The German Steuererklärung (income tax return) is optional for most employees but frequently results in a significant refund — the average refund for a German employed worker is approximately €1,000 per year. Here is what it is, who should file one, and how to do it.
Who Should File and Why
Mandatory filing: you must file if you had income from multiple employers in the same year; had income from self-employment or freelancing; received Kurzarbeitergeld (short-time work allowance) or other state benefits that are subject to Progressionsvorbehalt; were married with different Steuerklasse (tax class) combination (III/V); or had significant investment income above the Sparerpauschbetrag (€1,000 per person). Voluntary filing (freiwillige Steuererklärung): most employees are not required to file. But they often get a significant refund if they do. Common reasons for a refund: income tax is deducted at the standard rate throughout the year; if you started working part-way through the year (lower total income than assumed), you get money back; deductible expenses reduce your taxable income; the basic tax-free allowance (Grundfreibetrag — €11,604 in 2024) is fully applied only through a filed return; a change of Steuerklasse during the year. Common deductible expenses: Werbungskosten (work-related expenses): commuting costs (Entfernungspauschale — €0.30/km per working day, or €0.38 from the 21st km onward from 2022, for the one-way distance from home to work); home office expenses (Homeoffice-Pauschale — €6/day, up to €1,260/year from 2023); professional literature; work clothing (specific professional clothing only, not general business attire); professional development costs (courses, certifications, books). Sonderausgaben (special expenses): health insurance contributions; church tax (Kirchensteuer) paid; charitable donations. Außergewöhnliche Belastungen (extraordinary burdens): medical expenses above a threshold; disability-related costs.
How to File
The ELSTER portal (elster.de): the official German tax authority’s online filing system — free, available in German. Requires registration (takes a few weeks to activate the full account). The interface is functional but complex for non-native speakers. Tax software: WISO Steuer, Taxfix, and SteuerGo are popular commercial software options (€15–30 per filing). Taxfix has the most user-friendly interface and is available in English. Steuerberater (tax advisor): for complex situations (freelancers, rental income, multiple tax years) — fees typically €150–500 for an employed worker’s return. Worth the cost if you have a complex situation. The Lohnsteuerhilfeverein (wage tax assistance association): membership-based organisations (typically €60–120/year) that can prepare and file your return. Available to employees and pensioners (not self-employed). Many have English-speaking advisors. Documents you need: Lohnsteuerbescheinigung (income tax certificate — your employer sends this in January/February for the previous year; contains your gross income, taxes paid, and social contributions); Versicherungsbescheinigungen (insurance certificates from your health insurer showing contributions); bank statements for interest income; receipts for deductible expenses.
The Deadline and Refund Timeline
Deadline for voluntary filings: July 31st of the following year (for 2024 returns: July 31, 2025). If you use a tax advisor or Lohnsteuerhilfeverein: February 28th of the year after next (for 2024: February 28, 2026 — the advisors get an extended deadline). The look-back period: you can file a voluntary return for the last 4 years (in 2025, you can file for 2021, 2022, 2023, and 2024). This is a common piece of advice for new arrivals — file all four years at once, as the average refund is significant. Refund timeline: typically 2–6 months after submission, longer in peak periods (March–August when many people file). The tax assessment notice (Steuerbescheid): the official response from the Finanzamt (tax office) — shows the final calculation and either the refund amount or the additional tax owed. You have one month to appeal (Einspruch) if you disagree.
