Monday, October 26

Many thousands of retirees have to pay taxes

Statutory pensions have risen sharply recently. Since July 2020, retirees in the west have received 3.45 percent more, in the new federal states even 4.20 percent. But the joy of many retirees is clouded: More and more seniors have to pay taxes.

This year alone there are around 51,000 retirees who only have to pay income tax for the first time due to the pension adjustment on July 1, 2020. This explosive information is in the answer of the Federal Ministry of Finance to a small request from the FDP parliamentary group, from which the “Rheinische Post“Quoted.

Looking at the past few years, the figures are even more dramatic: According to this, several hundred thousand retirees have become taxable for the first time through the annual pension increases alone. There are around 313,000 cases in the past five years, says the report.

FDP expert complains about bureaucratic effort

“The obligation to submit an income tax return for the first time for over 300,000 pensioners in the last five years alone means enormous administrative costs that are worsened by the pension increases year after year,” said FDP tax expert Markus Herbrand of the newspaper. Since the state is aware of the pension payments, the Ministry of Finance must “finally develop models to end the annoying tax return obligation based solely on known increases”.

In the letter from the Federal Ministry of Finance, according to the “Rheinische Post”, the “Tax Pilot” project is working on a “greatly simplified electronic tax return” for retirees who only receive retirement income.

Only so-called basic allowance is tax-free

Basically: Anyone who receives more than 9408 euros in taxable income in 2020 will be taxable. This also applies to retirees. This so-called basic allowance increases annually. Because of the sharp rise in pensions, many retirees are still slipping into tax liability. It should be noted that those who retire in 2020 only have to declare 80 percent of their retirement income as taxable income. The percentage rises annually, from 2040 it will be 100 percent.

Everything you need to know about your retirement

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