The Oregon Legislature voted and passed a tax bill in February in response to the federal tax reform enacted in December 2017.
In planning for 2018 taxes, the following are a few of the key Oregon provisions to take into consideration:
- Addition of Oregon tax credit for certified contributions to the Oregon Opportunity Grant Fund.
- Oregon disconnected from federal tax law that allows specified pass-through entities a deduction of up to 20% of qualified pass-through business income on the federal return. As a result, the amount will be an addition to taxable income on Oregon tax returns.
- Oregon Pass-Through Entity reduced rates:
- For 2018, an addition of sole proprietorships for eligibility of preferential tax rates on business income.
- Limits preferential tax rates available to sole proprietorships and nonpassive income of partnerships or S corporations to first $250,000 of qualified taxable income.
- Limits use of preferential rates to businesses not classified in certain North American Industry Classification System industries.
- For tax years 2018 – 2025, increases Oregon personal exemption credit from $90 to $113.
As you are planning for 2018, it is important to include changes from both federal and Oregon tax laws to ensure you are effectively optimizing your cash flow and minimizing your tax liabilities.
Nicole McOmber, CPA is a Healthcare CPA and the leader of the Jones & Roth Healthcare Team. She specializes in practice management, advisory services, and tax & accounting services for medical practices and clinics across Oregon & Southwest Washington.