Most forms of income are subject to taxation by the state of Minnesota, including wages from employment and retirement distributions. Before you begin working on a state return, check the filing requirements to see if you are obligated to submit a return in Minnesota. If you make less than the income threshold, you may not have to file a return at all. However, it may be advantageous to do so, if you are entitled to a refund.http://taxes.state.mn.us/Forms_and_Instructions/m1_inst_10.pdf  

Your 2010 Minnesota state tax return has the same filing deadline as your federal income tax return, April 18, 2011. It's a good idea to begin your state tax return as soon as you receive all of your tax documents. This will help you to avoid rushing at the last minute. If you will need additional time to file your state return, you'll need to file a Minnesota state tax extension.http://taxes.state.mn.us/individ/pages/other_supporting_content_filing_on_time.aspx 

To begin working on your Minnesota state tax return, your first step is to assemble all of the tax information you will need to complete your return. This will include the following:

1. Your Social Security number
2. Your current mailing address
3. Your spouse's full name, date of birth and Social Security number, if you are filing a joint tax return 
4. Documentation of your earned income––This will include wages and salaries from employment as reported on your Form W-2 or Form 1099. If you are self-employed, you need to total your gross earnings and subtract any eligible business expenses you can claim.
5. Documentation of your unearned income that subject to taxation, such as unemployment compensation, rental property income, lottery winnings, etc.
6. The total amount of state income taxes you paid during the year––If you are an employee, this will appear on your Form W-2 as state taxes withheld. If you are self-employed, this will be the total of your estimated tax payments made.
7. A copy of your federal income tax return, if you are filing one
   

Before you begin your state return, you will want to complete your federal tax return, since you will need some of the figures from your IRS Form 1040 in order to prepare your Minnesota tax form. If you will not be submitting a federal return, you may wish to consult a tax professional to help you calculate these figures.http://taxes.state.mn.us/Forms_and_Instructions/m1_inst_10.pdf

Once you have the required information, you can get to work completing your state return. In Minnesota, the tax form is entitled Form M1 "Minnesota Revenue Individual Income Tax Return." If you have access to the Internet, you can download the form and the accompanying instructions from the Minnesota Department of Revenue website. If you do not have Internet access, you can generally pick up a paper copy of the form and instructions from your local library.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf 

Consider filing your return electronically, if possible. E-filing will greatly speed up the processing of your return and allow you to receive refunds much quicker than if you file by mail. If you are using tax preparation software, you will be given the option to include your Minnesota state return for an additional fee. Based on the amount of your earned income and your age, you may even qualify to file your federal and state tax returns electronically for free.http://taxes.state.mn.us/individ/Pages/other_supporting_content_pay_electronically.aspx 

If you will be filing by mail, you can download a web fill-in form that can be completed on your computer or you can print out a paper copy of the form to prepare by hand. If you choose to fill out the return by hand, be sure to write legibly and use black ink.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf

Begin the return by entering your full name, date of birth, and Social Security number as well as your spouse's, if applicable. Complete the address section and select the appropriate filing status.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf

Now is a good time to stop and read the tax form instructions. The instructions will explain income adjustments that may be required and state tax credits that you may eligible to claim. If any part of the return seems complicated, consult the instructions for assistance.http://taxes.state.mn.us/Forms_and_Instructions/m1_inst_10.pdf 

Enter the amount of your federal wages, pensions, and unemployment compensation on lines A, B, and C of your Minnesota return. These amounts must match what is reported on your federal Form 1040. On line D, enter the amount of your federal adjusted gross income and then enter your federal taxable income on line 1.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf 

Make any income adjustments necessary to complete lines 2 through 9. Then you will calculate your state taxable income on line 10. At this point, you will need to consult the tax table located in the instructions to assess how much tax is due according to your taxable income bracket. Enter the amount due on line 11 as your tax.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf 

Add any additional taxes that are due, then subtract any state credits that you are eligible to claim. Now you can subtract the amount of state income tax that you have paid in through withholding or estimated tax payments. What is left over will be either an overpayment (refund) or underpayment (balance due).http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf 

If you are due a refund, you can select how you would like to receive your money, either by check or direct deposit. Then sign and date the return and have your spouse do the same. Make a copy of the completed form for your records. If you owe a balance, enclose a check or money order for the amount owed. Then send the return, along with your payment, to the address listed on the form. Be sure to submit it by April 18, 2011.http://taxes.state.mn.us/Forms_and_Instructions/m1_10.pdf