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1. Fields Beginning a Beginning b End of Year End of Year c d Payable less than 1 year 2200 2200 Capital Stock Common 15000 15000 Retained Earnings 103131 269043 unappropriated Less cost of Treasury Stock 56375 56375 Figure 54 Schedule L Balance Sheets L screen Drake 2004 Data Entry 400002223 BEST FOODS INC Schedule L Balance Sheets Assets Beginning End of Year Trade notes amp Accts Recv Less allow for bad debts Inventories Override U 5 government securities Tax Exempt securities Other current assets Loans to shareholders Mortgage amp real est loans Other investments Deprec Assets Override Accum Depr Override Depletable Assets Accumulated Depletion Land Override Intang Assets Override Accum Amort Override Other Assets Dage Down for Liabilities and Capital Screen Press Shift or Right Click for Help SCHEDULE A COST OF GOODS SOLD Type A and press ENTER Enter the following data and press ESC when finished see Figure 55 on page 91 Fields Data Inventory at the beginning of the year 4000 Purchases less cost of items 238190 withdrawn for personal use Cost of labor 6000 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Fields Data Inventory at end of year 4000 Methods Used for Valuing Inventory Cost Do the rules of section 263A apply to No the corporation There was a
2. Drake Software Manual Copyrighted Material 74 2004 DRAKE SOFTWARE ANSWERS PART 3 1 The correct answer is C Examine WK_8812 lines 1 11 View this form to see the Child Tax Credit calculations resulting in 166 A is incorrect Line 13 of the 8812 reads 409 and is the calculation for the Additional Child Tax Credit B is incorrect This is the line on the 1040 for the CTC but it does not show how it is calculated D is incorrect View the WK 8812 lines 1 11 to examine the calculations The correct answer is D Form 8867 The Preparer s Earned Income Checklist must be completed for due diligence and saved for each taxpayer qualifying for EIC A is incorrect Examine the 8812 for the Additional Child Tax Credit calculations B is incorrect Examine the WK_8812 for the Child Tax Credit calculations C is incorrect Examine the WK_EIC for the Earned Income Credit calculations The correct answer is D Examine WK_EIC This worksheet shows how EIC was calculated A is incorrect Examine the 8812 for the Additional Child Tax Credit calculations B is incorrect The Preparer s Earned Income Checklist only determines EIC eligibility C is incorrect You can view the WK_EIC to examine the calculations The correct answer is A Examine Form 8812 and WK_8812 The 8812 calculates the 2000 in Additional Child Tax Credit The WK_8812 calculates zero on line 15 Child Tax Credit B is incorrect The EIC form does not display doll
3. Check the appropriate boxes to print the following with each return Folder coversheet Next year depreciation schedule Generates notes page when applicable Prior year comparison form Privacy letter Return summary Optional worksheets W2 1099 Forms Carryover Worksheet W2 list if greater than Select the number of W2s 1099 list if greater than Select the number of 1099s Dividend list if greater than Select the number of Dividends K1 list bus returns only if greater than Select the number of K1s Referral Coupons 3 per sheet Customize the text of these coupons in Setup gt Letters gt Coupon Enter the number of sheets to print with each return and the amount of the coupon Envelope Sheet taxpayer address Select none small large or extra large Envelope Sheet IRS service center address Result Letter Select from letters 1 12 Customize letters in Setup gt Letters Optional Items on Return Click the corresponding check box to print an item on the returns Gross social security only when required Date on return This date pulls from the date on the computer To change this date enter the required date on the MISC screen Taxpayer phone number Pulls from Screen 1 Third Party Designee Prints on the main form for the tax return Choose from specific preparers the return preparer in ERO setup Rounding Amounts Select dollar or penny rounding Dollar rounding is
4. Create standard and custom reports of EF data Reports gt Reports gt Standard or Custom E mail to Drake Send email directly to technical support Receive broadcast emails from Drake including a weekly update on tax changes program tips and more EF gt email to Drake Envelopes Print envelopes Tools gt Letters gt Envelopes Export Client Data Exports data to a database file that can be opened and used for generating reports in Access Excel etc Tools gt File Maintenance gt Export Client Data Export EF Data Export data to a database file that can be opened and used for generating reports in Access Excel etc Tools gt File Maintenance gt Export EF Data Filled In Screens Print the Data Entry screens for a return Reports gt Filled in Screens Firm Set up the preparer s firm information This is the information that prints on the bottom of 1040s Setup gt Firm Fixed Asset Manager Print various asset reports Reports gt Fixed Asset Manager Drake Software Manual Copyrighted Material 106 2004 DRAKE SOFTWARE Task Description Location Hash Totals Print a report showing the number of screens Reports gt Hash Totals fields and keystrokes used on one return Install Updates Install disks CDs or install Service Pack files online Tools gt Install Updates Letters Edit the coupon estim
5. Exit Get Updates Help This will install all updates downloaded but not yet installed Install Updates This will copy an update file to disk so you can update other computers f Copy update to disk Picea ronidice Copy update file to drive Copy Updates This will install a state program to your system from a CD or other disk DA v Install State Program 4 A listing ofall available state and city programs on the CD displays Select the states to install in the left box with a mouse click or click SELECT ALL to select all the states and cities 5 Click OK to install states and cities 6 Once the installation is complete click EXIT States and cities automatically calculate with the federal return if indicated on the federal data entry screens For example if you indicate that a W2 is for NY in the State field the New York return generates along with the federal OTHER DRAKE REFERENCE GUIDES The following manuals are available in PDF format on this CD 2004 Drake User s Manual A comprehensive resource for all your software questions e 2004 Drake Business Manual Walk step by step through the fields required to enter a business return in the software Packages include 1120 1120S 1065 990 and 706 PDF format allows the manuals to be viewed and printed directly from the CD Use the Adobe Acrobat Reader to read the PDF files practice returns and IRS forms and publications ADOBE ACROBA
6. Screen 1 of 1 Press Page Down for a new screen Press Shift or Right Click For Help ENTERING PROFITS OR LOSSES FROM BUSINESS SCHEDULE C To open the Self Employed Income screen type C in the selector field and press ENTER see Figure 27 on page 49 Fields Data TS S Business Code 311800 Business Name Patty Cakes Street Address 2579 W Oak Street Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 49 Fields Data Zip 94010 Accounting Method Cash Materially participated in 2004 Yes Gross receipts or sales 78 657 Figure 27 Schedule C Self Employed Income C screen rc Drake 2004 Data Entry 400006665 CARTER WILLIAM amp AMELIA X Schedule C Ts Bir st WE city W Passive Activity No EE Business Profession Product _ eee 311800 Business name Il Street address E Employer ID CIE aerosus c_i zip Accounting method Wcash WMAccrual Wother S Materially participated in 2004 Yes Wo E You started or acquired this business during 2004 X m Part I Income Statutory employee wages X W Gross receipts sales a Returns allowances a Part II Expenses Other income ha Advertising 480 Pensions Profit share BEM Car amp truck expenses BE Rent vehicle mach EE Commissions and fees Ss Rent Other P7200 Contract Labor EE Repairs Maintenance EEE Depletion ma
7. The correct answer is C Enter these numbers without dashes slashes dollar signs or commas Entering these symbols will cause the return to be rejected when e filed A is incorrect Do not use dashes when entering EINs SSNs or dates B is incorrect Do not enter EINs SSNs or dates with a slash D is incorrect Answer C describes the correct format when entering EINs SSNs and dates The correct answer is B PAGE DOWN Press PAGE DOWN to access fields 16 26 on the Corporate Schedule L A is incorrect SHIFT PAGE DOWN does not produce the second screen of the Corporate Schedule L C is incorrect END is used to move a cursor to the last field on a screen It will not produce a second screen D is incorrect Combining ALT END will not produce the second screen in any circumstances in Drake data entry The correct answer is B From the Toolbar click OPEN enter the EIN and select C Corp Follow this path to create a new corporate return in Drake A is incorrect It is not necessary to purchase an additional Corporate package The Corporate package is included in the Drake Tax Solution software C is incorrect This statement is false The Corporate package is included in the Drake Tax Solution software D is incorrect There is not a C Corp option on the Toolbar The correct answer is D both A and B are correct You can either leave the Business use field blank and Drake Software will default
8. e Tax Help Launch CCH Master Tax Guide Plus e Scheduler Open the Scheduler utility which enables you to create preparer schedules make appointments and run schedule reports e Exit Exit the program ESC Press ESC to exit a screen Information on that screen is saved To exit the screen without saving press SHIFT ESC Press ESC on the Home screen to exit the Drake program KEYBOARD The computer keyboard can be used to maneuver through the program See Overrides and Adjustments to Return Calculations on page 101 of the Appendix for a list of shortcut keys used during data entry Drake Software Manual Copyrighted Material 10 2004 DRAKE SOFTWARE Press ALT to display the underlined shortcut key for each option on the menu bar The underlined letter for each option is the shortcut key Example File Press ALT F to open the File Menu After the menu is selected the shortcut keys can be executed by pressing the shortcut key ALT is not necessary To open field specific help during return data entry put your cursor in the field and press SHIFT To open on screen help instructions press F1 GENERAL FLOW OF COMMANDS Instructions to reference parts of the program are as follows Menu Bar the list of menu options across the top of the window Drop Down Menus the list of available actions shown when an option is selected from the menu bar
9. B is incorrect A third party designee is not a necessity when filing an 8453 A third party designee allows a third party to discuss the return with the IRS D is incorrect If a PIN is provided a Form 8879 is produced and must be signed and kept in the tax preparer s office for three years 5 The correct answer is D The piggyback return is not processed and may be sent again with the corrected federal return If the return is rejected it does not go on to the state A is incorrect The state return is not processed It does not go on to the state B is incorrect The state return is not sent on to the state C is incorrect Many state returns can be sent with the federal return as piggyback or state only Illinois New York California Massachusetts Maine and Minnesota may be sent directly to the state Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 87 Business Return PREPARE THE 1120 EVALUATION RETURN To begin entering data in the Corporation Evaluation return you need to create a new client 1 From the toolbar click OPEN 2 Inthe available field type the following EIN for our Evaluation Return 40 0002222 and click OK to view the completed return open 40 0002223 3 Click YES to create a new return 4 Select the return TYPE In this case select C Corp and press OK Screen 1 opens SCREEN 1 CORPORATION GENERAL INFORMATION The Corporation Evaluation c
10. Rent Other 7200 Purchases Less Personal 889 Taxes amp Licenses 54 Cost of Labor 7000 Utilities 2734 Materials Supplies 34255 Press ESC to return to the Data Entry Selection Menu ENTERING DEPRECIATION Drake Software provides six data entry screens for Depreciation On the Income Tab of the Data Entry Selection Menu the six screens are grouped together in a box labeled Depreciable Assets Selection options are clearly marked and include Form 4562 Depreciation Detail and five additional screens offering additional parts of Form 4562 The 4562 is usually the only screen necessary to enter depreciation Screens 6 9 are used only when entering an existing return Screen 10 contains the Bonus Depreciation Elections To create a Form 4797 from within the 4562 double click an asset Complete the If Sold column on the bottom left The only fields required are the date sold the sales price and the property type For the Carter s return there are three separate depreciable assets The first is Patty Cakes baking oven and the others are the business vehicles To open the depreciation data entry screen type 4562 in the selector field and press ENTER see Figure 28 on page 51 Enter the following information on the 4562 Screen Press PAGE DOWN for the next entry Fields Data Data Data For AUTO AUTO C Description Delivery Van Delivery Truck Oven Date Acquired 01 01 2004
11. Speed Buttons or Toolbar the toolbar directly under the menu bar in the Windows program only Speed Buttons are used for quick access to commonly used program functions Data Entry Selection Menu the home base for return preparation These screens display the data entry options Tabs the Data Entry Selection Menu displays tabs along the top of the screen Select a tab to display an additional list of data entry screens Drop Down Box some fields in Windows display a down arrow next to the field Click the arrow to open a drop down list of available choices Buttons the Windows program offers additional buttons which can be mouse clicked to perform an action Selector Field In data entry the entry field located in the bottom left corner of the screen Type a corresponding screen code and press ENTER to access data entry screens When instructions are given to perform an action the flow of commands is as follows l 2 3 4 Select the menu bar option to show the drop down Menu e g Tools Select the action from the drop down Menu e g File Maintenance If the action displays gt to the right another list will open Select the action from that list e g Backup To shorten the commands in the instructions the flow of commands is given with arrows between each function Tools gt File Maintenance gt Backup Use the keyboard or the mouse to select the menu options Drake Software Ma
12. Well GEE BS anona so onsooncoonce caso arco sn sosncosN sosncosscosscecss nw v if N AS wi i H r m io Ww Screen 1 of 1 Press Page Down for a new screen Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 47 ENTERING LOCAL SALES TAX The Carter s purchased a boat and paid 300 in local county tax Enter local tax of 7 as a decimal 07 on the STAX screen see Figure 25 below Type STAX in the selector field and enter the following data Fields Data Local General Sales Tax Rate 07 General Sales Tax Specified Items 300 Enter X in the Force General Sales Tax Worksheet to Print field to view and examine the SALESTAX Worksheet in View Mode Figure 25 State and Local Tax STAX screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA State Local General Sales Tax Deduction Worksheet State general sales taxes Local general sales tax rate State general sales tax rate General sales tax specified items examples Car SUV van motorcycle motor home truck aircraft boat homej Force General Sales Tax Worksheet to print Adjustment to available income used in line 1 calculation Press Shift or Right Click For Help ENTERING INTEREST INCOME SCHEDULE B 1099 INT To open the Schedule B Interest Income screen type INT in the selector f
13. 05 01 2004 06 30 2004 Cost 15000 25000 7000 Business Percentage 100 100 100 Method M M M Life 5 5 7 Press ESC to return to the Data Entry Selection Menu Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 51 Figure 28 Deprecation Detail 4562 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 4562 ROY E 4 C E F 2106 4835 AUTO 8829 Multi form code B 1 95 1 is asmmed if left blank Date Business Used Description Acquired Cost use Prop DELIVERY VAN 01 01 2004 fi Mia Goaaacgaoonaoconcnenace Prior depreciation Salvage Value Override Regular Depr Override 179 Expense Override Borus Depr Prior 179 Expense Prior Borms Depr il w i Other information State Specific Information Investment credit code Asset number mort code section Overrides Month placed in service Force convention Do not use MACRS tables Recovery year ALALT If Sold Dae sold cco cece asec ees Sales price Expense of sale Property type 12 peni eee Set craieisteisinieie 4797 field 2 Group sale muber Group sales price aas Recapture Recapture because Business use dropped to 50 or less ial Screen 1 of 3 Press Page Down for a new screen Press Shift or Right Click for Help ENTERING CHILD amp DEPENDENT CARE EXPENSES FORM 2441 To open the Child amp Dependent Care Expenses Screen Form 2441 type 2441 in the se
14. 2 Drake 2004 Data Entry 400002223 BEST FOODS INC General Information Screen Resident State ONLY Company Information Consolidated Composite aistavatafstate efetalaisfetate e etale efetstelaletslelale etelalstetsiaistetsialelelsiatelstetala siaisisistatelss felele Member of a controlled group Snoosnoososonooonnsenncocusecno0snso0nqqn00 Date commenced business within state Date business terminated within state Porong n Oa o O onoo Foreign Corp date qualified to do business in the state TOE Jate D MMber gecemejciss seleniisieisticeisecisinecceisiceorsceccs ccs s Tax Withholding Account Number 4 2 Sales Tax Number 07544 74 3 Miscellaneous 1 SLA SOCIS MACS IOSS EE S Miscellaneous 2 a E a AAO A a a a aa aa erect Name of Corp changed within the year list old name E Care of and Address lines will defaut to the information entered on Federal screen 1 unless overrides are entered below Registered Office Information Registered Agent pa U E Street Address City State Zip Principal Place of Business Care of Street Address City State Zip Books in care of Information Care of Street Address City State Zip Contact Information Name Title Street Address City State Zip Email Screen 1 of 1 Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 89 SCREEN 3 INCOME amp DEDUCTIONS Fields Gross Receipts or Sale
