Hello everyone, I hope you are having a nice evening. Welcome to the 2nd episode of our webinars. To be honest, I don't even know if I'm actually live, I haven't seen the notification yet. If so, nice to have you here. So, I would say we're online a little earlier. If you can see/hear me, drop a brief comment and before we start, some small talk: 1.
Is the sound alright? 2. Were you in the first webinar yesterday? That would actually be interesting. Because we're trying it for the 2nd time right now. If I can know this somehow, that would be pretty good. For me a relatively important question: who was there yesterday? Because I now have a relatively detailed presentation and yesterday I was just …, I'm really super, super sorry again… I changed a lot and did something different here, hopefully everything should work today. But what would actually be important for me if you all were there yesterday, then we'll save the first 20 minutes and I'll compress it a lot before I tell you everything I told you yesterday. That would be a little double then. "Hey, it works, yes, everything fits, yes today, no, yes, ok" There are already people there who weren't there yesterday. “So far everything fits, was there yesterday, greetings, yesterday until failure, hey, you can hear, couldn't yesterday, works great, I wasn't there, running and was already there yesterday. Yes, I'm a bit in a bind now, but we still have 2 minutes.
We can now decide together, so we definitely won't do it in as much detail as yesterday. What I'm going to do, we now have two records, so to speak, you get the records and I will definitely cut the long 1st half that we had yesterday, then I'll cut together with the long 2nd half that we have today we have a beautiful comprehensive record. The big question, however, is should I jump to the point where we left off yesterday, or wouldn't you be so bored if I briefly go over it again in 5 minutes for all the people who haven't been there yet? Yes, there is a recording from yesterday, which means that I will go through the first part relatively quickly today and not as extensively as yesterday. Yesterday we talked a little bit about Spotify and how you can put your projector and screen down. Not how, I honestly told you who is allowed to, because I assume that most of you are not allowed to.
In fact, some weren't there yet. That's really nice, then we'll have another lap. Exactly, next time we're doing episode 1, series. In fact, that's also an issue, I'll think about it, if you like the format, oh it's already 5 p.m., but anyway, if you like the format, please write it in. Yesterday I read through all the questions again, including the points, and if you say the format is cool, you can almost see my office here, then I like to sit down once a week and then we go through different topics.
Because there are still quite a few topics that we can talk about. Very nice, wonderful, it's 5 p.m., let's get started. To answer the most frequent questions, similar to yesterday: yes, there will be a recording, yes there is also a short summary, a kind of checklist and 3rd question: yes, I have read everything in this book. These are the most common questions for now, otherwise for everyone who wasn't there yesterday, at the beginning I go over the slides very, very quickly. That will be given again in more detail in a recording, that is the unsuccessful attempt from yesterday. Where I go into more detail is the second half, which means you can watch it again in the preview. For all the people who were there yesterday, I will not bore you too much with summaries and so on, but I will go back briefly and my teachers at school always said you learn with repetition. So let’s see if it will work out here! Today it is about saving taxes for the self-employed.
There are a number of legal tax tips, which means that it isn't about dubious, dubious tricks, illegal methods, so I'm not teaching you how to evade taxes, but just a few things you can do, then you can deduct more so that you can optimize your profit a bit and actually get your tax savings over it. These € 1,000.00 are honestly an average value. In a few conversations I had it in such a way that one was clearly above it. Well, I have a case, I can tell you later, that ended up with a 5-digit tax saving simply because we changed a few things, completely legal. The agenda: Intro are we right in the middle of it, save taxes at all costs? I'll go over that briefly and then I'll go to the tax tips. Yesterday we were in the basic tax knowledge, that is, what can I actually deduct as a business expense. This is certainly another topic that deserves a lot more focus and where you can talk about it in much more detail. The focus today will be: your setup of the company, but I was interrupted when I wanted to tell you something about freelance work, trade and small business regulations and I will go deeper into everyday optimization.
For me, everyday optimizations are the optimizations that each of you can do without having to write big contracts back and forth and something that actually each of you can practically implement. And there are also things that I might be interested in again, who of you is already a customer of Kontist Steuerberatung? That means, who has heard of me before, who has read my name somewhere? The Kontist Steuerberatungsgesellschaft takes care of fundamentals of the tax work, as I said, the setup of the company, we help you and also the day-to-day optimization.
We do that for all of our clients once a year, we go over it, what can be done to be better off from the tax point of view. To be honest that’s more of a topic for the second half of the year, because you’re really good at reshaping taxes again. And at the very end I would like to give you a few more tips that are much more complex, but where you can also save a lot. So the subject of tax planning. In total, there are hundreds of such tips and I've been looking at them a lot in the last few weeks and months. The whole thing is actually like a Legos and there are many control modules, so optimization modules that you can use. All in all in the last few weeks I've researched between 300-350 of them.
In this webinar, I'll show you around 10-15 of them. But there is much, much more, so if you are interested, we can actually do a 2nd, 3rd and 4th webinar, where we go into certain parts again. I would say that beforehand what is the topic and we could do it. I don't want to say that this source is endless, but you can make a lot more out of it. Two sentences to me and I really try to get it done in two sentences. My name is Melchior, born in Berlin and I'm a tax clerk, studied business law with a focus on tax law and auditing, worked for many years in tax consulting and auditing, I've been self-employed for 14 years and, since last year, I've been a co-founder and manager of Kontist Steuerberatung. That means this whole tax service is based partially or essentially on many of my considerations and I constantly push the operational side of things forward so that we keep developing it. That means, if you are a customer, satisfied or dissatisfied and so on, you are welcome to contact me.
There are such crazy models if you are a customer, so we like to talk to you about it, so you will learn them here too, but I would say that what belongs to the normal setup and honestly does more than a classic tax advisor does. We will not set up a complex tax structure for several international companies and so on simply because the benefit is not there. Yes, there are some of them, very nice, I'm happy.
And that is exactly the point, which one do we apply? We use everything that makes sense in everyday life, because, as I briefly mentioned yesterday, saving taxes at all costs doesn't help you. Because the best tax saving method simply doesn't earn anything, don't make any sales, don't make any profit and you don't have to pay any taxes. This is the ultimate killer trick to never having to pay taxes, but of course it should never be the priority number one.
That is why you concentrate above all on ensuring that your company is running, that you are making sales, that you are making profits and saving taxes should always be priority 2. Sounds a bit obvious, but I often notice it differently in practice. How they try to fool around and something. It makes me think to myself: Please only put half of the energy with which you are trying to reduce your taxes to earn more, then the bottom line is that you have more left over.
That's why you always have to see it in the overall context, especially for the self-employed and freelancers. I think this is an important point, because we usually take care of everything. So we self-employed take care of everything and optimize. If you have the choice to optimize taxes and earn more, then you should always decide to earn more. Tax optimization always has a price. So you always have to look at the tax savings, you always have to consider what kind of effort I have to make to save taxes. This is the big difference to such large corporations, for example. They have entire legal departments and can employ entire armies of tax advisors and tax lawyers to reduce taxes. For Amazon with billions in sales and profits, for which it is also worthwhile to employ hundreds of tax lawyers in order to pay only 1% less taxes.
