Tax Advisor’s Guide: 10 Specific Expenses You Can Deduct on Your Tax Return

What exactly can you claim on your tax return? There is often a great deal of uncertainty about what is deductible and what might not belong on the tax return. As tax advisors, we know exactly what tax law allows. We also know the expense categories that are often overlooked when filing tax returns. Based on our daily experience, we have therefore identified ten more or less specific expenses that can be included in your tax return.

1. Hot Topic: Working from Home

With the ongoing COVID-19 pandemic, working from home has become the new full-time workplace for many employees and taxpayers. Before the pandemic, it was relatively difficult to claim deductions for working from home. The government has responded to this new situation by establishing the so-called home office allowance. Under this new allowance, you can claim 5 euros for each day worked from home. However, there is a maximum deductible amount of 600 euros per year. It’s even better if you have a dedicated home office.

2. The commute and the mileage allowance

For taxpayers who do not work from home, the commute to work is part of the daily routine. However, there is also an opportunity to save on taxes when it comes to the commute. The rule here is: 30 cents per kilometer for the one-way trip to work. It’s important to note that the so-called mileage allowance isn’t limited to drivers. You can also claim it if you commute by bike, bus, train, or even on foot. In all cases, you can claim the mileage allowance on your tax return. The only important thing is that only the most direct route is counted. Unfortunately, taking an extra detour to save on taxes isn’t worth it.

3. Doing Laundry with Tax Assistance

Unfortunately, washing your personal clothes has no impact on your taxes. However, the situation is different for work clothes! Both the purchase and the cleaning of work-related clothing can be tax-deductible. The amount of the costs you can deduct depends on the weight of the clothing and the frequency of cleaning. This applies at least if you wash the clothing yourself. Dry cleaning at a professional laundry, on the other hand, can be fully claimed on your tax return. The only important thing is that you always keep the receipts and have them ready for any inquiries from the tax authorities.

4. How Renters Can Save on Taxes

Unfortunately, it is not possible to simply deduct rent. Rent itself generally has no place on your tax return. However, the situation is different with operating costs. You normally receive a so-called operating cost statement from your landlord each year. In many cases, these operating costs also include expenses for household-related services and tradespeople. You can deduct 20 percent of these costs. As a tenant, you can quickly realize significant tax benefits by reporting these expenses on your tax return.

5. Save on taxes with sunglasses and laser eye surgery

You may already know that eyeglasses are tax-deductible. Eyeglasses are considered a so-called extraordinary expense. But what about sunglasses or laser eye surgery? In fact, the costs of sunglasses or laser eye treatment are also tax-deductible. However, for these expenses to be recognized for tax purposes, a medical certificate must always be provided. This also applies to contact lenses. If such a certificate is available, the expenses can be claimed as an extraordinary expense. Please note that you must obtain a certificate that is actually “valid” for tax purposes. It’s best to seek assistance from a tax advisor regarding this matter.

6. Save on taxes with man’s best friend

They say a dog is man’s best friend. Unfortunately, many expenses related to owning a dog cannot be claimed on your tax return. Costs for food or the vet are not tax-deductible. However, expenses for professional dog care are tax-deductible. A dog sitter whom you pay during the day because the dog cannot come to work with you or needs to be cared for during an absence such as a vacation can be claimed as a tax deduction. Since such a dog sitter can quickly become expensive, dog owners should be aware of this tax provision. It is important to note, however, that the care must take place at your home.

7. The Tax Authorities and the Gym

It’s a wonderful idea to have the tax authorities chip in for the costs of a gym membership. Unfortunately, however, gym costs are only deductible to a very limited extent. The basic idea is that the expenses are only deductible if there is a health-related reason for the training. For most athletes, physical health is the primary focus. However, to effectively claim these costs on your tax return, there must be a medically diagnosed condition that is to be treated or managed through the training. A doctor’s note is required for this purpose. Only if these conditions are met can gym costs be deducted. If you meet the requirements, please note that, of course, only those expenses may be deducted that are not already reimbursed by your health insurance.

8. Deducting dental costs

The bill for a dental visit can quickly amount to several hundred, if not thousands, of euros. In the best-case scenario, health insurance covers a large portion of the expenses. Often, however, a significant portion remains that you must pay yourself. These costs, however, also qualify as extraordinary expenses and can therefore be deducted on your tax return. Of course, it is important that these are costs incurred due to necessary treatment. Cosmetic procedures such as teeth whitening or invisible braces are not deductible.

9. Restful Sleep for Allergy Sufferers

People who suffer from allergies sometimes need to use special mattresses or pillows to alleviate their symptoms. If a doctor has certified the need for special allergy-friendly products, you can deduct the expenses from your taxes. This once again demonstrates that there are indeed very specific costs that can be claimed on your tax return. People with allergies often face high costs for medications or alternative products in their daily lives; this way, you can recoup a portion of those expenses.

10. The Locksmith

When a locksmith has to come out, it often gets expensive. Especially on weekends or at night, a hefty surcharge is often added to the bill. The costs for the locksmith can be claimed as a trade service at a rate of 20 percent. The only important thing is that you receive an invoice and did not pay in cash. Travel and labor costs can then be deducted on a pro-rata basis. Material costs, however, such as for a new lock, are not deductible.

Tax advice from experts in Düsseldorf and Oberhausen

We hope you enjoyed this post and were able to learn something new. There are various expenses that can be tax-deductible, at least in certain cases. It’s difficult for taxpayers to keep track of all this. As a result, opportunities are often missed and potential tax savings go unused. With a qualified tax advisor, this won’t happen to you anymore. Are you looking for a tax advisory expert? With our offices in Düsseldorf and Oberhausen, we are the ideal partner for you. Contact us to schedule a consultation.