15. 4868 is filed in April remove the X from that field and place it in the 2688 field to generate a later extension A PIN2 screen must accompany a 4868 with a Payment PMT screen A payment must accompany all 4868s with a balance due These can be selected for EF also complete line 68 of screen 5 Review the screen It is not necessary to enter extension data for the Carter s return Figure 44 Extension EXT screen Drake 2004 Data Entry 400006665 CARTER WILLIAM amp AMELIA X Extension Forms Check box for appropriate form Misses H 88 Wi2350 Overrides Total tax liability for SAN So pononovoooHDKODUKBHL a Federal income tax vicnheld ireisesiseisieisieieraieisisiiele a 2004 estimated tax payments s seseesesees eee annnnnns E Otkor payent ahd acted Gagaaaaqaanaacaaaaaaacaac po X Previously requested an extension this yaar noaea eee aeee E TE so the estension vas granted vayarelatetalsrarararataierabaralavatayalaralareter raverererelaralareralrs fai I request an extension of time until e If a fiscal year 1040 to MS o the tax year ending SS Explain why you need an extension Will you need additional time to allocate moving expenses ix m Date you first arrived in the foreign country see e eee ee eee cece eee jE Date qualifying period begins ends BEGINS i s Foreign home address EES E E Date you expect to return to the
16. For Help Fields Data TS Field T Federal ID 759988777 Employer s Name Catalyst Corporation Employer Address 5877 Hurst Square Employer ZIP 94061 Wages 25450 Federal Tax Withheld 5677 State CA State ID 462333465 State Tax Withheld 1340 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE William is also in the National Guard and received combat pay Enter his military pay on the third W 2 Fields Data TS Field T F Field M Federal ID 555555551 Employer s Name United States Army Employer Address 1876 We Want You Drive Employer ZIP 28734 Wages 15000 Federal Tax Withheld 2131 14 Other first box Q 14 Other second box 7000 State CA State ID 777777777 State Tax Withheld 1340 v MUST READ v If you have a W2 with combat pay in addition to entering the W2 you must also go to the MISC screen and enter X in the Military Indicator field and in the Special Processing field press SHIFT and select a combat location Press ESC to return to the Data Entry Selection Menu ENTERING ITEMIZED DEDUCTIONS SCHEDULE A To open the Itemized Deductions Schedule screen type A in the selector field and press ENTER This form mirrors the IRS Schedule A see Figure 24 on page 46 Enter the information shown below for the Carter s itemized deductions Fields Data
17. M 5 5142 29 5142 29 Equipment 1452 38 M 5 1452 38 1452 38 Cabinets 2553 20 M 5 2553 20 2553 20 Also enter the items below Prior Depreciation Description Date Acquired Cost Method Life Fed State Ice Machine 02281992 2626 00 M 7 2626 00 2626 00 Printer 03211995 2904 40 M 5 2904 40 2904 40 Cash Register 04301995 1865 60 M 5 1865 60 1865 60 Blizzard Machine 06301995 589 89 M 7 589 89 589 89 HVAC Unit 08141998 7171 00 M 7 6210 99 6210 99 Toaster 03301996 716 98 M 5 716 98 716 98 Cash Register 04301996 493 98 M 5 493 98 493 98 HVAC Unit 09151998 5971 00 M 7 5171 00 5171 00 Office Equipment 05311999 404 90 M 5 381 58 381 58 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Prior Depreciation Description Date Acquired Cost Method Life Fed State Misty Mch 02011999 2000 00 M 5 1884 80 1884 80 Computer 06262000 5383 M 5 4452 82 4452 82 Booths 05041989 9089 63 M 5 9089 63 9089 63 Paving 06041989 15695 87 ARP 5 15695 87 15695 87 Franchise 07022001 6000 AMT 15 1000 1000 Ice Maker 11282003 2560 M 7 91 39 91 39 Screen 1 of 32 Figure 58 Depreciation Detail 4562 screen Form 4562 Multi form code m Description GLASS BUILDING Prior depreciation Salvage Value Override Regular Depr Override 179 Expense Override Bonus Depr Prior 179 Expense Prior Borus Depr Other information Investment credit code Asset mmber Amort code section Overrides M
18. Software 2004 Printer Setup Assistant Choose Printer ns Select Printer Type ia Printer Port x Select the type of printer from the drop down list This field may be auto filled If so do not change the setting Click NEXT to continue The first page of the 1040 is sent as a test page to the printer Check the printer for the test page Answer the questions that follow by clicking the appropriate YES or NO button The next window prompts Apply this printer to the following sections Click the check boxes to select Click FINISH to complete the wizard Different printers can be selected to print reports letters forms checks etc OPTIONAL PROGRAM SETUP OPTIONS Select program preferences from the Options screen see Figure 13 on page 24 The software defaults to the most common preferences To change or view the defaults follow the steps below 1 From the menu bar go to Setup gt Options 2 Click the tabs to change the options screen that displays After selecting an option press OK to save Drake Software Manual Copyrighted Material 24 2004 DRAKE SOFTWARE Figure 13 Setup Options Drake 2004 Setup Options Optional Items on Return Billing States EF Data Entry Calculation amp View Print Form amp Schedule Options Optional Documents Select To Turn ON Language for menus and data entry screens Enlarge data entry screen
19. TSJ Field J Medical Dental Expenses 8777 State Local Taxes 624 Real Estate 1567 Drake Software Manual Copyrighted Material 46 2004 DRAKE SOFTWARE Fields Data Personal Property Taxes 245 Mortgage Interest from 1098 6788 Cash Check Charitable Contributions 275 Other Charitable Contributions 190 Tax Prep Fees 125 Press ESC to return to the Data Entry Selection Menu Figure 24 Schedule A Itemized Deductions A screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Schedule A Itemized Deductions MEDICAL amp DENTAL Health Insurance Premiums Long Term Care Premiums Medical Miles Other Medical and Dental expenses sogadesncdonao so Oo ooi TAXES a q 4 Income Taxes State and Local Sooosobocopocboonnaosnrocencsncoans General Sales Tax State and Local See STAX screen Personal property INTEREST YOU PAID Home mortgage interest and points reported on Form 1098 Address Portion of lines 10 amp 11 that is home equity interest Points not reported on Form 1098 No 1098 Nene 35 0 ar ees ee ees GIFTS TO CHARITY Gifts by cash or check Other than by cash or check Charitable Miles Carryover from prior year subject to 50 Limitation 30 Limitation 20 Limitation JOB EXPENSES amp MOST OTHER MISC DEDUCTIONS Unreimbursed employee expense Tax preparation fees OTHER MISCELLANEOUS DEDUCTIONS Other not subject to 23 Lm erry
20. Zip Email Telephone Number Date employed in the position from Date employed in the position to Ownership and Participation Total Common Preferred 100 B Compensation Officer s Deductible Compensation 3 Compensation of officers claimed on Schedule A and elsewhere on return Miscellaneous Screen 1 of 1 Press Page Down for a new screen SCHEDULE K OTHER INFORMATION CT Tuber SS ont act code ES sions Return Ee Se a O O O 400 00 5999 Press Shift or Right Click for Help Type K and press ENTER see Figure 57 on page 93 Enter the following data and press ESC to save the screen and exit Fields Data 1 Accounting Method Accrual 2 Principle Business Code 722110 2c Description of Product or Service Restaurant Food 3 Corporation Owned more than 50 of a No domestic corp s voting stock 4 Is corp a sub in an affiliated parent sub No controlled group 5 Did any entity at year end own 50 or more Yes of corp voting stock Name Robert T Dickson ID 256807327 Percent Owned 100 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 193 Fields Data 6 Did Corp pay dividends gt current No accumulated earnings and profits 7 Did one foreign person during the tax year No own at least 25 10 The number of shareholders at the end of 2 the year 11 If the corp has an NOL and elects to forego X carr
21. application Austin and or acceptance letter Wyoming No tax Philadelphia EF OPTIONS IN DATA ENTRY In Data Entry the EF screen overrides items entered in Setup gt Options Use this screen to send the federal alone or a state in any of the following ways Direct State returns are sent directly from Drake to the state e file service center Only a few states require direct filing CA IL MA ME MN e State Only packets can be sent at the same time the federal return is sent Unlike Piggyback returns State Only packets are reviewed by the state regardless of IRS acknowledgement e Piggyback state returns are sent with the federal return to the IRS If the federal return is rejected the state return is not sent A total of five states may be sent electronically each year per SSN Only one Piggyback state is Drake Software Manual allowed In Data Entry type EF in the selector field to access the EF Override screen The program automatically sends the federal and piggyback state unless an override is entered on this screen Enter X to select which federal forms to send Enter the two digit state code to be sent piggyback state only or direct Some states have established mandates This year California Minnesota Michigan and Oklahoma have published electronic filing mandates These are explained in Taxing Subjects January 2004 Issue 13 www taxingsubjects com as well as documented on our support
22. based on the wages entered in box 1 Because there are three W 2s included in this return press PAGE DOWN for a blank W 2 screen Enter the information on the next page for the W 2s When multiple screens are necessary ex when you have multiple W2s 1099s dependents etc press PAGE DOWN to save the current screen and produce an additional blank data entry screen Fields TS Field Data es Federal ID 751122333 Employer s Name Avalon Software Employer s Address 458 Spring Ave Employer ZIP 94404 Wages 27850 Federal Tax Withheld 4575 State CA State ID 341115679 State Tax Withheld 1534 This populates taxpayer information fields Once this employer ID is entered it is saved in the EIN database The next time this number is entered in data entry the employer s city and state information will populate The bottom portion of the W 2 screen allows entry of state wage information Drake Software Manual Copyrighted Material 44 2004 DRAKE SOFTWARE Figure 23 Wages W2 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Gr E AVALON SOFTWARE 458 SPRING AVENUE SAN MATEO WILLIAM CARTER 14998 NEW HEIGHTS ROAD BURLINGAME pema Press Page Down for a new screen Enter the information for the second W 2 27850 27850 27850 ai Press Shift or Right Click
23. e GR Grand Rapids e HC Hamtramck e HP Highland Park e HU Hudson e JC Ionia City e JC Jackson e LN Lansing e LP Lapeer e MC Muskegon e MH Muskegon Heights e PC Portland e PH Port Huron PT Pontiac e SG Saginaw e SP Springfield e WL Walker e PY Part Year use only on Screen 1 in Resident State field New York city codes are entered NY or YO with the exception of W2 locality codes when they should be entered NYC or YONKERS Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1109 Glossary Bank Products Enable a taxpayer to receive a refund faster and assist with paying for tax preparation service or any money owed to the IRS CBT Computer Based Tutorial CBTs enable the tax preparer to learn the basics of the software through short instructional videos CCH The US Master Tax Guide Plus from CCH Incorporated is a comprehensive online tax information library available though the Tax Help speed button on the toolbar Data Entry Selection Menu The home base for return preparation Direct State E filed returns that are sent directly from Drake to the State E file Center Only a few states require direct filing CA IL MA ME MN EFIN Electronic Filing Identification Number Preparers new to e filing must apply for an EFIN by preparing and submitting an 8633 to the IRS Email to Drake Used to send
24. gt c c Oregon Tax Preparers Preparer LTP Number Enter preparer information A yellow field indicates required information Create security rights see next section Preparer Security Settings Click SAVE to save changes Notice that the preparer is now saved with a preparer number Copyrighted Material 22 2004 DRAKE SOFTWARE PREPARER SECURITY SETTINGS The Security Setup information defines what functions the preparer can access in the program When the program opens the preparer is prompted to enter his her login name and password Menu options not accessible to the preparer are greyed out Choose from two types of security options CUSTOMIZE SECURITY SETUP Determine what areas of the program a preparer can access 1 With the preparer selected and in edit mode click to select the Customize Security box and click CUSTOMIZE The Preparer Security Setup screen opens see Figure 11 below Figure 11 Preparer Security Setup Preparer Security Setup File EF Tools Reports Last YearData Setup Help V Open Retum Save Settings Iv Cale v Print Cancel Iv View Pre Prepared Entry Help V Quick Estimator Click the menu items to apply security A checkmark indicates access is allowed Remove the checkmark to disallow access Security cannot be added nor taken away for a level higher than the logged preparers security level 2 Click the menu items to display the drop down menus Click to
25. installation process in your Update Profile Install software updates from within the program through your internet connection From the menu bar go to Tools gt Install Updates and from the Update Manager see Figure 7 below choose from the following options e Get Updates Downloads the latest federal software updates Install Updates Installs the updates Install State Program Installs state programs from the Drake CD Figure 7 Update Manager Drake 2004 Update Manager This will check for available updates and download them to your machine now Exit Get Updates Help This will install all updates downloaded but not yet installed Install Updates This will copy an update file to disk so you can update other computers Copy update to disk i Peer uademunndice Copy update file to drive v Copy Updates This will install a state program to your system from a CD or other disk DAN v Install State Program Drake Software Manual Copyrighted Material 18 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Program Setup Drake Software Setup enables you to customize the software to your office requirements The following screens must be completed before beginning tax preparation and electronic filing FIRM SETUP Enter and edit information for a specific firm on the Firm screen see Figure 8 below There is no default firm information in the program This informa
26. select or deselect menu items for accessibility Checked boxes indicate access is permitted 3 Click SAVE SETTINGS When prompted click OK 4 Click SAVE to save the preparer settings Click EXIT OTHER SECURITY OPTIONS With a preparer selected and in edit mode click the radio button to select one of the following options e Set Security to equal Preparer Select this option and enter a preparer number in the box This sets the current preparer s security rights to match the preparer entered e Set Security to Allow No Options The preparer cannot access any items in the program e Set Security to Allow All Options The preparer has rights to access all areas of the program Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 23 PRINTER SETUP Run the Printer Setup Assistant to set up printers quickly and easily The Printer Setup allows more than one printer to be accessed in the program PRINTER SETUP ASSISTANT 1 2 Shey On the menu bar go to Setup gt Equipment gt Printer Setup Initially the Printer Setup Assistant opens see Figure 12 below Select the printer from the drop down list in the window that appears Note Once a printer is set up in Drake the Printer Setup screen opens instead of the Printer Setup Assistant To launch the Printer Setup Assistant click ADD PRINTER from the Printer Setup screen Figure 12 Printer Setup Assistant E Drake
27. site in the Knowledgebase Copyrighted Material 2004 DRAKE SOFTWARE 79 MESSAGES PAGES When you view a return a red MESSAGES page may be present These pages are created when a return has certain issues that would cause an IRS State Rejection Each page lists the error code and a brief description to help you resolve the issue When these issues are resolved the return is ready for electronic filing You cannot select a return for electronic filing with a red MESSAGES page Similarly the yellow NOTES page provides reminders or tips about the tax return Please read the NOTES pages for pertinent information but the appearance of this page does not prevent electronic filing For example examine the practice return you entered during Return Preparation on page 35 Click OPEN from the toolbar and enter 400 00 6666 in the SSN field without dashes Click OK and then press CTRL V to view the return Double click with your mouse to view the red CA MESSAGES page The complete California return is prepared except for the California Child Care The CA MESSAGES page informs you of all of the criteria necessary to complete the credit Most of this information has been entered on the 2441 and screen 2 of the federal return You must however enter the telephone number for the child care provider Notice that the MESSAGES page tells you to use the CA 3506 screen Type CA in the return selector field to enter the California speci
28. software and prepare a basic 1040 return Electronic Filing Learn the basics of e filing in Drake Email to Drake Receive broadcast emails send an email attach a client file Installing Updates Create an Update Profile Download and Install Updates Letters Use the letter editor to edit a result letter Macros Create a customized short cut to speed data entry Online EF Database View your EF Database online in real time Organizers and Proformas Customize and print Organizers and Proformas for one or multiple clients Preparer Web Sites Discover the simplicity of creating and maintaining a preparer web site Printing Set up printers and print sets Review the various printing options in Drake Reports Run a standard report and create a custom report Appointment Scheduler Create preparer schedules set up scheduler preferences make appointments run reports Search EF Database Search for the status of a return use the reject code lookup and other various features of this powerful tool State Database Navigate and review the features of this online database Check Printing En Espanol Aprenda Lo Basico De Archivar electronicamente en Drake Spanish Electronic En Espanol Tutorial de Impresion de cheques To access the tutorials from the CD complete the steps below Drake Software Manual Copyrighted Material 8 2004 DRAKE SOFTWARE 1 Insert the 2004 Drake Evaluation CD int
