You can sell a craftsman service and thereby reduce the tax burden. In order for you to really benefit from it, however, you have to consider a few things. This includes, for example, the amount of costs or the type of work. We explain all this in this post.

You can sell craftsman services. There are different possibilities. Landlords can deduct the craftsman services incurred in the rented apartment as advertising costs. All others can make use of the tax reduction of § 35a EStG.

§ 35a EStG grants a tax reduction for expenses related to household employment, household services and also craftsman services. This tax reduction is linked to the collective income tax. The application of the rate results in the tax liability. This is modified by two types of tax reductions. While tariff reductions provide for a milder tax rate for special cases, tax reductions, such as the local one, lead to a deduction from the tax liability. However, if a taxable person is subject to an overhang due to the use of the tax reduction, the taxable person may not require the establishment of a negative income tax equal to the amount of the overhang or the establishment of a tax reduction that can be repaid or carried forward.

The deduction according to § 35a EStG is, however, subordinated. Prior to this, the costs are to be deducted as operating expenses, advertising costs or as a general charge, where permitted. In the case of mixed expenses, an estimated division is possible.

Beneficiary services include, for example, repair measures or conservation measures. It is therefore irrelevant whether the measure is for conservation, modernisation or control. Small business owners or the public sector can also provide tax-advantaged craftsman services.

Beneficiary expenses, however, are only the labour costs, i.e. in particular the gross wage, the travel costs and the costs of the work equipment. However, the fee for the material used is not included. Therefore, the share of labour costs must be shown separately in the invoice. Also, expenses are not deductible if an insurance covers them. It is also important to know that you can not claim new construction costs.

The service must be provided “in” a domestic household of the taxpayer and benefit the taxpayer’s dwelling. This also includes accessories or the garden. The craftsman services must be carried out in your own home, a rental apartment or a holiday home in the EU, which you use yourself. Therefore, the work must not take place in the workshop of the craftsman. Also craftsman services on objects that serve life in the household are reduced according to § 35a EStG. This does not include the repair of a car.

For tax purposes, you as a private individual can deduct 20 percent of the craftsman’s services. The ceiling is EUR 6 000. This allows you to achieve a tax bonus of 1 200 euros per year.

The maximum amounts according to § 35a EStG can only be used for budgetary purposes. Spouses assessed together are granted the tax reductions only once. Separately assessed spouses and single people with a common household may share the maximum amount among themselves.

If you provide the craftsman service independently, you cannot specify any costs for tax purposes. You must therefore hire an independent craftsman. It is important that you get a bill. You have to pay them demonstrably. This is why a bank transfer is available.

Decisive for the indication of craftsman services in the tax return is the year of payment and therefore not the year in which the work took place. It therefore makes sense to divide the payments over two years.

Even a tenant can sell a craftsman service. For example, you can claim the costs of commissioning a craftsman for the repair of furniture, but also caretaker costs or gardener costs. The latter are regularly passed on to the tenant via the incidental cost accounting. If the tenant also pays the craftsman services through the incidental cost statement, he can also claim the craftsman costs with 20 percent in the tax return. However, these costs should be listed in the ancillary cost statement. Otherwise, it is advisable to ask the landlord about the pure work performance of the craftsman and the bill. The tenant can also tax the beauty repairs commissioned for the apartment used for his own residential purposes.