Tags: Retirement | retirement | Oregon | taxes

Taxes for Retirees in Oregon

By    |   Tuesday, 09 June 2015 11:29 AM

The cost of retirement in Oregon, much like the state's overall cost of living, is significantly higher than the national average. The state taxes some types of retirement benefits and income that other states don't, and also doesn't offer as many incentives and credits on income and property taxes. While this makes it more expensive to spend your retirement in Oregon, it doesn't mean you can't achieve a high quality of life even on a limited income. Instead, it means you'll have to spend extra time researching what tax breaks you qualify for, in addition to budgeting your money carefully.

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Oregon does not have a state sales tax, making it one of just five states who don't. This is according to the Tax Foundation, which ranked Oregon 46 on its list of combined taxes by state. However, Oregon does have a high income tax. The Center for Retirement Living notes that Oregon uses a four-bracket system for income tax, charging 5 percent at the low end and 9.9 percent at the high end.

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Unlike other states, Oregon taxes most retirement income, except Social Security and railroad retirement benefits. Residents from the military or federal government may qualify for a deduction based on the length of their employment. The state offers other deductions of interest to retired senior citizens, including a full medical deduction for people older than age 59, and a tax credit on insurance paid for long-term care.

You might also pay more in property taxes than retirees in other areas of the country. Unlike many other states, Oregon does not offer a homestead exemption. This exemption lowers the assessed value of the property if it's the person's full-time residence, thereby lowering the property taxes paid. Many states offer an additional senior homestead exemption, which doubles the amount subtracted from the property value. If you're at least age 62 and have a total household income below $39,500, you may qualify for the Senior Citizen Property Tax Deferral Program, which allows you to delay paying your property taxes.

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The cost of retirement in Oregon, much like the state's overall cost of living, is significantly higher than the national average.
retirement, Oregon, taxes
Tuesday, 09 June 2015 11:29 AM
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