29. the selector field see Figure 37 below To view a topic place your cursor in the desired field and press SHIFT to access the information Review the FAQ screen Figure 37 FAQ screen Drake 2004 Data Entry 400001001 RETURN TEST amp TEST Il Move cursor to topic of interest and press Shift Wino to make check payable Wiithere when to mail check return WPinformation on getting refunds Micontacting IRS E FILE Banks Micommon errors in return preparation Withe MESSAGE and NOTES pages MiMileage rates WEMiscellaneous rates credits etc MB amended returns Mextensions WEliterals abbreviations on 1040 WELimitations and Phaseouts MiMilitary Personnel Miclergy Wischedule EIC MEschedule E Losses Mant alternative Minimum Tax MBow to file for a deceased taxpayer Mitax rates Wlusing ITINs Mithat s New for 2004 Electronic filing Using PINs and Form 8879 What to do with Form 8453 Bank Stored Value Cards What s New for 2005 next year HSA Health Savings Accounts Installment sale recapture LOSS on Rental disposal New Record Press Page Down for a new screen Press Shift or Right Click For Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 61 DIRECT DEPOSIT Use the DD screen to elect direct deposit of the IRS refund to the taxpayer s checking or savings account see Figure 38 below Generally direct deposit refunds are received one week earlier
30. transmission You can also select to download email when you e file on the EF Tab D is incorrect Options associated with the client s bill are found on the Billing Tab Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Drake 2004 Hot Keys Hot Keys enable you to perform specific actions quickly and easily Knowing when and where to use these keys can save you valuable time during tax season Data Entry Produce field specific help information in data entry or to verify a valid Social Security Number SHIFT or ALT Insert the current date into any field ALT D Delete a screen CTRL D Reset a screen CTRL U Exit and save a screen ESC Exit without saving SHIFT ESC Force an entry CTRL F Open an unformatted schedule CTRL W Toggle between heads down and standard data entry CTRL N Open the Online Help screen F1 View the Pop Up Calculator F10 Carry data to an amended return CTRL X Calculate View and Print Calculate a return CTRL C View a return CTRL V Print a return CTRL P Split MFJ return to MFS return CTRL S Return to data entry CTRL E Electronic Filing Look up reject codes in EF gt Search EF Database F4 Return to data entry from EF gt Se
31. with the completed 8633 to the IRS to apply 2 The correct answer is C Send the ERO acceptance letter from the IRS to the state of Wiscon sin Wisconsin does not have it s own state specific ERO application A is incorrect You must send the ERO acceptance letter from the IRS to Wisconsin B is incorrect Wisconsin does not have its own state specific ERO application D is incorrect You must send Wisconsin the ERO acceptance letter from the IRS A phone call is insufficient 3 The correct answer is FALSE When a PIN screen is completed a Form 8879 is generated and signed by all parties and sent to the applicable IRS Service Center within three business days of the IRS acknowledgement is a false statement It is not necessary to mail the 8879 to the IRS Service Center It must be retained by the tax preparer for three years TRUE is incorrect This is not a true statement For this statement to be true it would state that Form 8453 is sent to the applicable IRS Service Center within three business days of the IRS acknowledgement 4 The correct answer is C A Form 8453 is produced signed and sent to the applicable IRS Ser vice Center within three business days of the IRS acceptance When e filing a return if an 8879 is not produced an 8453 must be used A is incorrect You can e file a return with an 8453 without a PIN The 8453 must be sent to the IRS within three business days of the receipt of an acknowledgement from the IRS
32. 1332 Internet LAN RAS Installed Review Use this option to review the transmission file and remove any returns before connecting to Drake The returns that are selected and highlighted will NOT transmit Therefore do NOT select a return that you wish to transmit 1 To review the manifest click REVIEW see Figure 50 on page 82 2 To select all click SELECT ALL All returns are highlighted these will be removed from the transmission file To deselect all click DESELECT ALL For single returns click to select or deselect returns 3 Click CONTINUE Drake Software Manual Copyrighted Material 82 2004 DRAKE SOFTWARE Figure 50 Review Screen DRAKE SOFTWARE Transmit File Editor rs wle Contents of IRS File 1 ame SSN Type Select any items to be REMOVED O CARTER WILLIAM amp 400006665 Select All UnSelect All Continue Send Receive Use this option to connect and transmit the file and to pick up federal and state acknowledgments bank product acknowledgments and check authorizations 1 Click SEND RECEIVE to continue 2 The Declaration Control Record opens Click PRINT 3 Click CONTINUE 4 The program connects and completes the transmission and automatically disconnects from Drake after the transmission is complete Acks Only Use this option to pick up federal and state acknowledgements bank product acknowledgements and check authorizations No files are transmi
33. 20 Evaluation Return 87 Printer Dialog Box 69 Printer Setup Assistant 23 Process acks 83 Drake Software Manual 2004 DRAKE SOFTWARE Program Navigation 9 Emailing 13 ESC 9 Features 12 General Flow of Commands 10 Keyboard 9 Mouse 9 Slpit Returns 14 Tool Bar 9 Toolbar 9 Program Setup 19 Firm Setup 19 Options 23 Preparer Setup Customize Security Setup 22 Other Security Options 22 Preparer Security Settings 22 Printers 23 Printer Setup Assistant 23 R Reconciliation of Income 96 97 Return Preparation 35 Amended Returns 64 Auto Mileage for Sch C 55 Bank Products 62 Child and Dependant Care Expenses 51 Depreciation 50 Direct Deposit 61 Entering Data 36 Entering Dependant Information 41 Estimated Taxes 57 Extension 65 FAQ Screen 60 Interest Income 47 Itemized Deductions 45 Moving Expenses 54 Office In Home 53 Partnership Information 56 Part year Return 60 Payment 62 Profit or Losses from Sch C 48 Saving Data 40 State Data 58 Copyrighted Material 2004 DRAKE SOFTWARE Valid City Codes 59 Wages 43 Review Questions Answers Part 1 30 Answers Part 2 34 Answers Part 3 74 Answers Part 4 86 100 Part 1 29 Part 2 33 Part 3 73 Part 4 85 Selector Field 10 Service Center 76 Software Installation 5 State and City Programs 5 State 5 State Information EF Service Centers 76 State Only 78 States Tab 27 Support CCH 16 Online State Resource 16 websi
34. 2004 DRAKE SOFTWARE Bank State State EF Application Required Products Applica EF Center tions Required DC All EROs are automatically accepted Andover Florida No tax Kansas City Georgia All EROs are automatically accepted Memphis Hawaii All EROs are automatically accepted Philadelphia Idaho EROs must send a copy of IRS application Philadelphia and or acceptance letter Illinois EROs must complete state application Yes Austin Indiana All EROs are automatically accepted Kansas City lowa All EROs are automatically accepted Austin Kansas All EROs are automatically accepted Austin Kentucky All EROs are automatically accepted Kansas City Louisiana EROs must send a copy of IRS application Yes Memphis and or acceptance letter Call 225 922 0366 for more information Maine All EROs are automatically accepted Andover Maryland All EROs are automatically accepted Andover Massachusetts EROs must complete state application Yes Andover Michigan EROs must complete state application Yes Kansas City Minnesota All EROs are automatically accepted Austin Mississippi All EROs are automatically accepted Yes Memphis Missouri All EROs are automatically accepted Austin Montana All EROs are automatically accepted Philadelphia Nebraska Acceptance is automatic with Federal Philadelphia acceptance Nevada No tax Philadelphia New Hampshire No tax
35. 2004 DRAKE SOFTWARE Copyright Notice The 2004 Drake Software Evaluation Guide Drake Tax Software and any other related materials are copyrighted material All rights are reserved by Drake Enterprises LTD including all ownership rights This document associated software and related material are the property of DRAKE ENTERPRISES LTD No part of this document or associated online documentation may be reproduced or transmitted in any form or by any means without the express written permission of DRAKE ENTERPRISES LTD Publication Date Spring 2005 2005 Drake Enterprises LTD All rights reserved Printed in USA While every attempt has been made to produce an accurate and complete manual there is no warranty expressed or implied to that effect DRAKE ENTERPRISES LTD assumes no liability for damages or claims resulting from the use of the information contained herein TRADEMARKS The Drake Software Logo and Drake Software are registered trademarks of Drake Enterprises LTD Other product names mentioned in this manual may be trademarks or registered trademarks of their respective companies Drake Software Manual Copyrighted Material 2004DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Table of Contents Welcome snieni Sm ciwake apace leant 1 CPE Information 000 3 Software Installation 0 5 State and City Program Installation 5 Other Drake R
36. 2005 Estimated Taxes Due Review the screen It is not necessary to enter Estimated Tax data for the Carter s return Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Figure 34 Estimated Tax Payments ES screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 1040 E5 Estimated Tax Payments for TY 2004 and Overrides for TY 2005 TI m Overpayments Applied Estimated Taxes Estimated Taxes Paid in 2004 Federal 2003 OP ist Qtr 2nd Qtr 3rd Qtr 4th Qtr t City E 2003 OP ist Qtr 2nd Qtr 3rd Qtr 4th Qtr Sc City 2003 OP ist Qtr 2nd Qtr 3rd Qtr 4th Qtr St City 2003 OP ist Qtr 2nd Qtr 3rd Qtr 4th Qtr Estimated Taxes DUE in 2005 Federal ES Code i OP Code w OP to 2005 Voucher 1 Voucher 2 Voucher 3 Voucher 4 St City ES Code OP Code OP to 2005 Voucher 1 Voucher 2 Voucher 3 Voucher 4 St City ES Code OP Code OP to 2005 Voucher 1 Voucher 2 Voucher 3 Voucher 4 St City ES Code OP Code OP to 2005 Voucher 1 Voucher 2 Voucher 3 Voucher 4 New Record Press Page Down for a new screen ENTERING STATE DATA State returns are easy to generate in Drake Software First either install the state software on the hard drive or simply insert the Evaluation CD into the CD drive see State and City Program Installation on page 5 for installation instructions To run state programs from the CD go to Se
37. 400 00 6666 Click OK Drake Software Manual Copyrighted Material 38 2004 DRAKE SOFTWARE Figure 17 Open Returns Drake 2004 Open Returns Enter the SSN or the last name for the return you want to open 400006666 Name ON 3 A message box prompts you to create a new return Click YES 4 Next select the type of return to create see Figure 18 below Our sample is an Individual return Since this is the default press ENTER or click OK Figure 18 Select Return Type Drake 2004 New Return Select the Return Type 1040 Individual Fiduciary C Cop C 990 CComp C 706 Partnership NAME AND ADDRESS SCREEN Each time you create a new client the Name and Address screen opens initially see Figure 19 on page 39 The information provided on this screen flows to each of the forms for this client Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 39 Figure 19 Name and Address screen Drake 2004 Data Entry 400006666 DEMOGRAPHICS SSN First Name amp MI Last Name Birth Date 400 00 6666 FP REE eae eee ae Mi Dep of ancther W NOTE Enter MFS info in Spouse fields Resident Address SSE State City city Eee State ip County Ee Sch Dist Daytime phone ME Evening phone ME Cell phone T Email address ME Occupation Blind Pres Campaign Date of Death eee e lII E Yes W no W ae E Yes W mo W eooo In Care of A Firm i Fed ST Itemized Standard W Pr
38. 415 344 3443 Evening Phone 415 645 6456 Occupation Computer Technician Presidential Campaign Fund No Enter numbers with no formatting dashes dots or spaces and the program automatically enters the formats for SSN EIN Date Phone and Zip fields These formats are for viewing purposes only and can be turned off in Setup gt Options gt Data Entry Tab SAVING DATA When the Name and Address screen is complete press ESC to return to the Data Entry Selection Menu The information entered is saved automatically as it is typed On the Data Entry Selection Menu notice the Name and Address selection is highlighted indicating that data is entered on this screen see Figure 20 on page 41 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 141 Figure 20 Data Entry Selection Menu with Active Screen Drake 2004 Data Entry 400006666 CARTER WILLIAM Name and Address Adjustments Credits If a screen is highlighted but contains no data the screen must be deleted or it can cause E filing errors Press CTRL D from within the screen to delete the current data entry form ENTERING DEPENDENT INFORMATION William and Amelia have two dependents To access the dependent screen type 2 in the selector field see Figure 21 on page 42 After entering the first child s dependent information press PAGE DOWN on the keyboard to produce an addi
39. Andover New Jersey All EROs are automatically accepted Andover New Mexico All EROs are automatically accepted Austin New York State no longer requires a separate application Yes Andover to e file if you are accepted by the IRS you are accepted by the state North Carolina Special application is no longer required Memphis North Dakota EROs must complete state application Yes Philadelphia Ohio All EROs are automatically accepted Kansas City Oklahoma All EROs are automatically accepted Austin Oregon All EROs are automatically accepted Yes Philadelphia Call 503 378 4140 for more information Drake Software Manual Copyrighted Material 78 2004 DRAKE SOFTWARE Bank State State EF Application Required Products Applica EF Center tions Required Pennsylvania EROs must send a copy of IRS application Andover and or acceptance letter Rhode Island All EROs are automatically accepted Andover South Carolina All EROs are automatically accepted Kansas City South Dakota No tax Philadelphia Tennessee No tax Memphis Texas No tax Austin Utah EROs must send a copy of IRS application Austin and or acceptance letter Vermont All EROs are automatically accepted Andover Virginia All EROs are automatically accepted Andover Washington No tax Philadelphia West Virginia EROs must send a copy of IRS application Kansas City and or acceptance letter Wisconsin EROs must send a copy of IRS
40. D mmber Issuer Expires Choose one of these validation methods EE Key the 2 check digits from the label W review the SSN on a valid SSN card WE review the SSN on a current military ID MMMM Re Key in first 4 characters of last name EE Tapayer s prior last name if different nro Account mmber Eee Checking i Savings E Bank name ee Card Number ee New Record Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 64 2004 DRAKE SOFTWARE FILING AN AMENDED RETURN The 1040X form cannot be e filed but can be populated with data from the original form Enter X in the selector field to open the form When you are prompted see Figure 42 below click YES to auto fill the 1040X with information from the original return see Figure 43 below Then change the data in the original return to reflect your amendments to the return Print out the return and check for accuracy An amended return must be mailed to the IRS Figure 42 Auto Fill Amended Screen Prompt E Auto Fill Amended Sc Auto Fill Amended Screen Review the screen It is not necessary to enter amended data for the Carter s return Figure 43 1040X X screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 1040X For 2004 Returms Has the name and address been changed keen ceenceees AT TT ui Has original retum been audited or changed by IRS kee eaueeccaeuees fz Filing scans on original renum tie
41. Drake Soft ware Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE CPE Exam Answer Sheet 1115 Circle the appropriate response on this answer sheet for each of the questions on the CPE Exam ca Be oS Boe Boe o N N N N N Bes ee Be Cea Y a gt Bae Bee gt ea Bee So Ea Bo E OS 23 gt gt gt Fr gt Pp rue gt gt Ea re PP oe True gt gt gt True True True A A True w w v w w w False w v w v w w False False False False B B False O Kee Kea pe 5i a n O Ben O Bem oO a a n a C n a n a C C N A OU fee I E I Ee a Se J Bee I Bee T J N A Please return completed Exam and Evaluation see 2004 Evaluation on page 116 before January 1 2006 to Education Department Drake Software 235 E Palmer Street Franklin NC 28734 Drake Software Manual Copyrighted Material 116 2004 DRAKE SOFTWARE 2004 EVALUATION Please take a moment and let us know what you think We value your input and suggestions and strive to continually improve our educational tools to better suit your needs For CPE credit complete your name and address along with your evaluation of the course material Credit is awarded to a score of 70 or better Earn 5 credits based on a 50 minute hour for California CTEC credits 3 federal hours 0 CA hours based on a 100 minute hour Your CPE certificate will be mai
42. E ERO SETUP The temporary EFIN assigned by Drake does not enable electronic filing but allows system testing Preparers who are new to E filing must apply to the IRS for an EFIN ERO information MUST be entered before attempting to electronically file live returns 1 Onthe Menu Bar go to Setup gt ERO see Figure 47 below Figure 47 Setup gt ERO Drake 2004 Electronic Filing Setup DRAKEO4 CFYTAXSETUP ERO Information Ok EFIN 561 332 Drake Password p Install Dialer Transmitter Name TEST PERSON Exit Transmitter Address 200 MAIN STREET City State Zip Code RALEIGH NC 27555 Map Federal EIN 041234567 Telephone Number Connection Settings IRS Direct Filing has been chosen on the modem setup screen Any changes made to your connection settings will override IRS Direct Filing setup 1 I7 Use my DSL Cable or LAN connection 2 Use my dial up connection 2a a Advanced Options 1 Transfer my files using X Ja My machine uses a firewall use Passive FTP to define port range 1b Reserved Service Bureau Information J ERO is a Service Bureau Admin Only Master EFIN Fee HELP Enter the ERO s Electronic Filing Identification Number 2 Enter or edit the information The yellow fields indicate required data 3 Click OK or press ESC to save and exit Drake Software Manual Copyrighted Material 76 2004 DRAKE SOFTWARE If the preparer is fili
