Cheaper check

from Wikipedia, the free encyclopedia

Cheaper test is a term from German tax law . In cases in which the taxpayer has the right to choose, the tax office will check which of the possible variants is better off with the taxpayer. This variant is then to be used when determining the tax.

Ex officio cheaper examinations are carried out:

  • In the case of family allowances , it is checked whether the child benefit granted or the tax reduction resulting from the child allowances is more favorable ( Section 31 of the Income Tax Act ),
  • In the case of the Riester pension , it is checked whether the granted "Riester allowance" or the tax advantage through the possible deduction of special expenses brings a better result ( Section 10a (2) EStG),
  • In the case of deduction of special expenses for pension expenses according to § 10 EStG, it is checked whether
    • the actual contributions to health insurance to achieve a level of care equivalent to social assistance and to the statutory long-term care insurance (Paragraph 1 No. 3) or also certain other pension expenses (Paragraph 1 No. 3a), but then only within maximum amounts (Paragraph 4) are to be applied ("small" cheaper test, Section 10 (4) sentence 4 EStG) or
    • in the calendar years up to 2019 the maximum amounts of paragraphs 3 (e.g. Rürup pension ) and 4 (see above) or those from paragraph 3 in the version applicable for calendar year 2004 with certain maximum amounts for the advance deduction apply ("large “Cheaper test, § 10 Abs. 4a EStG).
  • In the case of the distance flat rate, it is checked for disabled people whether the distance flat rate or the actual expenses lead to higher advertising costs ( Section 9 (2) sentence 3 EStG).

At the request of the taxpayer, a more favorable test will take place in the case of investment income ; From 2009 onwards, it will be checked whether the inclusion of the investment income in the collectively agreed income tax leads to a more favorable result than the withholding tax through the final withholding tax ( Section 32d (6) EStG).

Furthermore, there is a cheaper test for extraordinary income according to § 34 EStG; Here it is checked whether the taxation according to the tariff, the sole taxation according to paragraph 1 (one- fifth rule ), the sole taxation according to paragraph 3 (reduced tax rate) or the combined application of paragraphs 1 and 3 is more favorable; the application of paragraph 3 requires an application.