George, your tax situation might brighten up in 2024! With the chaos surrounding public finances uncertain, there's some promising news for private households: Various tax relief measures for employees are set to kick in. These measures will provide families with an additional cushion in their wallets, enabling them to enjoy more of their hard-earned income without any increases in salary.
Financial scientist Frank Hechtner from the University of Erlangen-Nuremberg has crunched some numbers to give us a sneak peek into who stands to benefit and by how much. Here's how the relief breaks down for different income levels and family situations:
- A single, childless individual earning €4,000 per month will see an annual increase of €225 in their net income come 2024.
- Families with two children, where both parents earn €4,000 per month, will enjoy relief to the tune of €620 per year.
- For the wealthy, the relief can climb as high as €1,600.
With these figures, it's clear that taxpayers will have more money in their pockets in 2024, despite a projected sharp increase in social security contributions. Let's break down the factors that contribute to this relief:
- The basic tax-free allowance, which covers income up to which no tax is payable, will rise from €10,908 to €11,604.
- Key tax rate values will change, meaning the rates applicable today will apply to slightly higher income levels in 2024, except for the "wealth tax rate".
- Child allowance will increase from €3,012 to €3,192 per parent.
- The solidarity surcharge exemption limit for high-earners will be increased.
However, higher contributions to statutory pension and unemployment insurance as well as health and long-term care insurance will have a negative impact. Also, the additional health insurance contribution will rise from 1.6% to 1.7%. Childless people will benefit less overall than families with children due to certain factors like the increase in the mini-job threshold and the associated rise in social security contributions in the sliding zone.
Frank Hechtner has also predicted that additional tax relief will be introduced in 2024, as Finance Minister Christian Lindner has expressed the intention to boost the basic tax-free allowance and child tax-free allowance. Weighted down by these factors, taxpayers usually end up with more money.
Despite the chaos and uncertainty surrounding public finances, it's good to know that there's a silver lining for private households. Keep an eye on these roadmaps and take advantage of the tax relief opportunities that come your way!
