It’s tax season here in the good ‘ol US of A.
Having been self employed for a few years, I had a cpa do my taxes because there simply wasn’t enough time in the day to figure it all out. Now that I am once again working for the man, my taxes have become very easy to do myself.
So last night I was working on my Oregon tax filing and got the dreaded part of determining what I have to pay. I’m a freak about letting the respective taxing jurisdictions hold on to my money (since they don’t pay interest) and would rather that I be holding their money (which I don’t pay interest on either). That being said, I usually have to pay more taxes on April 15th. I’m fine with that because it’s usually under $1000 so it’s not a psychological money let down.
If you do your own taxes in Oregon, you will notice that in order to determine your taxable income, you have to go through the motions of determining your federal tax liability. Ideally, the higher this number is (for Oregon reporting), the less your Oregon taxable income will be.
The worksheet that is in the instructions (pg 33) for filing your Oregon taxes to establish your federal tax liability is as follows (these amounts are all found on your federal tax return):
1. Enter your federal tax liability
2. Enter your tax on qualified retirement plans (this is also a federal tax liability so this makes sense)
3. Enter line 63 (aka Making Work Pay) (what? this is obama money and has nothing to do with my liability)
4. Enter line 66 (aka American Opportunity Credit) this is a credit for college tuition – once again, nothing to do with tax liability
5. Enter line 67 (aka First Time Homebuyer Credit) nothing to do with my tax liability
6. Add line 1 and 2 together and subtract 3 thru 5
What? Remember, we want this number to be as high as possible. The State of Oregon wants to use your federal tax liability to establish your taxable income. The point of this whole article is why the State of Oregon wants to tax credits that were made to soften the blow of an already overtaxed fragile economy. Hell, even the federal govt doesn’t tax you on the credits they just handed to you.
So effectively, in my case, they took my Obama credit “Making Work Pay” and taxed it. I didn’t have the other two credits so those weren’t an issue for me.
The State of Oregon is always talking about how they want to help the middle class. Well, this method of establish your Oregon taxable income is an assault to the middle class. It irritates me to no end because here we get some tax relief at a much needed time from the federal govt only to have the State of Oregon swoop in to scoop it up.
I implore our state assembly to get rid of this tax on our taxes and quit spending so much so you don’t have to keep coming up with ways to pay for your inability to maintain a budget.
And since you made it to the end of this article, a great way to utilize all of those fillable pdf tax forms the government provides is with the free pdf program – Foxit Reader