Under Maine state tax laws, most forms of income are subject to taxation. This includes earned income, such as wages and salaries, as well as certain kinds of unearned income, including unemployment compensation and pension payments. However, some forms of income that are not taxable by the federal government are taxable by the state of Maine, so you will need to read the tax form instructions carefully as you proceed.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf  

In order to be required to file a state return in Maine, you will have to make more than the income threshold, which rises annually. Before you begin preparing a return, check the filing requirements against your earned income to see if you are obligated to submit a tax form. Even if you are not required to file, however, it may be to your benefit to do so, especially if you are due a refund.http://www.maine.gov/revenue/forms/1040/2010/10_Long1040MEBook_dwnld.pdf  

To get started on your Maine state tax return, take a few minutes to gather up all of your necessary information. This will save you time once you begin preparing the actual forms. You will need 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 are filing a joint tax return
4. Proof of your earned income for the year––This will include wages,tips and salaries that are reported to you on Form W-2 or Form 1099. If you are self-employed, you will need to total up your gross earnings and subtract any qualified business expenses.
5. Proof of your unearned income that is also subject to Maine state taxation––Examples of this will include pension payments, retirement distributions, and lottery winnings.
6. The total amount of your state income tax payments made––For employees, this will appear on Form W-2 as state taxes withheld. Self-employed individuals will use the total of any estimated tax payments made during the year.
7. A copy of your federal income tax return, if you are filing one
   

You will need the amount of your federal adjusted gross income to begin your Maine state tax return. So, complete your federal IRS Form 1040 before you begin your Maine forms. If you will not be filing a federal return at this time, you may need the help of a tax professional to calculate this figure.http://www.maine.gov/revenue/forms/1040/2010/10_Long1040MEBook_dwnld.pdf

If at all possible, consider filing your Maine return electronically. E-filing greatly increases the speed of return processing and the delivery of any refund you are due. If you meet the income requirements, you may qualify to file your federal and state return using tax preparation services for free.http://www.maine.gov/revenue/netfile/efile.htm 

Maine residents also qualify to file their state returns electronically for free through the Maine Revenue Services website. Those who will be filing their federal tax return using tax software will usually be given the option to include the state tax return for an additional fee.http://www.maine.gov/revenue/netfile/efile.htm 

To file your tax return by mail, you will need to get a copy of Form 1040ME "Maine Individual Income Tax Return".http://www.maine.gov/REVENUE/forms/1040/2009/09_1040ME_Long.pdf Depending on your particular circumstances, you may be eligible to file using Form 1040S-ME, the short form.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf 

If you have Internet access, you can download the forms and the accompanying instruction booklet from the Maine Revenue Services website. If you do not have access to the Internet, you can generally pick up a paper copy of the forms at your local library during tax season.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf 

Begin the tax form by entering your full name and Social Security number as well as your spouse's if applicable. Complete the address portion, select your filing and residency status and then enter the number of exemptions you claimed on your federal return.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf

Before you go on with the return, be sure to read the tax form instructions carefully. Pay special attention to the sections that discuss income adjustments for state taxable income and state tax credits. You may be eligible to claim a few credits that will help to reduce your tax liability.http://www.maine.gov/revenue/forms/1040/2010/10_Long1040MEBook_dwnld.pdf 

Enter the amount of your federal adjusted gross income from Form 1040 on line 14 of your Maine form. Make any adjustments to income necessary to arrive at your Maine adjusted gross income. Subtract your standard or itemized deductions and your exemption amount to calculate your total taxable income in Maine.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf 

Consult the tax table in your instruction booklet to assess the total tax owed for your taxable income bracket. Enter the amount on line 20 as your income tax. Add any additional tax due and then deduct your eligible state tax credits. Subtract the state taxes you have already paid through withholding or estimated payments. What remains will be either a refund or a balance due.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf 

If you are due a refund, you can enter your bank routing number and your bank account number on the form to receive your payment via direct deposit. If you do not choose this method, you will receive your refund as a paper check in 8 to 10 weeks. To remit payment for a balance due, you can pay using a check or money order through the mail or you can pay your tax online through the Maine Revenue Services website.http://www.maine.gov/revenue/forms/1040/2010/Long1040ME_dwnload_2010.pdf

Sign and date the return and have your spouse do the same. Make a copy of the completed form for your personal records. Then send off the return, along with a payment if required, to the appropriate address listed on the form. Be sure to submit it before April 18, 2011.http://www.maine.gov/revenue/publications/alerts/2011/TAJanuary2011_Vol21_Iss1.html If you will not be able to file your return by this date, file for a Maine state tax extension.