According to Arizona tax laws, most forms of income are taxable and will have to be reported on your tax return. This includes wages and salaries, net self-employment earnings, and tips. If you receive income from a pension plan, unemployment compensation or the sale of a capital asset, these amounts will also be taxable. On the other hand, some forms of unearned income, such as Social Security benefits are not taxable. Whatever the case may be, you need to learn how to prepare Arizona taxes if you are a taxpayer of the state.http://www.azdor.gov/LinkClick.aspx?fileticket=dBTRKCrC65M%3d&tabid=257&mid=878  

There are filing requirements that you will have to meet before you are required to submit an Arizona tax return. These qualifications will be based on your age, filing status, and gross income. However, even if you are not required to file a return, it may be beneficial to do so anyway. This is especially true if you are entitled to receive a refund.http://www.azdor.gov/LinkClick.aspx?fileticket=dBTRKCrC65M%3d&tabid=257&mid=878 

To start your return, you should first gather the tax-related documents needed to prepare your tax form. This will include the following:

1. Your Social Security number
2. Your complete mailing address
3. The full name and Social Security number of your spouse, if you will be filing a joint tax return
4. Your earned income for the year - Employees will use the total taxable wages reported to them on Form W-2 or Form 1099. Self-employed taxpayers will need to use the total of their gross earnings minus any applicable business expenses.
5. Your unearned income that is also subject to state taxes - Examples of this include rental property income, capital gains, bank interest, etc.
6. The state income taxes you have already paid - If you are employed, this will appear on Form W-2 as state taxes withheld. If you are self-employed, use your total estimated state tax payments made.
7. A copy of your completed federal income tax return, if you are filing onehttp://www.colorado.gov/cms/forms/dor-tax/CY104.pdf 
   

After determining if you are required to fill out a state tax form, the next thing you need to do is begin preparing the tax form. If possible, consider filing your return electronically. E-filing will save you a lot of time when your return is being processed. If you are due a refund, you can receive it up to six weeks faster through e-filing. The Arizona Department of Revenue provides a list of electronic filing providers on its website. Some of these services also participate in the FreeFile program which allows qualifying taxpayers to e-file at no charge.http://www.azdor.gov/EServices/Individuals.aspx 

If you choose to prepare your federal return using tax software, you will usually have the option to include your state tax form for an additional fee. To prepare your Arizona return using any of the electronic methods, you simply need to follow the program instructions using your tax information.http://www.azdor.gov/EServices/Individuals.aspx 

To prepare a paper form, obtain a copy of the state tax form to complete. If you have access to the Internet, you can download Form 140 "Arizona Resident Personal Income Tax Return" as well as the tax form instructions from the state revenue website. If you do not have Internet access, these forms will be made available at the public library during tax season.http://www.azdor.gov/LinkClick.aspx?fileticket=P_esOWwFPHw%3d&tabid=257&mid=878 

If you choose to complete your form by hand, be sure to write clearly and use black ink. This will eliminate any processing delays. Begin the return by entering your name and Social Security number as well as your spouse's, if applicable. Complete the address section and then choose the appropriate filing status and number of eligible dependent exemptions. Turn to page two of the form and list the names and Social Security numbers of your dependents.http://www.azdor.gov/LinkClick.aspx?fileticket=P_esOWwFPHw%3d&tabid=257&mid=878 

At this point, you should stop and read the tax form instructions in their entirety. The instructions provide line-by-line instructions for completing the return. They also explain how to account for income that is taxable by the state of Arizona but exempted by the federal government and vice versa. Read the section regarding tax credits carefully. You may be eligible to claim some of these on your return.http://www.azdor.gov/LinkClick.aspx?fileticket=dBTRKCrC65M%3d&tabid=257&mid=878

Start by entering the amount of your federal adjusted gross income from IRS Form 1040 on line 12 of the Arizona return. If you have any income adjustments to make, turn to page 2 of the form to list additions and subtractions to income. Then carry the total of these to page 1, lines 13 and 15. After adjusting for these totals, you will arrive at your state adjusted gross income on line 16.http://www.azdor.gov/LinkClick.aspx?fileticket=P_esOWwFPHw%3d&tabid=257&mid=878

Subtract the total of your standard or itemized deductions as well as your exemption allowances to calculate your state taxable income. Now consult the tax tables located in the form instructions to find the amount of state tax owed for your income bracket. Enter this on line 20 as your tax. Account for any additional taxes you will owe and then subtract any state tax credits you can claim. The amount you figure on line 30 will be your net tax owed.http://www.azdor.gov/LinkClick.aspx?fileticket=P_esOWwFPHw%3d&tabid=257&mid=878 

Deduct the state income taxes you have already paid through withholding or estimated payments. What is left over will be either an excess of tax payments, which will be refunded, or an excess of taxes owed, or your balance due. If you have an additional balance due, enter the total on line 37. If you have a refund, you will enter this on line 55. Should you decide to receive your refund via direct deposit, write in your bank's routing number and your personal account number in the boxes provided.http://www.azdor.gov/LinkClick.aspx?fileticket=P_esOWwFPHw%3d&tabid=257&mid=878

Sign and date the form and have your spouse do the same, if necessary. Make a copy for your records and then send the original, along with a check or money order for any balance you owe, to the appropriate address listed at the bottom on page 2 of the state form. Be sure to submit your return and payment before April 18, 2011.http://www.azdor.gov/LinkClick.aspx?fileticket=dBTRKCrC65M%3d&tabid=257&mid=878 If you will not be able to file your return by the initial filing deadline, consider learning how to get a state tax extension in Arizona.