How a gross net calculator works and what else you need
You need an example of how the income tax return for the self-employed works now? A gross-net calculator helps you enormously. In a few cases, it outputs a result that is maybe not one hundred per cent accurate (because an easy-to-use calculator cannot consider every single document and special case), but it gives you a very good orientation. Important questions to be clarified in advance when using a gross-net calculator is the question of the eventual spousal splitting and whether the expenses (income-related expenses) are summarized or not.
For example, this may look like this for 2018:
Revenues: 40,000 EUR
Advertising costs: 5,300 EUR
Allowance: 9,000 EUR
Miscellaneous Debit: 1,600 Euro
The taxable income is the income less all costs, less the allowance, so in this case 24,100 EUR. Income tax is paid on this sum. In this case, it would be around the 3,600 EUR you would have to pay for the year 2018 income tax. In addition, if necessary, the church tax (8 or 9 per cent, ie in this example around 300 EUR) and the solidarity contribution with about 5.5 per cent. A gross net calculator will serve you all these numbers. It should be noted that the solidarity contribution is not levied on very low incomes and you can leave the church as needed to save those taxes as well.
A gross net calculator will always ask you about the tax year you are referring to. As you know, the tax allowance has changed - but other packages can and will change. In addition, you must feed the gross net calculator with the actual taxable income, unless it explicitly asks you for all your expenses.
Note: Income tax as a progressive tax rate is charged exclusively on taxable income. If you pay attention to all expenses and always keep the allowance and possible lump sums in mind, then you also realize that the income tax return as a self-employed also has many pleasant sides. Because the more meticulous you are, the more money you save in the end. Does not sound so bad, right?
It is important that you always have receipts for all advertising costs. Lawmakers require you to keep them legible for ten years (which is absurd, of course, given the poor print quality of most receipts). Not everything has to be proven in the declaration, but for any checks, it is better to be able to prove everything.
The income tax return for the self-employed consists of collecting evidence of costs, calculating your actual taxable income and making such a statement. Of course, it's important that you already know what to expect - so that you can do what you later do. In addition, the tax office will ask you quarterly to pay the income tax - based on the income of the previous year. One more reason to calculate your expected income tax already during the current year, in order to be able to cover enough for additional payments if necessary.