Child allowance / Advertising costs
May 18, 2011 | 25,00 EUR | answered by StB Manuela Ponikwar
Hello,
our daughter (24) is studying Business Administration / further education after completing her banking apprenticeship.
We are providing her with an interest-free loan for this.
We receive child benefit for her and a tax-free allowance of 7008 euros is included in our tax return for 2010.
Can our daughter separately claim expenses for her studies (including expenses for a semester abroad) as pre-deducted advertising costs in her tax return for 2010?
And can she carry forward a loss carryforward?
What does this mean for the tax-free allowance in our tax return?
Thank you and best regards.
Dear Seeker,
Thank you for your inquiry. In the context of an initial consultation and considering your efforts, I would like to answer your question as follows:
The tax treatment is to be distinguished 1) for you and 2) for your daughter.
1) Tax treatment for you:
Your daughter was born in 1987 or 1986. For birth years from 1983 onwards, child benefit is only paid until the child reaches the age of 25. This criterion also affects other deduction possibilities and allowances that you could claim in your tax return for expenses related to your daughter.
Until your daughter turns 25, you can claim child allowances/child benefit, as well as an additional education allowance of 924 EUR (§33a (2) EStG) if your daughter is living away from home.
The child allowances you have mentioned consist of the actual child allowance of 2,184 EUR and the education allowance of 1,320 EUR, totaling 3,504 EUR per parent, and 7,008 EUR for two parents.
Another requirement for the consideration of children over 18 is that the child's income and benefits do not exceed 8,004 EUR (until 2009: 7,680 EUR) per calendar year.
You either receive child benefit or child allowance. In the context of tax assessment, a comparison is always made to see whether you are financially better off with child benefit or the tax effect of the child allowance. If the child allowance is more beneficial for you, the child benefit will be offset (effectively, you will have to pay it back in this case).
Another deduction, such as tuition fees, is not possible for you.
Once your daughter turns 25 (on her 25th birthday), your entitlement to child benefit/child allowance expires. You can then claim expenses for the support of your daughter as an extraordinary burden in special cases, up to a maximum of 7,680 EUR (§33a Abs. 1 EStG). Once your daughter earns more than 624 EUR, this amount will be reduced accordingly. Publicly funded educational grants may also be taken into account.
2) Tax treatment for your daughter:
To answer your question directly: The tax treatment of your daughter does not have an impact on the allowances in your tax return.
After successfully completing professional training, your daughter's studies are no longer considered a first-degree course, with the (positive) consequence that expenses can be claimed as anticipated work-related expenses in full. Your daughter can also carry forward a loss if there are no corresponding earnings to offset the expenses.
Deductible expenses include, for example:
- Course fees, school fees, or tuition fees
- Work materials, specialist literature
- Travel between residence and place of study
- Additional expenses for meals (flat rates)
- Additional expenses for accommodation away from home
- and all costs for a semester abroad, possibly within the scope of dual residence
Your daughter has at least 4 years (currently disputed to be 7 years) to voluntarily submit her tax return (application assessment). For example, the tax return for 2007 can be submitted by December 31, 2011.
I hope this information has been helpful to you.
Best regards,
Manuela Ponikwar
Tax Advisor
www.ponikwar.de