It's just not worth it for you because you would spend more on tax lawyers or tax advisors than you save in the end. And that always has to be in proportion and I speak from my own experience. I've been doing this for a couple of years. At KPMG, we made a tax-saving model for closed-end real estate funds and my whole day consisted of reading double taxation agreements. I did it, it was of course correspondingly expensive, but it was worth it for them because they also made billions in profits. Then a third point that can be forgotten is: the risk. On the internet, you find this again and again when you say “save taxes” or “I don't want to pay taxes”, there you find models like “let's establish an Estonian company, emigrate to Cyprus, to Malta, to Ireland”, however there are thousands of options, but there is certainly also a great risk. And I don't even mean when you work in the illegal field. If you work in the illegal field and somehow register a company in Panama, then you have a certain risk of getting caught, but you are acting partly illegally.
Even if you act legally, you run the risk that things will change and you just don't notice it because you happen to not speak Maltese, for example, and you always have to keep yourself up to date and you run the risk of changes that you don't notice and then have to pay later. That is why the points of tax savings, effort and risk must always be in a good relationship to one another.
So, whenever I look to the side, I always briefly look at your comments. To be honest, Tobi is also behind the camera who he is eating in the meantime. You can tell me if there is a good question, although I don't want to say that any question is bad, but if a relevant question comes up, you can tell me that, then I am less distracted. We briefly discussed basic tax knowledge yesterday, so I'm not going into it that deeply now. Why should you apply costs? So actually one of the best tax saving methods is to have more costs.
Why? Because the more costs you have, the less profit you have and income tax and trade tax are based on profit and if you make less profit, you will pay less tax accordingly. Therefore apply as many costs as possible. Important please: do not create unnecessary costs. So don't spend money now just to spend it and then save taxes, because it's not worth it. Then a little bit about the difference between revenue and profit, because you can tell that it is about profit.
Revenue is the incoming money and profit is the earnings that come in above. In other words, revenue is basically your sales. Profit is ultimately your income. That is why it is called Einkommensteuer and not Einahmenssteuer in German, because it is not sales that are taxed, but the actual income. And I assume that you generate as much sales as possible and then you can use as much cost as possible, the bottom line is that you will pay less taxes. If you look at your last tax bill, you see and risk something like that. That means you see a table somewhere, there the tax bases are listed and at the top it somehow starts with “income from self-employed work”. It is either income from freelance work or from commercial operations. There are two ways to become self-employed, freelance (Freiberuf) and commercial (Gewerbe). I'll come to that later, and that's always about where the profit is. This means that the most important costs that you can apply do not even appear in the tax assessment, because only the profit is relevant here and therefore the following applies: the lower we can keep the profit, the better and for that we need costs.
You can include all costs that are related to your income, that is, either with income from the past, with income from now or because you want to have more income in the future, want to enter other market segments and schedule expenses that may and will bring you income in the future. For example, training costs. If you want to continue your education and you do a certification and attend seminars, you also do retraining and such topics, if you are self-employed, you can usually set this as income-related expenses, because that is kind of an investment so that you can do more later and the tax office will accept that.
And an increase in business expenses reduces the tax burden for employees or if you've been employed before and you talk to people you know, it always creates a lot of confusion. For employees, they also have these expenses, but they are called advertising costs and employees have a lump sum, i.e. employees can set a flat rate of € 1,000 as advertising costs. Unfortunately, the self-employed do not have that opportunity. The self-employed can’t simply set a flat-rate operating expense allowance of € 1,000.00, this is only possible as an employee. As self-employed, we can do a lot more to achieve this. And what is very, very important, yesterday we had such a discussion about what can I deduct, the tax office is not there to distinguish whether you are a good entrepreneur or not. I told you about my mom. The self-employed midwife has been around for 30-35 years, she does birth preparation courses and these kinds of things and she has a Spotify account which she uses exclusively for her course preparations.
In this case she can deduct it. Everyone else says, "I also use Spotify because it allows me to concentrate better." Yes, but there will be a private share of use. But Spotify, with my mom, especially now the individual case, she can deduct as a cost. But that does not mean there is now a list of possible business expenses that you/everyone can deduct. To give an extreme example and another than yesterday is, yesterday I told you about how to set down a projector and screen, I had a client with whom it went very well.
We have a client at Kontist Steuerberatung who is currently dealing with dog training, dog sitting etc, and of course you can use dog food there. There are only a few companies where you can say: “Bro, I can sell dog food as a company expense”, but in most of the cases it won’t work. Somehow it always has to be in context with your work. Examples are office supplies, telephone costs, internet costs, business costs, professional association fees, seminars, specialist literature, especially when you buy books and they have relevance to your profession, for example if you are an author, if you are a journalist, even if you are moderator, working as a trainer and having everything in the broadest sense to do with your topic complex, start with these books.
That doesn't mean you can deduct any book you buy now, but if you're a scriptwriter, for example, and want to get to know the dramaturgy of one of the most successful books and can provide an argument that way, then Harry Potter books can also be bought as business expenses. If you have specific questions, feel free to write in the chat, then we can briefly go through what you can potentially deduct or under what conditions. Basically, the benchmark is or you have to ask yourself: “Does this help me to generate income?”.
If so, deduct it as a business expense. And one more important thing is, please separate it. Absolute basic rule: separate the private from the business. You need a separate business account and should run all of the business expenses over it. This is where the operating income flows in, you give out the operating expenses and then transfer your “salary” to your account on a monthly basis. You can also do this weekly, daily, depending on what suits you best. Well, that's about where we were yesterday. That means to everyone who was here yesterday and was just now letting me run in the background, was cooking a bit and were putting children to bed, although that may be a little early, now you can get back to the screen again. Now we're getting in where we left off yesterday, namely in the company's setup.
"What is your attitude towards newspapers and magazines if you are a journalist?" So you can deduct magazines and newspapers if you are a journalist? Basically: magazines and newspapers, if they have anything to do with your job.. So if I now … this is a super stupid example … if I have a car workshop, then of course I can deduct all of my car magazines as business cost. When I own in-house training and want to read the “Manager Magazin” and “Business Punk” and have no idea what, absolutely 100% business expense. If you are a journalist and you have to keep yourself up to date and then magazines, both in your thematic area and in the genre in which you are active, that's clear. If you need that to do your job, deduct it. Then perhaps it is also important for many self-employed people with whom I speak, that they start their own business with a passion and a personal interest.
If the reason is just to enjoy your work, it doesn't mean that you can't deduct the costs. Just because you like to deal with some topics, one might hardly believe that I have also become a tax clerk and found it somehow interesting in terms of content. Of course, if I buy a tax book, that's a business cost. There are a few magazines out there as well, some are more entertaining, but I need that to keep up to date.
That's why magazines which are clearly business editions can be considered as business costs. This is of course always in doubt, no idea, if you buy a funny paperback for your daughter now, something like that will be a bit more difficult to sell, unless you are now, for example, a comic artist and draw those things. Why not? Quite clearly possible and in case of doubt it is actually always an argument. You have to provide an argument. Some very, very nice business models that can be nailed to zero when I shoot YouTube videos and I really want to buy a new cactus, by the way, my colleagues always say I have to buy a new cactus, that's the backdrop very clearly. I need it to generate income, so I can deduct it as a business expense. Another thing that is really exciting is vacation rental. I need furnishings so that I can rent out the holiday apartment better and present it better, and the boundaries are very, very fluid, so you have to have an argument in case of doubt. The tax office sometimes asks which is not something bad at all, they can ask, then you just explain why you need that to generate income.
