Pension 2025: How to stay on the safe side when it comes to tax allowances!

Pension 2025: How to stay on the safe side when it comes to tax allowances!

Pension taxation in Germany represents a complex challenge for many pensioners. For the year 2024, newly retired pensioners will be allowed to receive up to 16,243 euros in gross annual pension without incurring taxes on this amount. A double amount of 32,486 euros also applies to married couples, which offers many households a certain amount of financial relief. stern.de reports that Older pensioners who retired in 2005 can receive up to 19,758 euros tax-free. It is important to note that the tax allowance for new pensioners decreases every year, while at the same time the taxable portion of the pension increases. In 2024, 83 percent of the gross pension will already be subject to taxation.

The development of pension taxation is clearly predictable in the coming years. Originally, full taxation was supposed to be achieved by 2040, but this deadline was postponed to 2058. This means that pensioners who have more than 11,604 euros in pension income in 2024 are obliged to submit a tax return. For 2025, this limit is 12,084 euros. However, pensioners have the option of claiming various business expenses, special expenses and extraordinary burdens in order to reduce their taxable income. The flat rate for business expenses is 102 euros, while the flat rate for special expenses is 36 euros. In addition, pension expenses of up to 1,739 euros can be deducted.

Taxable income and tax deductions

From 2025, pensioners will be required to pay tax on 83.5 percent of their pension benefits, which will further increase the tax burden. The tax share increases every year, and full taxation of all pension income is expected by 2058. transparent-beraten.de explains that Taxes on the pension apply if the total income is above the basic allowance. For 2025 this will be 12,096 euros for single people and 24,192 euros for married people.

In recent years, estimates have shown that around 75 percent of pensioner households are not affected by the pension tax. Married pensioners have the option of having their assets assessed jointly or separately, which can bring additional tax advantages.

Mini-jobs and tax treatment

Pensioners can also take on mini-jobs without their pension payments being reduced. However, this income counts as taxable income. In addition, pensioners who live abroad for more than six months must expect special tax regulations as they are subject to limited tax liability.

Overall, it is clear that pension taxation in Germany remains a complex issue that requires well-founded planning and, if necessary, consultation with an expert. However, pensioners can significantly reduce their tax burden through various deduction options and tax allowances.