Every year the same question: Do I have to file a tax return – or is it voluntary? While some see it as a tedious chore, others see the tax return as an opportunity to reclaim overpaid taxes. But what exactly applies and when is there an obligation? And what does our choice of tax class have to do with it?
"88% of all voluntary tax returns lead to a refund."
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Example
A married couple, both with full social security coverage, receive monthly wages (after deduction of any allowances) of 3.000 € and 1.700 €. Since the monthly wage of the lower-earning spouse does not exceed the amount of 2.255 € shown in column 2 of the table according to the monthly wage of the higher-earning spouse, the tax class combination III/V leads to the lowest wage tax in this case.
Comparison of wage tax deduction amounts:
a) Wage Tax
for 3.000 € under tax class III 88,16 €
for 1.700 € under tax class V 245,25 €
total of 333,41 €
b) Wage Tax
for 3.000 € under tax class IV 344,00 €
for 1.700 € under tax class IV 67,58 €
total of 411,58 €
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Comparison
If the monthly wage of the lower-earning spouse were 2.500 €, the tax class combination IV/IV would lead to the lowest total wage tax.
Comparison of wage tax deduction amounts:
a) Wage Tax
for 3.000 € under tax class III 88,16 €
for 2.500 € under tax class V 515,33 €
total of 603,49 €
b) Wage Tax
for 3.000 € under tax class IV 344,00 €
for 2.500 € under tax class IV 231,50 €
total of 575,50 €
When is there an obligation to file a tax return?
Not everyone must submit a tax return. However, there are cases in which the Finanzamt (Tax Office) mandatorily requires submission. The legal basis is provided by § 46 Abs. 2 Nr. 3a EStG (Income Tax Act), which lists various reasons for mandatory assessment. These include, among others:
Spouses with tax classes III/V or IV with factor
Anyone who chooses this combination must file a tax return, as a tax back-payment requirement can often arise (§ 46 Abs. 2 Nr. 3a EStG). The tax burden is not distributed evenly between both partners, so the Finanzamt requires a retrospective calculation.
For this reason, there is generally an obligation to submit an income tax return for tax class combination III/V. To avoid tax back-payments, spouses or life partners are free to choose the tax class combination IV/IV if they wish to avoid the higher tax deduction for the spouse or life partner with tax class V; however, the other spouse or life partner then loses the more favorable tax class III. Furthermore, there is the option to choose the tax class combination IV/IV with a factor (see also the examples on the "factor method" below).
Example: Florian is in tax class III and earns 60.000 € gross per year, Susanne is in tax class V and earns 20.000 €. Since less wage tax is withheld in tax class III, the joint assessment may lead to a tax back-payment.
Side income over 410 €
Anyone who earns additional income alongside their main job is obliged to file once a certain limit is reached.
Income from self-employed work, rental and leasing or investment income leads to a mandatory assessment from 410 € (according to § 46 Abs. 2 Nr. 1 EStG).
Example: Max is an employee and earns 45.000 € gross per year. On the side, he rents out a condominium and makes a profit of 600 € from it. Since he exceeds the 410 € limit, he must submit a tax return.
Tax-free wage replacement benefits
Certain types of income are tax-free but are subject to the progression clause (Progressionsvorbehalt) according to § 32b EStG. These include, among others:
- Sickness benefit (Krankengeld)
- Parental allowance (Elterngeld)
- Short-time work allowance (Kurzarbeitergeld)
- Unemployment benefit I (Arbeitslosengeld I)
These benefits increase the tax rate for the taxable income and can lead to a back-payment. Citizen's benefit (Bürgergeld) does not increase the tax rate.
When choosing the tax class combination or applying the factor method, spouses or life partners should remember that the decision can also influence the amount of wage replacement benefits, such as unemployment benefit I, short-time work allowance, maintenance allowance, sickness benefit, pension sickness benefit, injury benefit, transitional allowance, parental allowance and maternity benefit, or the amount of the wage entitlement during partial retirement. A tax class choice made before the start of the year is generally recognized by the Federal Employment Agency (Agentur für Arbeit) when granting wage replacement benefits. If spouses or life partners change tax classes during the calendar year, unexpected effects may arise regarding the payment of wage replacement benefits (e.g., due to the unemployment of one spouse or the use of partial retirement). Therefore, employees who expect to want or need to claim a wage replacement benefit in the foreseeable future, or who are already receiving one, should ask the relevant social benefit provider or employer about the impact before choosing a new tax class combination or applying the factor method.
Example: Lisa earns 30.000 € per year. During her parental leave, she receives 7.500 € in parental allowance. Her tax rate increases due to the progression clause, which means she may have to pay additional taxes.
- Losses from rentals or other income
Those who generate losses can offset these against other income and save taxes (§ 10d EStG). By generating income from rentals and leasing, there is an obligation to submit a tax return.
Example: A married couple generates a loss of 1.200 € from rentals in 2025. Since this loss can be used for tax purposes, they are obliged to submit a tax return.
Voluntary tax return – is it worth it?
Even if there is no obligation, it can be worthwhile to submit a tax return voluntarily. Especially when:
- High professional expenses have been incurred (e.g., travel costs or a home office according to § 9 EStG).
