What happens if I want to change my tax class as a self-employed person?
December 6, 2023 | 40,00 EUR | answered by Friedhelm Peters
Dear tax advisor,
My name is Leon Weise and I am self-employed. Currently, I am classified in tax class III, as my wife is not employed. However, I recently learned that it may be advantageous to switch to a different tax class in order to save taxes. I am concerned that changing tax classes could have negative effects on my financial situation and would like to learn more about what happens when I, as a self-employed individual, want to change my tax class.
My current situation is as follows: I earn an average income as a self-employed individual and pay taxes accordingly in tax class III. My wife is not employed and falls into tax class V. We do not have any children and no extraordinary tax deductions.
I am now wondering if it would be wise to switch to a different tax class and what impact this could have on my tax burden. Are there specific requirements that I need to meet in order to change tax classes? How should I best proceed to apply for the change and what documents are required for this?
I would greatly appreciate it if you could help me and provide possible solutions to optimize my tax burden. Thank you in advance for your assistance.
Best regards,
Leon Weise
Dear Mr. Weise,
Thank you for your inquiry regarding a possible change of tax class as a self-employed individual. I understand that you are considering whether a change of tax class could be advantageous for you and what impact this could have on your financial situation.
First of all, I would like to explain that self-employed individuals are not generally classified into the regular tax classes I to VI, but rather based on the income they earn from their self-employment. This means that as a self-employed individual, you do not automatically have the option to change your tax class as employees in dependent employment can do.
As a self-employed individual, you typically pay income tax based on the profit from your self-employment. This profit is usually determined by subtracting your business expenses from your income. The amount of income tax depends on the personal tax rate derived from your taxable income.
In your case, as a self-employed individual with an average income and your non-working wife, you should consider whether it might be beneficial to employ your wife as a marginal employee. This way, your wife could be classified in tax class IV and you may be able to save taxes, as you would be jointly assessed and the tax burden would be distributed between both spouses.
To apply for a change of tax class, you must contact your local tax office and submit a corresponding application. You should provide all relevant information such as your income situation and your wife's income. Additional documents such as income proofs or tax assessments may be required.
It is important to seek comprehensive advice before changing tax classes to ensure that the change is indeed advantageous for you and does not have any negative impact on your financial situation. I recommend scheduling an appointment with a tax advisor in your area to analyze your individual situation and find the best solutions for optimizing your tax burden.
I hope this information has been helpful to you and I am available for any further questions.
Best regards,
Friedhelm Peters, Tax Advisor