43. ME INFORMATION In addition to owning Patty Cakes Bakery Amelia s storage facility for linens and other catering materials is located at her home She qualifies for Office in Home expenses which are entered on the 8829 screen see Figure 30 on page 54 To access this data entry screen type 8829 Office in Home Fields Data For C Area used exclusively for business 180 Total area of home 2000 Input the following additional information Fields Direct Expenses Indirect Expenses Insurance 250 Utilities 500 Other Expenses 250 Press ESC to return to the Data Entry Selection Menu Drake Software Manual Copyrighted Material 54 2004 DRAKE SOFTWARE Figure 30 Office in Home 8829 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 8829 Office in Home For Multi form code Part I Area used exclusively for business Shift for override Total area of home Total hours used day care facilities not used exclusively Total hours available Default 366 days x 24 hours 8784 Gross income from business Part II Casualty losses Deductible mortgage interest Real estate taxes Excess mortgage interest Insurance Repairs amp maintenance Utilities Other expenses Carryover of operating expenses from 2003 Excess casualty losses see IRS instructions Carryover of casualty amp depreciation from 2003 Part III Smaller of basis or FMV Dep
44. Manual Copyrighted Material 2004 DRAKE SOFTWARE 1113 15 16 17 18 19 20 21 22 Which one of the following is NOT a method for opening a return in Drake Software a Type the SSN or EIN in the top box of the Open a Return window b Press F3 from the Open a Return Window c Select the desired return from those returns displayed in the lower box of the Open a Return window d Type a last name or company name in the entry field of the Open a Return box and press ENTER How do I file an amended return with Drake a Print out the blank form complete it and mail to the IRS b Reenter the return Go directly to the X screen Press CTRL X Then enter the changes needed to amend the return Select for EF c Reenter all information into the return and reprint Mail to the IRS d Reenter the return Go directly to the X screen Press CTRL X Then enter the changes needed to amend the return This return must be paper filed to the IRS Is it possible to create a Part Year Return with Drake Software a Yes enter PY as the resident state on screen 1 b Yes Type PY in the return selector field and fill out the screen c Yes create two separate returns d No Which of the following does not calculate a return a Press CTRL C b Click the CALC button on the toolbar c Exit the return After selecting Auto Calculate Return when exiting data entr
45. NU ITEMS Task Description Location Amortization Prepare and print an amortization schedule Tools gt Amortization using information furnished by the user Amo eest 4562 in a return Backup Backup the Client files EF Database Setup and Tools gt File Maintenance gt Pricing files Backup Restore Restore Client files EF Database Setup and Tools gt File Maintenance gt Pricing Files Restore Blank Forms Comprehensive list of Drake calculated Forms Tools gt Blank Forms or view and Forms not available in the software to print Blank Proformas and Organizers are available in Blank Forms Build EINs from 2003 Update EIN database from the prior year Last Year Data gt Build EINs from 2003 Change File Type Tax Exempt Changes the Return Type Individual Partnership Corporate Sub S Corp Fiduciary Change File Type Tools gt File Management gt Calculate Calculate single or batches of returns File gt Calculate Returns Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1105 Task Description Location Change SSNs on File Correct file name when changing a social security number Tools gt File Maintenance gt Change SSNs on File Check Register Prints a check register as a record EF gt Check Register Check Print Print new checks or reprint damaged checks EF gt Check Print C
46. OFTWARE 99 Review Questions Part 5 Answer the questions below See Answers Part 5 on page 100 for explanations of answers 1 In Drake software when entering EINs SSNs or dates what format is required a Enter these numbers with the appropriate dashes b Enter these numbers with a forward slash c Enter these numbers without dashes slashes dollar signs or commas d None of the above is correct 2 Ona Corporate Schedule L in Drake Software how can you access the remainder of the fields 16 26 a SHIFT PAGE DOWN b PAGE DOWN c END d ALT END 3 How is the corporate return started in Drake Software a Purchase the extra package and install Then enter the EIN b From the toolbar click OPEN enter the EIN and select C Corp c You cannot Drake Software is an 1040 only package d From the toolbar select C Corp 4 On the 4562 how can you indicate an asset is used 100 for business purposes a Leave the Business use field blank Drake Software defaults to 100 b Enter 100 into the Business Use field c Calculation of this item must be done outside the program d Both A and B are correct 5 How do you indicate a number is a negative number a Put the number in parenthesis b Use ALT R to make the number red c Put a in front of the number d None of the above Drake Software Manual Copyrighted Material 100 2004 DRAKE SOFTWARE ANSWERS PART 5 1
47. Programs Log Out Large Print 2 18 2005 11 15 32 J drakesottware com 1040 com taxingsubjects com dnet ne Tools Software Updates New Software i 3 F Update Routine Drake Software online support tools are designed to address the specific needs of our clients Take full advantage ofthe following Watch Now KB This new robust comprehensive online search tool provides 24 7 support The KB New Products consists of issues and solutions submitted by clients programmers support personnel the Money Matters IRS and DORs Enter in keywords or search by categories Drake has partnered with Crown Financial Ministries to bring a new Money Matters financial manager Click here for more info CCH Research Access the online U S Master Tax Guide Plus fram CCH Incorporated The product features a comprehensive online tax information library which includes the following U S Master Tax Guide Internal Revenue Code Revenue Rulings IRS Publications IRS Announcements IRS Notices and U S Tax Cases To access this feature Fae r from with the program click the TAX HELF speed button Resources Tools of the Trade EF Database Enables you to view your EF Database real time online This site displays SS CCH Research and rejected and accepted returns lists checks available for printing features multiple reports and much more much more Learn more Email Center Forums Interact online with other Drake clients in a mes
48. T READER INSTALLATION If Acrobat Reader is not installed complete the following installation steps 1 Insert the 2004 Drake Evaluation CD into the CD drive 2 Click Start gt Run 3 Inthe Open field type D PDF READER ARSOOENU EXE substitute correct CD drive letter if not D Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 7 4 Click OK and follow the instructions An icon is created on your desktop for the Acrobat Reader after installation is complete OPEN DOCUMENTS IN ADOBE ACROBAT READER Once the reader has been installed PDF files can be opened from the CD 1 Insert the 2004 Drake Evaluation CD into the CD drive 2 Go to Start gt Run 3 Inthe Open field type D PDF MANUALS substitute correct CD drive letter if not D 4 Double click a PDF to view the Drake User s Manual Quick Start Manual or the Business Manual Program Features The Drake User s Manual pages are updated in PDF format throughout tax season allowing you to easily print and replace outdated pages VIEW DRAKE TUTORIALS Drake Computer Based Tutorials CBT can be run directly from the Evaluation CD They enable you to learn the basics of the software by viewing a short video These tutorials play with sound if you have a sound card with speakers The following tutorials are included Printing Checks Set up print and reprint checks Data Entry Navigate the
49. TEST TEST 400007000 OK Exit Help C C e 22 Last 4 All Clients 1040 1120 11205 1065 1041 990 706 returns Returns are identified by either a Social Security Number SSN or an Employer Identification Number EIN in the case of business To create a new return e Type the SSN or EIN in the top box with no dashes spaces or other characters Click OK or press ENTER e Ifthe new SSN or EIN is not in the database you are prompted to create a new file Click YES e Select the type of return to create Click OK Drake Software Manual Copyrighted Material 36 2004 DRAKE SOFTWARE To open an existing return e Type the SSN or EIN in the top box with no dashes spaces or other characters Click OK or press ENTER e Select the desired return from those returns displayed in the lower box Use the return selector buttons to the right to narrow your search Empty the top field and press ENTER Scroll through the resulting list to select a return Type a last name or company name in the entry field and press ENTER For a sample return type the following SSN into the top field without dashes 400 00 6665 This is a completed version of our practice return You will see that the Data Entry Selection Menu is organized into six different pages marked by Tabs General Income Adjustments Credits Taxes and Other You can navigate to
50. United States Gd ance caunccosuacoccccc E New Record Press Shift or Right Click For Help Drake Software Manual Copyrighted Material 66 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 67 Calculate and Print the Return RETURN CALCULATION Drake Software automatically saves all data as it s being entered However it does not automatically calculate the return From anywhere within the return press CTRL C or CTRL V to calculate the return e Press CTRL C to calculate the return and view a calculation summary screen see Figure 45 below Press CONTINUE to return to the Data Entry Selection Menu Figure 45 Calculation Summary Window Calculation Results FED Taxable FED TotalT ax FED Refund CA Taxable CA TotalT ax CA Refund 2874 Eligible for EF Press ESC or Enter to Continue e Press CTRL V to calculate the return and enter View mode View mode enables you to view the actual forms that will print for the return The program automatically calculates when you exit a return This ensures that the latest figures are calculated and saved To automatically calculate the return when you view or exit go to Setup gt Options gt Calculate View Print Tab and select to turn on Auto Calculate Return when exiting data entry If the Pause Option for Calculation option has been selected to After vie
51. ader Installation on page 6 for installation instructions for the PDF Reader Open and read the file instructions pdf This folder contains 12 returns for practice data entry The solutions are also found in this folder Things to note when examining the completed practice returns Additional Child Tax Credit is calculated using Form 8812 Since the software generates the Child Tax Credit automatically you may need to refer to WK_8812 to examine the calculations used for line 49 of Form 1040 line 33 of Form 1040A To view this form check the Optional Worksheet box in the left col umn of Setup gt Options gt Optional Documents The Additional Child Tax Credit is also calculated auto matically Examine Form 8812 to check the calculations for line 65 of Form 1040 line 42 of Form 1040A There are two forms in Drake Software for Earned Income Credit The calculation is performed automat ically To examine the calculations for line 63 of Form 1040 line 41 of Form 1040A view WK_EIC EIC cannot be generated for a Form 1040EZ Form 8867 provides a checklist for EIC due diligence The IRS examines these forms during audits Complete and save Form 8867 for each taxpayer qualifying for EIC To qualify for Child Care Credit both parents must have earned income be full time students or disabled In Drake Software fill out the dependent information on screen 2 including any child care expenses and then fill out Form 2441 completely including chi
52. aluation CD and follow through with the chapters in this guide Submit the completed final exam answer sheet and evaluation to Drake Software Education 235 E Palmer St Franklin NC 28734 3049 or fax to 828 349 5713 For questions or complaints regarding Drake Software CPE credits contact Drake Education at 828 524 8020 Drake Software is registered with the National Association of State Boards of Accountancy NASBA as a sponsor of continuing professional education on the National Registry of CPE Sponsors State boards of accountancy have final authority on the acceptance of individual courses for CPE credit Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors 150 Fourth Avenue North Suite 700 Nashville SPONSORS TN 37219 2417 Web site www nasba org Drake Software has been approved by the California Tax Education Council to offer the 2004 Evaluation Guide 3038 CE 0001 which ia provides 3 hours of federal credit and 0 hours of state credit towards the annual continuing education requirement imposed by the State of California A listing of additional requirements to register as a tax Cetin s preparer may be obtained by contacting CTEC at P O Box 2890 Sacramento CA 95812 2890 toll free by phone at 877 850 2832 or on the Internet at www ctec org Drake Software Manual Copyrighted Material 4 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted M
53. and receive email in the Drake program Broadcast Email Email that provides information on important IRS updates and software changes Receive these messages in Help gt Email to Drake ERO Electronic Return Originator To become an ERO preparers must apply for an EFIN FAQ Screen Frequently Asked Questions Type FAQ in the selector field to access additional information Heads Down Data Entry Uses field codes that correspond with interview sheets proformas Data can be gathered by a tax preparer and entered by a data entry operator Hot Keys Enable the user to perform specific actions quickly and easily using the keyboard For example press CTRL C to calculate a return Menu Bar The list of menu options across the top of the Drake screen Drake Software Manual Copyrighted Material 110 2004 DRAKE SOFTWARE MESSAGES Page Red pages that appear in View or Print Mode when a return has certain issues that would cause an IRS State rejection You cannot select a return for electronic filing with a red MESSAGES page Correct the issue and view the return If the MESSAGES page is gone the return can be e filed NOTES Page The yellow NOTES page provides reminders or tips about a tax return and does not prevent e filing PDF PDF format allows Drake manuals and other materials to be viewed and printed directly from the CD PDF Portable Document Format is a file format that captures all the elements of a printe
54. ar amounts and the WK_EIC calculates the Earned Income Credit C is incorrect You can view the total Additional Child Tax Credit on the 8812 The 8867 is an EIC eligibility checklist D is incorrect The 2441 is used to report Child and Dependent Care expenses The correct answer is B Screen 2 and 2441 Screen Enter child care expenses on Screen 2 the Dependent screen and the 2441 Screen Child and Dependent Care Expenses A is incorrect Screen is the Name and Address screen You would enter Child Care Expenses on the 2441 Screen and the Dependent screen C is incorrect Screen 3 is the Income screen and the MISC screen is used to enter miscellaneous codes and notes D is incorrect Screen 1 is the Name and Address screen You would enter Child Care expenses on Screen 2 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 75 Electronically File the Return Drake users can electronically file federal tax returns either through Drake or directly to an IRS Service Center State returns can be piggybacked with federal returns or sent directly to the state depending on state requirements The flexibility in EF options that Drake offers can be useful when filing a multi state return or when the initial State return has been rejected and must be re filed Becoming an Electronic Return Originator ERO requires some pre season planning but it pays off when tax season arrives ERO STAT
55. arch EF Database F5 Return to EF Database from data entry F9 Check your online EF database from EF gt Search EF Database F10 Drake Software Manual Copyrighted Material 32 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 33 Review Questions Part 2 Answer the questions below See Answers Part 2 on page 34 for the correct answers 1 How do I delete a screen in Drake a CTRL F b CTRL D c CTRL S d CTRL N 2 Can I split a joint return into two married filing separate returns How a No b Yes CTRL F c Yes CTRL W d Yes CTRL S 3 How can I create a detailed worksheet for a particular line item on a return a With your cursor in the data entry field on a Drake Screen press CTRL F b You cannot c With your cursor in the data entry field on a Drake Screen press CTRL W d With your cursor in the data entry field on a Drake Screen press ESC 4 How do I save screen information in a return a CTRL W b CTRL S c ESC d ALT 5 Is it possible to insert the current date into a data entry field How a Yes press Insert D b Yes press CTRL D c No d Yes press ALT D Drake Software Manual Copyrighted Material 34 2004 DRAKE SOFTWARE ANSWERS PART 2 1 The correct answer is B CTRL D This Hot Key deletes the current screen A is i
56. ate pre season Setup gt Letters after season and result letters for clients Letterhead Activate or remove graphic letterhead for letters Setup gt Letterhead and bills Macros Set up shortcut keys for commonly used words Setup gt Macros phrases addresses etc Samples are pre programmed to show examples of input Mailing Labels Generate mailing labels for clients service Tools gt Letters gt Mailing centers DORs etc Labels Open Returns Open an existing return or create a new one File gt Open Returns Options Set user preferences that affect viewing Setup gt Options printing calculation optional documents EF etc Organizers Print client information and pre season sheets Last Year Data gt Organizers for gathering tax data based on last year s information Password Protect Files Lock a file with a Password The preparer must remember or write down the password There is no way to open the file without the correct password Drake Support does not have access to the password Tools gt File Maintenance gt Password Protect Files Pay Per Return Activate order and view availability of returns for Pay Per Return clients Setup gt Pay Per Return Postcards Addresses post cards to a selected group of Tools gt Letters gt Post Cards clients Preparers Set up Preparer information and level of Setup gt Preparers security Also set up hourly rates password an
