Residents of the greater Portland metro area also have to pay local income tax. However, the Beaver State also has no sales taxes and below-average property taxes. In Oregon, different tax brackets are applicable to different filing types. Married couples filing their Oregon income tax return jointly will usually have wider tax brackets than those filing separately or as an individual. Accordingly, it’s critical to identify strategies that can reduce oregon state income tax this tax.

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Oregon was one of the first Western states to adopt a state income tax, enacting its current tax in 1930. It consists of four income tax brackets, with rates increasing from 4.75% to a top rate of 9.9%. That top marginal rate is one of the highest rates in the country. Only a small subset of taxpayers actually pays that rate, however, as it applies only to single taxpayers making at least $125,000 a year ($250,000 for joint filers).

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If your state tax witholdings are greater then the amount of income tax you owe the state of Oregon, you will receive an income tax refund check from the government to make up the difference. You can also compare the quantitative returns and tax savings of these different strategies using our ordinary income tax savings calculator and customize it to your own situation. Taxable property includes real property, mobile homes, and some tangible personal property used by business. The state and each county assessor determine the value of property in each county. Measure 5, which was passed in November 1990, restricted non-school taxes on any property to $10 per $1,000 of real market value.

Oregon: Federal Retirement Plan Thresholds in 2025

This is different from a tax deduction, which reduces the amount of income that is subject to taxation. Tax credits are applied directly to the tax liability, while deductions are applied to the taxable income. Oregon imposes an individual income tax on earnings for both residents and nonresidents within the state. This tax is determined by the individual’s federal-adjusted gross income and has rates that vary from 4.75% to 9.9%. Technically, you don’t have just one “tax bracket” – you pay all of the Oregon marginal tax rates from the lowest tax bracket to the tax bracket in which you earned your last dollar.

In recent decades, income inequality has climbed to historic levels. Not coincidentally, business taxation has declined and tax rates for the superrich have collapsed. The two most popular tax software packages are H&R Bookkeeping for Painters Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company.

• The first thing to know about the state of Oregon’s tax system is that it includes no sales tax.
• For comparison purposes, however, your Oregon tax bracket is the tax bracket in which your last earned dollar in any given tax period falls.
• Multiple filters can be added in conjunction with the search to narrow down your results.
• Likewise, you can take an additional dependent exemption for each qualifying dependent (like a child or family member), who you financially support.

Oregon tax breaks often get written in Washington, D.C.

• For 2024, single filers and married couples filing separately with more than $125,000 in taxable income have to pay that top rate.
• Statewide, the average effective property tax rate (annual property taxes as a percentage of home value) is 0.86%.
• After deductions and credits, the average effective tax rate is about 6.0% of adjusted gross income.
• You could consider it a bit of a tradeoff, though, since Oregon’s income tax rates are among the highest in the country.
• Whenever Congress creates new tax breaks, Oregon often ends up copying them automatically, without Oregon lawmakers having ever voted to approve them.

The standard deduction, which Oregon has, is a deduction that is available by default to all taxpayers who do not instead choose to file an itemized deduction. For previous years’ tax rates, refer to the tax charts on the last page of Publication OR-17. Oregon has a graduated-rate income tax, ranging from 4.75 to 9.9 percent across four income brackets. The new Oregon child tax credit, known as the “Oregon Kid’s Credit,” is worth up to $1,000 and is completely refundable. That means eligible taxpayers can receive the credit back as a tax refund. Tax-Rates.org provides easy access to five balance sheet of the most commonly used Oregon income tax forms, in downloadable PDF format.