I'm looking at the improved familiar feat and it says that, does that mean if I'm a LG character I can pick a familiar who is LG, NG, LN, or N?
If a character possesses an alignment that's Lawful Good, one step away on each axis means as a far away as Neutral for the Lawful component of Lawful Good, and as a far away as Neutral for the Good component of Lawful Good.
Here's the chart of alignment steps. While the text reads
that diagonal "steps" count as two steps. For example, a lawful neutral character is one step away from a lawful good alignment, and three steps away from a chaotic evil alignment.
the feat Improved Familiar reads
You may choose a familiar with an alignment up to one step away on each alignment axis (lawful through chaotic, good through evil).
Emphasis mine. Neutral is one step from Lawful on the L/N/C axis while Neutral is one step from Good on the G/N/E axis. Thus taking both steps along both axes allows a LG character to select a N improved familiar, despite the text's 2-step diagonal rule.