57. aterial 2004 DRAKE SOFTWARE 5 Software Installation Install the 2004 Drake Software Evaluation CD using the instructions located on the back of the CD cover Additional installation may be necessary Please read the topics below for details STATE AND CITY PROGRAM INSTALLATION Installing state and city programs is optional as states and cities do not have to be installed on the hard drive in order to process and e file state tax returns State and city returns will calculate directly from the CD if it remains in the CD drive at the time of calculation ACCESS STATE AND CITY PROGRAMS DIRECTLY FROM THE CD 1 Insert the 2004 Drake CD in the CD drive 2 Open the Drake program Go to Setup gt Directories Paths see Figure 1 below 3 Inthe Drive Letter for State Programs field select the CD drive letter from the drop down menu Click OK Figure 1 Directories and Paths Setup Drake 2004 Directories and Paths Setup RAKEO4 CFATAXSETUP Configuration Choose the appropriate Configuration below Important If necessary consult with your technician or contact Drake Support for assistance These settings should not be changed during the season unless instructed to do so by Drake Support 1 Standalone computer no network T Network Options 2 Software installed only on Server preferred network setup T NW Client link installed on workstations 3 Software installed on server and workstations secondary net
58. ax returns and receiving acknowledgments is a simple process With just a few clicks you are able to electronically file returns to the IRS and state All returns transmitted through Drake are forwarded to the correct IRS Service Center An immediate acknowledgement P is sent to indicate a successful transmission After the IRS and or the state receive and process the forwarded return acknowledgements are sent to Drake indicating whether the return was accepted A or rejected R The acknowledgements are then forwarded to the ERO the next time a connection is made to Drake Although you have the option of transmitting directly to the IRS Drake users are encouraged to transmit returns through Drake There are two advantages to this option e The ability to send all returns in a single transmission IRS Piggyback State Only and State Direct e Drake support is easily accessible Our trained support personnel can access returns for troubleshooting BEGIN THE TRANSMISSION 1 Select EF gt Transmit Receive on the Menu Bar 2 The Transmit Receive screen opens see Figure 49 on page 81 providing five possible options Review Send Receive Acks Only Cancel and Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 81 Figure 49 Transmit Receive Window Drake 2004 Transmit Receive Files for EF IRS File 1 __ Review Direct State File 1 Communications Send Receive Acks Only tee EFIN 56
59. b Reserved Service Bureau Information ERO is a Service Bureau Admin Only Master EFIN Fee HELP Enter the phone number including area code of the Electronic Return Originator Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE PREPARER SETUP 21 Each preparer must be entered on the Preparer Setup screen see Figure 10 below Entering preparers in the program assigns them a preparer number The preparer number is then used to display unique preparer information on letters returns and reports Data entry DE operators may be entered along with paid preparers in Preparer Setup Entering the DE number on returns is used primarily for tracking purposes To enter a new preparer in the software complete the following steps 1 From the menu bar go to Setup gt Preparer s Figure 10 Preparer Setup Drake 2004 Preparer Setup Admin ADMINISTRATOR Not currently in use Not currently in use Not currently in use Not currently in use peee Self Employed E Social Security Number E PTIN Optional OoOo O PIN Signature Optional o Office Number Optional LOGIN NAME ed HELP Enter the Preparer s first and last name Preparer Name Password Password Repeated Hourly Rate i dee iS Click EXIT Drake Software Manual Save Schedule Cancel Help SECURITY OPTIONS FOR THIS PREPARER l Custom Security I Quick Setup Admin Only
60. change in determining No inventories Figure 55 Schedule A Cost of Goods Sold A screen Drake 2004 Data Entry 400002223 BEST FOODS INC Schedule A Cost of Goods Sold Inventory at beginning of year Purchases less cost of items withdrawn for personal use Cost of labor Additional section 263A costs Other costs Inventory at end of year Methods used for valuing inventory check all that apply Egcost MBbower of cost or market Bother O x this box if there was a writedown of subnormal goods X this box if LIFO was adopted this tax year If LIFO used amt of closing inventory computed under LIFO Do the rules of section 263A apply to the corporation There was a change in determining inventories 191 4000 238190 6000 If yes explain MS Press Shift or Right Click for Help SCHEDULE E COMPENSATION OF OFFICERS Type E and press ENTER to access Schedule E see Figure 56 on page 92 Enter the following data and press ESC Name Ownership amp Percent of Corp Stock Owned Officer s of Participation Deductible Officer Time Common Preferred Compensation Jane Doe 400005999 100 100 0 2100 Drake Software Manual Copyrighted Material 92 2004 DRAKE SOFTWARE Figure 56 Officer Information E screen Drake 2004 Data Entry 400002223 BEST FOODS INC officer Information officer Information officer Name Title Street Address City State
61. ciliation of Income 96 97 Screen 1 Corporate General 87 Screen 2 State General 88 Cc Calculate and Print the Return 67 Calculation 67 Print 68 Print Files 68 Calculate and View Tab 25 CBT Computer Based Training 7 CCH Master Tax Guide 16 Corporation General Information 87 CPE Exam 111 CPE Information 3 Drake Software Manual 1117 Index Data Entry 24 Navigation 37 Data Entry Selection Menu 10 Depreciation 4562 93 Drake Tutorials 7 Drake Reference Guides 6 EF Options 78 EF Tab 27 Select returns for EF 27 Electronically File the Return EF Options in Data Entry 78 ERO 75 Message Pages 79 Process Acknowledgements 83 Search EF Database 84 State E filing 76 Test Transmission 82 The EF Menu 79 Transmission 80 Transmit Recieve 80 Electronically File the return 75 Emailing Email to Drake 13 ERO State ERO Setup 75 Examining Returns 71 Extension 65 F Form and Schedule Option Tab 25 Frequently Used Codes for Date Entry 104 Copyrighted Material 118 G Glossary of Common Terms 109 Glossary of Menu Items 104 H Heads Down Data Entry 12 Hot Keys 31 101 Keyboard Keys 101 M MESSAGES pages 79 N Navigate Return Data Entry 102 NOTES pages 79 O Online Service Packs 17 Open a Return 35 Override Screens 78 Overrides and Adjustments to Return Calcula tions 101 P Pop up Calculator 103 Preparing a return 1040 Evaluation Return 37 11
62. culate a return CTRL C Open the return in Data Entry and press CTRL C View a return CTRL V Open the return in Data Entry and press CTRL V Print a return CTRL P Open the return in Data Entry and press CTRL P Split MFJ return to MFS return CTRL S Open the joint return in Data Entry and press CTRL S Populate the Amended or X CTRL X Use CTRL X to update the Amended screen This screen with data from the last screen corresponds with Column A on the 1040X calculation After the X screen is populated make changes to the other screens in the return Screens other than the X will be used to calculate Column B on the 1040X Change or return to Data Entry CTRL E Toggles pre prepared and full screen Data Entry Also returns to Data Entry from view mode or print mode Undo the most recent unsaved CTRL U Available in Data Entry change Open an unformatted schedule CTRL W Place the cursor in the desired field and press CTRL W for a detail worksheet Note If all data has been removed from a data entry screen the screen must be deleted to prevent e filing errors Toggle Between heads down and CTRL N In Data Entry use CTRL N to turn on the numbers standard Data Entry that correlate with fields in the Proformas Delete a Data Entry screen CTRL D With cursor in any field press CTRL D to permanently remove the screen Note If all data has been removed from a Data Entry screen
63. d PIN Pre Prepared Entry Enter data from a return that has been previously prepared This utility allows direct data entry to IRS forms returns are not calculated through the program File gt Pre Prepared Entry Pricing Set prices per form or per item Setup gt Pricing Print Print single or batch returns File gt Print Printer Setup Select printers and settings to use in program Setup gt Equipment gt Printer Setup Process Acks Print and post IRS State and Bank acknowledgements EF gt Process Acks Proformas Print a summary of the prior year s return on an interview sheet Last Year Data gt Proformas Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1107 Task Description Location Quick Estimator Prepare a quick estimate of the tax return with minimal data entry Save information for later tax preparation File gt Quick Estimator Quickbooks Import Import a client file created in Quickbooks Tools gt File Maintenance gt Quickbooks Import Repair Index Files Re index all database and client files Tools gt Repair Index Files Reprint Damaged Check Reprint damaged checks EF gt Check Print Search EF Database View client e file status EF information reject code and reject code description EF gt Search EF Database Security Administrator can set security levels for eac
64. d document as an electronic image that can be viewed navigated or printed PDF files are created in Adobe Distiller PDF995 or similar products View the files with Adobe Reader Piggyback E filed state returns that are sent with the Federal return to the IRS If the Federal return is rejected the state return is not sent Print mode Enables the printing of the forms associated with a return Press CTRL P to enter Print mode Selector Field In data entry the entry field located in the bottom left corner of the screen Type corresponding screen codes in the field and press ENTER to access data entry screens Service Packs Program updates that can be installed through an internet connection From the menu bar go to Tools gt Install Updates Speed Button Used for quick access to commonly used program functions Speed Buttons are located on the toolbar directly under the menu bar Split Return Press CTRL S to split a MFJ Married Filing Joint return into two MFS Married Filing Separate returns enabling the preparer to easily compare and determine the best option for the taxpayers State Only E filed returns that can be sent through an IRS Service Center to a state by themselves Unlike Piggyback state returns State Only packets are reviewed by the state regardless of the IRS acknowledgement View Mode Enables you to view the actual forms that print with a return Press CTRL V to enter View mo
65. de Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1111 CPE Exam Answer the questions below See CPE Exam Answer Sheet on page 115 for answer sheet and instructions for receiving credit 1 In Drake Setup gt Options which tab would I select to change state options a EF Tab b Optional Items on a Return Tab c Billing Tab d State Tab 2 What operation does CTRL S perform a Splits a Married Filing Joint return into two Married Filing Separate returns b Opens a return c Saves a return d Saves Firm and ERO information 3 What information is provided on WK_EIC a A check list for Additional Child Tax eligibility b A check list for EIC due diligence c Calculation used for determining EIC amounts d Calculation used for determining ACTC amounts 4 Which of the following would not be used when electronic filing with Drake Software a Form 8453 b Form 8879 c The signature lines on the bottom of the 1040 d PIN Screen 5 Which pages in view mode of Drake Software would prevent electronic filing a NOTES pages b Form 8879 c Form 8453 d MESSAGES pages 6 Which key combination inserts the current date into a data entry field with Drake Software a CTRL D b CTRL F c ALT D d SHIFT D Drake Software Manual Copyrighted Material 112 2004 DRAKE SOFTWARE 7 True or False A Form 4797 can be created by filling out the date sold the selling price and th
66. e property type on the 4562 screen 8 Automobile expenses are created from what screen in Drake a 4562 d 4797 c AUTO d C 9 Once a W 2 has been entered in Drake how can you create another blank form for a second W 2 a Press Insert b Press Page Down c Press F3 d Press ESC 10 What information is found on WK_ 8812 a Due diligence information for the Child Tax Credit b Due diligence information for the EIC c Calculation for the Advanced Child tax Credit d Calculations for the Child Tax Credit 11 Within Drake Software on the C screen how can I find the business code a You cannot You must check the Schedule C instructions b In the business code field Press Shift c You cannot The client will know the appropriate code d In the business code field press ESC 12 Press F4 from EF gt Search EF Database This gives you access to what information a Taxpayer demographics b Federal Reject Codes c Bank or Direct Deposit Information d Sends you to Your EF Database on support drakesoftware com 13 How can you access blank federal and state forms within Drake Software a From the Menu Bar choose Tools gt Blank Forms b From the Menu Bar choose Setup gt Options gt Blank Forms c You cannot get blank forms within the software d Open a return and enter no information 14 True or False You can email returns inquiries or information to Drake from within the software Drake Software
67. e M 1 Reconciliation of Income M 1 screen Drake 2004 Data Entry 400002223 BEST FOODS INC Schedule M 1 Reconciliation of Income Loss Per Books with Income per Return If the balance sheet s total assets are less than 250 000 Schedules M 1 amp M2 are not required to force them to print enter X here Description Net income per books computed from data below amp line 10 Federal income tax Override Income subject to tax not on books Expenses recorded on books Depreciation but not deducted on the 1120 Contrib carryover Travel entertainment PENALTIES Income recorded on books but Tax exempt interest not included on the 1120 Deductions on the 1120 not Depreciation charged against book income Contribution carryover Page Up for Balance Sheet Screens OR Page Down for M 2 Screen Screen 1 of 1 Press Shift or Right Click for Help SCHEDULE M2 RETAINED EARNINGS Enter M2 in the selector field to open Schedule M2 see Figure 61 on page 98 Enter the following information Line 5 on this screen has a field for the cash amount In the example below you would enter 29015 next to box a Cash Amount Fields Line 5 Distributions a Cash Amount Drake Software Manual Copyrighted Material 98 2004 DRAKE SOFTWARE Figure 61 Retained Earnings M 2 screen Drake 2004 Data Entry 400002223 BEST FOODS INC x Drake Software Manual Copyrighted Material 2004 DRAKE S
68. each page by either clicking on the actual tab or using the arrow keys ENTERING DATA To access a form for data entry double click the form description or type the screen code into the selector field in the bottom left corner of the Data Entry Selection Menu see Figure 15 below To access installed state screens type the state s two letter abbreviation into the selector field Figure 15 Data Entry Selection Menu Drake 2004 Data Entry 400001001 RETURN TEST amp TEST II a Ea x Calc View Print Split Exit Adiustments Credits Name and Address Income Payments Firm DD Direct Deposit Selector Field Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 37 NAVIGATION AND DATA ENTRY Move through the data entry fields on any form e Press TAB ENTER or the Down arrow key to advance the cursor to the next field e Press SHIFT TAB or the Up arrow key to move the cursor back one field e Use the Left Right arrow keys to move the cursor within a data entry field e Press ESC to save and close the data entry screen and return to the Data Entry Selection Menu Program Feature In any data entry field press Shift or right click and select View Help to view field specific information This help is available in any field and often contains selectable options for that field see Figure 16 below On each of the forms screens
69. eference Guides 6 View Drake Tutorials 00 00 0000 7 Program Navigation 0 9 Drake for Windows 0 000 eee eens 9 General Flow of Commands 10 Feat re sh s i dyeditigd moteatea R hehe eed hice oda Ree 12 Program Setup 0 66 6 5 8 css ease eee wie es 19 Firm Sepre ene ios a eee wea ier ea be 19 ERO sii Sede ht end bard pees ed Sat eae 20 Preparer Setup 2 2 2 0 a eee eee 21 Printer Setup 4305 25 seen eke eto eee ee 23 Optional Program Setup 23 Review Questions Part 1 29 Answers Part 1 0 0 2 00 eee eee 30 Drake 2004 Hot Keys 31 Review Questions Part 2 33 Answers Part 2 0 0 00 cece eee eee 34 Return Preparation 006 35 Open a Return 6 kee eee 35 Entering Data 0 0 c eee eee eee 36 Preparing the 1040 Evaluation Return 37 Calculate and Print the Return 67 Return Calculation 0 00 00 eae 67 Print Biles ssc jos beets hier bak essed ahd be goo Sa ee 68 Printed 3503 enir SAS ee a A RS 68 Examining Returns 006 71 Review Questions Part3 73 Answers Part 3 0 0 0 0 0 0 cece eee eee 74 Drake Software Manual Electronically File the Return 75 ERO State ERO Setup 0 005 75 State E Filing 1 0 0 0 0c ccc eee 76 EF Options in Data Entry 78 Messa
70. elow LSSN EIN___ Date Time Name ___ Feed Refund State Refund Type _ Status CORES TEST A YY Ci 400001002 02 18 11 14 RETURN TEST Il O 40000100 02 1811 14 RETURN TESTI amp T SPLIT RETURN O PER Msg A T 0 PER Filing JOINTLY will save 390 Click Print or Press the P key to Print this screen Click Save or Press the S key to Save the MFS returns HINT Select Return s First then Click Save and View Save Select All UnSelect All View Exit Help Print If both returns are saved each time you open the return you choose the MFJ or the MFS format In this case either return can have additional data entered SUPPORT OPTIONS SUPPORT DRAKESOFTWARE COM All Drake clients can take advantage of our online support site Select the Internet Speed Button from the toolbar to log onto support drakesoftware com for access to 24 hour software information including resource links for tax preparers the Knowledge Base and Your EF database see Figure 6 on page 16 Drake Software Manual Copyrighted Material 16 2004 DRAKE SOFTWARE Figure 6 Drake Support Fie Edit view Favorites Tools Help F Welcome to Drake Support Microsoft Internet Explorer DER ar Back g x 2 os Search Sie Favorites 2 2 X z Laas er 33 Address ES http support drakesoftware com tools asp gt Go Links 7 Drake Support ools MyAccount Preparer Site State Support CWU Money Matters Partner
