How to File a Tax Return in Alabama for 2015

Filing your state tax return is essential to maintaining financial responsibility and compliance with local regulations. Submitting your 2015 tax return is no exception for Alabama residents and small business owners. Whether you're a full-year resident, a nonresident earning income from Alabama sources, or a small business owner, understanding the specific requirements for filing your Alabama tax return is crucial for a smooth process.

In this guide, we'll walk you through the steps to filing your 2015 Alabama tax return, from understanding who needs to file to the required forms and key deadlines. We’ll also explore the differences between e-filing and paper filing, payment methods, and how to track your refund or balance due. Whether you're filing as an individual or a business owner, we’ll provide practical information and resources to ensure your taxes are filed correctly and on time.

Overview of Alabama State Income Tax for 2015 

For the 2015 tax year, Alabama's state income tax system requires individuals and small businesses to file returns based on residency status and income level. If you're wondering whether you need to file your Alabama state income tax return for 2015, several key factors must be considered.

Who Needs to File:

In Alabama, you are required to file a tax return for 2015 if any of the following apply to you:

• You are a full-year Alabama resident who must file a federal income tax return.
• You are a single filer with a gross income of $4,000.
• You are married, filing separately, and have a gross income of $5,250 or more.
• You are a head of family filer with a gross income of $7,700.
• You are a nonresident who earned income from Alabama sources.
• You are a business owner who conducted business in Alabama during 2015.

Key Deadlines:

For most Alabama residents and businesses, the deadline for filing your 2015 income tax return and paying any taxes owed is April 15, 2016. However, Alabama offers automatic extensions for filing. If you cannot meet the April deadline, you can file for an automatic six-month extension, extending your filing deadline to October 15, 2016. It is important to note that this extension applies only to filing your return and not to paying any taxes owed. If you owe taxes, they must still be paid by April 15, 2016, to avoid penalties and interest.

Tax Rates for 2015:

Alabama uses a graduated tax system, with tax rates based on taxable income. For the 2015 tax year, the following rates apply:

• 2% on the first $500 of taxable income
• 4% on taxable income between $501 and $3,000
• 5% on taxable income over $3,000

These rates are designed to be straightforward, helping taxpayers determine their tax liability based on their income level.

Requirements for Filing an Alabama Individual Income Tax Return

When filing your Alabama tax return for 2015, choosing the correct forms is essential. Depending on your residency status and filing situation, you’ll need to use one or more specific forms to complete your tax return accurately. Here’s a breakdown of the primary forms required for individuals and business owners.

Main Individual Income Tax Forms:

1. Form 40 - Alabama Individual Income Tax Return
   This is the standard form for full-year Alabama residents. It reports your income, exemptions, deductions, and tax credits. If you're filing as a resident, you’ll most likely use Form 40 to report your taxable income, such as wages, salary, and other sources of revenue.
2. Form 40NR - Alabama Individual Income Tax Return for Non-Residents
   Non-residents who earned income from Alabama sources will need to use Form 40NR. This form helps non-residents calculate the amount of Alabama income tax they owe based on their earnings from the state.
3. Form 40A - Simplified Alabama Individual Income Tax Return
   If you're a full-year resident with a simple tax situation, you might qualify to use Form 40A. This shorter and easier version of the standard Form 40 is designed for individuals with basic tax returns, typically those who don’t have complex deductions or business income.

Standard Schedules and Attachments:

Depending on your financial situation, you may need to complete additional schedules or attachments. Here are some of the most commonly used forms:

• Schedule A: If you itemize deductions, Schedule A allows you to report mortgage interest, property taxes, and charitable contributions.
• Schedule B: For reporting interest and dividend income.
• Schedule D: This schedule reports capital gains and losses from the sale of assets.
• Schedule CR: Used to claim a credit for taxes paid to other states if you’re a resident of Alabama but have paid taxes in another state.
• Schedule DC: This is for claiming exemptions for dependents.
• Schedule NTC: For reporting nontaxable income, such as certain retirement benefits.

Business-Related Forms:

If you're a small business owner or sole proprietor, you’ll need to file additional forms alongside your tax return:

• Business Privilege Tax Return: Required for certain business entities, including LLCs, S-Corps, and partnerships.
• Federal Schedule C or C-EZ: Sole proprietors must attach Schedule C or C-EZ to report business income and expenses.
• Federal Schedule F: If you run a farming business, Schedule F is used to report farming income and expenses.

