How to File a State Tax Return

Adam Krause
by Adam Krause, Contributor

 

After you’ve sweated over the federal income tax return, filing a state tax return can be an additional challenge. However, there are several options for filing state taxes that can reduce the anxiety. In most cases, you will need the information from your federal return in order to successfully complete your state tax return.

File By Paper / Mail

The cheapest way to file a state tax return is to physically fill-out the proper tax forms (downloadable online or available at your local library) and mail it in, as this will only require the cost of postage. A typical state tax return form, such as the one for California, is fairly simple. You will need to provide your filing status, your taxable income, as well as any qualified tax exemptions, tax credits, or tax deductions. However, due to the large volume of paper returns that the IRS and state agencies receive every year, mailed forms usually take longer to process. Thus, if you are expecting a tax refund, it may take more time to arrive.

File Electronically

An easy and secure way to file your state tax return is to use an e-filing program or online tax preparation software. These services sometimes allow taxpayers to file a basic federal return for free, and may charge a small fee for the state return.

A big advantage to using the same service for filing your state and federal tax returns is that you will be able to input your federal return information onto your state return, eliminating the need to look up the same information twice. You can even save your information for the next tax year if you plan to use that service again. The IRS offers a free e-filing service called “FreeFile” which is available to taxpayers with an annual income of $57,000 or less. But keep in mind that this service only allows you to file federal taxes, not your state taxes.

Hire a Tax Professional

Many taxpayers choose to seek the services of a tax professional to file their federal and state tax returns. Note that it may not make sense to use a professional for your state tax return if you are already using an e-file service for your federal return. However, if you are in a high-income tax bracket and/or you have a complex tax situation, you should consider consulting a professional tax preparer. A big advantage to hiring a tax professional is that they can inform you of tax relief programs that you may have otherwise missed. A professional can also ensure that your federal and state returns are free of errors.

Also bear in mind that most states will automatically grant an extension for your state tax return if you apply for a federal tax extension. Make sure to plan ahead so you have plenty of time to decide which filing option is right for you.