71. eparer Estimated tax E E Print letter E Data Entry E Overpayment code E Fed suppress E a ERO 2210 code X F i State suppress Receipt 2003 Fed tax MSC isc code 1 a Fee Override 2003 St tax E isc code 2 oOo o o Screen 1 of 1 Press Shift or Right Click For Help Our Evaluation taxpayers are William and Amelia Carter from Burlingame CA e They are filing a joint return e They have two children Richard and Carolyn e William receives a salary from two computer jobs e Amelia is the sole proprietor of a bakery Enter the following data in the name and address fields Fields Taxpayer TP Data Spouse Data SSN 400 00 6666 241 41 4441 First Name William Amelia Last Name Carter Carter Date of Birth 5 25 1960 12 18 1962 Drake Software Manual Copyrighted Material 40 2004 DRAKE SOFTWARE Program Features e Pressing Shift in a completed Social Security Number field will produce information about the validity of the entered SSN e Drake Software includes an integrated zip code database To speed data entry on Screen 1 W 2 W 2G 1099 1099G or the Schedule C screens enter the zip code before entering the City and State fields Typing the zip code populates the city state county and resident state fields Fields Data Filing Status 2 Address 14998 New Heights Road Zip 94010 Daytime Phone
72. ethods by pressing CTRL N Copyrighted Material 2004 DRAKE SOFTWARE 113 Figure 3 Heads Down Data Entry Drake 2004 Data Entry 400007000 TEST TEST DEMOGRAPHICS SSN First Name amp MI Last Name Birth Date Taxpayer BEEN Spouse Gimme 4 soe Sa Sa Filing status Dep of another UM NOTE Enter MFS info in Spouse fields Single Resident Address State City city StatQRC 2 i REECE Dm County sch Dist ed Daytime phone MO Evening phone Ei Cell phone EE Email address CAm Occupation Blind Pres Campaign Date of Death Taxpayer O E Em ve EC Spouse Cs O EI vel Ee In Care of i Firm 3 Fed ST Itemized Standard Preparer Estimated tax pann Print letter Data Entry Overpayment code MEOE Fed suppress ERO 2710 ende WITA ma State suppress Receipt Misc code 1 Fee Override EM 2003 st tax Misc code 2 Screen 1 of 1 Press Shift or Right Click for Help EMAILING Use Email to Drake to send and receive emails from within the Drake Software program Some of the benefits of using this utility include e Receive Broadcast emails from Drake These emails provide information on important IRS amp state updates and software changes e Easily attach client files to emails and send them to Drake Support e Use the built in Drake Address Book to quickly and easily send support related emails to Drake To access the email function go to the menu bar select Help gt Email to Drake The email interface di
73. ettings Print bank application when keyed on return Print 9325 when eligible for EF Suppress federal EF Print EF status page State EF Suppress If the box is checked you can list states or suppress all states ERO SSN Indicator Choose from preparer 1 9 paid preparer or none This field selects the ERO for the return The default can be overridden in Data Entry Check for email during EF transmit receive Combine EF steps Select Transmit Post Acks If this option is selected the only screen that needs to be opened on the EF menu is Select Returns for EF After the returns are selected click OK to start the remainder of the EF routine No further steps are necessary Copyrighted Material 28 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 29 Review Questions Part 1 Answer the questions below See Answers Part 1 on page 30 for explanations of answers 1 In Drake Software Setup gt Options what tab would you choose to select a third party designee for all your returns a Optional Items on Return b States c EF d Billing 2 In Drake Software which option on the Setup Menu would you use to indicate a bank for Bank Products a ERO b Pricing c Firm d Macros 3 In Drake Software Setup gt Options which tab would you select to bill by time a Optional Documents b States c EF d Billing 4 In Drake Software Setup gt Options w
74. fic data Type 3506 and enter a telephone number for the child care provider in the appropriate field Now when you view the return it is ready to electronically file to the IRS and to California The MESSAGES page has disappeared All the states operate in a similar manner THE EF MENU SELECT RETURNS FOR EF After the return has been created and calculated without a MESSAGES page it is ready for EF From the Menu Bar go to EF gt Select Returns for EF 1 The Return Selector screen displays see Figure 48 on page 80 A selection window opens listing all recently calculated files that are eligible for electronic filing Use the arrow keys to scroll through the list of returns Click the check box to select or deselect the desired returns 3 After selecting the returns click CONTINUE A report opens listing all returns included in the transmission Select the PRINT option to print the report Click EXIT to close Drake Software Manual Copyrighted Material 80 2004 DRAKE SOFTWARE Figure 48 EF Return Selector E Drake 2004 EF Return Selector SSN EIN Date Time Refund Method EFIN ACK fm 400006666 27181542 CARTER Wi 1040 12383 Mall CA ttt CO 400002223 2 18 11 25 BEST FOODS 1120 O 4000000 28 11 14 RETURN TE 1040 390 DD NEV 111111 CO 400001001 2 18 11 14 RETURN TE 0 DD 111111 x O 400001002 2 1811 14 RETURN TE 0 DD 111111 x Select All OK Exit Help TRANSMIT RECEIVE Transmitting t
75. fication Number assigned by Drake does not enable electronic filing but allows system testing and access to Drake Internet utilities Preparers who are new to e filing must apply to the IRS for an EFIN using Form 8633 The 8633 along with many other forms can be printed in Drake Go to Tools gt Blank Forms single click 8633 and click PRINT To enter ERO information in the software complete the following steps l From the menu bar go to Setup gt ERO The Electronic Filing Setup screen opens see Figure 9 below Enter ERO information A yellow field indicates required information Select the connection settings for the computer Click OK to save and exit Figure 9 Electronic Filing Setup Drake 2004 Electronic Filing Setup DRAKEO4 CFYTAXSETUP ERO Information EFIN 111111 Drake Password j Install Dialer Transmitter Name TEST PERSON tt stst C SO s S S Exit Transmitter Address 200 MAIN STREET City State Zip Code RALEIGH NC 27555 L Federal EIN pzz 2 2X W Telephone Number Connection Settings IRS Direct Filing has been chosen on the modem setup screen Any changes made to your connection settings will override IAS Direct Filing setup 1 J7 Use my DSL Cable or LAN connection Ok 2 Use my dial up connection Za iE Advanced Options 1 Transfer my files using v Ja V My machine uses a firewall use Passive FTP to define port range 1
76. fthe field is marked Adjust indicated by a symbol any data entered in that field will be added to the calculated amount normally associated with that field To reduce an amount in an adjust field enter a negative figure see Figure 36 on page 60 e All other entries are direct no entry made means nothing appears on the form Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Figure 36 Overrides and Adjustments on a state screen Form 58704A Tax on Accumulated Distribution of Trusts E Other taxes and credit recapture Form SE on i Withholding Adjustment a Source MO a Amount FICC CHE EXCE NEIG N sp A E Real Estate Withholding 592 B 593 B or 594 kee eee eee eee are Total SDI VPDI withheld Taxpayer n o M Amount of Overpayment to be applied to 2005 estimated tax D PART YEAR RETURN In the Resident State field of the Name amp Address Screen enter PY for a part year return If questions arise about what options are available for a specific field press SHIFT For those forms corresponding to a particular state 2106 2441 W2 etc enter the appropriate state in the ST field at the top of the screen This prints the state information on the appropriate state form FAQ SCREEN The FAQ Screen for each state is a great resource for federal and state specific information On the Data Entry Selection Menu for the federal or state type FAQ in
77. ges Pages 000 c cece e eens 79 TEE MG HU os 650 osi eare e inn gee 79 Test Transmissions 0000 cece eee 82 Process Acknowledgements 83 Search EF Database 0 000 000s 84 Review Questions Part 4 85 Answers Part 4 0 cece eee ee 86 Business Return 2e0e eee 87 Prepare the 1120 Evaluation Return 87 Review Questions Part5 99 Answers Part 5 poies ge ar ea ee ee eee ees 100 Appendix lt c 25 ooo te ee bee ee es 101 Glossary of Menu Items 104 Valid City Codes 0 000000 005 108 GISSA y 2 6 ose d nn tsi ees has ews aes 109 CPE Exam Jo eases ela ce aes 111 CPE Exam Answer Sheet 115 2004 Evaluation 0 00 00 eee ee 116 Copyrighted Material 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1 Welcome Thank you for taking the time to review the 2004 Drake Software and Evaluation Guide We appreciate this opportunity to familiarize you with our software and its capabilities Drake is a pioneer in the Tax Software and electronic filing industry This year alone Drake filed over 5 million IRS accepted electronic returns If you are not already e filing your client s returns let us help you Electronic filing is FREE for federal and state returns in Drake Software You may also review this guide and receive CPE credits see CPE I
78. h preparer Setup gt Preparers Select Returns for EF Select from a list of calculated returns to create an electronic transmission file EF gt Select Returns for EF Setup New Checks Enter check range when new checks are received from bank EF gt Check Setup gt Setup New Transmit Receive Connect and transmit return EF gt Transmit Receive Unlock Client Files If a file has been locked use this option to unlock and edit the return Tools gt File Maintenance gt Unlock Client Files Update 2003 to 2004 Update the previous year s client data Last Year Data gt Update 2003 to 2004 Update Config 2003 2004 Bring forward last year s setup e g firms Last Year Data gt Update preparers pricing macros etc Config 2003 to 2004 View View the forms generated for a return File gt View Returns Void Unused Check Void checks in the system that have not been printed EF gt Check Setup gt Void Unused Check Drake Software Manual Copyrighted Material 108 2004 DRAKE SOFTWARE VALID CITY CODES When entering city returns the following codes are used to access city screens Type the two letter code in the selector field DE NY MI MO e WM Wilmington NY New York City AC Albion e KC Kansas City e YO Yonkers e BC Battle Creek e SL St Louis e BR Big Rapids e DT Detroit FT Filint e GC Grayling
79. he Not a Dependent HOH Qualifier 5 above the default is Other Dependent Screen 1 of 2 Press Page Down for a new screen Press Shift or Right Click for Help Press ESC to return to the Data Entry Selection Menu Once again type 2 in the selector field to open the Dependent screen When there are multiple screens entered they display in an Existing Forms List see Figure 22 below Select an existing form to edit or select New Record Figure 22 Existing Forms List Existing Forms List 1 CAROLYN 239211123 DAUGHTER l2 07111995 3450 2 RICHARD 245622235 SON l2 12181984 New Record Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE ENTERING WAGES W 2 To open the W2 screen type W2 in the selector field and press ENTER see Figure 23 on page 44 In the first field of the W 2 screen enter T for taxpayer or S for spouse After tabbing to the next field the corresponding taxpayer or spouse information is populated in the Employee Name Address fields Remember help is available in each data entry field Press Shift to access detailed information for individual fields Program Feature Drake Software offers an Employer Identification Number Database Each time a recognized EIN is entered on a W 2 1099 or 2441 the business name and address populates When entering wages notice Drake Software populates boxes 3 6 and 16
80. hich tab would you select to adjust the sales tax on your bill a Optional Documents b States c EF d Billing 5 In Drake Software Setup gt Options which tab would you select to print the taxpayer s phone number and or the current date on tax return a Optional Items on Return b States c EF d Billing Drake Software Manual Copyrighted Material 30 2004 DRAKE SOFTWARE ANSWERS PART 1 1 The correct answer is A Optional Items on Return Use the Third Party Designee drop down box to select which preparer will be the third party designee for all returns An override is avail able on screen 5 B is incorrect The States Tab contains customization options for each state C is incorrect The EF Tab contains options available for electronic filing You can select to suppress individual states combine the EF steps and several other EF related options D is incorrect Enter sales tax amount choose a billing format select to show bank fees on bill and other billing related options on the Billing Tab The correct answer is C Firm Go to Setup gt Firm and select your firm Click EDIT FIRM On the right side of the screen select the bank used for bank products from the drop down box A is incorrect Setup gt ERO is used to enter information about the ERO and to indicate the connection settings used during the electronic filing process B is incorrect Set pricing for forms and schedules in Setup gt Pric
81. his screen then the Direct Debit will not be allowed New Record Press Shift or Right Click for Help BANK PRODUCTS Bank products are available through Bank One HSBC Republic Bank or Santa Barbara Bank amp Trust Indicate the bank you use for bank products in Setup gt Firm see Figure 40 on page 63 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 63 Figure 40 Setup gt Firm Banking Section Banking Select Bank B1 BankOne Zi RAL Prep Fee lo Bonu Prep Fee 0 State Bonu Prep Fee in Electronic Filing Fee Once a bank is selected the corresponding screen is activated Enter bank information on the B1 HSBC RB or SB screen see Figure 41 below Review the screen It is not necessary to enter Bank data for the Carter s return Figure 41 Example Bank Screen Bank One B1 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Bank One RAL BONU Information E RAL Refimd Anticipation Loan W Bouf check when IRS direct deposits the money GMB Add state Borm to the RAL or the federal Bonu GEE Override the loan amoumt for a RAL GE Preparer tax preparation fees to be WITHHELD from proceeds N Preparer electronic filing fee to be WITHHELD from proceeds E Preparer fees for STATE Borm to be WITHHELD from proceeds Ss Dae that the RAL application was signed Birth date Daytime phone Evening phone as Taxpayer ME Spouse EE oe Ea Type I
82. i Show Users e Hash Totals hee Setup Wizard Cale lt ADMIN gt Update Profile Equipment e Printer Setup e Modem Setup PDF Printer FEATURES Drake Software offers numerous value added features to enhance and simplify tax preparation The software is designed to ease the return preparation process In addition to the program resources highlighted below the program boasts the following convenient features Information flows to related forms automatically e Message pages display errors or alerts that will prevent successful e filing and or possible IRS rejection e Zip Code and Employer Identification Number databases speed data entry for several key forms Drake Software Manual Built in calculator is accessible in any data entry screen by pressing F10 Blank forms are available to view or print Unformatted worksheets are available by pressing CTRL W in any numeric data entry field Calculate amortization or search Drake s stock index from within the Tools section of the menu bar HEADS DOWN DATA ENTRY Drake Software enables users to enter data by keying it directly into screens or using the Heads Down Method The Heads Down Method uses field codes that correspond with Proformas your clients can prepare during an interview see Figure 3 on page 13 This option is a great time saver as it allows data to be gathered by a tax professional and entered by a data entry operator Toggle between data entry m
83. ield and press ENTER see Figure 26 on page 48 Enter the following account interest for the Carter s return TSJ Field J Drake Software Manual Copyrighted Material 48 2004 DRAKE SOFTWARE Fields Data Name of Payer CCB Interest Income 657 Press ESC to return to the Data Entry Selection Menu Dividend Income is entered in the same manner as Interest To open the Schedule B Dividend Screen select DIV Dividend Income on the General Tab or enter DIV in the selector field Figure 26 Interest Income Int screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Schedule B Interest Income 1099 INT tal Er Est HB crm Use DIV screen for dividends Name of payer Interest income not including US Government Early withdrawal penalty US Government interest Federal tax withheld Amount of line 1 above that is Resident state municipal interest Other state municipal interest Nominee interest Accrued interest Other tax exempt interest Tax exempt interest from PAB after 8 7 1986 Foreign acct OID interest Adjustment question on Amortizable bond premium Adjustment MIS2 screen Seller financed mortgage interest Payer SSN Hs Payer address Amount of Tax Exempt Interest that is subject to AMT MASSACHUSETTS bank interest OKLAHOMA bank interest Extra tax withheld State tax withheld on this 1099 INT ID Number for use by MI MN amp NH
84. ing The amounts entered here are used to populate the client bill D is incorrect Macros are short cuts used to speed up data entry Go to the Setup gt Macros to create customized macros The correct answer is D Billing Use the Billing Statement Format drop down box to select Bill by Time from the list of billing options A is incorrect Use the Optional Documents Tab to setup the referral coupon dollar amounts and the quantity to print per return B is incorrect The States Tab contains customization options for each state C is incorrect Select to turn on various EF features on the EF Tab including Require Ready for EF Indicator on EF screen and Lock Client Data File after EF Acceptance The correct answer is D Billing Enter the amount of tax to charge in the Sales Tax field A is incorrect The Optional Documents Tab is used to select specific items to print with returns or select the result letter to print B is incorrect The States Tab contains customization options for each state C is incorrect Select the EF Tab to receive Service Packs during the EF transmission You can also select to download email when you e file on the EF Tab The correct answer is A Optional Items on Return Check the corresponding box to turn this fea ture ON B is incorrect The States Tab contains customization options for each state C is incorrect Go here and select to receive Service Packs during the EF