The tax office is not there to decide how to run your business. So to go into the point of setting up the company. There are a few areas. There are two ways to start your own business in Germany. One is freelance work, the other is a commercial activity. Freelance is stipulated by who it is, journalists, interpreters, doctors, architects, tax consultants, lawyers, veterinarians, artists, I can't list them all, you'll find everything listed in the Income Tax Act, you don't have to read everything yourself. But it would be important that you know for yourself whether you are freelance or not and if you are a freelancer, please do not register a trade license. We actually see this with customers who now come to us, i.e. Kontist Steuerberatung, as a client, we see this with some who have registered incorrectly. This is a bit annoying because freelancers don't pay commercial tax. That is, freelancers only pay income tax and VAT under certain circumstances, but freelancers do not pay business tax.
In other words, they basically pay a whole lot less tax. It is, however, the case that traders can offset the trade tax against their own income tax, i.e. they pay a little less income tax. But the eligibility is not 100%. That means, freelancers often pay, I can't generalize that for everyone, but they often pay less tax and that can be changed. That means, if you have registered as a trader, but you notice that I am actually more of a freelancer, then you can re-register. Then you have the advantage to do an entire tax return, and you also have the advantage that you pay less taxes in total. What is also a decisive factor, the trade tax varies from region to region. There is a trade tax multiplier, which is determined by the responsible municipality.
And now, especially in times of remote work, home office and so on, it might not be so bad to register your company somewhere else other than where you work. For example, it is usually more expensive in metropolitan areas. I am now taking Berlin as an example, because I know Berlin very well. If I'm registered in a coworking space and have my company headquarters there, then I probably pay more trade tax there than at home if I live on the outskirts, because that's a different municipality that has a lower tax rate. That's why you can search the Internet, preferably not immediately, but after the webinar, so please take a look at your community and look for the rate of assessment. That doesn't exactly mean you can calculate it that way, there is a longer calculation formula, but you could, for example, if you are now registered in the coworking space and live on the outskirts, you can relocate your company and then pay less trade tax, of course only if you are a trader.
We once had a client who moved his seat, i.e. to the former law firm, a larger corporation, who moved his seat and moved the office from Hamburg to the outskirts and really saved a five-digit amount in business tax per year. This is absolutely madness, only because of the move, only because he has now taken his office in the countryside and not absolutely in the center. This is important for you if you are registered as a freelancer, there is no problem. But if you are registered commercially, think about whether you are also a freelancer. Here, do not overuse it, if you overinterpret it and stretch the legal rules in such a way, if you are more of a freelancer and is it worth the risk to change that. Because if you have your own interpretation, or are the only ones who have this interpretation, then the risk is simply very high that the tax office will see it differently at some point in an audit and want the money back.
Otherwise, if you are interested, please do not hesitate to contact us. So under Kontist Steuerberatung, you will find this video / livestream there you will find the first link and there you can virtually book a consultation for free. Of course we are happy to advise our customers, and we are happy to help. Another point is the small business regulation, oh a question! “Business: Can you simply register your business / self-employment with a municipality with a lower tax? Both activities are not tied to a specific location. " In case of doubt, you have to look at what is where and how. Of course, you somehow get into an area where the risk is too high, where that is no longer the case. But if in doubt, we would have to look in detail. What exactly are you doing, what does the whole business look like? If you just go somewhere now, I could tell a story, but I'm going beyond the scope of always telling you stories from my life, but really there are some areas that are deliberately very, very low. In other words, there were trade tax heavens within Germany and they were then simply closed.
In the trade tax law there is a minimum amount that you have to take in the trade tax multiplier, because somewhere such a small village by the North Sea coast simply set it to zero and said now we will register here and they have the highest trade rate on all statistics ever had. So in that case you would have to take a closer look at what is going on, what you are doing exactly, how it is reported, that is probably a bit beyond the scope here. But if you are interested, please contact us. What I would also like to go into is the small business regulation. Most people are familiar with the small business regulation. The small business regulation is primarily a simplification regulation for small self-employment, that is, if you permanently make less than 22,000.00 € in turnover.
Specifically, you have to think about it: if I made sales below € 22,000.00 in the previous year and probably not more than € 50,000.00 in the current year, then I can take advantage of the small business regulation, which means I don't pay VAT. Most of the people who start up say, oh that's pretty good, I'll do that and also those who are self-employed part-time say, oh that's convenient, I'll do that. Can be good, sounds good too. You don't pay VAT, which is why most people assume that they have to do that. But very important, you don't have to do that. There is no obligation and even if you only make € 10,000 in sales per year and only make € 10,000 permanently, you don't have to be a small business owner, you can always voluntarily switch to regular taxation.
And this is a very important point, because as a small business owner you not only pay no VAT, but you also cannot claim the VAT that was billed to you. That means you don't have any input tax deduction and there are some business models where this is very, very unfavorable for you. Just to take one example, we also have one of our clients who does affiliate marketing. That means he gets affiliate links, gets funds and so on. Most of the tools that he advertises, most of the providers that he advertises, are based in other EU countries and in other EU countries this income is tax-free anyway, regardless of whether he is a small business owner or not.
And this person as a small business owner is happy and thinks, I have less bureaucracy, but forgets that his sales would have been exempt from VAT anyway. The only thing he has achieved through his small business regulation is that he cannot claim input tax. And between 50 and 100 € a month in input tax went to him, for service providers, for web hosting services, for any plugins for his website and for all such things, he could not claim input tax everywhere, because he thought small business regulation is better and must register as such. Therefore, very, very important: if you are a small business owner, ask yourself if that is actually good for me, it would be very good if I can claim all the VAT that is billed to me.
Because it is a mistake to think that the small business regulation is always good. And now again… Oh very good, we only have large entrepreneurs with us, of course I'm happy too, then I don't have to worry too much about it. But actually a very extreme tax trap for small business owners is “reverse charged”. Just to give an example, unfortunately that too is beyond the scope and I have to go over it a bit quickly. If you are a small business owner in Germany and you advertise on Google with Google Ads or on Facebook with Facebook Ads, there is this reverse charge and you have to pay 19% VAT on top of your advertising costs.
As a small business owner, because small business owners do not pay any VAT, they do not have to pay it, but with the reverse charged procedure they receive a net invoice. This means that if I, as a small business owner in Germany, spend € 1,000 on Google advertising, I have to pay another € 190 to the tax office. Almost no one knows that, no one does, but if this is discovered later, a very, very high additional payment can be made. That means, if you are a small business owner, please be careful with expenses that you have in other EU countries. That you are correctly registered there. But especially with Google and Facebook there is a great danger if you place advertising there, so please google it and inform yourself if you have any questions and feel free to get in touch, because that is actually a big risk, which you may be taking .
"If you are a freelance software developer and you start to sell your software to customers and get a sales commission, how do you best separate them?" Unfortunately, I have to say more often that it depends a little on your individual situation. I can only answer that in general, if you are interested in how you do it yourself, then we actually have to talk 1: 1 and I need more context. Basically, however, there are options. There are limits that you can still make in your freelance work without doing any harm and becoming a trader. But if you primarily do commission income, i.e. sales, you have the other thing. Theoretically, you can register for two different self-employments, that you are a freelancer and a trader.
You can also do everything as a trade, but when in doubt you still have to do a little math and see what makes sense for you, what volumes we are talking about, what is the percentage and such… Well, I always feel so stressed because theoretically I can tell stories without end, but the important and for you, the most beautiful part, these are really the basics, what can I withdraw, how can I register? It will be really fun with everyday optimizations, which you can all do.
