Best tax return software Germany 2022

Doing tax returns in Germany is almost always financially rewarding. But understandably, preparing and filing your tax return may not be one of your favorite things to do. You may even be facing this task for the first time. If so, you may be comforted that nine out of ten people who file a tax return in Germany also receive a refund from the government.

And those who voluntarily file their tax return will get a refund in most cases, with a tax program that helps you step by step, in simple language and partly in English, to create your tax return. So the tax return is no longer a big problem, and many tax software even give tips on how you can save taxes. This way, the annual tax return can be fun.

Note for expats: You can deduct a job-related move from your taxes and get reimbursed. 

Who has to file a tax return in Germany at all?

Doing tax returns in Germany is almost always financially rewarding. But understandably, preparing and filing your tax return may not be one of your favorite things to do. You may even be facing this task for the first time. If so, you may be comforted that nine out of ten people who file a tax return in Germany also receive a refund from the government.

And those who voluntarily file their tax return will get a refund in most cases, with a tax program that helps you step by step, in simple language and partly in English, to create your tax return. So the tax return is no longer a big problem, and many tax software even give tips on how you can save taxes. This way, the annual tax return can be fun.

What is the income tax “Einkommenststeuer”?

The German government collects income tax based on how much money you earn in a year and other factors, such as your marital or family status.

How much income tax do I have to pay in Germany?

The higher your German income, the higher your tax rate is. Married people can have significant income tax advantages in Germany.

Scenario 1: The maximum tax rate is 45% and only applies to income above 277,826 euros per year if you are unmarried or not in a civil partnership.

Scenario 2: For couples married or living in a civil partnership, the maximum tax rate of 45% only applies if you earn more than 555,652 euros.

Filing deadline for the 2022 tax return?

During the last decades, the deadline for filing the previous year’s income tax return was always May 31. In 2022, this has now changed due to the Corona Pandemic. The draft by the Federal Ministry of Finance now gives taxpayers until September 30, 2022, to submit their 2021 tax return to the relevant tax office.

If you would like assistance in preparing your tax return, you can contact a tax advisor or turn to an income tax assistance association. This will automatically extend the deadline for submitting your tax return. With the help of a tax advisor, you always have a deadline extension until the end of February of the year after next. For the 2021 tax return, you would then have until February 28, 2023.

What is a tax class “Lohnsteuerklasse”?

All German taxpayers get a tax class (Lohnsteuerklasse), which also applies to foreigners living and working in Germany. This tax class determines the amount of income tax you have to pay.

What is your German tax class?

Tax class 1

If you are single (unmarried), permanently separated, or divorced, you belong to tax class 1. If you belong to this category, you probably have Germany’s highest income tax rate, and the German income tax is about 42% of your salary in this tax bracket.

Tax class 2

This tax class is for single parents who live alone and apply for tax relief.

Tax class 3

Employees who are married or in a registered civil partnership can choose this tax class if one of the spouses does not work or earns significantly less than the other. The other spouse or civil partner then falls into tax class 5. If both spouses or partners make approximately the same amount, tax class 4 is better for them.

Tax class 4

Married couples and civil partners can apply for income splitting. Income splitting means that the person who earns more only has to pay the income tax rate of the person who makes less. In simple words, it means that you save taxes!

Example: Peter is single and has to pay 41% tax. Sophie is single and pays 30% income tax. Now they are getting married. Now they both pay 30% taxes.

Note: This is only an example with fictitious numbers. Unfortunately, income tax is infinitely more complex than this.

Tax class 5

Professionals who are married or in a civil partnership fall into this tax class if their spouse or partner falls into tax bracket 3.

Tax class 6

This applies to anyone who has a second job or more.

Can I change my tax class in Germany?

Yes, you can! For example, if you got married, divorced, or started a new job, you can apply for a tax class change in Germany. You can also change your German tax class if the tax office places you in the wrong class.

How do I change my German tax class?

To change your German tax class, you only need to fill out an “Antrag auf Lohnsteuerklassenwechsel” application form. The easiest way to do this is to visit your local tax office in person. To ensure that you are placed in the correct tax class from the start, it is essential that you bring all relevant certificates to the Finanzamt when you apply.

What married couples need to know about tax classes in Germany

Scenario 1: You are married, and person A earns much more money than person B. Or: Person A makes money, and person B earns no money. Then person A is in tax class 3, and person B is in tax class 5.

Scenario 2: Person A and B earn about the same amount. Then person A and B are in tax bracket 4. Here you are part of the income splitting system.

