Tax documents advice: Optimal strategies for families and senior citizens
In Germany, families, retirees, and mini-jobbers can take advantage of a range of specific tax deductions and allowances designed to reduce taxable income or provide direct monetary support. These benefits cover various areas, including education, parental leave, household services, childcare, child allowances, and various care and insurance expenses.
Key Family, Retiree, and Mini-Jobber Tax Deductions and Allowances:
- Child Allowance (Kinderfreibetrag) and Child Benefit (Kindergeld) Families benefit from a combined system where child allowances reduce taxable income, and child benefit provides monthly payments per child. The total allowance per child is adjusted yearly; for 2025, this amount is significant and available for joint assessments of couples [4].
- Education Bonus and School Fees Parents may deduct certain school fees and costs associated with children’s education under specific conditions, if the expenses are related to vocational or certain private schooling.
- Parental Leave and Related Allowances Parental leave itself does not directly reduce taxes, but parents can claim certain allowances and social security exemptions during this period, notably child benefit continues and may influence the tax class and benefits related to income splitting [4].
- Household Services, Domestic Help, and Home Office Costs Costs for household services (e.g., cleaning, repairs), employing domestic help, and expenses for a home office are partially tax-deductible. Up to 20% of these expenses can reduce taxable income, capped at certain limits, recognizing the economic burden of domestic assistance and remote work [4].
- Childcare Costs Parents can deduct part of the childcare expenses (up to two-thirds of the costs, capped at €4,000 per child per year) for children under 14 years, which helps cover daycare or after-school care fees.
- Maintenance Costs and Loan Losses Maintenance payments (e.g., alimony) to spouses or children and losses from loans under specific conditions can be deducted from taxable income as extraordinary burdens or special expenses [4].
- Healthcare Costs, Care Expenses, and Nursing Home Costs Taxpayers can deduct reasonable healthcare and nursing care expenses, particularly when costs exceed a certain percentage of income and are not reimbursed by insurance. This also extends to costs of nursing home care under defined conditions [4].
- Donations Charitable donations to recognized organizations are tax-deductible up to a defined percentage of income (generally 20-21%), incentivizing philanthropy [4].
- Insurances Certain insurance premiums, notably health, long-term care, liability, and life insurances, can be claimed as special expenses (Sonderausgaben), reducing taxable income.
For Retirees and Mini-Jobbers:
- Retirees benefit from a basic tax-free allowance increasing to €12,096 in 2025 and may have supplementary income allowances. Supplementary incomes up to €410 per year are tax-free, with a sliding scale from €410 to €820 for reduced taxation, which applies to retirees with small incomes from rents or mini-jobs [2].
- Mini-Jobbers (employees with marginal earnings up to €520/month usually exempt from social security) typically do not pay income tax on those earnings, but if combined with other income, allowances apply similarly. The tax-free threshold for supplementary income is €410/year [2].
Summary Table of Typical Allowances and Deductions Relevant to Families, Retirees, and Mini-Jobbers in Germany (2025):
| Category | Description and Limits | Applies to | |----------------------------|--------------------------------------------------------------------|-----------------------------| | Child Allowance & Benefit | Child allowance reduces taxable income; child benefit pays monthly per child; updated yearly (€12,096 allowance basis in 2025) | Families | | Education & School Fees | Partial deductions for vocational education and eligible school fees | Families | | Parental Leave Allowances | Continued child benefits, tax class benefits, and social security considerations during leave | Families | | Household Services & Domestic Help | 20% of costs deductible within limits for domestic help and home office expenses | Families/Retail workers, Home office users | | Childcare Costs | 2/3 of costs up to €4,000 deductible per child under age 14 | Families | | Maintenance Payments & Loan Losses | Deductible as special expenses if legally required | Families/Retirees | | Healthcare, Care, Nursing Home Costs | Deductible if exceeding reasonable thresholds | Families/Retirees | | Charitable Donations | Tax-deductible up to approx. 20% of income | All taxpayers | | Insurances | Health, long-term care, life insurances deductible as special expenses | All taxpayers | | Supplementary Income Allowances | €410 tax-free, up to €820 with reduction for retirees and mini-jobbers | Retirees, Mini-jobbers |
These allowances and deductions help reduce the overall tax burden for families, retirees, and low-income workers and are governed by the German Income Tax Act (Einkommensteuergesetz, EStG) and related regulations [2][4].
For precise figures or eligibility for a particular deduction (e.g., exact childcare cost deduction or nursing home costs), it’s advisable to consult current official tax guidance or a tax professional, as limits and qualifying conditions can be detailed and subject to change.
- Children may declare up to 9,000 euros as maintenance payment for a non-care-dependent parent living in a senior residence under certain conditions.
- Senior citizens or direct relatives can claim costs for health-related accommodation in homes as exceptional burdens.
- Retirees who bundle healthcare costs for glasses, dental care, medication, doctor's visits, and non-reimbursed cures in 2018 can often deduct these expenses as extraordinary expenses.
- 4.9 million pensioners currently pay taxes on their pensions, and this number is expected to increase with the next pension increase in July.
- Donations made to charitable organizations in 2018 can be deducted as special expenses, with proof required for amounts over 200 euros. Political donations are deductible up to half of the tax liability and as special expenses, up to a maximum of 1,650 euros (single) and 3,300 euros (joint assessment).
A retiree may claim a tax-free allowance increasing to €12,096 in 2025, and additionally, supplementary income up to €410 per year is tax-free.
For personal-finance planning, families can take advantage of the Child Allowance (Kinderfreibetrag) and Child Benefit (Kindergeld), which combined lower taxable income and provide monthly payments per child, with significant amounts available in 2025.
