If you live and work in Washington, you pay sales tax, but not state income tax. If you live in Washington and work in Oregon, you must file a non-resident Oregon tax return and Oregon taxes a portion of your income. Washington residents working in Oregon must pay Oregon State Income Tax, filed with Form OR-40-N, Oregon Non-Resident Tax Form The personal income tax benefit in this situation occurs only if you work partly in Oregon and partly in Washington, or if your spouse or other household members live with you in Washington and also work in that state. In that circumstance, you only pay personal income taxes for the work you do in Oregon.
Your work in Washington is subject only to federal income taxes and local, state and federal payroll taxes. People who live and work in Washington don't pay income taxes. But what about everyone who lives in Washington and now works from home for an Oregon company? According to tax experts, they could get a big increase in their tax refund. However, if you live or work in Washington and owe federal income tax returns due to Oregon State income taxes, your Oregon State income tax will be deductible.
If you live or work in Oregon or Washington, you won't get any tax benefits because you're charged the same federal income tax. Not surprisingly to anyone who drives the two bridges across the Columbia River during rush hour, four out of five of these non-resident workers come from southwest Washington. However, if you live in Washington and work in Oregon, you can deduct the Oregon state income taxes you paid when you file your federal income tax return. All interest, rent, dividend, capital gains, or other income derived from business in Washington is exempt from these taxes.
If you work in that state, you can easily pick up food and other items on your way home from work, avoiding the sales tax you would pay in Washington for the same items. Employees in Washington don't pay income tax on their earnings, and people in Oregon don't pay income taxes on their income while they're employed there. The difference in home price in the states of Oregon and Washington allows taxes to be reduced when moving within both states. As with other elements, you are still responsible for federal taxes on all types of income, but you'll save yourself the hassle of filing information twice, once at the state level and once at the federal level, when you live in Washington.
Most Washington State residents don't know how much sales tax they will have to pay for goods and certain services purchased and purchased without paying them. The reason you're not required to pay sales tax in Oregon is because you don't need to bring those items into the state while you shop there. The same federal income taxes apply to both Oregon and Washington, so you don't receive direct tax benefits for living and working in either place. Washington residents who live near the Oregon border often take advantage of sales tax-free shopping in Oregon.