The difference in income tax between married couples and singles is viewed controversially in Germany.

Why is that? Because single people have to pay much more income tax than families, this seems a bit unfair. Married people have another tax advantage. If you’re married, you can earn about 20,694 euros in 2022 without paying any income tax! It is called a “tax allowance.” If you’re single, you can make about 10,347 euros in 2022 before paying income tax in Germany.

Best German tax return software 2022 – Our recommendations

If you can’t or don’t want to afford a tax advisor or a membership in an income tax help club, “Lohnsteuerhilfeverein,” you can turn to one of the following tax programs. They only cost a fraction and are a tremendous help, and they guide you step by step through preparing your tax return. Plus, they can help you save on taxes. We have described our three favorite programs in the following section. Enjoy reading.

#1 Wundertax 2022 – English software

Wundertax is an online tax tool that allows you to prepare your tax return digitally. You have to answer a few questions about your situation using the Q&A principle and then automatically fill out your tax return in Wundertax step by step.

Wundertax operates several platforms in Germany through which different groups of people and professions can create online tax returns according to their needs and submit them to the tax office. These include employees, self-employed persons, students, police officers, soldiers, and expatriates.

Note: This program is perfect for expats who can’t speak German yet. It is available in English and guides you through your tax return step by step. 

What can I deduct with Wundertax?

In Wundertax, you can deduct many different expenses, just as you would prepare a manual tax return. These charges include:

• Telephone and internet charges
• Insurance
• Volunteer work
• Moving expenses
• Travel expenses
• Education
• Housekeeping
• Application documents
• Union dues
• Health costs
• Workplace
• Pension
• Renovation costs

Wundertax is a straightforward and understandable tool to do your tax return in about 17 minutes.

#2 WISO Tax Savings Book 2022

This popular tax software can help you fulfill your tax obligations and ensure that you quickly get the best refund from the tax office you deserve. In addition, you save yourself an expensive consultation or a membership in the income tax help club. The tax program WISO Steuer-Sparbuch regularly wins awards in independent tests and receives top marks in the trade media.

Whether income-related expenses, studies, two-family household, commuter allowance, or Riester pension: WISO Steuersparbuch knows how to save taxes and helps with the optimal refund. All tax forms are included and cover all particular circumstances.

Note: This program is top-rated among German taxpayers and is currently the best program on the market. However, it is only available in German and therefore suitable if you can already speak some German.

How does the WISO tax software work?

To begin, you describe your life situation and that of your family:

• Place of residence
• Marital status
• children, etc.

Next, you enter your income and the associated expenses in the following categories:

• Salary and wages
• Pension and annuity
• Alternative benefits such as unemployment benefits
• Rent and lease apartments and houses
• Sales of stocks and fund shares
• Interest and dividends
• Income and expenses from freelance, business, and self-employed activities

Depending on your situation, WISO Steuersparbuch shows you at any time how much money you can get back from the tax office and where you can save. Finally, let WISO Steuersparbuch check your entries to ensure there are no inconsistencies and that you have made all the necessary entries.

#3 Smartsteuer – Connected with ELSTER

Smartsteuer is Germany’s leading provider of online tax returns for private individuals, the self-employed, and small businesses.

From the very beginning, smartsteuer has focused on three themes: simple, uncomplicated, and personalized support for taxpayers, innovation, and, of course, maximum security. Everyone should make it as easy as possible to file their tax returns at home. The result is convincing: smartsteuer users receive an average refund of 1,069 euros from the state.

The smartsteuer software can be used on any PC or tablet, regardless of the operating system. No installation is required, just Internet access and an up-to-date browser. Practical: You only pay when you transmit your data to the tax office. So you can play your control scene for free.

Note: This program has the advantage that it can be connected to ELSTER, the free government tool for tax returns, and you can upload tax returns directly to ELSTER. The disadvantage is that you need to know some German since this tool is only available in German.

What is Elster?

Elster Online is a government service tool where you can log in directly and submit your tax return online. Elster is free for all taxpayers, and you can file income tax returns online and wage tax or sales tax returns.

After free registration in the ELSTER portal and subsequent confirmation by the service provider, you can use the ELSTER interface to send both tax software and your tax return conveniently and in seconds via an encrypted connection to your local tax office.

The authorities review your submission and upload your tax assessment into the program, along with calculations and comments.