Where to Get Forms:

All Alabama tax forms for 2015 can be downloaded from the Alabama Department of Revenue website. These forms are available in PDF format, making printing and completing your paperwork easy.

Step-by-Step Instructions for Filing Your Tax Return

Filing your 2015 Alabama tax return involves several essential steps to ensure accuracy and avoid errors. Whether you're filing as an individual or a small business owner, following these instructions will help you complete your return correctly.

Step 1: Prepare for Filing

Before filling out your Alabama tax return, prepare all the necessary documents. This will make the process smoother and help you avoid delays. Here's what you'll need:

• Federal Tax Return: Your completed 2015 federal tax return (Form 1040) is essential for calculating your adjusted gross income and transferring relevant information to your Alabama return.
• W-2 Forms: These show wages and taxes withheld from your employers throughout the year.
• 1099 Forms: If you received income from freelance work, interest, or dividends, you must include the appropriate 1099 forms (1099-MISC, 1099-INT, 1099-DIV).
• Records of Deductible Expenses: Gather supporting documents if you claim deductions for medical expenses, charitable contributions, or business expenses.
• Information on Dependents: You’ll need Social Security numbers and birthdates for any dependents you're claiming.
• Previous Year’s Alabama Return: If applicable, having a copy of your prior year's tax return can help you with specific calculations.

Step 2: Completing Form 40 for Full-Year Residents

1. Personal Information:

At the top of Form 40, enter your name, address, Social Security number, and filing status. If you’re filing jointly, include your spouse’s information as well.

2. Exemptions:

Check the box for your exemption status. The standard exemptions for 2015 are

• $1,500 for Single filers
• $3,000 for Married Filing Joint filers
• $1,500 for Married Filing Separate filers
• $3,000 for Head of Family filers (with qualifying dependents)

3. Dependent Information:

If you claim dependents, you must complete Schedule DC, which lists your dependents' Social Security numbers and birthdates.

4. Alabama Income:

Calculate your Alabama Adjusted Gross Income (AGI) by transferring your federal AGI to your state return. Adjustments specific to Alabama, such as deductions for retirement income or state-specific credits, may need to be applied.

5. Deductions:

You’ll need to choose between the standard deduction and itemized deductions. The standard deductions for 2015 range from $2,000 to $7,500, depending on your filing status and income level. If you itemize, you’ll need to complete Schedule A.

6. Tax Calculation:

Once you have your taxable income, calculate your tax liability using Alabama's tax brackets for 2015:

• 2% on the first $500 of taxable income
• 4% on income between $501 and $3,000
• 5% on income over $3,000

7. Tax Credits:

Apply any available tax credits, such as those for taxes paid to other states (Schedule CR) or deductions for retirement income. Make sure you include all eligible credits.

8. Tax Payments:

Enter any tax payments already made, including federal tax withholdings, state withholding from your W-2s, and any estimated tax payments you made throughout the year.

9. Refund or Amount Due:

After calculating your taxes and applying any credits and payments, determine if you are due a refund or owe additional tax. If you owe, make sure to calculate the correct payment amount.

Step 3: Sign and Date Your Return

Before submitting your tax return, don’t forget to sign and date it. If you’re filing jointly, both spouses must sign the return. This is an essential step that is often overlooked.

Step 4: Attach Required Forms and Documents

Attach all necessary forms, such as your W-2s, 1099s, Schedule A (if itemizing), and other supporting documentation.

Step 5: Double-Check for Errors

Before submitting your return, double-check your math and verify that all information is correct. Common errors to avoid include:

• Incorrect Social Security numbers
• Missing signatures
• Incorrectly calculated deductions or credits
• Missing W-2s or other necessary forms

How to File Your Return: E-Filing vs. Paper Filing 

You have two main options when filing your 2015 Alabama tax return: e-filing or paper filing. Both methods are valid, but each has its advantages and potential drawbacks. Understanding the differences between e-filing and paper filing will help you choose the best option.

