• The Montana Department of Revenue is in charge of administering the tax code for the state, which has been in effect since 1933. Montana has seven tax brackets for taxable income that range from 1 percent to 6.9 percent of your income. The collected taxes represent the largest source of income for the state, according to the Department of Revenue website.
  
  

How is Income Calculated?

• Montana looks at salaries, wages, interest, dividends, state refunds, alimony, business income, capital gains, pensions, rents, royalties, farm income, unemployment, Social Security benefits and miscellaneous income as your total income. You are then allowed to make certain federal adjustments, such as alimony paid, IRA deduction and others that lower your income. This is considered your Federal Adjusted Gross Income. Using this number, Montana then requires you to make certain additions and subtractions that might be applicable. This result is your Montana Adjusted Gross Income.
  
  

What Deductions Are Allowed?

• Montana allows you to deduct medical and dental expenses above 7.5 percent of your Montana Adjusted Gross Income. You can also deduct health insurance and long-term care insurance premiums. Federal taxes, local taxes, real estate taxes, general sales taxes and personal property taxes are all deductible. Home mortgage interest and mortgage interest points are deductible. Other miscellaneous deductions include child care, casualty losses, political contributions and gambling losses. Any unreimbursed business expenses above 2 percent of your Montana Adjusted Gross Income are deductible.
  
  

How Much Are the Standard Deduction and Exemption Amounts?

• Montana's standard deduction is not a set figure. It was 20 percent of your Montana Adjusted Gross Income with the minimum amount in 2009 of $1,750 and the maximum amount of $3,950 for single filers. Taxpayers who file as married filing jointly have double the maximum and minimum amounts. The deduction of your exemptions in 2009 was $2,110 times the total number exemptions you take. You can take one for you, one for your spouse and one for each of your dependents. You can also take additional exemptions if you or your spouse is blind or over 65 years old.
  
  

Where Do I Go For Help?

• If you are confused by the Montana tax forms, need help or just have questions, you can visit the Montana Department of Revenue office in the Sam W. Mitchell Building on 125 North Roberts in Helena, Monday through Friday from 8 a.m. to 5 p.m. You can also call 1-866-859-2254 for assistance. The state also provides trained tax specialists in the local Department of Revenue offices in Billings, Bozeman, Great Falls, Missoula, Hamilton and Lewistown to assist residents. For taxpayers who generally earn below $42,000 a year, you can get free tax help with the state's Volunteer Income Tax Assistance Program. Call your local Department of Revenue office for more information.