How can I turn 20 into 200

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Easily reduce the tax burden with donations

Udo Reuss
Tax Expert As of April 14, 2021

Udo Reuss

The tax lawyer and business graduate Udo Reuß is responsible for tax issues at Finanztip. Before that, he worked for various business and specialist publishers such as Handelsblatt, F.A.Z.-Verlagsgruppe, Haufe-Lexware and Vogel Business Media - 14 years of which he worked as editor-in-chief of trade magazines. He draws the relevant judgments for tax savers from the complex tax law.

  • Claim your donations to charities as special expenses against taxes.
  • If you don't want to donate money, you can also make donations in kind. You can even deduct your volunteer time as a donation.
  • If you support political parties, you can earn up to 3,300 euros per person. For the first 1,650 euros you get half of it back as a tax refund - the rest is additionally deductible as a further special expense.
  • Always get a receipt for your donation over 200 euros (from 2021: 300 euros). In principle, you no longer have to submit receipts. Keep them anyway. The tax office can ask for them.
  • For donations up to 200 euros, simplified documentation requirements apply; from 2021 even up to 300 euros.
  • Enter your donations in the special expenses annex. If you donated a lot in one year, you can deduct part of it immediately and the rest as a Donation lecture take with you into the following year.

According to a study by the Society for Consumer Research (GfK), German citizens donated 5.4 billion euros in 2020. The small or large gifts do not only benefit people in need: associations and foundations finance theirs daily work With the money, many artistic or scientific institutions depend on this support, and political parties are also happy to accept donations.

The State promotes taxpayerswho want to donate through the Special edition deduction in the tax return. That means: You can deduct your donations from the tax.

Up to what amount can you donate immediately?

The tax authorities distinguish between three types:

  1. Donations for funding non-profit and tax-privileged purposes
  2. Donate to the fortune stock of a Foundation, endowment as
  3. Donations to political parties.

In order for the special expenses deduction to take effect, there is one prerequisite in all three cases: The donor must give the money voluntarily, without anything in return expected.

Donations and membership fees You can donate to tax-privileged and non-profit associations that dedicate their work to art and culture up to an amount of 20 percent Your total income in the tax returnright away claim (§ 10b EStG). This also applies to church, religious or scientific organizations.

If you have donated so much in a year that the donations reach the Maximum of 20 percent of the total amount of income you can carry over the excess amount to the following year. This oneDonation lecture the tax office determines separately at the end of the year. In the tax return of the following year, you enter thePlant othera cross in line 6, then the tax office will take the remaining partial amount into account.

For example, if you donate money to a youth project in the neighborhood or to the Deutsche Aids-Hilfe, this amount will reduce your taxable income as a special expense as soon as all of your special expenses (in addition to pension expenses) reach Lump sum exceed. This is for single people 36 euros, for spouses assessed together and registered life partners twice as much. You can read about what you can deduct in addition to donations in our guide to special editions.

Not The special expenses include membership fees for clubs that primarily serve leisure activities, for example sports clubs, home clubs or carnival clubs.

You carry donations and membership fees in the Appendix special editions (from line 5) on your tax return.

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How can you prove the donations?

All donations and membership fees for tax-privileged purposes must be made on the basis of the "Donation receipt according to the official model ”, previously a donation receipt. You will receive the confirmation from the recipient of the donation, who can also send the confirmation electronically to the tax office.

This should be the standard since 2017. Advantage for the donor: He has to receive the donation receipt just keep it and only submit it at the request of the tax office - i.e. retention requirement instead of submission requirement. The official forms for donation recipients are available on the website of the Federal Ministry of Finance (BMF). You must have the donation receipts at least a year cancel long after notification of the tax assessment.

Tax return helper

Simple proof up to 200 euros, from 2021 even up to 300 euros

For donations and membership fees up to 200 euros No formal donation receipt is required for each payment. From 2021 the simplified proof of donation is even valid up to 300 Euro (Section 50 (4) sentence 1 no.2 EStDV).

A simplified proof is possible: If the recipient is a so-called legal entity under public law, for example a university or a "public service" such as a school, an account statement and proof of the organization, for example from the school's sponsorship association, are sufficient as proof.

In addition to donations to state authorities and non-profit organizations, this simplified regulation also applies to disasters and donations to political parties.

If you have donated to charitable organizations such as associations and foundations, you also need a receipt stating, among other things, that this organization is exempt from corporation tax and how it uses the funds.

In summary, the following requirements apply to the simplification rule for small donations (Section 50 (2) Income Tax Implementation Ordinance):

  1. The deposit slip as a printout must contain the name, account number, booking date, the actual execution of the payment and the amount of the donation.
  2. The tax-privileged purpose for which the donation is used must be noted on the receipt: for example, "refugee aid" as a charitable purpose.
  3. If you are asked to hand in the donation receipt to the tax office, make sure that the receipt shows that the association is exempt from corporation tax.
  4. It must be clear whether it is a donation or a membership fee.

The Booking confirmation Contains information about the purpose of the donation and about the tax relief of the association. If you want to donate via your PayPal account, all you need is a bank statement and a printout that proves the transaction.

