Structure of tax deductions (Werbungskosten & Sonderausgaben)
Category 1: Professional Expenses (Werbungskosten)

1.1. Commuting Between Home and Work (Entfernungspauschale)
What it is: A fixed amount per kilometer of the one-way distance between your home and your primary workplace. It is independent of your mode of transport.
The amount for 2026:
As of January 1, 2026, the commuter allowance was significantly simplified and increased. There is now a flat rate of €0.38 per kilometer for every full kilometer of the one-way commute . The previous graduated system (€0.30 for the first 20 km, €0.38 from the 21st km) was abolished.
Calculation Example: Distance to work: 30 km. Working days: 220.
Calculation: 30 km × €0.38 × 220 days = €2,508.00 for the year.
(The example in your text is based on the 2025 rules and should be updated to the 2026 single-rate model.)
Important: The allowance is only effective if your total professional expenses exceed the standard employee lump sum of €1,230.

1.2. Home Office Allowance (Homeoffice-Pauschale) & Dedicated Office (Arbeitszimmer)
Home Office Allowance (for 2026):
  • Rate: €6 per day spent working from home.
  • Maximum: 210 days per year, for a total of €1,260.
  • Requirement: The work from home must be your primary activity for that day (more than 50% of your working time), and you must not have visited your first place of work.
  • No dedicated room required: You do not need a separate, dedicated room to claim this.
Dedicated Home Office (Arbeitszimmer):
  • Requirement: You need a separate, lockable room that is used almost exclusively for professional purposes.
  • Deduction: If it is the center of your entire professional activity, you can claim the actual, proportionate costs of the room without a cap. If not, the deduction is capped at €1,250 per year.
  • Caution: This is a high-scrutiny deduction. The tax office strictly checks whether the room is genuinely used almost exclusively for work.
Important rule for both: The home office allowance is counted against the standard employee lump sum of €1,230 and only takes effect if your total expenses exceed this amount.

1.3. Work Equipment and Materials (Arbeitsmittel)
What can be claimed: Office supplies, professional literature, computer, monitor, software, professional work clothing, tools, etc.
For expensive items (e.g., a laptop costing over €800), the cost must be depreciated over several years rather than claimed in a single year.

1.4. Accommodation Away from Home (Doppelte Haushaltsführung)
If you work in a different city and must rent a second home there while maintaining your main home for your family, you can claim:
  • The rent for the second apartment.
  • Travel home on weekends.
  • Additional meal allowances (Verpflegungsmehraufwand).
1.5. Further Education Costs (Fortbildungskosten)
Condition: The training must serve to maintain, improve, or increase your current income (not a complete career change).
What can be claimed: Course fees, seminars, materials, travel to and from the location, accommodation, and meals during the training.

1.6. Other Professional Expenses
  • Membership fees in professional associations.
  • Job application costs (travel to interviews, postage).
  • Interest on a loan for education.
  • Moving costs (Umzugskosten) directly related to a new job.
Category 2: Special Expenses (Sonderausgaben) & Other Deductions

These are personal expenses that the state encourages or recognizes as necessary.
2.1. Pension Contributions and Life Insurance (Altersvorsorge)
  • Mandatory contributions to the state pension system (GRV), as well as to systems for civil servants and freelance professionals.
  • Contributions to private pension insurance (Riester-Rente, Rürup-Rente) – within the statutory limits.
  • Contributions to life insurance (Risiko-LV), provided the contract term exceeds 12 years and includes a savings component.
  • Contributions to basic pension insurance (Basisrente / Rürup-Rente).
Important for 2026:
  • There is currently no legislative change to specifically increase the pension contribution deduction limits for 2026. For the 2025 tax year, the deduction for Rürup pensions was capped at €28,317 for singles and €56,634 for married couples . Until new legislation is passed, the relevant existing tax laws will continue to apply for 2026 .
  • It is important to note that the spouse pension splitting (Ehegattensplitting) is still a controversial issue, with the number of divorces increasing, but the decision on its future has been postponed.
2.2. Health and Personal Insurance
  • Contributions to statutory (gesetzliche) and private (private) health insurance.
  • Contributions to dental insurance (Zahnzusatzversicherung).
  • Contributions to occupational disability insurance (Berufsunfähigkeitsversicherung).
  • Contributions to nursing care insurance (Pflegeversicherung) – since January 1, 2025, the contribution rate has been increased by 0.2 percentage points, making these deductions potentially higher.
2.3. Other Special Expenses
  • Church tax (Kirchensteuer): Not refunded, but fully deductible from the taxable base.
  • Donations (Spenden) to recognized charitable organizations (usually up to 20% of income).
  • Alimony payments (Unterhaltszahlungen) to a spouse, in certain cases.
  • Tax consultant costs (Steuerberater) for preparing the previous year's tax return.
Category 3: Exceptional Burdens (Außergewöhnliche Belastungen)

