Tax Return Step by Step — ELSTER, Allowances and Tips

Why File a Tax Return?

In Germany, taxes are deducted monthly from wages (income tax). Employees often overpay — a tax return helps you get your money back. The average refund is around €1,095.

Required or Voluntary?

Required (filing is mandatory):
- Married with tax class III/V
- Additional income over €410/year
- Wage replacement benefits (short-time work allowance, parental leave, sick pay) over €410
- Multiple employers simultaneously

Voluntary — almost always worthwhile:
- Employees with tax class I or IV
- High commuting costs, relocation, training

Step-by-Step Guide

Step 1: Set Up ELSTER Access

ELSTER (elster.de) is the official online portal of the tax authority:

1. Register an account on elster.de
2. Activation code arrives by mail (takes about 2 weeks)
3. Download certificate file and store securely

Alternative: Tax software like WISO Steuer, Taxfix, or SteuerBot — often easier than ELSTER directly.

Step 2: Gather Documents

• Wage tax certificate — from employer (by end of February)
• Commuting costs — distance from home to work in km
• Bank statements — for deductible expenses
• Donation receipts
• Invoices for craftspeople, household help
• Receipts for training, professional literature, work materials

Step 3: Enter Werbungskosten

Werbungskosten are expenses related to your profession:

Tip: If your actual Werbungskosten exceed €1,230, it's worth collecting all receipts.

Step 4: Special Expenses and Extraordinary Burdens

• Health and long-term care insurance — basic coverage fully deductible
• Donations — up to 20% of total income
• Church tax — automatically included
• Childcare — 2/3 of costs, max. €4,000/child
• Medical costs — glasses, dentures, medications (above reasonable burden)

Step 5: Household Services

• Craftspeople costs: 20% of labor costs, max. €1,200/year tax reduction
• Household services: cleaning, garden care — 20%, max. €4,000/year

Step 6: Submit and Review Assessment

• Deadline: July 31 of the following year (with tax advisor: end of February of the year after)
• Voluntary filing: Possible retroactively up to 4 years
• Income tax assessment arrives by mail — refund is transferred
• Objection: 1 month after receiving the assessment

Status: March 2026. All information provided without warranty.