Also important here: this is also what we always do for our Konstist Steuerberatung clients and always check, every year. That means, if you are a customer, there are a few and I am very happy that you are here, welcome again, these are definitely points that we will talk about again and again over the course of the year. Or partly, without you noticing that we are simply checking in the background, does it make sense for you or not. Otherwise, everyday optimization and that's not really a tip, I have to honestly say, but I see that so many people do it wrong.
Please register as a company with the software tools you are using. And as a company you register and why is it like this: Of the tools, most of the online tools, I have listed a few, App Store, Zoom, Monday, honestly I went through my own accounting and looked where I am paying for Software. Most software tool providers are based in other EU countries and if I am a customer of a software tool, i.e. under VAT law, if I have other services from a company with the rest of the community, i.e. in German if the tool provider is located somewhere else in the EU and not in Germany and I register privately, this tool shows VAT. That means they write the VAT on the invoice. But if I am a business who makes B2B sales out of it, then I get a net invoice and don't pay the tax. That means, I no longer transfer tax to the tax office, but my bill is simply higher because I have to pay the VAT to the company, so to speak.
That's why it's very important to register in the App Store, Play Store, Zoom, Monday, probably Asana, I can't think of all of them, but you know yourself which tools you use, see if they are in other EU countries and register please as a company. How do you do this? How do you prove that you are using this for your company? This is always done within the EU by giving your VAT identification number. That means, please enter in the settings that work almost everywhere, enter your VAT identification number and then you will receive a net invoice that is lower, of course, and you will pay the tax less. By the way, there are also videos on this channel.
Which tax number, where do you get the VAT identification number, how do you do it, there are already videos on this YouTube channel. It would be super nice if you subscribe to this channel, because I've already shot a few, they're coming for the next few days, they're a bit distributed in the future. These are always short videos where I give tips and there will be a lot more in the future and would be happy if you subscribe to our channel and watch older videos after the webinar.
Anyway, many think that if the tool shows VAT, can I claim this input tax? Unfortunately you are not allowed to. So I could say yes, for example, I pay 100 € a month to Zoom video conference tool, pay 100 € plus 19% VAT and I can claim this 19%. Unfortunately, you are not allowed to do that, because you are registered as a private customer and the VAT has been incorrectly reported to you, because you have practically drawn it privately and you are then not allowed to claim this VAT. I notice that again and again and when we unfortunately annoy you with it, if you have a software tool and actually have VAT and we have not drawn and not claimed input tax and so on.
I'm really sorry about that, I know it's super annoying and it annoys me all the time, but unfortunately we are not allowed to. And in the end, if we are not allowed to, bummer. So please register there. If you don't have a VAT number, you can apply for one. In our channel you will find a video about which tax numbers you need and where you can get them from, all Kontist Steuerberatung customers, simply write in the Kontist app or in the chat: “Hello Melchior, you said or in the seminar you promised that we would take care of your VAT identification number ”and then we will send you all the information. For everyone who is not a customer: become a customer! No, kidding, look at one of the older videos because I made a video about tax numbers and there is a link in the description where you can apply for it. An important point and I see a very good comment, Amazon Business also makes a lot of sense. Also another important point, because getting bills on Amazon is a horror.
Please also register with Amazon, create a second account, you can register with Amazon Business, because you will always get a nice, correct invoice with VAT and so on and even there you actually pay less because of the costs because you have a reasonable bill and that doesn't cost anything extra. “In the Apple App Store it was unfortunately not so easy to identify myself as a company without joining Apple's large business program.
Do you have any tips for solo self-employed? " I know, I didn't think it was noticeable, I would just write an email to the App Store, no, unfortunately it's actually not easy because Apple doesn't make it so easy for you. In fact, the best thing is if you have two Apple IDs. And for me, for example, I use my iPad almost exclusively as a company, it is registered as a company and if something private happens to run on it, then it is practically a private withdrawal. But that is fully registered as a business device. The only clean solution is to register once as a company and once as a private person. "If, as a freelancer, I pass on activities to self-employed people in the country and they are practically small businesses and do not have a VAT ID, do I also have to book reverse charged?" Good point, for you, you are a freelancer in Germany and perform a service to other companies in other EU countries that are small businesses, if I understood that correctly.
If that is the case and if I have understood correctly, then you still write a net invoice with the reference to reverse charged. And why is that? In Germany, there is the VAT law. There it says that is in Germany a reverse charge turnover applies and you therefore have to write a net invoice. You do this, send the invoice to the recipient, and then you are DONE. The recipient then has to look into the tax law in his country and has to consider how to treat your net invoice. So for you, it doesn't matter what the rules are in other countries. You write your invoice as a reverse charged invoice and send it to the company abroad. Have a look if its really called VAT law. Well, I have to go a little further. The next important point, which I see many people keep forgetting, is additional catering expenses. I don't know, is this not known or is it just too annoying to make? When you are on the road for work, well that was unfortunately not that easy in the last few months because of Corona, anyway when you are on the road for work, you are not allowed to claim your own food.
This is actually normal, for example when you go to the gas station and get a sausage, or when you run to the bakery and get a roll, or something. You are not allowed to claim these costs, even if they say they are somehow related to your professional activity, because if you don't eat, then you can't work and generate no income and the state should actually promote that. No, it is overused. So private lifestyle or private food may not be included as business costs. But flat rates apply to domestic services. This means that you can actually add costs for your own food even if you don't have any. That is, if you are on the road for over 8 hours. That means, I just imagine: I was on the road as a self-employed community manager for many years and I gave day workshops. For example, I lived in Berlin and took the train to Munich for an 8 hour workshop. I often arrived the day before, when I left by train at 6:00 p.m. and came back the next day at 10:00 p.m. That means I was on the road for 28 hours.
And there are lump sums that I can use in accounting, even if I had no costs at all and I don't have to prove anything and nothing at all. The only thing I have to do is keep a list and say from when to when and when I was out. And then I can add these costs and of course pay less taxes for these costs.
And everything from door to door, i.e. you are away for over 8 hours, you can add € 12 per day. This means that if you are out and about every day and always work for the customer and are always away from home for more than 8 hours, then you can set costs of € 12 for each day, even if you had no costs at all. For everything over 24 hours, my example is 28 hours, it would be over 24 hours, so I can charge € 24.
Even if I prearranged all the sandwiches at home, took everything with me and had no costs, costs of € 24, at a tax rate of 30%… too much math. 3.60 € or 7.20 € that you save in taxes because you have listed that. Please do it. If you are traveling abroad, different lump sums apply. Just google it, there are endless lists. I didn't want to build that in here and anything else. If there is such great interest, I can send a few more links around afterwards, but sometimes they change and I don't have all 270 countries out of my head by chance.
“For how many days a year can you claim for services? I heard once that there was a limit. " 366 days would be such a good limit. No, of course, more than 366 doesn't fit. There is a hard and fast rule here too. If you are on the go, then you are on the go. And if you are on the road for 350 days, for example, then you really have to be able to prove and prove that you are on the road. It is not an invitation just for you to prove that a little bit, when are you going, when are you back and so on. It's not like that, as an employee, you know trips to work, where there are lists, which you can google, what are the usual working days you have and then you simply set 180 days and calculate the travel costs.
Maybe you know that from advertising expenses, there it doesn't apply. You actually have to prove when you are gone. So there are limits that you can't be gone every day now, that's exactly right. If you are really away for too long in one go, there are limitations, but basically per business trip. And really, please do that. So this is really free money. Most of the time you are, so personally I am mostly too lazy for that, but thank God my calendar is always so full. Once a year I sit down and go through my calendar and can then write it down, because I know where I'm going and mostly have train tickets.
