Tax Return Software In Austria

Tax Return Software In Austria: A Simple Guide

Navigating the Austrian tax landscape doesn’t have to be as daunting as a trek through the Alps, thanks to modern tax return software. Looking for best tax return software in Austria? Worry Not! We’ve got your back!

This guide is your digital compass, pointing you towards the tools that will streamline your fiscal journey. Whether you’re settling in Vienna or venturing into the Tyrolean mountains, we’ll help you find the tax software that best fits your Austrian adventure.

Let’s dive in!

What Is A Tax Return?

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A tax return is a document submitted to the relevant tax authorities and contains information on income, expenses, and other relevant tax matters. 

Tax returns allow people to plan their tax payments, estimate their tax liability, and get refunds for overpaid taxes. 

Any person or corporation with reportable income, such as wages, interest, dividends, capital gains, or other earnings, must file tax returns every year in most of these countries.

Every personal tax return has a primary part that lists popular forms of income (like dividends or bank interest) and anticipated tax benefits (like charitable contributions). 

Other forms of revenue are stated in different categories, such as earnings from self-employment or employment salary.

Not all income must be reported on a personal tax return.

For instance, interest received on funds held in an Individual Savings Account (ISA) is not required to be included because the interest is tax deductible.

Understanding Tax Refunds

It can be exciting to get a large tax refund. You can expect a refund if you overpaid your taxes during the year.

This generally happens when taxes are deducted from your paycheck every time you get paid by your employer.

Here are some reasons why a taxpayer might get a refund:

  • The taxpayer should have filled out Form W-4, which estimates the correct withholding amount from the employee’s paycheck.
  • The taxpayer intentionally fills out their W-4 for a higher withholding and larger tax refund at tax time.
  • The taxpayer should have updated their W-4 to reflect a change of circumstances, such as the birth of a child and an additional child tax credit (CTC).
  • A freelancer or self-employed person who files quarterly estimated taxes may overpay to avoid a surprise tax bill or underpayment penalties at tax time.
  • The taxpayer is eligible for refundable tax credits, which can reduce the taxes owed below $0. In other words, if the credit exceeds your tax bill, you will receive a refund for the difference.

Tax refunds are the opposite of a tax bill, which refers to taxes owed by a taxpayer.

In the case of a tax bill, you owe more taxes to the government than you paid during the year. You usually have a tax bill if your employer doesn’t withhold enough taxes from your paycheck.

What Are Refundable Tax Credits?

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Most tax credits are nonrefundable, meaning that the tax credit can only reduce a taxpayer’s liability to $0.

The taxpayer automatically forfeits any remaining amount from a nonrefundable tax credit. For this reason, this type of tax credit is sometimes called a waste tax credit.

In contrast, a refundable tax credit pays out in full, meaning that a taxpayer is entitled to the entire amount of the credit regardless of their income or tax liability.

If the tax credit reduces the tax liability to below $0, the taxpayer gets a refund.

Refundable tax credits include:

Child Tax Credit (CTC)

The child tax credit is $2,000 maximum for eligible taxpayers. The fully refundable portion is $1,600 for 2023 and $1,700 for 2024.

Earned Income Tax Credit (EITC)

The Earned Income Tax Credit (EITC) gives low– and moderate-income workers and families a tax break.

The credit is $7,430 in 2023 and $7,830 in 2024. The amount of credit a taxpayer receives depends on their income, filing status, and the number of children.

For example, eligible taxpayers without children will receive $600 for tax year 2023. That figure increases to $632 for tax year 2024.

Premium Tax Credit (PTC)

Low- and moderate-income households may qualify for the premium tax credit (PTC), which lowers the monthly premiums for health plans offered through the federal and state health benefit exchanges.

Taxpayers can use all, some, or none of their PTC in advance (i.e., upfront). If taxpayers use less PTC than they qualify for, they will get the difference as a taxable credit.

How Do You Get Your Taxes Back From Austria?

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As a first step, requesting a Lohnzettel form from your employer is essential. You then need to file a tax return in your home country. 

