Due to the COVID crisis lots of people were suddenly required to work from home and had to transform their living space into a Home Office. However, until now you had to follow strict guidelines, in order to be able to deduct a Home Office from your taxes. But now there is a new Home Office allowance! In this article we explain, what this means exactly and how you can make use of it.
Deducting the Home Office from your taxes
In general, it’s already possible to deduct the Home Office from your taxes. But usually you need to meet certain requirements given by the Finanzamt (finance office), in order to fully deduct it:
The place where you work needs to be a separate room in your home and you should be able to prove, that it’s mainly used for work. This means a small corner or a desk in your bedroom doesn’t count and won’t be accepted. It’s also not allowed to keep things you don’t need for work, like a TV for example, in this room. Furthermore, it’s important how often you use this Home Office, because if you only work from home a part of the time, you cannot deduct the entire costs.
However, since many self-employed professionals actually work from home most of their time, it’s often possible to deduct the entire costs, as the Home Office represents the center of their professional work. What is deductible in this case are the proportional rental costs and costs for electricity and internet.
Tip from Accountable💡: In this article you can find more information about the costs you can deduct for a Home Office in general and how to state it in your tax return.
The new Home Office lump sum
So far, the guidelines for stating your Home Office in your tax return were fairly strict. Therefore, it wasn’t possible to deduct the work space for many people working from home. But due to the ever-changing lockdown rules and the general COVID situation, a lot has changed, especially how and where we work. That’s why the government decided to introduce a new allowance that will provide much broader support and can be stated by many more self-employed professionals working from home. The result is the Home Office allowance.
How can I make use of the Home Office allowance?
Anyone working from home can claim this allowance, it applies to both employees and self-employed people. Also, it’s no longer necessary to meet the strict requirements for the Home Office. Unlike before, it is not important, wether you actually have a separate office room, or simply work in your kitchen, on your balcony or in your bed.
However, many freelancers and Gewerbetreibende (trade persons) already worked from home full time, even before Corona. So they have a Home Office that they are already deducting in their tax return. If you belong to those who already deduct costs for a Home Office, it’s recommended that you keep it that way, rather than making use of the Home Office allowance. Mostly because you can specify the costs for the work space in much greater detail and thus deduct a higher amount from your taxes than with the new lump sum.
How much is the Home Office allowance?
All together, since 2023 you can claim 6€ for every day that you work in your Home Office. However, there is a total limit of 1.260€ per year (previous €600). So if you worked more than 210 days from home, you can still only deduct a maximum of 1.260€.
Where do I state the Home Office allowance in my tax return?
The good thing is, you don’t need to apply or register in order to make use of the allowance. Instead, you can simply deduct it in your Werbungskosten (business expenses). So just include the allowance in your expenses for your business when you prepare your income tax return.
What else is there to know?
Regardless of wether you are self-employed or an employee, it’s always advisable to be able to prove that you actually worked from home for the stated amount of time. If you worked directly at your clients place for example, you can’t officially claim the 6€ per day. You can only deduct them, if you really worked from home for the whole work day.
Tip from Accountable💡: In addition to the Home Office allowance, you can also deduct expenses for office equipment, computer, Internet and telephone. You can upload those expenses in the Accountable App and then add them directly to your tax return.