It can be reconstructed and it is worth it. We also have some moderators / trainers as clients who work in companies, or do project work with the client or something. When 100 days a year come together, we're talking about € 500-1,000 tax savings, not just cost savings, but tax savings. Also important, and I don't want to open up that much and that's why I would like to point out again, subscribe to the channel, because this is one of the next videos we will make. Very detailed about: How can I set off my home office. You can deduct your work at home from home for tax purposes, “almost completely without limit”, if that is the absolute focus of your work. That means, if you always work from home, you can deduct all costs. All costs mean, to make it very easy, you have a separate study in a 100m2 apartment and this room is 30m2. Then you have 30% of your apartment as your home office.
That means, you can deduct 30% of the rent, electricity and gas, you can remove the desk, you can deduct renovation costs proportionately. All of that can settle. Sometimes that's a lot, it depends on where you live, but sometimes it's really a lot. There are a couple of rules. If you actually do the main focus of your work somewhere else, but since no job is made available, then that is capped at € 1,250. There are also a lot of regulations and stories like that, but if you are basically not leaving your workplace at home, please be sure to deal with it. As I said, today is a bit like a buffet. I mentioned yesterday that I can't go into every topic very deeply. If there is a topic somewhere where you say I would like to find out more about it, please write “would like to hear more about this…” or “definitely do a single webinar again about…”, then I'll go into it much more deeply. I already shot a video about working from home.
What is new now, or what is called new, due to Corona, because there are usually regulations how such a home office / workplace should look like, it must be delimited, it must be very clear, that is where work takes place and that is not enough basically the living room or the kitchen table or something. But due to Corona, many have to work from home who otherwise do not work at home, and € 5 per day that you sit and work at home can be deducted as a flat rate, even if you have no other proof or anything like that. That means, if this is too annoying for you to calculate everything, as I said it is always about the effort and tax savings.
What you can definitely put is are 5 € per day that you worked from home. If you now know that I've been working from home every day since the beginning of April last year, then you look at the calendar, write 5 times and use these € 5 a day as costs. This is actually a regulation, if you google it, it is actually a regulation that is communicated a lot for employees, but it actually also applies to the self-employed, because the law says taxpayers, it does not say just employees, so it also applies to the self-employed. This 5 € flat rate also applies to you. Good question: "How do I have to state / pass on the meal allowance to Konstist Steuerberatung?" We don't need this for ongoing bookkeeping because it is not so relevant for VAT, but it is essential once a year.
The best thing is, we will have templates for it soon, unfortunately we have not yet built them. Write it down in Excel, send it to us as soon as you have finished the last year, just with the documents we need for the entire income tax return and so on. Send us that too. If we are not yet in contact, we will definitely ask you about it, so that you please list it. And maybe do it for this year. Don't take my role as a role model, I only do that once a year. "How is it with the home office if you don't have your own study?" 5 €, for last year above all 5 € and for this year, honestly, we have to look. This is a corona regulation, we can't know for the future. There are these regulations and things like that, they sometimes come a little later and no one knows when we will come out of lockdown at some point, but at least the € 5 for last year.
Another point that is relatively new is the whole subject of acquisitions and depreciation, and there is one very interesting point. So far this has always been the case when I have major purchases, i.e. when I purchase things that I use permanently in my business assets. My desk, for example. I use it a bit longer in the company and I am not allowed to claim the entire costs immediately and if I buy a desk for € 2,000, I can't put the € 2,000 in the accounting and say, now I tax this € 2,000 less , but I have to divide it up over the useful life and then just have to divide the € 2,000 over 2, 3, 4, 5 years. Depending on how long I use this desk. This applied to purchases up to € 800 net, or with VAT that would have to be € 952 gross. What is new now and that is absolutely new since January 1st of this year, this regulation no longer applies to computers and software. So far there was such a laptop, and when I spent 5,000 € on it, I had to write it off over 3 years.
That said, okay, $ 5,000 is a little too much. I buy a really good laptop for € 3,000 and had to split that € 3,000 over 3 years. That's changed, that's new, from January 1, 2021 you can immediately add these € 3,000 to the costs. That means, if you say now at the end of the year or even now that I need a device anyway, this year it will be particularly interesting to buy laptops or computer software, because you can claim these costs immediately. For major purchases, I'll take a car as an example, because cars are always major purchases, but it can also be anything else. Now, we have a couple of cameramen as clients, for example, a super cool job and if you buy your own equipment there, what I saw in the way of bills for camera equipment, that goes beyond a car. Perhaps that is in your area, depending on what you do, it can of course also be. Perhaps you've heard it before: investment allowance. That is a certain paragraph 7g in the Income Tax Act if you want to look it up. There are certain ways to write off before you've actually bought it.
That said, there are a few requirements for you to be able to do this. When purchasing, the asset, the car, the camera or whatever, is wearable and movable. Wearable means that it loses value. You always have to say that, because if I should buy a piece of forest, for example, why should I do it, it doesn't wear out. Good question, actually, because I wouldn't even rule out the possibility that a farm never wears out, because of deforestation and such, but a farm without plants, i.e.
Only one piece of land, usually does not wear out and is also not movable. That means cameras, cars and such, I'll stick to the example of the car. I want to buy a Tesla next year. Tesla wears out, unfortunately and is agile, thank God, otherwise it would miss its point. With freelancers I can make up to 100,000 € profit, traders can make 235,000 € profit and the maximum amount that I can claim for investment is 200,000 €. That means I want to buy a Tesla. At € 200,000 there is easily a Model S in there and I can, even if I want to buy it next year, I can take into account an investment deduction of 40% this year. That said, if I have no idea how much does a Model S cost? Maybe € 100,000? If I want to buy a car for € 100,000 next year, I can deduct € 40,000 as costs this year, even if I haven't borne any costs this year.
That means, I can already deduct € 40,000 this year and have to pay € 40,000 less in taxes. At a 30% tax rate, that's already € 12,000. Of course, I have to make the investment later, but that's very exciting. And on top of that, it's as if I had planned it, comes a car, crazy. I will buy a car in 2023, so I made a mistake in 2-3 years. I'll only get it myself and I bought a Model 3 for € 40,000. I can already use 40% of the 40,000 € as costs this year, if it were a Model S with 100,000 € I can already take 40,000 €. In the case with Model 3 it is then 16,000 € that I can already take into account this year, with Model S it is more like 40,000 €. Thus, the profit is already reduced in full this year. I haven't even written down what will come next, also in § 7g there are one-off special depreciations. That means, of course I will write if I now have € 16,000 less, then there are still € 24,000 left. That means, next year when I buy the car, or the year after next it will be € 24,000 and then I can write off another € 20,000 immediately and then I have to split the rest over the term.
So go ahead google these investment deductions for large purchases, please do not hesitate to google it to see calculation examples. You should definitely know the investment deduction. With large purchases you can play back and forth very flexibly. Another point. I've already mentioned expenses a bit, as a repetition, if you put costs on you have less profit, pay less taxes and so on, of course. But please don't spend meaninglessly. Of course, you can also spend so much money that an account is simply empty and then you pay less tax.
