With a loss carryforward, you can transfer costs from one tax year to future years and claim them for tax purposes. Here, we explain what to consider – clearly and simply.
-
A loss occurs when your job-related expenses exceed your income.
-
A loss carryforward is not paid out, but it reduces your tax burden in later years.
-
In the Taxfix app, you enter existing loss carryforwards under “Expenses” → “Additional Information” → “Received Tax Assessment” → “Loss Carryforward.”
🚀 Your Guide
Loss carryforward: how it works
A loss occurs when your expenses (e.g. income-related costs) are higher than your income, or you had no income at all. You can carry this loss forward into the next year and use it to reduce your taxes.
The tax office confirms the loss in writing (as a “Notice of the Separate Determination of the Remaining Loss Carryforward”). This amount is deducted from your income in the following year – reducing your taxable income and potentially leading to a higher refund.
Important: A loss carryforward is not paid out, but is offset against future tax returns.
(The video is in german. Please use translation in video caption).
Example: loss carryforward explained
Tina had no income in 2020 but €1,500 in job-related expenses. The tax office determines a loss of €1,500.
In 2021, she has income – the loss is deducted from her income:
| Year | Income | Expenses | Net Income | Carryforward | Taxable Income |
|---|---|---|---|---|---|
| 2020 | 0 € | 1,500 € | –1,500 € | – | 0 € |
| 2021 | 5,000 € | 1,000 € | 4,000 € | –1,500 € | 2,500 € |
➡️ If a loss also occurs in 2021, it is carried forward again to the next year.
Loss carryforward for students
Students often have more expenses than income, resulting in a loss. These losses can be claimed after entering the workforce – reducing taxable income and significantly lowering the tax burden.
Important:
-
Only second-degree education (e.g. Master’s, university after vocational training) qualifies for a loss carryforward.
-
First-degree education counts as special expenses and cannot be carried forward.
➡️ So only students in a second-degree program benefit from a tax-deductible loss carryforward.
Applying a loss retroactively
-
You can claim a loss retroactively for up to four years using a tax return.
-
If you have not filed a tax return yet, you can have a loss confirmed retroactively for up to seven years.
With Taxfix, you can only claim losses for the last four years – for earlier years, you can use ELSTER, for example.
What is a loss carryback?
In addition to a loss carryforward, there is also a loss carryback. In this case, the loss is applied to the previous year, which can result in a refund.
Since 2022, losses can be offset against income from the two previous years. If your tax office automatically applies a loss carryback, you can file an objection and request a carryforward instead – if that benefits you more.
Loss carryforwards when filing multiple tax returns
If you file several tax returns at once – for example, retroactively for several years – each loss is applied in the year it occurred. The tax office determines separately for each year whether a loss carryforward arises.
These losses are then automatically carried forward to the next year. So, if you submit tax returns for 2021, 2022, and 2023, the tax office will account for the losses in chronological order and offset them accordingly.
💡 Tip: When completing your tax returns, be sure to include all job-related expenses – this allows the tax office to correctly calculate the loss offset.
Where do you enter a loss carryforward?
A loss carryforward arises automatically when your expenses exceed your income.
In the Taxfix app, you can enter an existing loss carryforward under “Expenses.” Scroll down to the section “Additional Information.” There, click “Received Tax Assessment” and select “Loss Carryforward.” Enter the amount – the tax office will then automatically apply it in the following tax year.
🚀 Fill out the simple question-answer flow - we'll take care of the rest!
Still have questions?
We're here to help! Contact our support team: support@taxfix.de