85. ional SSS SSeS SSS SSS City optional Hee r M o ee Check Applicable Boxes Ed This is a PASSIVE activity no material participation B If so any PRIOR passive loss carryovers This is a NOT AT RISK investment If so any PRIOR mallowed AT RISK loss carryovers W The activity was disposed of during taxable year W This is a publicly traded partnership Ed This partner is a limited partner W Forei Partnership Amounts From K 1 A Ordinary income loss GER keral Real Estate Inc ME Other rental inc loss EES Gusrarteed payments GEE terest Income EEE Ordinary dividends MEE ual i fied dividends EEE Royalties MEE ST Capital gain loss MEE LT Capital gain loss GEE Col ectibles 283 g l MB Net 1231 gain loss Amount Code Other Inc Loss a a as E GEE Section 179 deduction l TT Tr m Hiii S m w TTT THT i zB g 4 z 1 2 3 4 5 6a 6b 7 8 9a Sb 10 Altemative minimm tax items H H kif Tax exempt inc duct expenses F 3 ALLE SEEB208 HEE Press Page Down for a new screen State Tax Withheld State Distributions N Section 179 Recapture N hited States Interest Press Shift or Right Click for Help ENTERING ESTIMATED TAXES To override the system s automatic calculations and enter estimated taxes type ES in the selector field to open the Estimated Taxes screen see Figure 34 on page 58 This screen is divided into columns and sections 2004 Estimated Taxes Paid and
86. it the file to Drake by selecting EF gt Transmit Receive on the Menu Bar Drake posts test acknowledgements T when the transmission is received 6 Select EF gt Process Acks on the Menu Bar Print the acknowledgements if desired See Process Acknowledgements below Test transmissions through Drake do not receive an additional IRS acknowledgement The T acknowledgement indicates the transmission was successful PROCESS ACKNOWLEDGEMENTS Every successfully transmitted tax return receives an acknowledgement EROs transmitting through Drake receive e Processed acknowledgements to indicate the transmission was received T for test transmissions P for live transmissions Federal acceptance or rejection acknowledgements State acceptance or rejection acknowledgements when a state return is electronically filed Bank acknowledgements to indicate when a bank product has been accepted or rejected Any available acknowledgements are received when the ERO connects to Drake whether transmitting files or not To process and print acknowledgements select EF gt Process Acks on the Menu Bar The acknowledgement report displays e Social Security Number of primary taxpayer Document Control Number DCN of the transmitted return Refund due on the return Acceptance rejection code Number of errors recorded Two letter state code for the state return When the acknowledgements are processed they move to the EF Databa
87. ld care expenses again Drake Software Manual Copyrighted Material 72 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 73 Review Questions Part 3 Answer the questions below to answer these questions you must have completed the practice returns referred to in Examining Returns on page 71 See Answers Part 3 on page 74 for explanations of answers 1 In return 400008001 why have we calculated a Child Tax Credit of 166 a Examine Form 8812 calculations line 13 reads 166 b Examine Form 1040 line 49 c Examine WK_ 8812 lines 1 11 d You cannot tell why from the forms produced 2 What form must be completed for due diligence and saved for each taxpayer qualifying for EIC a Form 8812 b Form WK_ 8812 c WK_EIC d Form 8867 3 Inreturn 400008003 why is there an EIC of 1 355 a Examine the calculations on Form 8812 b Examine the calculations on Form 8867 c You cannot tell from a form produced with the software d Examine WK_EIC 4 In return 400008003 why is there 2000 of Additional Child Tax Credit and 693 of Child Tax Credit a Examine Form 8812 and WK_ 8812 b Examine the EIC Form and WK_EIC c Examine Form 8812 and Form 8867 d Examine Form 2441 and Form 8812 5 What two screens in the software must contain the Child Care expenses a Screen 1 and 2441 Screen b Screen 2 and 2441 Screen c Screen 3 and the MISC Screen d Screen 1 and Screen 2
88. lear BBS files Delete BBS files after they are installed Tools gt File Maintenance gt Clear BBS Files Client Reports Generate reports based on default or user identified criteria Reports gt Reports gt Standard or Custom Colors Edit default colors displayed on screen Setup gt Colors Copy EF Returns to Disk Copy print files of calculated returns from the hard drive to a disk EF gt Copy EF Returns to Disk Copy EF Returns from Disk Copy print files of calculated returns from a disk to the hard drive EF gt Copy EF Returns to Disk Delete Client Files Permanently delete client files Tools gt File Maintenance gt Delete Client Files Delete Print Files Delete the temporary print files that are created when returns are calculated Tools gt File Maintenance gt Delete Print Files Depreciation List Print a list of client s depreciable assets Reports gt Depreciation List Directories Paths Set up CD drive letter drive location of current year last year s files and shared drive letter for peer to peer networks Setup gt Directories Paths Download Fonts Copy Softfonts which are necessary to print tax forms to the printer This must be run each time the printer is turned off Tools gt Download Fonts Edit EIN Database Edit specific employer information in the EIN Database Tools gt Edit EIN Database EF Reports
89. lector field and press ENTER see Figure 29 on page 52 When entering child care expenses make sure the expense amounts are listed on BOTH the Dependent Screen and the 2441 Screen Fields SSN EIN 587999556 Drake Software Manual Copyrighted Material Screen 1 of 1 2004 DRAKE SOFTWARE Fields Data EIN X Provider s Name Short Stuff Academy Address 5788 Elm Street Zip 94010 Amount 3450 Press ESC to return to the Data Entry Selection Menu Figure 29 Child amp Dependent Care Expenses 2441 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 2441 Child Dependent Care Expenses Provider s information 556 Ed EN SHORT STUFF ACAD ELM STREET BURLINGAME au E rn eT E N Amount Carryover amount of 2003 paid in 2004 Complete the info for Name SSN and Amoumt ONLY if you have a carryover Name of qualifying person 55N of qualifying person Enmployer provided dependent care benefits in 2004 Amount forfeited if any Amount of qualifying expenses incurred in 2004 Earned income for 2441 purposes ONLY Amount of line 14 that is from your sole proprietorship or Partnership Press Page Down for a new screen Drake Software Manual Create STM 47 to explain computation Press Shift or Right Click for Help Copyrighted Material 2004 DRAKE SOFTWARE ENTERING OFFICE IN HO
90. led to you Please Print All Information Clearly Circle the designation that applies to you CPA PA Enrolled Agent Tax Practitioner Attorney Other Your Name Mr Mrs Miss Ms EFIN CTEC for CA Email Phone Firm Name Address City ST Zip Regarding Content and Media please circle Yes or No e Ifapplicable were prerequisites appropriate Yes or No e Were the handout or advanced preparation materials satisfactory Yes or No e Was the time allotted to the learning activity appropriate Yes or No e Were the stated learning objectives met Yes or No e Were program materials accurate Yes or No e Did the Evaluation Guide and Software contribute to the achievement of the learning objectives Yes or No Comments To receive your CPE certificate you must sign this form Your signature Your Name please print A Course Report and Student List for this Evaluation will be submitted on the 15th of each month to www ctec org Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE A Adobe Acrobat Reader Installation 6 Amended Returns 64 Appendix 101 Bank Products 62 Billing Tab 26 Business Return 87 1120 preparation 87 Form 4562 Depreciation 93 Income 89 Loss Carry Forward 96 Per Books with Returns 96 Schedule A Cost of Goods Sold 90 Schedule E Compensation of Officers 91 Schedule K Other Info 92 Schedule L Balance Sheet 89 Schedule M1 Recon
91. lient is Best Foods Inc which was incorporated in GA on 01 01 1986 The calendar year for the corporation ends 12 31 2004 Type all numbers without dashes unless the number is negative slashes dollar signs or commas Enter the following fields and press ESC Fields Data Address 4554 Middle Road Zip 30525 Figure 51 1120 Corporate General Information screen 1 Drake 2004 Data Entry 400002223 BEST FOODS INC Corporation General Information Co Name Care of Address city County 1 2 3 Resident state PEET Misc code 1 Ce i c code 2 CO Phone o ceip Preparer fee Consolidated return Firm Personal Holding Company Preparer Personal Service Corp Data entry op E Employer I D number Signature date Date incorporated MMDDYYYY State of incorporation If Not calendar year Check applicable boxes Fiscal yr begins Initial return Fiscal yr ends Final return Name change May IRS ST discuss return Change in address u preparer Yes W no E Force 11204 Calculate Form 2220 penalty Page Down for Additional State Information Screen 1 of 1 Press Shift or Right Click For Help Drake Software Manual Copyrighted Material 88 2004 DRAKE SOFTWARE SCREEN 2 STATE GENERAL INFORMATION Enter the following data on Screen 2 and press ESC when finished Tax W H Acct 417 02 00012222 Sales Tax 0754474 38 Figure 52 General Information screen
92. n eeanan Supplies eaaa anane ess Depreciation Adj as Taxes and licenses Employee benefits BEEM Travel a TMsurance mee eee eee Meals amp entertainment MEMME Interest mortgage pe Utilities Interest other a3 Wages Legal prof sves ae All investment is at risk x W Office expense as Some is NOT at risk ix E Part III Cost of Goods Sold Inventory valuation method Cost Ed Lower of cost or market Wother W thangeri nitua thin a A S eicteiore T N T Yes W m E Beginning inventory Purchases personal Cost of labor Materials supplies Asystem computes mileage rate X a Date placed in service mee Business miles Other costs eer Commuting miles _ Ending inventory a Other miles a Part V Other expenses Yes No cree Another veh available w E SEES IOE Available when off duty W E Ss i You have evidence E E It is written E E C e n Suppress Schedule C EZ ix E SEI HRS MEM Business disposed of in 2004 X W ior unalloved passive ri WEE Family Health Coverage Screen 1 of 1 Press Page Down for a new screen Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 50 Enter the following additional information on Schedule C for Patty Cakes Expenses Data Cost of Goods Sold Data Advertising 480 Inventory Valuation Method Cost Insurance 400 Beginning Inventory 2578
93. ncorrect CTRL F is used to force an entry in a field in data entry C is incorrect CTRL S is used to split a MFJ return into two MFS returns allowing you to compare the differences D is incorrect CTRL N enables the Heads Down Method The Heads Down Method uses field codes that correspond with Proformas you can prepare during an interview The correct answer is D Yes CTRL S Use this Hot Key to split a MFJ return into two MFS returns allowing you to compare the differences A is incorrect With Drake Software CTRL S enables you to split the MFJ return B is incorrect CTRL F is used to force an entry in a field in data entry C is incorrect Use CTRL W in any numeric field to access an unformatted schedule The correct answer is C With your cursor in the data entry field on a Drake Screen press CTRL W Key this shortcut in any numeric field to access an unformatted schedule A is incorrect CTRL F is used to force an entry in a field in data entry B is incorrect With Drake Software you can use CTRL W in any numeric field to access an unformatted schedule D is incorrect ESC is used to save and exit to the Data Entry Selection Menu The correct answer is C ESC This Hot Key is used to save a data entry screen and return to the Data Entry Selection Menu A is incorrect Use CTRL W in any numeric field to access an unformatted schedule B is incorrec
94. nd the calculation total transfers to the Data Entry field where the cursor is located To turn on the calculator F10 Press F10 to activate the calculator To turn off the calculator ESC To deactivate the calculator without inserting data in a field press ESC on the keyboard or the ESC Quit tab on the screen Drake Software Manual Copyrighted Material 104 2004 DRAKE SOFTWARE FREQUENTLY USED CODES FOR DATA ENTRY Field Code Application TS or TSJ T Data is assigned to the primary taxpayer TS or TSJ S Data is assigned to the spouse TS or TSJ J Data is assigned to both the taxpayer and spouse F Blank or 0 zero To exclude data from the federal return enter 0 zero ST State Code If a State return is being prepared enter the appropriate two letter state code postal service abbreviation If the field is left blank the program defaults to the resident state ST 0 zero To exclude data from any state return ST BM When preparing multi state returns use PY as the resident state code on Screen 1 Do NOT use PY on any other screen C City Code When preparing city returns enter the appropriate city code to indicate the source of income Multiple Form Code 1 99 When preparing Form 4562 depreciation indicate the appropriate schedule for the depreciated item and indicate where the information should be carried when there are multiple schedules GLOSSARY OF ME
95. nformation on page 3 for details Upon completion of this Evaluation Guide you will be able to e Navigate Drake Software e Prepare a basic 1040 and 1120 return e Examine returns E file returns If you have any questions about the 2004 Drake Software please feel free to contact your salesperson at 1 800 890 9500 or our courteous and knowledgeable support staff at 1 828 524 8020 This Evaluation CD contains e A complete copy of the 2004 Drake Software e All state programs e Computer based tutorials e Practice returns and solutions in PDF format e 2004 Drake User s Manual in PDF format e 2004 Drake Business Package Manual in PDF format We are proud to offer our tax preparation software as one complete suite e Tax preparation software for Forms 1040 1065 1120 1120S 990 706 709 and 1041 e State personal and business tax preparation packages e Electronic filing e Bank products e Blank federal and state forms for viewing and printing e Online CCH Master Tax Guide Plus e Many other features Drake Software Manual Copyrighted Material 2 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 3 CPE Information No prerequisites are necessary to participate in this self study distance learning overview course There is no charge to participate in this program and no refund policy To receive CPE credits 5 NASBA credits or 3 Federal 0 State CA CTEC credits install the Drake Ev
96. ng through Drake and has returns for more than one IRS Service Center all the returns can be filed in the same batch without changing the processing site Drake separates the returns and sends them to the correct IRS Service Center Returns with bank products multiple state returns to different IRS Service Centers and Direct State returns must be E filed through Drake To apply to the IRS to become an ERO file form 8633 This form can be found online at irs gov or in the software Tools gt Blank Forms gt Select 1040 gt 8633 and 8633 PG2 Mail this completed form with a fingerprint card to the Internal Revenue Service Andover Campus Attention EFU Acceptance Testing Stop 983 PO Box 4099 Woburn MA 01888 4099 Call the IRS 1 866 255 0654 or Drake Support 1 828 524 8020 to obtain a Fingerprint Card In addition some states require the IRS acceptance letter or a special application before you can electronically file to their state Please refer to the chart below for state application requirements The taxpayer does not sign the bottom of page 2 of the 1040 when electronically filing the return The signature page for electronic filing is either the 8879 to send an electronic signature or the 8453 which must be mailed to the applicable IRS Service Center within 3 business days after the ERO has received acknowledgment from the IRS that the return has been accepted The 8879 must be signed by the taxpayer BEFORE
97. nt for state refund o Taxpayer s prior last name if different Proof of account Other i Next Gen Account Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 62 2004 DRAKE SOFTWARE PAYMENT Use the PMT screen to pay the tax due amount through automatic withdrawal from the taxpayer s bank account see Figure 39 below Enter the taxpayer s electronic funds withdrawal information After completing the screen press PAGE DOWN to rekey the information Do not use this screen unless the return will be filed electronically Use the SPMT screen for the following states only AZ CA CT DE IL KS KY LA MA MD ME MN MT NE NJ NM NY OH OK PA SC VA WI and WV Not all states allow electronic payments for taxes due Review the screen It is not necessary to enter Payment data for the Carter s return Figure 39 Payment PMT screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA PMT Electronic Funds Withdrawal Information Note This screen can be used ONLY if the return is to be e filed Routing transit number Bank account number Type of account Amount of payment Requested payment date Daytime phone number Payment is for z 1040Es 709 w 4868 Reserved W Press Page Down and rekey the information If the information provided on the second screen does not match the information on t
98. nual Copyrighted Material 2004 DRAKE SOFTWARE Refer to the following lists of Menu options Copy EF Returns_from Disk FILE EF TOOLS e Open Returns Select Returns for EF Install Updates e Calculate Transmit Receive Download Fonts e Print Process Acks Blank Forms e View Check Print Repair Index Files e Pre Prepared Entry Check Setup File Maintenance e Quick Estimator e Setup New e Backup e Exit Void Unused e Restore e Logout Preparer Check Register e Change SSNs on File Search EF Database e Clear BBS Files Copy EF Returns to Disk e Export Client EF Data e Password Protect Files e Unlock Client Files e Delete Print Files e Delete Client Files e Change File Type e Quick Books Import Letters e Letters e Mailing Labels Envelopes e Postcards Amortization Edit EIN Database Stock Search Scheduler Drake Software Manual Copyrighted Material 12 2004 DRAKE SOFTWARE REPORTS LAST YEAR DATA SETUP HELP e Reports e Organizers Options CCH Tax Research e Standard e Proformas Firm s Drake Software Help Reports e Update 2003 to ERO Setup E Mail to Drake Custom Report 2004 Preparer s Tutorial Editor Build EIN Name Pay Per Return Support Info Review Reports from 2003 Directories Paths Check Installation e Depreciation List e Update Config 2003 Pricing Copyright Notice a Asset EON Macros Show Setup Ber Letters lt ADMIN gt e Filled in Screens 3 Teteh
