What are the advantages of tax class 3 for married couples?
April 28, 2022 | 40,00 EUR | answered by Babette Schneider
Dear tax advisor,
my name is Katja Wittkopf and I am married. My husband and I are currently classified in tax classes 4 and 4. We are wondering if it would be advantageous for us if one of us were to switch to tax class 3.
In our current situation, my husband and I earn similar amounts, which is why we are both classified in tax class 4. Now we are considering whether it would be sensible for one of us to switch to tax class 3 in order to potentially take advantage of tax benefits.
Our concern is that due to the incorrect classification in the tax classes, we may be paying too much tax and therefore unnecessarily giving away money. We would like to know what specific advantages tax class 3 offers for married couples and whether it would be financially beneficial for us to make a switch.
What options are available to determine if a switch to tax class 3 would be advantageous for us? Are there specific criteria or calculation models that we can use to calculate the financial impact of a switch? What factors should we consider in our decision?
Thank you in advance for your support.
Sincerely,
Katja Wittkopf
Dear Mrs. Wittkopf,
Thank you for your inquiry regarding tax brackets and their impact on your tax situation. It is good that you are considering whether a switch to tax bracket 3 could be advantageous for you. I am happy to explain the possible advantages and disadvantages as well as the criteria you should consider in your decision.
First and foremost, it is important to know that tax bracket 3 is usually beneficial for married couples when one spouse earns significantly more than the other. By being placed in tax bracket 3, the tax burden of the higher-earning partner is reduced, as they have to pay less taxes. The lower-earning partner will be placed in tax bracket 5, which can lead to a higher tax burden.
If you and your husband earn a similar amount, as you have stated, a switch to tax bracket 3 for one of you could indeed result in tax benefits. However, the exact calculation of the financial impact of a switch depends on various factors. These include the income of both spouses, child allowances, possible deductible expenses, and other tax-reducing factors.
To determine if switching to tax bracket 3 is financially worthwhile for you, I recommend conducting a specific calculation. You can use various online calculators to help you determine the tax savings from a switch. Alternatively, you can consult a tax advisor or tax assistance association, who can perform an individual calculation for you.
In your decision, you should also consider that switching to tax bracket 3 not only affects your current tax situation but also other tax aspects such as the amount of parental leave benefits or pension entitlements. Therefore, it is advisable to seek comprehensive advice before making a decision.
I hope my explanation has helped you with your question. If you need further information or assistance with the calculation, I am at your disposal.
Sincerely,
Babette Schneider