Once you have filed your tax return, the tax office in your home country will issue you an EU/EWR form, which is necessary for filing your Austrian tax return. 

The last step is to file your tax return in Austria and get your tax back.

What Can You Deduct From Your Austrian Tax Return?

Austrian deductions can be summarised into three main categories:

  • General Expenses are related to employment, education or job search, e.g. travel costs, course costs or mobile phone charges.
  • Other Expenses – e.g. home office, family bonus or additional insurance.
  • Extraordinary Expenses – these are expenses related to a chronic illness or disability. This includes dental or medical expenses.

Other deductible items related to employment include work clothes, work equipment, moving expenses, or travel expenses to a permanent residence to visit family.

What Documents Are Needed To File An Austrian Tax Return?

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To file an Austrian tax return, you will need the following:

  • Form L1 for the Austrian tax return. The Austrian tax return must be filed on the official L1 form, available from the relevant Austrian employment offices.
  • L1i or Erklärung zur Arbeitnehmerinnenveranlagung. The L1i form confirms that you have no income in your home country.
  • L16 or Lohnzettel. The L16 form confirms Austrian income, contributions, and advance tax payments.
  • EU/EWR Bescheinigung form. The EU/EWR form is a confirmation of the amount of income outside Austria.

What Is The Best Tax Return Software In Austria?

NeoTax

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Since 2012, Neotax has provided accounting and tax consultancy services for foreigners or residents in most European and American countries.

With 10+ years of experience and over 1 million taxes filed, their team will respond to your queries promptly with the same professionalism and integrity they use to do your taxes.

Get started with NeoTax 🔥 

RelaxTax

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RelaxTax is the first App in Austria that is able to create automated tax returns with an electronic submission & follow-up to the Austrian Tax Authorities (FinanzOnline). 

It is available in multiple languages, currently German & English, with more to come.

Get started with RelaxTax 🔥 

Wolters Kluwer

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Wolters Kluwer is a global leader in professional information, software solutions, and services for healthcare, tax and accounting, financial and corporate compliance, legal and regulatory, and corporate performance and ESG sectors.

They help your customers make critical decisions daily by providing expert solutions combining deep domain knowledge with specialised technology and services.   

Wolters Kluwer reported 2022 annual revenues of €5.5 billion

The group serves customers in over 180 countries, operates in over 40 countries, and employs approximately 20,000 people worldwide. 

The company is headquartered in Alphen aan den Rijn, the Netherlands.

Get started with Wolters Kluwer 🔥 

Digital Tax-Free

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Digital Tax-Free is a new service provider which offers digital technology and an improved service approach. 

Believing only a happy customer is a good customer. It is all about the customer journey, aiming to provide maximum convenience.

The constantly growing numbers of European international visitors contributed to the rising importance and demand for Tax-Free services. 

Requirements are many and various, and Digital Tax-Free developed a new and innovative solution in which technology is driving – and improving – the existing slow and inconvenient process. 

Get started with Digital Tax-free 🔥 

What Are The Benefits Of Filing Taxes Online?

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Electronic filing is becoming increasingly popular because of the vast array of benefits it brings to the table:

Convenient And Flexible: E-filing has brought about increased flexibility in the filing of taxes and is a lot more convenient since one’s taxes can now be filed from the comfort of one’s home or workspace on one’s own time. 

They can do it whenever they wish, as it no longer serves as a 9 to 5 task.

✅ Saves Time And Money: E-filing saves a considerable amount of time and money. When taxes are e-filed, whether it be for businesses, professions, or individuals, the data is directly transmitted online from the e-filer’s servers to the tax agency’s servers. 

The process saves time and money from transferring data from paper to online input and saves the agency from making transmission errors.

E-filing also reduces time and effort for the tax agency and the taxpayer because it is generally much easier and faster to process e-file tax returns than paper returns, saving a lot of time on both ends.

✅ Increased Accuracy: Since transmission errors and the like can be avoided through e-filing, it increases data record accuracy and the overall tax filing process.

✅ Less Room For The Manipulation Of Records And Window Dressing: E-filing leaves less room for manipulation of data records and window dressing. 

