Student Tax Returns — Loss Carryforward

Verlustvortrag (loss carryforward) allows deducting education expenses from first taxable income after graduation. Typical savings — €3,000-5,000 at career start. Works only for second higher education (master's, professional retraining) [1].

Who Can Use Verlustvortrag

Critical distinction: Erstausbildung vs. Zweitausbildung

Criterion	Erstausbildung (first education)	Zweitausbildung (second education)
What it is	Bachelor's immediately after school	Master's, second bachelor's, professional retraining after completing first education
Verlustvortrag	❌ Doesn't work	✅ Works
What can be deducted	Only Sonderausgaben (up to €6,000/year) — deducted from current year's taxable base	Werbungskosten (no limit) — carried forward to future years as losses
Practical effect	Almost zero (students usually have no income)	€3,000-5,000 refund from first salaries [2]

Important: If you studied for bachelor's in another country and entered master's in Germany — this is Zweitausbildung. Verlusvortrag works [3].

Which Expenses Carry Forward

For Zweitausbildung you carry forward all education-related expenses:

Category	What's Included	Annual Amount (typical)
Semesterbeitrag	Mandatory university fees	€300-400
Study materials	Laptop (depreciation), books, stationery, software	€500-800
Transport	Commute from home to place of study (€0.30/km)	€200-500
Double household	Second housing rent if studying in another city (doppelte Haushaltsführung)	€3,000-9,000
Arbeitszimmer	Home office (if studying remotely)	€600-1,200
Other	Copying, printing, bank fees for student account	€100-200

Total: €1,700-2,100/year without double household, €4,700-11,100/year with it [4].

Loss Carryforward Mechanics

1. During studies: File return, declare expenses as Werbungskosten. Finanzamt records negative income (losses).
2. After graduation: Losses automatically deducted from first taxable income. You pay less tax or get refund.

Example:

• 2021-2023: Master's. Expenses €2,000/year. Total loss: €6,000.
• 2024: First job, annual income €50,000.
• Without Verlustvortrag: Taxable base €50,000 → tax ~€11,500.
• With Verlustvortrag: Taxable base €44,000 → tax ~€9,100. Savings: €2,400 [5].

How to File Return

Steps:

1. Collect documents: Semesterbeitrag receipts, study materials receipts, rental contract (if double household), mileage records.
2. Fill out Anlage N form: Werbungskosten section, "Fortbildungskosten" or "Ausbildungskosten" subsection.
3. Submit through ELSTER: Finanzamt online portal. Return can be filed up to 4 years retrospectively for voluntary returns [6].
4. Receive Verlustfeststellungsbescheid: Finanzamt confirms losses. This document carries forward to future years automatically.

Filing deadline: For voluntary return (students without income) — until December 31 of fourth year after reporting year. Return for 2021 can be filed until 12/31/2025 [7].

Common Mistakes

Mistake	Why Problem	How to Avoid
Not filing during studies	Lose losses forever — after graduation it's too late	File every year of master's
Claiming Erstausbildung as Zweitausbildung	Finanzamt will reject without proof of first education completion	Attach bachelor's diploma
Not keeping receipts	Without proof Finanzamt will deny	Keep all receipts minimum 6 years
Forget double household	Lose largest expense category (up to €9,000/year)	If renting housing at study location while main residence in another city, claim doppelte Haushaltsführung

When to Contact Steuerberater

You can handle yourself if:

• Studying in master's, expenses are standard (Semesterbeitrag, study materials, transport)
• No income during studies
• No complex situations (foreign income sources, self-employment)

Contact Steuerberater if:

• Double household (doppelte Haushaltsführung) — complex category with many requirements
• Studying and working simultaneously — need to properly allocate expenses
• Financing studies through scholarship or employer — tax consequences differ
• Finanzamt already rejected your return — need appeal (Einspruch)

Cost: €150-300 per return. Steuerberater expenses also deductible as Werbungskosten [8].

Psychological Dimension

Filing tax return during studies seems pointless — income is zero, no refund coming. Brain doesn't see immediate reward. But €3,000-5,000 refund from first salaries — that's real money at moment when you're just starting career and every euro is critical.

Barrier: "I'll figure it out later when I start working."

Reality: Later is too late. Verlustvortrag works only if return filed during studies. Four years for voluntary filing is a window, but it closes.

Action: Spend 2-3 hours per year on ELSTER. This is investment with guaranteed return.

FAQ

Not legal or financial advice.

My bachelor's is from Russia/Ukraine — does a German master's count as Zweitausbildung?

