Which tax class choice makes sense for me as a married couple?
November 3, 2023 | 40,00 EUR | answered by Ralf Otten
Dear Mr. Tax Advisor,
My wife and I have been married for three years and have chosen tax class IV/IV so far. This year, however, we have had a baby and are considering whether it would be beneficial to switch tax classes in order to take advantage of tax benefits. We earn roughly the same amount and have not made any special tax optimizations so far.
Our concern is that we may be paying unnecessarily high taxes due to the wrong tax class choice and therefore giving away money. We would like to know which tax class choice would be most advantageous for us as a married couple with a child and what impact a possible change could have. Additionally, we are interested in whether we can also use other tax planning options to optimize our tax burden.
We would greatly appreciate your expert advice and would like to know what specific steps we need to take to make the optimal tax class choice for us. Thank you in advance for your support.
Sincerely,
Leon Reuter
Dear Mr. Reuter,
Thank you for your inquiry regarding the optimal choice of tax classes for a married couple with a child. First of all, congratulations on your new addition to the family! It is understandable that you are considering whether it would be beneficial to change tax classes in order to take advantage of tax benefits.
Generally, married couples with similar incomes in tax class IV/IV have the highest tax burden. By switching to tax class III/V, you could potentially use tax advantages. In tax class III, the income of the partner with the lower earnings is taxed higher, while in tax class V, the income of the partner with higher earnings is taxed lower. This can lead to a reduction in tax burden.
However, since you indicate that you earn approximately the same amount, a combination of tax classes IV/IV and IV/IV with a tax factor may be advantageous for you. This takes into account parental leave benefits, resulting in a fair distribution of the tax burden.
A change of tax class is generally only possible once a year and must be requested from the tax office by November of the previous year at the latest. It is important that you carefully consider the effects before making a switch and possibly seek tax advice.
In addition to a potential change of tax class, there are other tax planning opportunities to optimize your tax burden. This includes utilizing tax allowances, claiming childcare expenses, and considering deductible expenses.
I am available for a detailed consultation and can assist you in choosing the optimal tax class for you and utilizing other tax planning opportunities. Please schedule an appointment for a consultation so that we can analyze your individual situation together and develop solutions.
I look forward to assisting you with your tax matters and thank you for your trust.
Best regards,
Ralf Otten, Tax Advisor