That is the case and it is sometimes worthwhile. For example, if you're making a lot this year and you're definitely investing this year, that makes a lot more sense this year. Most of you know that we have an income tax rate in Germany that is progressive, that is, the more you earn, the higher the percentage. That actually means with every euro that I earn more, the share that I give is always greater. A bit annoying, maybe too annoying, but that's why it's worth making the bigger purchases in years when you have a lot of income, but please don't just spend money to save taxes.
If you now have a tax rate of 40%, you can think about it, I'll buy a laptop for € 5,000 and then of course you will pay the 40% less tax. That means the bottom line is that the laptop costs you, in a very extreme example, a laptop, iMac, € 5,000 plus VAT, € 6,000.00 is on the gross invoice, i.e. € 6,000.00 somewhere. I can get € 1,000 input tax anyway and if I now have a tax rate of 40%, I pay if I buy it as business assets, I pay this 40% less tax anyway, that is, I am effectively charged with € 3,000, which is really cool, because 6,000 € was on the price tag. Of course, that doesn't make sense if I don't need it.
And that's why it's important not to create expenses just to save taxes. But if the issues are pending anyway, you can still drag them into the old year. And there is another great trick that is really easy for most of you to do. That is, if you do an income surplus calculation, that is, if you are not subject to accounting, but do an income surplus calculation, that is the prerequisite.
Why? In the case of the income surplus calculation, the time of payment is always the date of issue. And what you can do at the end of the year to save taxes is so that you do not create costs just to save taxes, but that you have costs that you have already paid 100% in the coming year and then you can already get them from now to deduct the tax. This means, for example, with tools that you don't have to pay monthly if you pay once a year or that changes at the end of the year and then pay once, then you have all the costs now and you won't have to pay anything next year. I once worked with external freelancers, I once had a sales representative, at some point at the end of the year I bought hourly contingents. In December I said, yes, I still have to get rid of some money, how about I just pay 250 hours now and then I have a quota and I will call it up over the next few months.
She issued the bill, I transferred it, there were costs for this year and I didn't get the service until next year. But now I could immediately make it tax deductible. Wherever it goes with rent, coworking spaces, just go and say “hey, I would like to pay 6 months in the future”. These are not costs that you create just to pay taxes, but you can now deduct them. You can do that with electricity, gas, water and so on. This also works with a mobile phone contract and something like that. If you are really tricky, then simply transfer Vodafone an additional € 600 shortly before the turn of the year. Send the money away and then it will come up again at some point, but then you can take it off again that year. So important: the inflow-outflow principle of a surplus calculation, if you understand that, the profit wins after inflow-outflow, that is, since every money that flows out are costs in this year and advances are very feasible.
And the advantage is, logically, there are no real expenses, but you have simply postponed the payment date. It can also be done differently, by the way, it also works in the other direction. For example, if you now say, “Oh, I'm actually fine this year,” invoice later. So if you say now, for example, that it was good this year, or maybe a little difficult, Corona help or something, you can decide when to write an invoice and when you have the payment date. And if, for any reason, you would not earn more money this year because the tax rate is otherwise too high, talk to your customer that you will not write the invoice until 3 months later, that is no problem at all. And then that will only be taxed in the coming year.
Well, it's April now, and that will take a long time. But I actually did work with a larger customer, it was about a larger project with a 5-digit amount, at that time that was really a lot of sales for me, it was about € 12,000. I spoke to the customer and only wrote the invoice 8 months after my order and didn't have to pay taxes for it until the following year. So I implemented it in July and only wrote the invoice in January afterwards and only then paid the taxes. 5:54 p.m. Are there any questions before I give you a proper outlook on what else can be done, direction design and such. I don't want to say creative, the rules, they all exist, I didn't invent them and you could all read them up and google them. It's a bit of a buffet, but of course you can do a little more there. So importantly, I would also create an Excel table when working from home and list all the costs.
So your total costs as a percentage, then you have your calculation and you have several options. You can actually then use them as costs, so you've mostly paid them from your private account. That means, if you can prove it and have this calculation, then you can then use the bills and bank statements with which you paid for it, so you have to keep them because if you put that in the accounting, then you have to do it for 10 years. You have to take them into account and then you can do that in your EÜR system, so if we are your tax advisor, which I say that a little too often, I know, no, but then you just send it to us and then it's all good.
Whatever you can do monthly to take this into account in your accounting, you can also calculate this proportion and it will be the same every month. Simply transfer this amount to you monthly and I have to say it's “like a rent”. Simply transfer this portion that you have calculated from your business account to your private account every month. Exactly what is workable, if you work out a stake, transfer that back to you as an amount each month. But what is really nice is that you also have input tax, so keep the electricity bill, i.e. wherever VAT is included. You can also deduct the input tax as a percentage. So in my example I said yes, 100m2 apartment and 30m2 is your study, you can now use electricity and gas, for example, VAT is shown on this invoice. You can also claim this 30% of this VAT in the monthly bookkeeping. First of all, it is important for you to do the calculation, transfer the monthly amount and so on. As I said for all clients, get in touch if we shouldn't do that yet. One more question was specifically about the home office flat rate, i.e.
This 5 € per day, how do you book this? I would because it is not relevant for VAT … so I always make a distinction, is it relevant for the VAT return, so should I do it every month or is it really relevant for determining the profit at the end of the year? The flat rate, there is now no idea what the flat rate is, no VAT included, I would put it in once a year. Add up the days, does it apply to last year? I am also currently seeing the question. Count them for last year and put them in your EÜR. Depending on how you do your tax return. You either tell your tax advisor and let him know. If you now use tools like Smartsteuer, Taxfix, Steuerbot, wundertax, I can't think of any more than these, then there will be a field and then you can enter it there. The important thing is: this is not advertising costs or something, these are part of the operating expenses. That means, you can sort of room costs / rent, room and rent there is such a field, I don't know the number out of my head, you can enter it there.
Somebody wants to challenge me and sends me some paragraphs and asks me if there is anything there. I basically know what is in §4, paragraph 5. I still have to answer the question afterwards, unless you have a short time, which I look at. No, I don't know, I actually have to look it up. But I like to look and then get in touch. "I have my home office in the bedroom, can I somehow also use it as a study?" If you sleep there and work there, that's more of a case for the 5 € a day. So it depends a bit. There are also sometimes or what is actually a bit difficult, there are lofts and “I actually only have one room and then everything takes place there”. It is actually difficult. But there are also a lot of judgments, so in case of doubt you would actually have to look at the individual case. So now the highlight is “the tax design”, we now want to make a really nice check. And that applies in particular to those who earn a lot, so I don't want to say a lot of money now, but I've heard that there are primarily large entrepreneurs at the start.
That pleases me. There are a few things that are relatively easy, you can put them on once and keep using them. I would say this topic is advanced stuff. That means it is not part of the daily work that you do, that is really a design for everyone who is our customer. Feel free to write to us if something is particularly interesting for you, then we will be happy to make a consultation and just do the math. An example: 450 € jobs. So I'll take myself as an example. For example, I am self-employed. No, that’s a lie, I am no longer self-employed. I was self-employed for years, Kontist has seduced me and now I do the tax advice here. But before that, I was self-employed and I had a tax rate. Just as an example, 40% tax rate. For example, I have my wife, we are assessed together, we make a tax return together, so by the way, when you register, I also know in advance who is married and so on, to see whether that is a tip that can also be given.