With e-filing, online data availability and inter-connectivity are much more profound, and linking or tracing data back to a tax-paying unit is made much easier and faster with e-filing.

Increased Authenticity And Accountability: E-filing has also led to increased authenticity in the process of tax filing and increased accountability for both the tax agency and the taxpayer. 

Paper filing could be clearer because there is high ambiguity in the receipt of tax papers and tax records.

With e-filing, notification throughout the tax filing process and confirmation of receipt or rejections are delivered within 24 hours, thereby increasing the level of certainty of the entire process. 

It makes it less ambiguous than it usually is via paper filing.

How Are Taxes In Austria?

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It sounds simple in theory but more complex in practice. 

Austria has many different types of taxes, and the country needs to have standardised tax legislation. But don’t worry—we’ll give you an overview.  

The Tax System In Austria

For historical reasons, Austrian tax law is very similar to German. 

Like Germany, Austria works with a multi-tax system, with different types of taxes in various categories that can be collected on a federal, state, or municipal level. 

Of course, Austrian tax law does have peculiarities of its own. 

Employers and self-employed workers formerly paid trade tax, for example, until it was replaced with municipal tax in 1994. Plus, there are different income tax brackets in Austria than in Germany. 

Do You Need To Do A Tax Return?

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As an employee, you don’t need to do a tax return. You might have certain expenses that would reduce your tax burden. 

You can offset them against the wage tax you’ve already paid in Austria. In other words, the tax office will give you money back! 

Freelancers always need to submit an income tax return

Because they don’t have an employer who automatically deducts income tax on their behalf, freelancers are responsible for reporting their income and paying taxes on it. 

Of course, they can also claim some of their expenses to offset their tax payment, and if they’re VAT-registered, they can claim value-added tax, too.

What Are Some Tips For Maximising Your Tax Return Savings?

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You can file your tax return (also called the ANV or “Arbeitnehmerveranlagung”) for 2022 by 30 April 2023 or 30 June 2023 if you file your tax return online

You can submit your tax declaration easily via the official platform FinanzOnline. There are two ways to file your ANV. 

The first is a fully automated process, meaning you don’t need to fill in any forms. You can wait for your tax refund to show up in your account balance — provided you did pay too much in income taxes. 

However, if you’ve filed tax-deductible expenses such as income-related expenses for previous years, you’ll have to manually do your annual tax assessment. 

However, even if it’s your first time, you can still file manually via FinanzOnline. 

Here are just a few of the deductions that may make it worth your while:

Work-Related Expenses

From work clothes to professional development materials to your smartphone bill — as an employee, you might have several work-related expenses considered tax-deductible in Austria. 

These fees are considered work-related expenses, too. If you file your tax return without listing them, the tax office applies a standard deduction of €132.

Here’s a list of the most frequent income-related expenses you can deduct from your taxes in Austria, provided they are relevant for your job:

  • Work equipment and tools
  • Work clothing
  • Home office supplies and furniture
  • Phone and internet bills
  • A computer
  • Professional-development materials
  • Transportation costs
  • Vehicles
  • Bicycles
  • Further or advanced training courses
  • Language courses
  • Study-related travel expenses
  • Travel and accommodation expenses 
  • Double housekeeping
  • Union or Works Council dues
  • Cashier’s allowance (the sum of the difference in a cash register that a cashier must reimburse to their employer)

Tip: Remember to keep all bills and receipts for at least 7 years in case of a tax audit.

The New Home-Office Standard Deduction

Have you been primarily working from home in 2021? Then you might have had extra expenses, such as a new laptop or monthly internet bills. 

As of 2022, employees in Austria can declare a deduction of up to €300 from their income taxes thanks to the home office standard deduction (“Home-Office-Pauschale”). 

This amount will be deducted by default when you file. On top of that, you can declare another €300 (maximum) for office furniture. 

Technically, home office supplies are considered work-related expenses. This means it’s likely worth deducting them individually rather than taking the automatic lump sum of €132

Commuting Allowance

Are you commuting to work? Then you can save even more! Commuting allowances are another work-related expense. 

