Why is car insurance not tax deductible?

The most important thing in advance:

  • There are maximum limits for pension expenses: € 1,900 for employees and € 2,800 for the self-employed.
  • You can state costs for work-related insurance under income-related costs (employees) or operating costs (self-employed).
  • For employees: You can claim your motor vehicle liability insurance for tax purposes in several ways.

Basically, the following applies: You can deduct costs for insurance that serves as a precautionary expense from tax as special expenses. The policies that either protect your health or your assets are considered preventive measures. The majority of these insurances are entered in the pension expense annex (from line 12) on the tax return. These include:

  • Health insurance
  • care insurance
  • Liability insurance
  • Accident insurance
  • unemployment insurance
  • Pension insurance
  • Term life insurance

Certain maximum limits apply to these insurances. You cannot deduct costs that are higher.

  • For employees, civil servants and pensioners: € 1,900
  • For self-employed and freelancers: € 2,800
  • For married couples who invest their income together: the sum of the maximum limits for each spouse (as of 2018)

Deduct health and long-term care insurance from tax

Basically, the following applies: You can claim the full basic rate of statutory health and long-term care insurance for pension expenses (Annex Pension expenses, page 1, line 12 or 14). In the case of statutory health insurance, this also includes contributions for children and spouses.

If you pay into a private health and / or long-term care insurance, you can also deduct the basic tariff in full (Appendix Pension expenses, page 1, line 24 or 25).

As a member of the statutory health insurance, you will find your annual contribution payment in your income tax certificate or in your pension notification. If you are privately insured, you will see the contribution amount in the notification from your health insurance company.

Certain optional and additional tariffs, on the other hand, do not count towards the basic pension. For example, additional dental insurance or travel health insurance abroad. You can deduct this as special expenses in your tax return if you have not yet exceeded the maximum amount of € 1,900 or € 2,800. Enter additional benefits from the statutory health insurance in the annex Pension expenses (line 23). Additional services from private health and / or long-term care insurance belong in lines 28 and 29.

Also for all other insurance policies, e.g. For example, for private liability insurance, the following applies: You can only deduct them as other pension expenses if € 1,900 (for employees) or € 2,800 (for self-employed) have not yet been exhausted by the contribution payments for health and long-term care insurance.

But that is only very rarely the case. Employees already exceed the maximum amount with a gross monthly wage of around € 2,000: The contributions for statutory health insurance alone are between € 160 and € 170 per month (€ 1,920 and € 2,040 per year), depending on the health insurance company.

Occupational insurance in the tax return

Many private insurances also protect the professional area. If this is the case, you can state these policies in your tax return: for the Advertising expenses in Appendix N (Employees) or at the operating cost (Self-employed). In the case of the self-employed, this reduces the taxable part of the profit. Occupational insurance includes:

  • Professional Liability Insurance
  • (Professional) accident insurance
  • Parts of the legal protection insurance

In contrast to the limited special expenses, advertising costs or business expenses can be deducted in unlimited amounts. Prerequisite: The insurance relates to the professional area.

However, employees must note: When they submit a tax return, the tax office automatically takes into account an amount of € 1,000 as advertising expenses. This means: You only have to enclose receipts for contribution payments with the income-related expenses for € 1,000 or more.

You should therefore estimate whether the total amount of your advertising expenses will exceed € 1,000. If that is not the case, it is not worth the effort. The advertising expenses include, among other things. also expenses for

  • The trip to work (distance flat rate)
  • Professional literature
  • Office supplies
If you stay below the € 1,000, you can claim your work-related insurance as special expenses. Provided that the maximum amount has not yet been exhausted.

Work-related insurance: You can claim these expenses

Tax deduction can also be made Accident insurancethat you cover in the event of accidents during working hours, on the way to or from work or in your private life. You can 50% of your total contribution payments State as income-related expenses (employees) or operating costs (self-employed). The remaining 50% are theoretically deductible as pension expenses within the framework of the maximum amounts. The contribution invoice is sufficient as proof.

The same applies to private liability insurance. If the contributions are divided into a professional and a private part, you can deduct 50% of the total premium as income-related expenses (employees) or business expenses (self-employed). To do this, you need a certificate from your insurance company. This must show what proportion of the total costs is attributable to the professional part.