These are unforeseen and unavoidable expenses that not all taxpayers incur. A deduction is only applied if the expenses exceed a "reasonable burden" (zumutbare Belastung), which depends on your income and family status.
  • Co-payments for medical expenses (Zuzahlungen): If your expenses for treatment, medication, glasses, dentures, etc., exceed this threshold in a given year.
  • Funeral expenses.
  • Expenses for household-related services (haushaltsnahe Dienstleistungen) and craftsman services (Handwerkerleistungen): Up to 20% of the labor costs can be deducted directly from your income tax. The maximum deduction is €1,200 per year for craftsman services and €4,000 per year for household-related services. Important: The services must be provided in your own home, where you reside.
Household-Related Services (Haushaltsnahe Dienstleistungen) & Craftsman Services (Handwerkerleistungen)
This is a tax relief, not a deduction from taxable income. The tax office deducts 20% of the labor costs directly from your tax liability . This is a key difference from other deductions.

1. Household-Related Services 
  • Description: Services that are typically performed by members of a private household. Examples include:
  • Apartment cleaning, window cleaning, and housekeeping.
  • Gardening and lawn care.
  • Childcare or care for relatives.
  • Snow removal and housekeeping services.
  • Privately organized moves carried out by a moving company.
  • Requirement: The service must be provided in your own household in Germany or another EU/EEA country.
  • Tax Relief: 20% of the labor costs (including machine and travel costs), with a maximum deduction of €4,000 per year.
  • For Renters: You can also claim these deductions. Check your annual utility bill (Nebenkostenabrechnung). Costs for building cleaning, gardening, and caretaker services are often listed there and are deductible .
2. Craftsman Services (Handwerkerleistungen) 
  • Description: Renovation, maintenance, and modernization work in your household. Examples include:
  • Work on walls, facades, roofs, or garages.
  • Painting, varnishing, and wallpapering.
  • Repairs or replacement of floors, windows, or doors.
  • Maintenance or replacement of heating, electrical, gas, or water installations.
  • Bathroom and kitchen renovations.
  • Requirement: As with household-related services, the work must be performed in your own household. The labor costs must be separately stated on the invoice, and the payment must be made via bank transfer to the service provider's account (cash payments are not accepted).
  • Not Eligible: New construction measures or measures funded by public subsidies are generally excluded from the relief.
  • Tax Relief: 20% of the labor costs, with a maximum deduction of €1,200 per year.
Flat-Rate Deductions & Standard Allowances in 2026

Deduction Category

Description

2026 Rates / Limits

Employee Lump Sum (Arbeitnehmer-Pauschbetrag)

Standard allowance for every employee, automatically applied.

€1,230 per year

Special Expenses Lump Sum (Sonderausgaben-Pauschbetrag)

Standard allowance for special expenses, automatically applied.

€36 for singles, €72 for married couples

Lump Sum for Single Parents (Entlastungsbetrag für Alleinerziehende)

Additional allowance for single parents.

€4,260 per year for the first child

Childcare Costs

Costs for daycare, kindergarten, etc.

Up to €6,000 per child (deductible for two-thirds of costs)

Child Benefit (Kindergeld) / Child Allowance (Kinderfreibetrag)

A monthly payment or a tax-free allowance per child.

Child benefit is €259/month per child (2026)

Craftsman Services (Handwerkerleistungen)

For services like repairs or maintenance in your household.

20% of labor costs, up to €1,200 per year

Household-Related Services

For services like cleaning, gardening, or care.

20% of labor costs, up to €4,000 per year

Care for Relatives

Costs for care of close relatives.

Up to €4,000 per year


Don't try to memorize everything.
Use tax filing software (like Wiso Steuer, Taxfix, etc.). They ask you simple questions like "Did you have expenses for...?" and automatically assign them to the correct category while applying the current limits. Your only task is to collect receipts throughout the year and answer the program's questions honestly.
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