My wife sometimes helped me and sorted things like that, documents. I hate it like the plague and that's how it helped me. The ancillary wage costs are usually more expensive in Germany, with a € 450 job they are less. When I pass the office and other activities to my wife, I think she's even watching, auditing, sorting documents, and I pay her 450€. The ancillary wage costs are, depending on how registered, private health insurance or not, pension insurance and so on, you can choose a few things and there are also calculators. If that's interesting for you, google mini job employer gross calculator, I'll also send the link around. The non-wage costs of a € 450 job are around 20% to around 33% are taxes. And the big advantage is mini-jobs, i.e. income from a mini-job, which means my wife doesn't have to declare this one income from her mini-job in our joint tax return. In other words, I can now hire my wife if I say, I'm counting on around 20% now.
I'm hiring my wife, I have costs of € 450, which I transfer to her, and another 20% incidental wage costs. That means, I pay another 90 € to the union. That means, I have a 20% tax burden, but have € 540 out of my company, because € 540 has almost flowed out and I have to pay tax on the € 540 per month, which means, I pay 40% less on the € 540, which is already happening is neat. And when I compare that, my tax burden with the ancillary costs for my wife, who helps me sort through documents, for example or when building presentations or whatever, then I save a lot, sometimes up to 20%, depending of course on how the personal tax rate is. Of course, that doesn't make sense now, if I have an average tax rate of 10%, then the non-wage costs are higher.
But this comparison calculation is worth it and you can do it quite well and there is definitely a lever where you save € 50, € 60, € 70 per month. And if you extrapolate that, that's already 1,000 €. You can of course do that with your mom, your sister or whatever. Anyone can have a mini job with € 450. Thanks Tobi for the link. So that would be possible and if you are interested, please do not hesitate to contact us.
Another point and I notice that many are not aware of this, that now always sounds stupid, which is “losses”. Profits and losses from different types of income, so now especially for income tax. I have several types of income in the income tax, so the income tax assessment lists several types of income and if I make losses, i.e. if I make a profit with one type of income and losses with another type of income, that does not work in all constellations, but in many, then can I offset that and I only pay the difference. And you can make losses very consciously. It can be, for example, if I am employed as a main job and want to be self-employed, I start my self-employment as a part-time job and can initially invest a lot.
These losses that I make in my self-employment, I can offset them with the income from being an employee and then I get a lot of money back with every tax return, namely the money that was deducted from my salary as wage tax. And I mean a phase of loss that can depend on what you do, but when let’s say I'm a programmer and develop an app that I want to push and advertise at the same time, I have a lot of work to do in the beginning. I need software tools, I need a laptop, I have advertising expenses, and so on.
You can do that, or I build websites, I have external copywriters and that kind of thing and first make good losses and I can offset that and then I get taxes back. On the other hand, we are talking to large entrepreneurs here, which means we have profits, a lot of profits from self-employment and now I would like to think about it, I would like to build up wealth. I would like to make provisions for old age. For example, I could buy real estate and especially real estate, you can play a lot with depreciation, so how much I can write off and so on. With real estate there are relatively many ways in which you can make losses. That means, if I know that I will make stable profits with my self-employment, but I will make losses from renting and leasing. Then I can offset that too and the bottom line is that I pay less taxes.
And then it's actually a bit about designing that and what is the best setup from different types of income to make more money. It's not about making losses in order to pay less tax, that's not the point, but it may make sense to consciously make losses in some areas, i.e. investments in order to later have more assets or to become self-employed to have. Employed and losses in self-employment, the losses in self-employment only make sense if it is of course about investments and I know if I invest money now that I will later have a better, more successful, financially better self-employment.
Real estate, of course, I pay less taxes now, but I build up my assets for later. That means, I actually build from my tax payments, I build up my assets for later. This is of course a case, I cannot answer any general things, we would definitely have to look at them in detail. Good question: share capital, that's why I didn't use that as an example, capital income is stored a bit special, even there you can't offset profits and losses against everything and that's definitely beyond the scope. If that's interesting, I'll be happy to do it too. Just because there was such a huge hype about Trade Republic and online brokers last year, we are very happy to offer an extra course on capital income. Good question: when the tax office asks questions about your hobby, if you make losses too often, if it is actually a part-time job.
Well, I understand what you mean, I have not taken up a hobby here, if you only make losses, then at some point the tax office will say “oh come on, that's not self-employment, it's more of a hobby and now can be cross-subsidized by the tax ”. That can happen, but that is usually if you are 4 years, 5 years into this then, the questions sometimes might arise and then you have to discuss your point.
You have to show that you are willing to make a profit with this investment. And I have to honestly say, I had an experience that was a few years ago, so I became a tax clerk and was also employed and had exactly this issue. I was employed and had losses in self-employment, made losses for 5 years and then I stopped being self-employed. I actually wanted to make a profit, but unfortunately it just didn't work the way I imagined it would. But I made losses in my self-employment for 5 years and basically got the taxes that I paid as an employee again and again, but it just didn't go as I had imagined. But now there was never a claim back. The tax office once asked: "How does it look now?" There you get a letter like “Examination Hobby” and stories like that. They are not really too strict and then I explained to them how it is and then they said: "yes, ok." and then it went on. It was a bit stupid then, for me, because I would have preferred to have been successfully self-employed and be perfect in terms of taxation.
So now comes the fancy trick. I hope I haven't lost you guys, I know that it's a bit more content-wise and technically, and dropping off Spotify at the beginning is a bit easier with regard to content. If I have lost you completely, then I am sorry, then let us discuss this in detail. But when I heard this, super exciting, you would have to, as I said, just mention it once. If this is relevant to you then let's talk. You are probably familiar with spouse splitting. Spouse splitting is very simple: everyone has a certain basic allowance in their income tax return. That means in 2021 that will be € 9,744, which everyone will have tax-free from income tax. If you are married, then everything is lumped together, you make a tax return together if you decide to do so. You can also separate them, but that usually doesn't make any sense. Now everything is thrown together and you have a double basic tax allowance of € 19,488 and you have that together. But you also usually have double income, sometimes.
What a lot of people don't use: Children also have these allowances, everyone, the whole family also have these allowances and to cite an extreme example, you can build up your independence in such a way that you also use the children's allowances. To take an extreme example now, you have 4 children. Let's just do the math: € 10,000 is tax-free as a married couple € 20,000, but you have 2 incomes. If you now have 4 children, they also have each, because they are taxable, because when you are born you get your personal tax identification number, they are people from a tax point of view, they also have € 10,000 tax-free each.
That means, if you are a married couple and have 4 children, then you as a family have together tax allowances of 60,000 € and you could use these 60,000 €. You just have to think about how your child can have an income of € 10,000, for example. Sometimes there are things like that, if they now have an income, then they don't have child benefit and there are a few rules, but it can be used.
Even if you only use half of it, which means you use € 5,000 of the children's allowances so that they also receive child benefit and so on and you don't do any harm to your finances. But that means your 4 children are 4 x € 5,000. You can earn € 20,000 tax-free if the children earn it. For example, assets are transferred and they give you a loan, your company. Or you make them silent partners. That means, you transfer part of your independence, a participation, a silent participation, we would then have to look at how that is best designed. And you regularly pay interest to the children for this silent participation. This is of course a remuneration. They have a part of it and then they get part of the income and then they have the income. And I mean, if the children have an income, why not tell the children that they are also subsidizing something to lead a life together. Simply so that it goes into the family budget. And so you could use that for the children, so there is, you can search for that under family splitting, collection of the basic tax allowance.