#4 Tax 2022 – The price-performance winner

The tax software offers you excellent performance at a low price. Because this software covers all types of income (e.g., employees, pensioners, retirees, wage replacement benefits, rent and leasing, capital gains) and knows all forms of income tax returns. You can also apply wage tax reduction 2021 or homeownership promotion with tax.

You can decide whether you want to print out your tax return on paper or send it via the Internet using ELSTER, and both options are officially recognized. By the way, if you use ELSTER, you don’t have to submit most of your receipts.

So that you know in advance how much the tax office will refund you, tax calculates the exact amount. You will then receive a sample notice with a detailed explanation, which you can compare with your official tax notice.

Note: This program has the best price-performance ratio on the German market and has the advantage that it can be connected to ELSTER, the free government tool for tax returns. You can upload tax returns directly to ELSTER. The disadvantage is that you need to know some German since this tool is only available in German.

FAQ – Tax program 2022

In which cases can I get a tax refund in Germany?

We have compiled some typical characteristics of an expected tax refund for you:

• Your regular commute to work is longer than half an hour
• You have participated in further education measures during the tax year
• You have purchased technical equipment, such as a computer
• You are married and in tax class III or IV
• In addition to your main job, you earn money from a self-employed activity
• You moved during the tax year for professional reasons → worthwhile for expats

If several aspects apply to you simultaneously, you can assume that the tax return will pay off for you. It’s best to use a tool to calculate your potential tax refund. If you are expecting a significant amount of money from the tax office, you should not do without it.

What are the advantages of an online tax return in Germany?

• Accelerated tax return
• No more paperwork
• Prepare tax returns without difficult-to-understand jargon
• Tax saving tips Get instant tax refund forecasts
• Plausibility check before sending the tax return
• Securely transmit data to the appropriate tax authority

The downside:

The cost of the tax software. Some programs need to be installed and may require a time investment in the future to perform updates for an update.

One thing is clear: for a good tax program; you have to make an additional investment that would be eliminated if you used forms that are available for free. BUT: For those unfamiliar with tax terminology, this investment will pay off. It will speed up the process but can be more fun and rewarding as many programs will identify where you can save on taxes.

Which is better – tax accountant, income tax help club, or tax software?

There are several ways to prepare your tax return. On the one hand, you can fill out the form manually or via software; on the other hand, a tax consultant can handle the tax return. This method is recommended for those who cannot avoid preparing complex tax returns. Tax consultants offer competent personal support, but individual cases may have financial implications.

The “Lohnsteuerhilfeverein can also prepare more uncomplicated tax returns.” Here you get essential advice and professional help, which is often cheaper than consulting a tax advisor. Another possibility is the use of tax software. Commercially available programs are usually inexpensive and support you in preparing your tax return. In terms of content and organization, you are on the safe side if you find the right program for you.

For whom is the voluntary submission of a tax return worthwhile?

Not everyone is obliged to file a tax return in Germany. However, a voluntary tax return can often be worthwhile, and you can get a refund of the taxes you have paid too much.

• The voluntary submission of tax returns can be worthwhile in the following situations:
• You had high advertising costs, special fees or special charges
• You had expenses for household services, artisans, or household help.
• You have entered into a new employment relationship
• Your salary is not the same every month
• Your tax class has changed during the tax year

The voluntary tax return is also efficient if the tax office wants an additional payment from you. In this case, you can withdraw your voluntary tax return in an appeal procedure and do not have to pay any money.

Can I deduct the cost of a German tax program from my taxes?

The costs for tax software are just as deductible as the costs for tax books or contributions to the Lohnsteuerhilfeverein. With these costs, the distinction between business and private cannot be justified. Therefore, the allocation of the expenses to business expenses, income-related expenses, or living expenses can be structured as follows:

Costs up to 100 euros can be fully reported as income-related or business expenses. You can deduct amounts between 101 and 200 euros at a flat rate of 100 euros as income or business expenses without proof. You can enter half of the costs for higher fees, and the remainder is ignored. Again, no proof is required.

When are tax programs most favorable in Germany?

July 31 is the last day to file income tax returns in Germany each year. Shortly before this deadline, the software usually becomes cheaper. BUT: The longer you wait, the less time you have to prepare your tax return.

Tax software is always released at the beginning of December when bargains are usually already available. Another option is to buy by download. Here the software is not shipped, and you save the shipping directly, and the software license is sent by e-mail. A third possibility is the purchase of the so-called “Frustfrei-Pakete.” Here you get the software as DVD, without additional books, and in simple packaging. These editions are usually cheaper than other packages, with books and glossy boxes.