If you only insure occupational accidents, you can cover the entire cost of the Occupational accident insurance Specify in the advertising costs (employees) or in the operating costs (self-employed).

A clean Professional Liability Insurance on the other hand, you can state it completely in the advertising expenses.

Under certain conditions the Legal protection insurance tax deductible: does it contain one Labor law protection, you can enter this share as an employee in the income-related expenses. As a self-employed person with operating costs. The tax office requires a certificate from the insurance company stating the amount of this share. Usually it is between 40 and 60% of the total premium.

The occupational insurance can also include motor vehicle liability, comprehensive and household contents insurance. Special rules apply to these insurances.

Motor vehicle liability and comprehensive insurance in the tax return

When it comes to the deductibility of motor vehicle liability and comprehensive insurance, different rules apply to employees and the self-employed.

Self-employed can do both the Motor vehicle liability as well as the Comprehensive insurancedrop. To do this, enter the expenses in the income-surplus-account as business expenses (Annex EÜR, motor vehicle costs, line 60). Prerequisite: you use your car for work. Then you can also claim the travel expenses to work and business trips for tax purposes.

Employees can only Remove motor vehicle liability insurance, but not comprehensive insurance. The reason: The comprehensive insurance is considered property insurance. As such, it is not intended to cover personal life risks.

On the other hand, as an employee, you can deduct your motor vehicle liability in several ways. You can save up to an amount of € 4,500 per year Commute Bill as a distance lump sum with the advertising expenses (Annex N, lines 31–39). The tax office calculates € 0.30 per kilometer. This also covers the proportional contribution to the motor vehicle liability insurance.

The distance flat rate only covers the way there, not the way back. In addition, only the shortest way to work is taken into account. Detours are only taken into account if they can be shown to save you time. When calculating the distance flat rate, only the number of actual working days counts. Vacation and sick days are deducted. The tax offices usually recognize a flat rate of 230 days for a 5-day week.

For the proof of motor vehicle liability insurance in the tax return, you usually only need copies of the contract and a proof of contributions from the insurance company.

At Business trips you can also claim the entire number of kilometers for tax purposes. Prerequisite: You have not yet received a tax-free reimbursement from your employer.

Household contents insurance is tax deductible for the office

The Household insurance serves to protect household items from burglary, fire, etc. This makes it a property insurance policy and in most cases is not tax deductible. Unless you are using a room in the apartment as a study. You can deduct its area share as a percentage of the annual contribution for household insurance in your tax return.

Example: Your apartment is 80 m² and your study is 8 m². So you can deduct 10% of the premium from tax. As Self-employed enter the amount at the operating cost to (Annex EÜR, line 56), as employee both Advertising expenses (Line 43).

The following requirements must be met:

  • The study is a separate room from the rest of the apartment.
  • You have earned taxable income.

As an employee, you may have to prove, based on your employment contract, that you can work from home for a certain part of your working hours.

Other deductible pension expenses

Not only insurance policies that serve as a precaution are deductible. Also Retirement expenses you can claim for tax purposes. And under certain conditions you can Exceptional costs drop.

How to deduct retirement savings

With regard to pension costs, you can, among other things, deduct the contributions to the basic pension. These include:

  • Statutory pension insurance
  • Professional pension funds
  • Rürup pension

For the state sponsored Riester pension there is the system AV. The also state-sponsored employer-funded pension you do not have to state this in the tax form Find out here about the tax deduction of old-age provision and learn how to proceed correctly.

Exceptional costs

If you or a family member falls ill, this can mean considerable additional costs over the year. This is called Exceptional costs. In order to relieve you financially, the tax office will determine your reasonable limit. You can deduct amounts in excess of this for tax purposes. In the case of special, extraordinary burdens, there are also so-called lump sums for certain groups of people. These include B. Disabled people or people who care for a relative.

Exceptional stress can also affect life circumstances other than health. Read about the extraordinary burdens you can claim for tax purposes and what you have to consider.

Conclusion

These insurances are tax deductible:

  • Health insurance
  • care insurance
  • unemployment insurance
  • Liability insurance
  • Work and disability insurance
  • Accident insurance
  • Retirement benefits

You cannot stop:

  • Supplementary health insurance
  • Supplementary care insurance
  • Car comprehensive insurance (only deductible for the self-employed)
  • Household contents insurance (exception: proportionately deductible for study)

Informed and secure in every situation
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