Yes. A completed foreign bachelor's degree is recognized by German tax authorities as Erstausbildung (first education). The subsequent master's in Germany qualifies as Zweitausbildung (second education), enabling Verlustvortrag (loss carryforward). The key requirement: proof that the first degree was completed (diploma or transcript). The BFH (Bundesfinanzhof, Federal Fiscal Court) has confirmed this in multiple rulings. The degree does NOT need formal Anerkennung (recognition) for tax purposes — the Finanzamt (tax office) requires only proof of completion. Attach a certified translation (beglaubigte Übersetzung) of the diploma to the Steuererklärung (tax return).

I missed filing for previous study years — can I file retroactively?

For voluntary declarations (freiwillige Steuererklärung), which students without income typically file, the deadline is 4 years after the tax year. In 2026, filing is still possible for 2022, 2023, 2024, and 2025. Earlier years are lost. The Verlustfeststellungsbescheid (loss determination notice) accumulates across years automatically. All missing years can be filed at once through ELSTER or a Steuerberater (tax advisor). Each year's Verlustvortrag (loss carryforward) carries forward cumulatively — losses are summed up and deducted from the first income after graduation.

I worked as a Werkstudent during my studies — how does that interact with Verlustvortrag?

Werkstudent (working student) income is taxable. If study expenses (Werbungskosten, income-related expenses) exceed the Werkstudent income, the difference becomes a Verlustvortrag (loss carryforward). If income exceeds expenses, tax is paid normally — and the Grundfreibetrag (basic tax-free allowance, €12,096 in 2025) means many working students pay zero tax anyway. Example: €8,000 Werkstudent income, €5,000 study costs — taxable income €3,000 — below Grundfreibetrag — no tax, but no Verlustvortrag either. If expenses were €12,000 — loss of €4,000 — Verlustvortrag is generated. The Werbungskostenpauschale (standard deduction of €1,230) is automatically applied.

Does a completed Ausbildung (vocational training) count as Erstausbildung?

Yes. A completed Berufsausbildung (vocational training) of at least 12 months counts as Erstausbildung (first education) under § 9 Abs. 6 EStG (Income Tax Act). Any subsequent education — whether a bachelor's, master's, or a different Ausbildung — qualifies as Zweitausbildung (second education) and enables Verlustvortrag (loss carryforward). This is relevant for immigrants who completed vocational training in their home country before studying in Germany. The BFH (Federal Fiscal Court) confirmed this in ruling VI R 8/12. Keep the vocational certificate and a certified translation (beglaubigte Übersetzung).

Can I deduct student housing costs (WG room) as doppelte Haushaltsführung?

Only if a primary household (eigener Hausstand) is maintained in another city and the student housing serves as a secondary residence for study purposes. The primary household must be one's own — living with parents counts only if financial contributions to the household are made (at least 10% of living costs). If conditions are met: rent, utilities, travel home (once per week, Entfernungspauschale, distance allowance), and meal allowances during the first 3 months (Verpflegungsmehraufwand, additional meal expenses) are deductible. This is the most valuable deduction for students — up to €1,000/month for rent alone. Without a primary household elsewhere, WG room rent is not deductible.

Sources

1. Bundesfinanzhof, Urteil vom 19.09.2019, VI R 26/17 — Erstausbildung expenses not carried forward as losses. bundesfinanzhof.de
2. Stiftung Warentest (2024) — "Studenten: So holen Sie sich Steuern zurück". Typical refund for master's students. test.de
3. Bundesministerium der Finanzen, Schreiben vom 22.09.2010, IV C 4 - S 2227/07/10002 — Foreign Erstausbildung + German Zweitausbildung = Verlustvortrag possible. bundesfinanzministerium.de
4. Lohnsteuer-Hilfe-Ring Deutschland (2024) — "Werbungskosten Studium: Was kann ich absetzen?". Expense categories and typical amounts. steuerring.de
5. Einkommensteuerrechner (third-party tool, 2024) — Tax burden calculation with Verlustvortrag. Approximate illustration; exact calculations depend on individual factors. bmf-steuerrechner.de
6. § 149 Abgabenordnung (AO) — Feststellungsfrist für Verlustfeststellung. gesetze-im-internet.de
7. § 149 Abs. 2 AO, § 170 Abs. 2 Nr. 1 AO — Fristen für Abgabe der Steuererklärung. gesetze-im-internet.de
8. Bundesverband der Lohnsteuerhilfevereine (2024) — Durchschnittliche Kosten Steuerberatung für Studenten. bdl-online.de