Oregon Individual Income Tax: Complete Guide

TurboTax guides you step by step to law firm chart of accounts ensure you claim every deduction and credit you qualify for. And if you want professional tax help, simply connect with a TurboTax expert for personalized advice, or let us handle filing for you. For previous years’ tax rates, refer to the tax charts on the last page of Publication OR-17.

Oregon Considers Decoupling from the Federal Tax Code

While putting money in these accounts shrinks your paycheck, it also lowers your taxable income (and, in the case of retirement accounts, simultaneously helps secure your financial future). Oregon levies a progressive state income tax system with one of the highest top rates in the U.S., at 9.90%. 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. The Tax tables below include the tax rates, thresholds and allowances included in the Oregon Tax Calculator 2024.

3 – Oregon Dependent Deduction

Read more here and check out our Guided Planner tool, where we’ll point you toward the strategies that might apply to you. These deductions, such as union dues, charitable donations, or wage garnishments, are taken out after taxes have been calculated and withheld. By monitoring your post-tax deductions, you can ensure that you’re making the most of your paycheck and maximizing your financial well-being. Every time you receive your Oregon paycheck, you may wonder how all those deductions and taxes affect your take-home pay. Understanding the components of your paycheck is essential to making the most of your hard-earned money. If you meet these state filing thresholds, you’re responsible for filing Oregon state income taxes.

What is the standard deduction in Oregon?

• Federal tax filings are done by filing Form 941 (quarterly) and Form 940 (annually), but deposits can be made on an ongoing basis through the EFTPS payment system.
• The seller may accept this certificate and exempt the transaction from their state’s sales/use/transaction tax, but they aren’t required to accept it.
• The Personal Exemption, which is supported by the Oregon income tax, is an additional deduction you can take if you (and not someone else) are primarily responsible for your own living expenses.
• For other reasons why your income may be exempt from Oregonwithholding, and instructions for claiming the exemption, see Form OR-W-4 Instructions​.
• The two most popular tax software packages are H&R Block At Home, sold by the H&R Block tax preparation company, and TurboTax Federal & State, sold by the Intuit software company.

If the federal form was used for Oregon withholding, then each allowance was equal to one personal exemption credit’s worth of tax for the year on your Oregon return. Marital status significantly determines your tax liability, affecting your filing status and tax brackets. Pre-tax deductions, such as retirement fund contributions, can also impact your paycheck. By reducing your taxable income, these deductions may lower your overall tax liability. Let’s consider an individual who has a taxable income of $350,000 in Oregon. The individual qualifies oregon state income tax for the $2,800 standard deduction, reducing their taxable income to $347,255, putting them in the 9.90% tax bracket.

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. It restricted school taxes on any property to $5 per $1,000 of real market value. For small businesses, managing taxes, accounting and everything legal is just a pain.

• The table below shows the full tax brackets and rates for the state income tax in Oregon.
• Your employer then matches those amounts, so the total contribution is double what you paid.
• Most taxpayers use the standard deduction because it results in a lower taxable income than itemizing deductions.
• Residents of Portland should also factor in the city’s $35 arts tax, which applies to many adult residents.
• It’s important to understand your state’s income tax and how it will impact your financial future, not least because that knowledge will empower you to take action to reduce your tax bill today.
• The mechanism of FICA taxation involves a dual contribution system where both the employer and the employee contribute a set percentage of the employee’s income towards these programs.
• Let’s consider a single individual whose ordinary income is $350,000.

This tool is freely available and is designed to help you accurately estimate your 2022 tax return. The bookkeeping 2025 tax rates and thresholds for both the Oregon State Tax Tables and Federal Tax Tables are comprehensively integrated into the Oregon Tax Calculator for 2025. This tool is freely available and is designed to help you accurately estimate your 2026 tax return. Most taxpayers use the standard deduction because it results in a lower taxable income than itemizing deductions.

• Oregon’s maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Oregon’s %.
• Additionally, if an employee leaves for another employer, you’ll need to calculate their final pay.
• Tax deductions are available for a wide range of expenses, such as charitable donations, mortgage interest, medical expenses, and business expenses.
• First and foremost, your paycheck is subject to federal income taxes and FICA taxes.
• Effective beginning tax year 2020, the Legislature reduced Oregon’s first three income tax brackets from 5%, 7%, and 9%, to 4.75%, 6.75%, and 8.75% respectively.
• If you couldn’t afford it, you paid it off by performing road work.
• The standard deduction for a Head of Household Filer in Oregon for 2023 is $ 2,605.00.

That was the case with the massive overhaul of the federal tax code under the Trump administration and in two stimulus packages in response to the pandemic. Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978. The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.