burden. This includes expenses such as office supplies, travel to business appointments, training courses, or rent for your office.
If you are unsure whether you are maximizing all tax options, you can consult a tax advisor. A tax advisor can help you optimize your tax burden and potentially take advantage of tax benefits available to you as a self-employed individual.
Unlike employees, self-employed individuals are not able to switch tax classes. Instead, it is important to carefully plan and review your tax affairs to ensure that you are not missing out on tax benefits and calculate your tax burden correctly.
I hope this information is helpful to you. If you have any further questions or require individual advice, I am happy to assist you.
Best regards,
Dirk Voigt
