Tax return with a side business
If you earn money on your own account next to your job, this income belongs in your tax return. It sounds more complicated than it is.
Profit, not turnover
You are taxed on your profit, not on what you take in: income minus the expenses connected to the activity. For small side businesses you calculate it with a simple profit calculation (Einnahmen-Überschuss-Rechnung, EÜR).
Anlage S or Anlage G
Freelance work such as teaching, writing or design goes into Anlage S, trade such as selling goods into Anlage G. The app asks about your activity and assigns it – if in doubt, a short question to the tax office helps.
Small businesses: no VAT
If your turnover stays below certain limits, you can use the small business rule (Kleinunternehmerregelung) and do not charge VAT. The app knows the limits of each year and warns you when you get close.
Losses count too
If you spent more than you earned at the start, the loss can lower the tax on your wages. The condition is that you intend to make a profit with the activity in the long run.