Do I also have to declare interest income in my tax return?
April 27, 2022 | 30,00 EUR | answered by Wolfgang Stricker
Dear tax advisor,
My name is Sandra Böhm and I have a question regarding my tax return. This year, I received interest income for the first time and I am unsure if I need to declare this in my tax return.
Background information: I have a savings account at my bank where I have some money invested. This year, I received interest amounting to 500 euros. I am an employee and earn my income through my salary.
Current situation: I have already started preparing my tax return for the year 2021. I came across the question about interest income and I am unsure whether I need to declare this or not. I do not want to make any mistakes or evade taxes.
Concerns: I am worried that I may face problems with the tax office if I do not correctly declare the interest income. I want to submit my tax return properly and avoid any legal consequences.
Question: Do I need to declare interest income in the tax return? If yes, how do I correctly declare it and are there any specific tax-free allowances or tax rates that I should be aware of? I would be very grateful for your help and advice on this matter.
Thank you in advance.
Best regards,
Sandra Böhm
Dear Mrs. Böhm,
Thank you for your question regarding your interest income and the correct reporting in your tax return. It is important to accurately report all income to avoid any potential issues with the tax authorities.
In your case, you received interest income of 500 euros, which you have invested in your savings account. This interest income is generally subject to taxation and must therefore be reported in your tax return. The interest income is subject to a withholding tax of 25%, which is automatically deducted by the bank. Therefore, you must report this interest income in your tax return to ensure that the tax is correctly withheld.
To report the interest income in your tax return, you will need the relevant documents from your bank confirming the amount of interest income. In your tax return, you will need to report the interest income in the "Anlage KAP". There, you will enter the amount of interest income and indicate whether taxes have already been withheld.
There is a tax-free allowance for interest income, which is 801 euros for singles and 1,602 euros for jointly assessed married couples. This means that no withholding tax is levied on interest income up to this amount. However, since your interest income is below this threshold, you still need to report the income in your tax return.
It is important to accurately report all income to avoid legal consequences. If you are unsure, I recommend consulting a tax advisor who can assist you with preparing your tax return.
I hope this information is helpful to you and I am available to answer any further questions you may have.
Sincerely,
Wolfgang Stricker, Tax Advisor