A donation receipt is required for a higher donation

For donations over 200 euros (from 2021: 300 euros) you generally need always a donation receipt from the recipient. Exception: In the event of disasters such as an earthquake or tsunami, the tax offices have so far been generous and accepted a payment on a corresponding one Special account the simplified proof within a fixed period of time, even for higher donation sums.

Tip:The tax offices can recognize your donations up to 100 euros even without receipts, if you enclose a list of the individual expenses and the recipients. However, there is no legal claim to this, it is only an internal instruction from the tax authorities to stem the flood of paper by sending receipts. Since 2017, receipts have generally first been required at the request of the tax office be submitted.

Maintenance as an extraordinary burden

Do you want one specific person financially, you cannot deduct your donation as a special expense. Anyone who supports people in need financially on a permanent basis, however, has another option for tax deduction: as an extraordinary burden.

If you take a person with a residence permit (for example, a civil war refugee) into your household, you can claim the maximum amount of 9,744 euros (2020: 9,408 euros, 2022: 9,984 euros) as maintenance benefits for the year 2021 (Plant maintenance). The tax office requires that you declare in writing that you will bear all costs for the living of the admitted person (declaration of commitment). Collect all receipts so that you can submit them when requested.

Enter the tax exemption for donations on the income tax card

Donations can also reduce your tax burden immediately and not only when you submit your tax return. You can take advantage of the income tax reduction procedure by applying to the tax office for an allowance for your special expenses. This is saved as an electronic wage tax deduction feature (ELStAM) and automatically taken into account by the employer - this increases your monthly net income. The prerequisite, however, is that your special expenses together with the extraordinary burdens amount to at least 600 euros per year.

State donations in kind in the tax return

You can even include donations in kind, such as clothing or toys, as a special expense on your tax return. Organized by a non-profit association in Purpose-built operation an officially approved raffle, in which the surplus is used directly and exclusively for Promotion of tax-privileged purposes is used, your donations in kind are deductible. However, this does not apply if your donation in kind is raffled or sold in the economic business of the association - for example at a club festival or flea market.

The value of the donation in kind must be entered on the donation receipt. It makes sense to document the new price, the period of use and the condition at the time of the donation so that you can prove the market value of the donation in kind.

Donations to foundations

Donations to the assets to be received by a foundation - in official German into the asset stock - are eligible for up to 1 million euros regardless of income (2 million euros for married couples who are assessed together or registered partners). The donor can claim the donation for tax purposes either in the year of the donation or in the nine following years.

What applies to donations to political parties?

You have a big tax effect with a party donation. Donations and membership fees You can participate in political parties half directly from your tax liability deduct - up to a maximum amount of 825 euros per year, double that for married couples or partners who are assessed together (Section 34g of the Income Tax Act).

As a couple, you can collect up to 6,600 euros for tax purposes. Up to the amount of 3,300 euros you will get half of your donation back as a tax refund. The amount above this is also deductible as a special expense up to a maximum of EUR 3,300.

Example: As a married couple, you pay a total of 4,000 euros in one year to the party you trust. You will receive half of 3,300 euros, i.e. 1,650 euros, directly as a refund with your tax return. And you also deduct the remaining 700 euros as special expenses (Section 10b (2) EStG).

Warning: one municipal voters' association applies Not as a party. That is why a donation or membership fee can save you a maximum of 825 euros in tax. This was decided by the Federal Fiscal Court in a judgment dated March 20, 2017 (Az. X R 55/14).

Donate time and support

Do you volunteer as a coach for the football club, do you lead the church choir or do you regularly drive your children and their sports friends to competitions? Then you can possibly claim your effort as a donation. To do this, you need a written agreement stating that you are entitled to reimbursement of expenses, for example for travel expenses, or a claim for remuneration such as the flat rate for the trainer or the flat rate for volunteers, and that you formally waive it. The right must also be included in the association's articles of association.

In a letter dated August 24, 2016, the Federal Ministry of Finance stipulated that an annual waiver is sufficient for a monthly payment claim. Previously, it called for a three-month statement.

How do I find the right organization to donate to?

If you don't know which association to donate to or which organization is serious and handles your money responsibly, you can contact us Donation seals orientate. The German Central Institute for Social Issues (DZI) evaluates, among other things, the use of donations as well as the expenditure on advertising and administration. Recipients of donations who adhere to an acceptable level are allowed to use the DZI seal for their public relations work, although this is subject to a fee. The German Donation Council also issues a certificate.

The non-profit Phineo AG, which is committed to social engagement, awards a free seal. Organizations that deal with donors' money in a trusting manner can receive the “Effective Seal” from Phineo.

You can easily do good and save taxes at the same time, if you contact the alliance of 23 large German aid organizations: You can donate either once or from 5 euros a month. For donations of 50 euros or more, you will automatically receive a donation receipt. Regular donors will automatically receive an in January of the year following their donation Collective donation receipt. You can download the form for the simplified proof of donation directly from the homepage.

You can read more about this in our guide to donating correctly.

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Udo Reuss

Udo Reuss

The tax lawyer and business graduate Udo Reuß is responsible for tax issues at Finanztip. Before that, he worked for various business and specialist publishers such as Handelsblatt, F.A.Z.-Verlagsgruppe, Haufe-Lexware and Vogel Business Media - 14 years of which he worked as editor-in-chief of trade magazines. He draws the relevant judgments for tax savers from the complex tax law.

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