Living in Germany while you support your family abroad? You’re not alone. Many expats regularly send money to their parents back home. But here’s something you might not know: Germany’s tax system allows you to claim these remittances as tax-deductible expenses.
Can you claim money sent to Family Abroad in taxes from Germany
Tax Deductions for Family Support from Germany?
In Germany, if you financially support relatives overseas, you might be eligible to deduct these payments from your taxable income. This provision acknowledges the financial responsibilities many individuals have towards their families, even across borders.
Who Qualifies as a Dependent?
Typically, your parents, wife, children and parents-inlaw are considered dependents if they:
- Reside in a country where their income is below a certain threshold.
- Rely on your financial support for their basic needs.
The exact criteria can vary, so it’s essential to consult with a tax advisor or the local tax office (Finanzamt) to confirm eligibility.
Related Guide: Claim Remittance money sent to Parents from Germany in Tax Return
How Much Family Support You can Deduct in Germany?
The amount you can deduct depends on several factors, including:
- The amount of money sent.
- The cost of living in your parents’ country.
- Any other income your parents might have.
There are annual limits to these deductions, so it’s crucial to keep track of all relevant financial details.
Documentation is Key
To claim these deductions, you’ll need to provide:
- Proof of the money transferred (e.g., bank statements, transfer receipts).
- A declaration from your parents confirming receipt and use of the funds.
- Possibly additional documentation, depending on your specific situation.
Ensure all documents are accurate and, if necessary, translated into German. Read my detailed guide to learn everything you must know about claiming Maintenance Payments sent to family from Germany
Filing the Claim
When submitting your annual tax return:
- Include the relevant forms detailing your financial support.
- Attach all necessary documentation.
- Make sure you fill out Anlage U and get a maintenance declaration form filled out properly
- Consult with a tax professional to ensure everything is in order.
Final Thoughts
Supporting your family is commendable, and Germany’s tax system recognizes this commitment. By understanding the available deductions and ensuring proper documentation, you can potentially reduce your tax burden while continuing to assist your loved ones abroad.
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Disclaimer: None of the content in this article is meant to be considered as investment advice. I am not a financial expert and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article. The information may not be accurate at the time you are reading it.