This amount of pension will remain tax-free in 2024

This amount of pension will remain tax-free in 2024

The statutory pension will increase by 4.57 percent from July 2024, resulting in an increase in pension payments for all pensioners in Germany. However, this increase could result in pensioners becoming liable to pay taxes. However, there is also the possibility that pensioners will no longer have to pay taxes due to the increase. In 2024, the basic tax allowance also increased, which means that single people have a higher allowance of 11,604 euros compared to 2023.

Important information for pensioners is that a tax return is required if the gross annual pension after deducting the personal pension allowance exceeds the basic allowance. The amount of the pension allowance depends on how much of the pension is taxed and in which year the pension began to be withdrawn. The pension allowance is calculated once after one year of pension receipt and remains unchanged until the end of the pensioner's life.

The rule applies that the earlier you retire, the more statutory pension you can receive tax-free. Finanztip specialists have calculated the amount up to which the gross pension will remain tax-free in 2024. It is important to note that retirees who have additional taxable income, such as rental income or a part-time job, may have to pay taxes if their gross pension exceeds the set limit.

Pensioners whose gross annual pension is above the maximum amount in the financial tip table must submit a tax return. However, it is possible to use this declaration to claim business expenses, special expenses and extraordinary burdens and thereby possibly have to pay less taxes. It is recommended that you use a tax software or tax app to file your taxes to ensure that all relevant information is taken into account.