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Oklahoma Income Tax
Qualifying Oklahoma residents and non-residents are required to file a tax return to claim income with the state. After filing a federal income tax return, you must also pay Oklahoma income taxes on what you earned throughout the year.
You’re only required to file income taxes with the state if you’re a nonresident who earned $1,000 or more in the state. As an Oklahoma resident, you’re required to pay income taxes to the state if you earned more than the state’s standard deduction, which varies based on your filing status. Standard deductions are as follows:
- Single filers or married but filing separately: $6,350;
- Filing as head of household: $9,350;
- Qualifying widow(er) or married and filing jointly: $12,700.
If you are required to file income taxes with the state, the amount of taxes you owe each year depends on your filing status, as well as the amount of income you earned throughout the year.
If you’re a single filer or married but filing separately, the following tax rates apply to you:
|Income Earned||Tax Rate|
|$0 to $1,000||Half of 1% of your taxable income|
|$1,000 to $2,500||$5 plus 1% of taxable income over $1,000|
|$2,500 to $3,750||$20 plus 2% of taxable income over $2,500|
|$3,750 to $4,900||$45 plus 3% of taxable income over $3,750|
|$4,900 to $7,200||$79.50 plus 4% of taxable income over $4,900|
|$7,200 and over||$171.50 plus 5% of taxable income over $7,200|
If you’re a qualifying widow(er), filing as the head of household or married and filing jointly, the following tax rates apply to you:
|Income Earned||Tax Rate|
|$0 to $2,000||Half of 1% of your taxable income|
|$2,000 to $5,000||$10 plus 1% of taxable income over $2,000|
|$5,000 to $7,500||$40 plus 2% of taxable income over $5,000|
|$7,500 to $9,800||$90 plus 3% of taxable income over $7,500|
|$9,800 to $12,200||$159 plus 4% of taxable income over $9,800|
|$12,200 and over||$255 plus 5% of taxable income over $12,200|
You can only claim itemized deductions on your Oklahoma income taxes if you also claimed these deductions on your federal tax return. The state caps itemized deductions at $17,000, with the exception of medical expenses and charitable donations. If you claimed the standard deduction on your federal return, you must also claim it on your Oklahoma income tax return.
Oklahoma Sales Tax
If you purchase tangible personal property or buy certain services in Oklahoma, you must pay sales tax on the transaction. Oklahoma’s sales tax rate is 4.5%. However, counties and municipalities within the state can levy additional sales tax to fund their local government and public services. Therefore, the sales tax rate you’re required to pay may vary depending on the location in which the transaction occurs. For example, in Oklahoma City, the state and local combined sales tax is 8.625%.
You may qualify for a sales tax relief credit that provides you with a refund on some of the sales tax you paid throughout the year. To claim this credit, you must be an Oklahoma resident who has lived in the state for the entire past year. You must also have earned a total gross household income for the year that’s less than $20,000, unless one or more of the following is true:
- You have a dependent that you claim an exemption for;
- You’re 65 years of age or older;
- You have a physical disability that hinders your ability to work.
If one or more of these circumstances apply to you, claim the sales tax relief credit if you earned less than $50,000 for the year. If you receive Medicaid or aid from the government because you’re elderly, blind, or disabled, you automatically qualify for the sales tax credit. However, if you received temporary assistance for needy families (TANF) at any time throughout the year or if you were convicted of a felony, you’re not eligible for sales tax relief.
To claim the credit, complete a Claim for Credit/Refund of Sales Tax (Form 538-S) and turn it in with your income taxes. If you’re eligible for the credit and you owe taxes, the credit may be deducted from your tax liability.
Oklahoma Property Tax
Every state imposes property taxes on property owners. If you own property in the state, the local government assesses the value of your property and its funding needs. It sets a tax rate and provides you with a property tax bill based on the assessed value of your property. This tax is considered “ad valorem” since it’s a value-based tax.
The county assessor evaluates your property and determines its value, which is used to calculate the property taxes you owe. You must be notified if your property value has increased. The assessor cannot increase the value of your property each year by more than 3% on homestead property or agricultural land or more than 5% on other types of property.
Your county treasurer mails your property tax bill in November. You must pay your property taxes by December 31 to avoid late penalty and interest fees. Your property taxes are used by your county for public space improvement projects and school funding.
Oklahoma Estate Tax
An estate tax is a tariff on the transfer of a taxpayer’s estate after they die. Oklahoma no longer collects any type of estate taxes. These taxes do not apply to any death that occurred on or after January 1, 2010.
Filing Taxes in Oklahoma
If you earned income, you must file federal taxes to claim this income. If your income was earned in Oklahoma, you’re also responsible for filing state income taxes. Both federal and state income tax returns are due by April 15 every year. You can complete your income tax forms by paper and mail them to the Oklahoma Tax Commission.
You may also choose to create an online account with the department and use the e-filing service to file your income taxes online. You can make payments or receive your refund by providing bank account information through the system. By opting to use the online service, you can check the status of your return at any time and you may receive your refund faster than if you file by mail.
By reviewing the tax regulations in Oklahoma, as well as the qualifications for certain tax credits, you get a better idea of what you may owe. It’s important to pay the correct amount of taxes on time so you can avoid penalty fees, interest charges, or other legal consequences.
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