These household-related services reduce tax liability
The deadline for tax declaration 2023 is approaching. Those who are under pressure should not forget to claim tax-deductible expenses.
Is the tax declaration for 2023 still hanging over your head? Those obligated to submit it must have it completed by September 2, 2024. At the latest, the tax declaration must be present at the competent tax office. It's crunch time to refresh your knowledge about tax-deductible costs. Two categories of expenses that can lead to tax savings in many households are household-related services and craftsman services.
Tax-deductible household-related services
Taxpayers can claim expenses for services rendered in their household by an agency or self-employed service provider, as stated by Daniela Karbe-Geßler from the Taxpayers' Association. However, the service must indeed be provided within the household, which includes the garden, garage, and garden house, as long as they are on the same property.
Typical examples of tax-deductible household-related services are:
- Window cleaning and apartment cleaning
- Gardening and leaf removal
- Domestic work such as washing, ironing, cooking
- Handyman services
- Winter services
- Tree felling
- Care for the elderly or disabled at home
Exclusions for tax-deductible household-related services:
- Chauffeur services
- Grave maintenance work
- Garbage collection and garbage fees
- Heating costs
- Household debt repayments
Tax-deductible craftsman services
Those who commissioned craftsmen for renovation, maintenance, and modernization work in the previous year can also claim these costs tax-deductibly. According to Jana Bauer from the Federal Association of Tax Advisory Associations, these costs fall under craftsman services.
Typical examples of tax-deductible craftsman services are:
- Painting work
- Repair and maintenance work in the apartment - for example, on the washing machine or heating system
- Window replacement or door replacement
- Locksmith services
- Chimney sweeping
- Installation and maintenance of a solar panel system
Exclusions for tax-deductible craftsman services:
- The creation of a new garden or the construction of a new house
- Services of an engineer or architect
- Demolition costs of a building
Not all receipted items are tax-deductible
The amount and which costs can actually be deducted are subject to strict limits. Taxpayers can only claim actual labor costs and, if applicable, consumable materials such as cleaning agents, sweeping materials, or sandpaper. Other material costs are excluded from tax savings.
Even if the invoice for household-related services or craftsman services only lists labor costs, transportation costs, and consumable materials, the tax office does not recognize the full invoice amount. Tax-deductible are each only 20% of the expenses - up to the respective maximum limit. For household-related services, a maximum of 4000 Euro per year is considered, for craftsman services, a maximum of 1200 Euro. For those who employ a mini-jobber for the work, additional parts of their wages can be deducted. The limit for this is 520 Euro per year.
Tenants and renters, who cannot pay such invoices themselves under certain circumstances but pay them proportionally through the common cost sharing, should find the deductible invoice items in the operating cost statement of the housing community. Homeowners and homeowners of a housing community should deduct their share of the invoice from the annual statement of account.
Tax relief is linked to certain conditions
In order to benefit from tax relief, taxpayers must fill out the "Domestic Expenses" section of their tax declaration for the Steuererklärung. A prerequisite for this is that the invoices were not paid in cash, but for example by transfer. Cash payments for invoices are not recognized by the tax office, according to Steffen Gall from Vereinigte Lohnsteuerhilfe.
Additionally, taxpayers must themselves live in the household for which they want to make expenses tax-deductible. Expenses for craftsmen's services that arise during new construction or in any way are publicly funded are also excluded from tax deduction, as Gall explains.
- To ensure you're making the most of your tax-deductible expenses, consider joining the Association of Taxpayers for valuable Tax Tips.
- When completing your tax declaration, don't forget to include your tax-decision regarding household-related services and craftsman services to maximize your potential savings.
- For a comprehensive guide on what costs are tax-deductible, refer to resources provided by organizations like the Federal Association of Tax Advisory Associations and the Taxpayers' Association.
- If you're a tenant or renter, consult your housing community's operating cost statement to identify the tax-deductible invoice items for household-related services and craftsman services.
