Which tax bracket is best for me as an employee with a side job?
July 27, 2023 | 30,00 EUR | answered by Yvonne Schreiber
Dear tax advisor,
My name is Tobias Prestel and I am employed as a worker. In addition to my main job, I have a side job where I earn additional income. Currently, I am classified in tax class I, as I am single and childless. I am now wondering if it would be beneficial for me to switch to a different tax class in order to take advantage of tax benefits.
My concern is that I may have to pay too much in taxes and therefore keep less of my income. I would like to know which tax class would be most advantageous for me as an employee with a side job, and what effects a change in tax class could have.
I also wonder if it is possible to change my tax class during the current year and how I should go about it. What documents do I need for this and what deadlines do I need to consider? Are there any tax disadvantages that I should consider when changing tax classes?
I would greatly appreciate your expertise and recommendations to optimize my tax situation. Thank you in advance for your help.
Sincerely,
Tobias Prestel
Dear Mr. Prestel,
Thank you for your inquiry regarding your tax class as an employee with a side job. As a tax advisor, I would like to help you and provide you with some information and recommendations.
First of all, it is important to understand that tax class I is the standard tax class for single and childless employees. In this tax class, a higher tax rate is applied compared to the other tax classes. However, if you have a side job and earn additional income, it may be beneficial to consider switching tax classes to take advantage of tax benefits.
In your case, it may be advantageous to switch to tax class IV if you are married or in a registered civil partnership. In this tax class, the income of both partners is assessed jointly, which can lead to tax benefits. If you are not married, you could also switch to tax class II if you are a single parent with at least one child. This tax class also offers tax benefits.
A change of tax class is generally possible during the current year. You will need to submit an application to the tax office. The required documents may vary depending on the situation, but in most cases, the income tax card, income statements, and possibly other documents are needed. It is important to observe the deadlines for the application for a tax class change to ensure a timely switch.
Switching tax classes can also lead to tax disadvantages, for example if higher taxes are incurred. Therefore, it is advisable to seek comprehensive advice beforehand and calculate different scenarios to make the best decision.
I hope that this information has been helpful to you. If you have any further questions or require more detailed advice, I am at your disposal.
Best regards,
Yvonne Schreiber
