Every self-employed person has to file an income tax return and has confirmed by signing it, that the return is correct and without mistakes. But what happens if you discover a mistake after you have submitted your tax return? Do you have to fear penalties now? We will answer this question here.
First, we need to distinguish between whether this false information is to the advantage of the Finanzamt (tax office) or to your advantage.
You paid more – Mistakes to the benefit of the Finanzamt
If you have made a mistake for the benefit of the Finanzamt, i.e. you should have paid less taxes than you did, you can apply for a simple modification of the tax assessment. This request is to your advantage, because you don’t have to change the entire tax return. It’s only about the part for which you have requested the change.
For example, if you discovered an important missing expense, you can submit and deduct it later and thus reduce your taxable income. With this request, you are on the safe side, as the assessment cannot usually be changed to your disadvantage.
Be careful: If you made other mistakes that are to your advantage, you can still get a penalty, when you not also correct them.
It can also happen that the Finanzamt itself miscalculated the amount you need to pay in taxes. In that case, you can of course apply for a simple change of the tax assessment and have the error corrected in your favor.
💡Tip from Accountable: You received a letter from the German Finanzamt and are not sure what it means? Use our free AI tool! Just upload the letter and the tool will analyze and translate it for you!
You paid less – Mistakes to your advantage
It becomes much more serious if you have made a mistake that turns out to be to your advantage. That is, if you pay less taxes than you actually should have paid to the Finanzamt. In this case, you should contact your Finanzamt or in the best case your direct tax administrator as soon as possible.
There are three ways to change the tax assessment if there is an error in your favor:
- If you have not yet received your tax assessment, you can simply contact your tax administrator at the Finanzamt and ask for the processing of your tax return to be stopped. You can then submit a revised tax return within a new deadline.
- If you have already received your tax assessment via mail, you can request a correction of it. Normally, you will then receive a new deadline by which you have to correct the mistake.
- Another way of correcting your tax return is to file an objection. It’s possible to file it within four weeks after you have received the tax assessment. If the objection is justified and you submit the improved tax return, you will receive a revised tax assessment with a corrected amount of what you have to pay in taxes.
How far back can mistakes be penalized?
The Finanzamt could initiate criminal proceedings in the case of serious tax evasion up to 10 years in the past. Smaller cases of careless tax evasion may be prosecuted for up to 5 years. In the case of minor discrepancies, however, this is only possible retroactively for up to 4 years.
How to avoid mistakes in the tax return
Report your total income!
No matter how little you earned, you should always declare your entire income as a self-employed person. Profits from capital assets (shares, cryptocurrencies, etc.) or other profits are also sources of income and must therefore be included in the tax return.
Never round amounts!
Unless directly required by the Finanzamt, you should never round amounts in your favor. Report your expenses and income exactly as they appear on your receipts. You should also not round up or down amounts of the mileage allowance when calculating the kilometers for your commute. Try to be as accurate as possible to avoid a penalty.
💡Tip from Accountable: With our tax app you can scan your receipts directly when you get them and can be sure that all amounts and numbers are correct. No more number twists!
Register your self-employment!
If you work as a freelancer in Germany, you have to register your self-employment beforehand! The process is not that complicated, just make sure you submit the so-called “Fragebogen zur steuerlichen Erfassung”. You find the official form on our website for free.
File your tax return on time!
Take the time to carefully prepare your income tax return. Plan ahead so you don’t miss the deadline. The income tax is usually due on the 31th of July in the following year.
Let us help you!
In case of doubt, it is best to consult a tax advisor, the Finanzamt staff or tax experts like the team from Accountable. We are always happy to help with tax questions. Just send us an email to: support@accountable.de.
💡Tip from Accountable: Our tax solution is designed so that even tax newbies can do everything right and never miss a deadline. Our team will also help you with any questions.
What are the consequences of mistakes in the tax return?
Intentional errors are punishable by law and are often considered tax evasion. If there really is tax evasion, this could threaten your existence.
But don’t worry: Generally, accidental errors in tax returns are not considered tax evasion. Small mistakes happen to everyone. But sometimes, even ignorance or lack of concentration do not protect you from a fine. The penalty depends on the severity of the error, but is far from the consequences of tax evasion.
So, as long as you recognize and correct your own mistakes, you have nothing to fear!
How can an app help you avoid mistakes?
With the Accountable solution it’s easy to do everything right. You can create invoices that automatically hold the correct legal requirements and with the scan function you have all expenses digital and in one place. You can also send your tax returns to your Finanzamt directly from the app or desktop version – Accountable scans all data before submission.
These are the error precautions of Accountable:
- The scan function recognizes data and amounts on receipts automatically.
- The invoice number and all other requirements for invoices are met automatically.
- Documents entered twice are detected so you don’t deduct them twice.
- You get reminders when the next tax return is due, so you never miss a deadline.
- The system checks your revenues and expenses for errors before you send it to the Finanzamt.
- We adapt Accountable continuously to new laws and rules (e.g. Corona help).
- Our support helps you with any questions.
- If you need additional help by a tax advisor, you can book an appointment with one of our partners.
These precautions will make your life as a self-employed professional easier, so you can focus on your business and not on taxes.