So these are the buzzwords you would have to google if you don't believe me. But this is completely legal and so you can distribute family income so that you can make the most of all the basic family allowances. A lot of people don't even know that, but it is extremely worth it, because we're talking about € 20,000 or € 30,000, depending on how many children there are. But the money can be tax-free, but of course it has to be designed that way. And those can be used in which the entire income is distributed more evenly. This is a tip that not everyone knows. But you will find that under the buzzwords. And I mean, that is a bit advanced, there are also a whole lot more tips in this direction. I look a little at the clock on the side, I talk way too much and I really feel sorry for that. But that would also be the tip with which I would like to end this here and would like to ask: “Do you have any questions in general?” I know at the end that it's a bit important to know, for me it's a bit experimental, honestly, we technically failed yesterday, I'm a bit sorry.
I'm happy about everyone who found their way back here today. That's why I'm personally very interested in feedback. Was that too boring? Was that too lengthy ? Was it technically too easy? Was it too difficult in the end? I am very interested in the feedback and what would you say if we just do it regularly, so I am perfectly fine with it if we also do a small survey, topic requests and then we do it once a week. We can do it in pairs, like a little interview in front of the camera and so on. If you are otherwise interested, and I'll do that in a moment, I'll go into all of the questions, I won't leave right away. If you have questions and also if you say: "Bro, I would like a tax advisor and he should help me somehow and I don't have one or mine is not helping me. Please talk to him and such. But if you say I would like to and I need a tax advisor.
Feel free to write questions and also if you have concerns, write to [email protected]. Please write in “Hello Melchior …” and refer to the webinar. That is important, then I know that and then I'll highlight you out of the email box. And what's also important, I have a few colleagues and I would like to offer you that. I wrote in the email yesterday and I'm really sorry how it went yesterday.
We are welcome to have an individual conversation. Somehow I have now shown you how many tips were there? 10, 11, 12, 15? Such building blocks and I told you we have a long document with 300-350 things like that. I'm happy to do it with you and analyze your things and explain to you how you can implement it and so on. I would offer you that. Normally I would put a price tag on it for you and such, but especially when I look at how many there are. Sorry to everyone who doesn't see the recording until later. So if you feel like going through the tax modules with me personally to see which ones fit and so on and to give you a guide from Kontist Steuerberatung on how you can optimize your tax situation, then you are welcome to book one Appointment free of charge. Tobi, it would be very good if you sent the link out once. Otherwise you can find it in the description as the first link. First of all, these are my colleagues from our product’s consulting. They can give you a little advice and answer any other questions you may have about the Kontist Tax Service.
Normally I would have said we would take money for it, but I was really sorry about it yesterday. Prepared for it all day and there were so many people registered beforehand and stories like that. That means, everyone who is there when you register and virtually book a product consultation appointment this week, so the appointment does not have to be this week, but you should book it this week, then I'll do it for free. I like it that way and I don't charge anything. It's a bit more like that, but I think that's very good and I'm happy when you say afterwards: "Oh man, somehow they are more personable than any other tax advisor who I hire." But that's not the condition either. That's why you are welcome to book an appointment. As I said, product advice doesn't immediately attack them with all tax issues.
The conversation with me then comes afterwards. However, I have already done this 1-2 times and then all the emails came afterwards and then I was busy for 3 weeks coordinating the appointments and therefore I have to fall back on my dear colleagues. Such a long monologue, but now I would really like to go through the questions again. Well, I told you the paragraphs, I have to read that, I'm really sorry. I still can't get the paragraphs out of my head. How do you calculate your own tax rate? Have you already posted that by any chance? I had already posted the text myself, unfortunately I cannot copy the link into it. kontist.com. Yes, so, the most important thing is that it is a topic for a completely different webinar, especially if you also have the Kontist app and such, please do not enter your top tax rate there. For example, there are lists of what top tax rate you have, there is always a top tax rate and an average tax rate.
It is important that you take the average tax rate and look for a the taxator, but Tobi has also copied that in, but you can also google it. Kontist Taxator, this is a tax calculation tool for the self-employed, like a salary calculator actually for the self-employed. There you get the percentage, that's your tax rate. Give me the advice where to find the Kontist tax service. You should definitely register once for this. So yes you get it and we'll be happy to implement it for you, that's the point anyway. Then it's best to write an email, either in the chat and please refer to the webinar. I recently did a webinar and just said, oh just write once and I didn't tell the colleagues. So please refer to the webinar, "Here Melchior promised me that, in the webinar" etc. and then we will know and then it will go straight to me. Otherwise they are frustrated and then I am not allowed to come to the office again tomorrow because everyone is angry with me because I flooded their email inbox without telling them.
Therefore, if you refer the email to me, then it ends up with me too and I know what I'm saying here. Will there be a separate video about this, Tim. Yes, I don't know exactly what for now? I like shares very much, as far as I am concerned, because it was all about shares. If so, then like to say stocks, thumbs up, then I'll do something about capital income. Honestly, the whole subject of Bitcoin and cryptocurrency and such. We get these questions more and more frequently, and there is very little information on them. We can do it with pleasure. Good question from Denis Hadler: "Can you correct errors in the pre-registration only in the VAT return?" Yes, it works, so it's almost normal too. There are almost no VAT tax returns that do not include some minor corrections to the pre-registration.
So just when you say home office and you've just heard for the first time that you can also claim input tax on gas and electricity bills and so on. Even the internet at home when your work is at home. Please set costs if you mainly work at home, the Internet and deduct the input tax. If you have just heard this for the first time, you can also take it into account in the normal way, also for last year retrospectively in the VAT tax return. Then there is a VAT tax refund and that's not bad either. It was great, thank you, wonderfully explained, I'm happy, very well conveyed, very personable, good examples, thank you, I'm very happy, was well done, really lively. I hope the topic is caustic enough too. The length was great, it was interesting, I like to repeat it regularly, I thought it was just right, very good explanatory skills, I'm delighted.
To be honest, we went too quickly into technical jargon. I am also very inclined to do so. And to be honest, I would have had no idea how I should have done yesterday and today in an hour. It's basically a problem, what I might have, that I might talk a little bit too much sometimes, but that's why I do seminars. A good event both yesterday and today, very nice. Mega format, if I'm a customer of yours anyway, will I get the advice anyway? Yes, as I said, then ideally we have to make an appointment, because at some point we have to talk again. In any case, if you are a customer, let's talk. I'm already with you, but I still like to listen to meetings like this. Very good. It's very nice that everyone is at the tax consultancy, I'm not talking nonsense, we are actually tax consultants and we actually have customers and things like that, nice that a few are there. Otherwise, if there are no more questions, in all honesty, I am very delighted that it worked technically, because then I know that next time we will do everything exactly as we do today and it will work out.
As I said, you didn't see the funny part yesterday because I was stressed and funnier than the taxes before. Well, otherwise I would honestly say that you are doing me a huge pleasure if you subscribe to the channel. We currently publish short explanatory videos every Friday. If the feedback is there and that is how it looks now, no one says “no, please don’t do it!” I will do this on a regular basis. So I don't know now whether every 14 days or so, but I think if I do it on an afternoon like this, later afternoon, like today, like yesterday, we'll just do it. We pick out different topics. I have an overview of what our customers ask. Well, otherwise, we will then send the link with the recording, as I said, there will also be a combination of yesterday and today, but that is definitely available by email.
Otherwise, thank you very much and I wish you a nice evening. I hope the sun is shining with you. And please stay healthy. I keep my fingers crossed for all of us that the whole pandemy thing will eventually come to an end..