However, in most cases, they are already settled with your monthly salary. For this, your employer uses form L 34 EDV. 

If the commuting allowance isn’t accounted for in your monthly salary, you can declare it in your annual tax assessment. Look at your pay slip or contact your employer if in doubt.

Unanticipated Medical Expenses

Unanticipated expenses you might have had in 2021 are also considered tax-deductible, provided they exceeded your capacity to pay. 

These include braces, medical bills that aren’t covered by your health insurance, health care expenses, nursing expenses, and expenses related to a physical disability.  

Child Allowance And More

Do you have a family? If your kids are 10 or younger, you can declare childcare expenses on your tax return. 

And if you’re a single parent, the age limit doesn’t apply—meaning you can declare child care expenses of up to €2,300. 

Tuition fees of up to €110 per month are tax-deductible, too—but only if the nearest suitable school is over 80 km away from your home. 

Do you receive a child allowance or the “Kindermehrbetrag” (for single low-income parents), or do you pay additional contributions to co-insure a family member?

If so, you can also deduct these expenses from your annual income taxes. 

Tip: Remember to keep all bills and receipts for at least 7 years in case of a tax audit.

The Home-Office Standard Deduction

Have you been primarily working from home in 2022? Then you might have had extra expenses, such as a new laptop or monthly internet bills. 

In 2022, just like in 2021, employees in Austria can declare a deduction of up to €300 from their income taxes thanks to the home office standard deduction (Home Office-Pauschale). This amount will be deducted by default when you file. 

On top of that, you can declare another €300 (maximum) per year for office furniture. Technically, home office supplies are considered work-related expenses. 

This means it’s likely worth deducting them individually rather than taking the automatic lump sum of €132. 

Commuting Allowance

Are you commuting to work? Then you can save even more, specifically between €31 and €306 per month! Commuting allowances are another work-related expense. 

However, in most cases, they are already settled with your monthly salary. For this, your employer uses form L 34 EDV. 

If the commuting allowance isn’t accounted for in your monthly salary, you can declare it in your annual tax assessment. 

Look at your pay slip or contact your employer if in doubt.

However, there is a particular condition for your 2022 and 2023 tax declarations.

From May 2022 to June 2023, commuters will benefit from a doubled commuting allowance — and in addition, the so-called “commuter euro” (Pendlereuro) will be quadrupled during this period.

Unanticipated Medical Expenses

Unanticipated expenses you might have had in 2022 are also considered tax-deductible, provided they exceeded your capacity to pay. 

These include braces, medical bills that aren’t covered by your health insurance, health care expenses, nursing expenses, and expenses related to a physical disability.  

Family Bonus Plus And Child Allowance

If you have children, you can directly reduce your tax burden thanks to Family Bonus Plus. 

From 2022 on, the maximum tax-deductible amount for each child under 18 is €2,000 and €650 for each child over 18

However, the prerequisite is that you receive a family allowance (Familienbeihilfe) for the child and are subject to unlimited tax liability in Austria.

Are you a single earner or a single parent? If your income is too low to qualify for the family bonus, you will receive a child allowance (Kindermehrbetrag) of €550 per year and a child (from 2022) as a negative tax.

Cost-Of-Living Deduction For Employees

To combat high inflation in Austria, it was decided to introduce a new cost-of-living deduction (Teuerungsabsetzbetrag) for employees. 

The aim is to relieve the burden of lower-income employees in particular. 

Thanks to this new regulation, a one-time deduction of up to €500 applies to employees with incomes of up to €24,200 — this is subject to negative taxation. 

It’s also worth noting that pensioners can also benefit from this new regulation.

Conclusion

With the right tax return software, filing taxes in Austria can be as smooth as the country’s renowned chocolate. You’ve now got the knowledge to choose the tool that not only meets your needs but also makes tax season a breeze.

Embrace the efficiency of digital solutions and spend more time enjoying the beauty and culture Austria has to offer. Here’s to a stress-free tax season!

File Smart!

But wait! There’s lot more that you might be interested in following:

  • Tax System In Austria
  • Tax Consulting In Austria
  • Tax Refund In Austria

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