- Special expenses can be claimed (e.g., donations or church tax according to § 10 EStG).
- Extraordinary burdens exist (e.g., high medical costs according to § 33 EStG).
- The income in one year was lower than in the previous year, making a tax refund likely.
Example: Anna worked full-time in 2024, but was only part-time in 2025. Due to tax progression, she receives a high refund with a voluntary submission.
Deadlines and consequences for non-submission
Those subject to mandatory assessment must submit the tax return by 31 July of the following year (§ 149 AO (Fiscal Code)). However, the Corona rules form an exception.
Anyone who misses the deadline must expect late filing penalties according to § 152 AO.
Voluntary submissions are possible up to four years retrospectively.
Incidentally, an assessment by estimate (Schätzungsbescheid) by no means releases one from the obligation to submit a tax return – in the worst case, a fine (Zwangsgeld) and further consequences may follow.
Application
Applications for a change of tax class or for the application of the factor method must be addressed to the Finanzamt in whose district the spouses or life partners have their residence at the time of application (Wohnsitzfinanzamt). As a Lohnsteuerhilfeverein, we are happy to handle this for you.
The tax class is one of the wage tax deduction features decisive for wage tax deduction. In the calendar year 2025, the tax class used in the calendar year 2024 generally continues to apply.
An application for a change of tax class or the application of the factor method can be made using the form "Antrag auf Steuerklassenwechsel bei Ehegatten/Lebenspartnern" no later than 30 November, either electronically via "Mein ELSTER" (www.elster.de) or at the local Finanzamt. Within the current calendar year, a tax class change is possible multiple times. When choosing the factor method, the expected wages for the year 2025 or 2026 from the primary employment relationships must also be stated.
A change from tax class III or V to tax class IV is also possible upon application by only one spouse/life partner, with the result that both spouses or life partners are placed in tax class IV.
Factor Method
Tax Class Combination IV/IV
Annual wage tax for tax class combination IV/IV (both spouses with full social security coverage):
Spouse A for 36.000 € (monthly 3.000 € x 12) = 4.128 €
Spouse B for 20.400 € (monthly 1.700 € x 12) = 811 €
Total wage tax for tax class combination IV/IV (corresponds to "X") is 4.939 €.
The estimated income tax in the splitting procedure (corresponds to "Y") is 4.780 €.
The factor is Y divided by X, i.e., 4.780 € : 4.939 € = 0.967
(The factor is calculated to three decimal places and is only entered if it is less than 1).
Annual wage tax for tax class IV/IV with factor 0.967:
Spouse A for 36.000 € (4.128 € x 0.967) = 3.991 €
Spouse B for 20.400 € (811 € x 0.967) = 784 €
Total wage tax for tax class combination IV/IV with factor 0.967 = 4.775 €.
Comparison of Tax Class Combinations
In the example case, the income tax assessment – provided that no other tax-related matters need to be considered – leads to:
– with tax class combination III/V
a back-payment of 779 €
(estimated income tax in the splitting procedure 4.780 € – total wage tax for tax class combination III/V 4.001 € [1.058 € + 2.943 €]),
– with tax class combination IV/IV
a refund of 159 €
(estimated income tax in the splitting procedure 4.780 € – total wage tax for tax class combination IV/IV 4.939 €),
– with tax class combination IV/IV-Factor
neither a high back-payment nor a refund
(in this case only a rounding difference of 5 €; estimated income tax splitting procedure 4.780 € – total wage tax for tax class IV/IV with factor 4.775 €).
The wage tax is distributed significantly differently in the factor method (3.991 € for A and 784 € for B) than with tax class combination III/V (1.058 € for A and 2.943 € for B). The wage tax distribution in the factor method corresponds to the family law distribution of the tax burden in the internal relationship of the spouses.
The wage tax is distributed significantly differently in the factor method (3.991 € for A and 784 € for B) than with tax class combination III/V (1.058 € for A and 2.943 € for B). The wage tax distribution in the factor method corresponds to the family law distribution of the tax burden in the internal relationship of the spouses.
Tax return: Obligatory or optional? That depends on the individual situation. Those who must, cannot avoid it. Those who don't have to can still get hard cash back, and the choice of tax class should also be optimally selected.
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Choosing a tax class, whether I have to submit a tax return, and whether I am then obliged to submit one forever are probably the most common questions and are subject to many myths.
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Note
**This article serves as general information and was carefully created by the editorial team of Lexo.Tax. Personal tax advice can only take place within the framework of a membership with Lexo.Tax – and exclusively within the legally permissible scope according to § 4 Nr. 11 StBerG (Tax Consultancy Act).
Frequently Asked Questions (FAQ)
Do I always have to file a tax return after filing it once?
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No, a one-time voluntary tax return does not oblige you to future submissions. However, if your tax situation changes, an obligation may arise.
Do I always get money back if I file a tax return voluntarily?
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Not necessarily. The refund depends on whether too much wage tax was withheld or whether tax benefits can be utilized.
How long can I submit a voluntary tax return?
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Voluntary tax returns can be submitted up to four years retrospectively. After that, a refund is no longer possible.