E-Filing: The Convenient and Fast Option

E-filing is a popular and efficient way to file your taxes. With e-filing, you can submit your 2015 Alabama tax return directly through the state’s online system or third-party software providers. There are several key advantages to e-filing:

• Faster Processing: E-filing generally leads to more rapid processing of your return. If you’re expecting a refund, filing electronically can help you receive your money quicker than filing on paper.
• Immediate Confirmation: Once you submit your return electronically, you’ll receive immediate confirmation that the Alabama Department of Revenue has received your return. This reduces the risk of missing or misfiled documents.
• Less Room for Error: E-filing through Alabama’s system or commercial tax software helps minimize the chances of making mistakes. Before submitting, the software checks for common errors, such as missing information or incorrect math.
• Free Filing Options: If you qualify, you can file for free using Alabama Free File or the state’s online system, My Alabama Taxes (MAT), both of which are available to qualifying taxpayers.
• Easier Payment Methods: E-filing makes paying taxes online easier. You can directly link your bank account for payments or use a credit or debit card to make tax payments.

Paper Filing: The Traditional Method

While e-filing is the preferred method for many, some taxpayers still file their returns on paper. Paper filing involves completing the required forms manually and mailing them to the Alabama Department of Revenue. Here are some points to consider when filing papers:

• Slower Processing: The state generally takes longer to process paper filings. Refunds may take several weeks, and you won’t receive immediate confirmation that your return has been received.
• More Potential for Errors: When filing on paper, there is a higher likelihood of making mistakes. Missing them before submitting your return could delay its processing or result in additional penalties.
• Required for Some Filers: Some taxpayers may not be eligible to e-file, particularly those who need to file certain business-related forms or complicated tax returns. If your tax situation is complex, paper filing may still be necessary.

Choosing Between E-Filing and Paper Filing

When deciding between e-filing and paper filing, consider the following factors:

• Speed: E-filing is generally faster and more convenient.
• Error Prevention: E-filing systems help reduce mistakes, especially with complex calculations.
• Eligibility: Ensure you meet the eligibility requirements for free e-filing services like MAT or Free File.
• Personal Preference: Although some taxpayers still prefer the physical process of filling out and mailing forms, this preference is becoming less common.

How to Pay Your Alabama Taxes

Once you've filed your 2015 Alabama tax return, the next step is to pay any taxes owed. Fortunately, Alabama offers several payment options to make the process convenient and secure. Some solutions can fit your needs, whether you prefer paying online or by mail.

Online Payment Options

Alabama provides several online methods for taxpayers to pay any taxes due. Paying online is typically the fastest and most efficient option, as it offers immediate confirmation and processing. Here are the key online payment methods:

1. My Alabama Taxes (MAT)

MAT is the state’s online system. It allows taxpayers to pay directly from their bank accounts via ACH debit, the most straightforward option for residents who want to manage their taxes online. MAT will enable you to track your payment history and manage your account information easily.

2. Credit or Debit Card

Alabama allows you to make payments via MAT or third-party service providers if you prefer to use a credit or debit card. However, convenience fees may apply when using a card, so review the terms before paying.

3. Electronic Funds Transfer (EFT)

For businesses required to make tax payments via EFT, this method allows you to transfer funds directly from your bank account to the Alabama Department of Revenue.

Payment by Mail

If you prefer to pay by check or money order, mail your payment to the Alabama Department of Revenue. Here’s how to make a payment by mail:

1. Prepare Your Payment

Make your check or money order payable to the “Alabama Department of Revenue.” Ensure you write your Social Security number and “2015 Form 40” on the memo line to help the state process your payment correctly.

2. Form 40V - Payment Voucher

If you’re mailing a payment with your return, you must complete Form 40V, the payment voucher. This ensures your payment is recorded correctly and applied to your tax balance.

3. Mail Your Payment

If you owe taxes, send your payment (along with Form 40V) to the following address:

• Alabama Department of Revenue
• P.O. Box 2401
• Montgomery, AL 36140-0001

Penalties for Late Payments

Paying your taxes on time is essential to avoid penalties and interest. If you fail to make your payment by the April 15, 2016, deadline, the state may impose:

• Failure-to-Pay Penalty: A 10% penalty on the unpaid tax amount.
• Interest Charges: Interest will accrue at the federal rate plus 1% until the tax is paid in full.

To minimize these penalties, pay as much as possible by the due date and consider contacting the Alabama Department of Revenue to set up a payment plan.

How to Track Your Refund or Balance Due

Once you’ve filed your 2015 Alabama tax return, you must know how to check the status of your refund or balance due—knowing where your return stands will help you manage expectations, especially if you’re waiting on a refund or need to make additional payments.

