According to Idaho state tax law, if you are required to file a federal income tax return then you are also obligated to submit an Idaho tax return. On the other hand, there are circumstances where you may not be required to file an Idaho return, especially if you make less than the income threshold for your filing status. See the tax form instructions for complete details regarding filing requirements.http://tax.idaho.gov/forms/EIN00046_10-12-2010.pdf 

Almost every kind of income is taxable by the state of Idaho. This includes earned income, such as wages, tips, and salaries; and certain kinds of unearned income, including unemployment compensation, lottery winnings, and bank interest. Self-employed individuals will need to report their net earnings for the year.http://tax.idaho.gov/forms/EIN00046_10-12-2010.pdf

The first step to preparing Idaho taxes is to compile all of the tax documents you will need to complete your return. This will include the following:

1. Your Social Security number
2. Your current mailing address
3. The full name and Social Security number of your spouse, if you will be filing a joint tax return
4. The full names and Social Security numbers of any dependents you will be claiming
5. Proof of your earned income for the year––If you are employed, this will be reported to you on Form W-2 or Form 1099 as total taxable wages. If you are self-employed, use the total of your gross earnings minus any applicable business expenses.
6. Proof of your unearned income that is subject to Idaho state tax––Examples of this include a Form 1099-INT showing the amount of bank interest you received during the year. Be sure not to include interest that you paid as income.
7. The total of your state income taxes paid––If you're an employee, this has most likely been done through withholding from your wages. If so, it will appear on your Form W-2 as state taxes withheld. Self-employed individuals will use the total of any estimated tax payments made.
8. A copy of your completed federal income tax return, if you are filing one 
   

Your Idaho return will begin with the amount of your federal adjusted gross income, so complete your federal return before you start your state form. If you will not be filing a federal return, you may wish to consult a tax professional to help you calculate this amount.http://tax.idaho.gov/forms/EIN00046_10-12-2010.pdf 

If possible, consider filing your return electronically. E-filing is the fastest and most convenient option for tax filing, since your return is processed much faster using this method. If you are due a refund, you can receive it up to six weeks quicker by filing electronically.http://tax.idaho.gov/i-1027.cfm 

Depending on your income level and filing status, you may qualify to file your Idaho state return electronically for free. If you will be preparing your federal return using tax software, you will usually be given the option to include your state return for an additional fee. To prepare your Idaho return using either of these methods, simply follow the screen prompts using the information you gathered above.http://tax.idaho.gov/i-1027.cfm 

To file by mail, you will need to get copies of Form 40 "Idaho Individual Income Tax Return" and the accompanying form instructions. If you have access to the Internet, you can download these forms from the Idaho Tax Commission website. If you don't have Internet access, you can generally obtain these from your local library during tax season.http://tax.idaho.gov/forms/EFO00089_08-12-2010.pdf 

Begin the form by entering your full name and Social Security number as well as your spouse's, if applicable. Complete the address section, select your filing status and enter the names and Social Security numbers of your dependents.http://tax.idaho.gov/forms/EFO00089_08-12-2010.pdf 

Now is a good time to stop and read the tax form instructions. The instruction booklet explains how to make income adjustments that may be necessary as well as state tax credits you may qualify to claim on your return. If you get stuck on any form on the tax return, consult the tax form instructions for a full explanation.http://tax.idaho.gov/forms/EIN00046_10-12-2010.pdf 

Enter the amount of your federal adjusted gross income from IRS Form 1040 on line 9 of your Idaho return. Make any income additions necessary on line 10 and any income subtractions necessary on line 12 to reach your Idaho adjusted gross income on line 13. Subtract your standard or itemized deductions and your total exemption amount to calculate your taxable income on line 21.http://tax.idaho.gov/forms/EFO00089_08-12-2010.pdf 

Consult the tax tables located in the instructions and enter the amount for your taxable income bracket on line 22 as your tax. Deduct any eligible credits and add any other taxes to which you are subject on lines 24 through 35. After you make any desired charitable contributions, you will subtract your state income taxes already paid through withholding or estimated payments. What remains will be either the amount of your refund or your additional balance due.http://tax.idaho.gov/forms/EFO00089_08-12-2010.pdf  

If you are due a refund and you would like to receive your payment via direct deposit, enter your bank routing number and your personal account number at the bottom of the form. Sign and date the form and have your spouse do the same, if necessary.http://tax.idaho.gov/forms/EFO00089_08-12-2010.pdf  Make a copy of the form for your records. Send off the return, along with a check or money order for any balance due, to the address listed on the form. Be sure to submit it by April 18, 2011.http://tax.idaho.gov/n-feed.cfm?idd=162 

If you will need additional time to file your Idaho tax return, you should file an Idaho state tax extension.