Pension alarm: Millions of seniors affected by tax increases!

Pension alarm: Millions of seniors affected by tax increases!

pensions are still a central topic, especially for many seniors. According to Infranken , pensions are fundamentally subject to income tax and wage tax. This system has been in force since 2005 when the "downstream taxation" was introduced. This means that pension expenses are tax -free, but the pension income is taxed.

A major problem occurs when many seniors exceed their personal basic allowance by taxing and slide into higher tax zones. The tax progression ensures that higher income also leads to higher tax levies.

The five tariff zones of taxation

These tariff zones are adapted annually to the current requirements based on the paragraph 32a of the Income Tax Act (EStG). The border tax rate refers to any additional euro of the income. The solidarity surcharge (Solz) is also added as a supplementary tax on income tax.

Tax tips for pensioners

seniors should check their tax return carefully in order to receive possible repayments. Voluntary activities and other deductions can be asserted for tax purposes. A thorough examination of the data is particularly useful for new pension notices, which are often sent in December. The possibility of paying voluntary contributions to health or long-term care insurance can also reduce net income.

For extensive clarification, pensioners can seek advice from the German pension insurance or an independent tax advisor. It is estimated that around 40% of the pension notices checked are incorrect, which underlines the need for exactly.

How the Deutsche Rentenversicherung , relevant data are automatically transmitted to the financial office for taxation. Pensioners do not have to provide any information on their legal pension in the income tax return, but are obliged to submit an income tax return with Appendix R.

The tax treatment of pension income is linked to the respective start of the pension. At the start of the pension before December 2005, 50% of the gross tores are taxable, while this share is already 80% at the start of the pension. From 2058, all pension income must be fully taxed. For pensioners who retire by 2057, a "pension allowance" is determined that does not have to be taxed and remains constant in the following years.

The central question of pension taxation is also discussed at the political level. The Federal Ministry of Finance offers information on the tax treatment of pensions and provides an age income computer, which was specially developed for seniors, in order to use their tax burdens determine.