Track Your Refund Online

Alabama provides several ways for taxpayers to check the status of their refunds. You can visit the My Alabama Taxes (MAT) portal to track your rebate in real time. MAT allows you to see if your return is being processed or if any issues need your attention.

You can also call the 24-hour toll-free refund hotline at 1-855-894-7391 or the daytime refund status line at 334-309-2612. To check your refund status, you’ll need to provide the following information:

• Your Social Security number
• The tax year (2015)
• Your expected refund amount (in whole dollars)

Refund Processing Time

Refunds for e-filed returns typically take 8-10 weeks to process, while paper returns can take 10-12 weeks. Processing times may be longer during peak filing periods, so allow at least six weeks before checking your refund status. Issues with your return, such as incorrect adjusted gross income or missing information, may delay the processing time.

Common Reasons for Delayed Refunds

Here are some common reasons for a delayed refund:

• Errors or incomplete information on your tax return
• Missing signatures or required attachments
• Return selected for additional review by the Alabama Department of Revenue
• Identity verification required
• Outstanding obligations, such as child support, that need to be cleared before your refund can be processed

Common Mistakes to Avoid When Filing Your Alabama Tax Return 

Filing your Alabama tax return is a straightforward process, but there are common mistakes that many taxpayers make. Avoiding these errors will help ensure your return is processed smoothly and you don’t face unnecessary delays or penalties.

Missing Signatures

One of the most common mistakes when filing tax returns is forgetting to sign and date the form. If you’re filing jointly, both spouses must sign the return to make it valid. Missing signatures can delay the processing of your return.

Incorrect Calculations

Math errors, especially when calculating taxable income, can result in the incorrect amount of taxes owed or lead to a delayed refund. Double-check your calculations, particularly when calculating your adjusted gross income and applying deductions.

Not Attaching Required Forms

Ensure you attach all required supporting documents, including W-2s, 1099s, and Schedule A (if itemizing deductions). Failing to include these documents can lead to processing delays and may result in penalties.

Choosing the Wrong Form

Use the correct form based on your residency status and filing situation. If unsure, refer to the last reviewed or updated information on the Alabama Department of Revenue website to determine the correct form for your situation.

Forgetting to Claim All Deductions and Credits

Many taxpayers miss valuable deductions or credits they qualify for, such as deductions for federal taxes paid or credits for taxes paid to other states. Review the complete list of available deductions to ensure you don’t miss out on potential savings.

Frequently Asked Questions (FAQs)

Where can I find my tax information on the Alabama Department of Revenue page?

You can access your tax information by visiting the Alabama Department of Revenue's official page. Once there, log in with your account details to view your tax history, asset classifications, and other relevant data. The page allows easy access to your filed returns and status updates.

How long does it take for a human to respond to my inquiry about asset 712?

Response times vary, but if you inquire about asset 712 on your Alabama tax return, the Alabama Department of Revenue typically aims to respond within a few business days. The complexity of your question may influence how quickly they can address your concerns.

I owe taxes for asset 212. What steps should I take next?

If you owe taxes related to asset 212, the first step is to ensure your return is correctly filed. You can pay directly through My Alabama Taxes (MAT), set up a payment plan, or consult the Alabama Department of Revenue for further instructions to resolve your balance.

What does "asset 812" mean on my Alabama return?

"Asset 812" refers to a specific asset classification in certain tax filings. If this appears on your Alabama tax return, it's essential to understand how it impacts your taxes. Contact a tax professional for assistance or refer to the detailed explanation in your forms to determine how to report it correctly.

How should I report a limited asset on my 2015 Alabama tax return?

Considering their restricted nature, report "limited" assets on your 2015 Alabama tax return. These assets may have unique tax implications. Make sure to refer to the correct schedules and consult a tax expert to ensure proper reporting if necessary.

What is the significance of asset 612 on my tax filing, and how do I handle it?

"Asset 612" refers to a specific asset that may require particular attention when filing your taxes. Ensure that you accurately report it according to Alabama's tax laws. You can seek guidance from the Alabama Department of Revenue or a tax professional if uncertain.

How do I report "10asset 1112" or "10asset 411" on my 2015 Alabama tax return?

"10asset 1112" and "10asset 411" likely refer to specific asset categories in your Alabama tax filings. Carefully review the forms for proper reporting and ensure you provide all required supporting documents. If you are unsure, consulting a tax professional can help clarify their implications.