99. o the CD drive Open the Drake program Go to Help gt Tutorial Select the drive letter of your CD drive from the drop down box If prompted click RUN Click a CBT from the list to begin OS AO ee ee To exit the tutorial any time during the presentation press ESC Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 9 Program Navigation Learning to navigate the program before tax season saves time and frustration Use this section to become acquainted with Drake Softwares menu structure DRAKE FOR WINDOWS The navigation choices when using Windows include the mouse toolbar and the computer keyboard MOUSE Left mouse button Move the pointer over an item and click the left mouse button to select that item Right mouse button During data entry right click the mouse outside of a field to display a menu of common program functions or right click in a data entry field to cut copy paste or view help TOOLBAR Speed Buttons are located under the menu bar on the toolbar Speed Buttons are shortcuts to maneuver through the program quickly Different areas of the program are associated with different Speed Buttons e Open Open or create a new return e Calculate Perform a batch calculation e Print Print a return or returns from the return selector View View a return or returns from the return selector Internet Launch your internet browser to support drakesoftware com
100. one or more forms including the entire return and sets e Double click to select a form e Use the up down arrow keys and SPACE BAR to select multiple forms to print When the desired forms are highlighted click PRINT or press ENTER e Select the appropriate printer and click PRINT e Click PRINT SETS to open the Print Sets dialog box Select the sets to print by checking or unchecking the Print Set boxes with a mouse click When the correct sets have been checked click PRINT or press ALT P e Use the Classic Mode check box to select the number of each form to print using the and keys The number chosen for each form is saved Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Figure 46 Print Mode Drake 2004 Print Mode 400006665 69 2 am A Mh hh mh x F1 Help Print Sets Classic F2 All F3 Clear CA38854 1045 PG2 CA38854 FOLDR CACA WK_REF CAW EFSTATUS CA540 WK_EIC2_ 9325 SUMMARY 8453 BILL 4562 LETTER 8829 PRIVACY 3903 WK_8812 EPG2 WkK_AUTO WK_AUTO WK_CARRY DEPR SCH SALESTAX DEPR SCH V2_LIST CA8453 WWK_NOL Drake Software Manual F5 Fed F6 State F7 Misc Copyrighted Material 70 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 71 Examining Returns Now that you have completed a return try entering a few more In the PDF folder on this CD open the folder Data Entry if necessary see Adobe Acrobat Re
101. onth placed in service Force convention Do not use MACRS tables If Sold Date sold Sales price Expense of sale Property type 4797 field 1 4797 field 2 Group sale mmber Group sales price Recapture Date Drake 2004 Data Entry 400002223 BEST FOODS INC 1120 F 1 99 1 is assumed if left blank Recapture because Business use dropped to 50 or less Drake Software Manual Press Page Down for a new screen Used Listed Y 8 7 Mif Press Shift or Right Click For Help Copyrighted Material 96 2004 DRAKE SOFTWARE LOSS SCREEN LOSS CARRYFORWARDS FROM PRIOR YEARS Enter LOSS in the selector field to enter the information below see Figure 59 below NOL Unused for Year 2002 13603 NOL Unused for Year 2001 0 Figure 59 Loss Carryforwards LOSS screen Drake 2004 Data Entry 400002223 BEST FOODS INC Press Shift or Right Click for Help SCHEDULE M1 RECONCILIATION OF INCOME Enter M1 in the selector field to open the Schedule M1 see Figure 60 on page 97 Line 5 on this screen has a blank field for description entries In the example below you would enter Penalties in that box and 1184 in the amount field next to it Table 1 Fields Line 5 Expense Item Box Penalties Line 5 Amount Field 1184 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 97 Figure 60 Schedul
102. reciation percentage or date placed in service percentage will be automatic Depreciation allowable If you do NOT want personal portion of interest and taxes to carry to Schedule A x E Indirect Trt te tc ke C aes ee eee ES Sasa ee ee E Screen 1 of 1 Press Page Down for a new screen Press Shift or Right Click for Help ENTERING MOVING EXPENSES FORM 3903 During the last year the Carter s moved to a new location because Bill changed jobs To open the Moving Expenses screen type 3903 see Figure 31 on page 55 Enter the following moving expenses on the 3903 Screen Fields Data Miles from Old to New 125 Miles from Old to Old 14 Transportation amp Storage 5400 Travel amp Lodging 58 Amount Reimbursed 95 Press ESC to return to the Data Entry Selection Menu Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 55 Figure 31 Moving Expenses 3903 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Form 3903 Moving Expenses a Number of miles from OLD residence to NEW workplace Number of miles from OLD residence to OLD workplace Transportation amp storage of household goods amp personal effects Travel amp lodging expenses incurred during move Amount of moving expenses reimbursed by employer If military move If this is a move into a city that will allow the moving expenses to be deduc
103. reen of return data entry for the SSN EIN displayed Search EF F9 Go back to Search EF Database while in the return WEB F10 e Connect to Your online EF Database to check the most current information available from the Service Centers e View pending Bank State and Federal Information about one or multiple clients e View reports of your EF information for the current tax season Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 85 Review Questions Part 4 Answer the following questions See Answers Part 4 on page 86 for explanations of answers 1 To become an ERO which of the following is NOT true a Contact the IRS at 1 866 255 0654 and ask to be added to the ERO list b Request and complete a fingerprint card c Send a completed 8633 to the IRS d Send the fingerprint card to the IRS 2 To electronically file returns to the state of Wisconsin what must an ERO do a Nothing b Fill out the Wisconsin application and submit to the state c Send the ERO acceptance letter from the IRS to the state of Wisconsin d Call the Wisconsin DOR and request to be placed on their ERO approved list 3 True or False When a PIN screen is completed a Form 8879 is generated and signed by all parties and sent to the applicable IRS Service Center within three business days of the IRS acknowledgement 4 Ifareturn is electronically filed without a PIN what must happen a You cannot elec
104. required for electronic filing Penny rounding prints penny amounts on all forms Billing Tab Click the corresponding check box to turn a feature on Drake Software Manual Print taxpayer s SSN on bill Show RAL preparer fees as withheld on bill Show bank fees on bill Sales Tax Sales tax percent to add to client statement Enter a number greater than 1 For example 4 5 would represent a sales tax rate of 4 5 Billing statement format Select a statement option Show forms form prices and total Show form list and total Bill by time or Do not prepare bill Header on Bill Show preparer s name Only show tax year Professional services statement or None Copyrighted Material 2004 DRAKE SOFTWARE 27 States Tab There are specific options available for some states Select the state from the drop down list and select the options that apply Set up each desired state separately EF Tab Click the corresponding check box to turn a feature on Drake Software Manual Print 8453 or 8879 if using PIN when eligible for EF Require PIN screen 8879 on all EF returns Require Ready for EF indicator on EF screen Lock client data file after EF acceptance Log in as ADMIN to edit unlock a file that has been transmitted and accepted Allow preparers the same ability by giving them access to Tools gt File Maintenance gt Unlock Client Files in their security s
105. s 538920 Enter the above data on screen 3 and press ESC when finished see Figure 53 below Figure 53 Income and Deductions screen 3 Drake 2004 Data Entry 400002223 BEST FOODS INC Income amp Deductions Income la 1b 10 Gross receipts or sales Returns amp allowances Interest income Gross rental income Gross royalty income Other income Deductions ily 13 14 15 16 Lz 18 19 19 20 21a Screen 1 of 1 officer compensation 2 Salaries amp wages Repairs amp maintenance 23 Advertising Bad debts 24 Pension plans etc 25 Emp benefit programs Depletion Taxes amp licenses Interest expense 26 Gross meals ent exp 26 Bond Repurchase Prem Contributions 26 Other deductions Contr carryovers 29a NOL carrybacks Depreciation adj Key NOL CarryFORWARDS on LOSS Screen Depreciation on Sch A Press Shift or Right Click For Help SCHEDULE L BALANCE SHEETS ASSETS Type L and press ENTER to access the Schedule L see Figure 54 on page 90 Enter the following data and press ESC Press PAGE DOWN to access more of the screen or to access a new screen Fields Beginning a Beginning b End of Year End of Year c d Cash 6712 44576 Trade Notes amp Accounts 0 123 356 Receivable Other current assets 2860 1421 Loans to shareholders 19163 19163 Drake Software Manual Copyrighted Material 90 2004 DRAKE SOFTWARE
106. s eneen aeae Reanna 2 Amounts as on ORIGINAL Retum Adjusted Gross Income 695 Amounts paid with 4868 Ea Dede toms enone Ean Amounts paid w retum D Overpayment Refmd appl to 20 m Credits Other taxes Fed income tax withheld Estimated tax paid Earned Income Credit Additional Child Tax Cr Credits for fuel etc Part I Exemptions Complete ONLY IF NUMBER OF EXEMPTIONS has changed MOLE L Ep eral use yay races ajar stereielateraysieisiecsie avcleyaistaiciate Children who lived with you lk e eee eee eee a Children who did not live with you Other dependents Exemption amount Sis ws ate 12400 Complete this part ONLY for children not reported on original retum Dependent Name Age SN Relationship in home ee Oe i eT eS eee COC A M M E A A M If child did not live with you but claimed under a pre 85 agreement ff Part II Explemation of Changes to Income Deductions and Credits If change relates to a NOL or general business credit carryback ix ff Part III Presidential Election Campaign Fund If you did not want 3 to go to Presidential fund but do now x ff If spouse did not want 3 to go to Presidential fund but does now x ff New Record Press Shift or Right Click for Help Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 65 FILING AN EXTENSION Use the EXT screen to file an extension see Figure 44 below Only one extension can be generated at a time If Form
107. s for easier viewing English Use 25 row screen size for 50 row screens Sch C 1099 etc Language for field specific help in data entry M Use grid data entry format for select screens Diy Int 4562 etc English X Letter case for data entry Upper Case X V Tab to zip code field skip city state and use zip code database J Show reminders to preparer when opening a return Display formatting in SSN EIN Date Phone and Zip fields The following options are available Data Entry Tab e Enlarge data entry screens for easier viewing e Use 25 row screen size for 50 row screens Sch C 1099 etc e Use grid data entry format for select screens DIV INT 4562 etc e Tab to zip code field skip city state and use zip code database e Show reminders to preparer when opening a return e Display formatting in SSN EIN Date Phone and Zip fields e Language for menus and data entry screens Select English or Spanish e Language for field specific help in data entry Select English or Spanish e Letter case for data entry Select Upper Case or Mixed Case Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 25 Calculation and View Print Tab Auto calculate tax return when exiting data entry Display client fee on calculation screen Print only one overflow statement per page Go directly to form when accessing View or Data Entry Mode Audible notification of calculation error me
108. sage board setting Join discussions Get more from Support Learn more v a and field questions regarding tax issues Menu ready for use Internet ONLINE STATE SUPPORT The Online State page is available through support drakesoftware com enabling the search of state specific questions including reject codes exclusions state instructions and e filing explanations and instructions Select State Support gt States Database from the menu bar CCH Go to Tax Help on the toolbar to access CCH All Drake clients receive access to the online U S Master Tax Guide Plus from CCH Incorporated This product features a comprehensive online tax information library which includes the following U S Master Tax Guide Internal Revenue Code Revenue Rulings IRS Publications IRS Announcements IRS Notices and U S Tax Cases Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 117 SOFTWARE UPDATES Before downloading updates go to Setup gt Update Profile Program and 1040 package updates always download but you must select the desired business packages to download and update Also a list of states installed appear in the left hand column of the screen Highlight to select the states you wish to install updates for or click SELECT ALL The states move to the right hand column of the screen and those states will be updated along with your federal selections You may also make selections to automate the update
109. se for future reference The EF Reports utility can pull information from this database Drake Software Manual Copyrighted Material 84 2004 DRAKE SOFTWARE SEARCH EF DATABASE The EF database contains information about all returns that have been electronically filed A return that has been filed more than once has more than one record OPEN A RECORD IN THE EF DATABASE ae Se E Select EF gt Search EF Database on the Menu Bar Type the SSN of the primary taxpayer without spaces dashes or additional characters Press ENTER or click OK in Windows Use PAGE UP and PAGE DOWN to access additional records for a taxpayer The Main screen of the record opens There are six separate screens available for viewing with the following information on each screen l SD Main screen F1 e Taxpayer information e Federal and state acknowledgement codes e Acknowledgement dates e Transaction date e Filing status Refund amount or balance due e Reject codes e Bank codes and loan status e Bank check information Bank DD Info F2 e Detailed loan information e Direct deposit information e Document Control Number Fees Errors Miscellaneous F3 e Earned Income Credit EIC e Adjusted Gross Income AGI e PINs firm number preparer number ERO number e Bank distribution fees Reject F4 Enter and view the reject code description and solution DE F5 Open the first sc
110. splays email messages and the available options see Figure 4 on page 14 The Check Mail option retrieves waiting messages Drake Software Manual Copyrighted Material 14 2004 DRAKE SOFTWARE Figure 4 Email To Drake Drake 2004 Email IN Fie Message Mailbox Setup a x K Check Mail New Reply Forward Delete Address Book Help Your Drake email address is YourEFIN 1040 com You must have your EFIN and password entered in Setup gt ERO Information to use this utility SPLIT RETURNS Drake Software allows you to easily compare Married Filing Joint MFJ and Married Filing Separate MFS returns From the Data Entry Selection Menu screen on a joint return split the return using CTRL S or use the speed button labeled Split The program splits the return On the resulting Return Selector screen the return displays in three ways Married Filing Joint Taxpayer separate and Spouse separate see Figure 5 on page 15 Included on this screen are the following e Summaries of both federal and state refunds or amounts due e The resulting savings e The option to save any one or all three of the return formats e The ability to print this summary screen press P Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Figure 5 Split Return Selector Drake 2004 Return Selector Press Space Bar or Click CheckBox to Select Returns To sort the data click on any column b
111. ssages Layout for depreciation schedule Select Portrait or Landscape from the drop down menu Pause option for calculation Always after calculation pauses when the calculation is complete File gt Calculate After View or Print Only will pause only after a Ctrl View or Ctrl Print are used to calculate Only when using File gt Calculate will pause only when calculating from the main menu Never use pause option Display forms in view mode Forms display the same as printed forms or in text mode Text Mode is a computer generated mode with larger text Number of days to store print files If the return is needed after the software removes the print file recalculating the return will recreate the print file Form and Schedule Options Tab Drake Software Manual Print Schedule A only when required Print Schedule B only when required Print Form 1116 for Alt Min tax worksheet Print 4562 only when required Print 6251 only when required Form 8867 Preparer s EIC checklist Form 8867 is the IRS form for EIC verification The VER_EIC is a form designed in house that preparers prefer Use this option to indicate your choice 1040A EZ Suppress Form 1045 page 2 NOL Select to prepare as needed or only when indicated in data entry Form 2210 Select to prepare as needed or only when indicated in data entry Copyrighted Material 26 2004 DRAKE SOFTWARE Optional Documents Tab
112. t Use CTRL S to split a MFJ return into two MFS returns allowing you to compare the differences D is incorrect Use ALT in any data entry field to view field specific information SHIFT functions the same way The correct answer is D Yes press ALT D This enters the current date in any Date field A is incorrect Insert D is not a Hot Key in Drake B is incorrect CTRL D deletes a screen in data entry C is incorrect You can enter the current date using ALT D Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Return Preparation While there are many ways Drake Software simplifies tax preparation the software cannot replace a fundamental understanding of tax laws Your data will be calculated as entered on each screen The screens in almost every instance reflect the corresponding tax form In this section we will review the following e Opening Returns e Navigating Fields and Forms e Preparing a Return OPEN A RETURN On the menu bar go to File gt Open Returns or click OPEN from the toolbar The Open Returns window appears see Figure 14 below Here you can create a new return or open an existing one Figure 14 Open Returns Drake 2004 Open Returns Enter the SSN or the last name for the return you want to open 400001001 Name SSN RETURN TESTI amp TEST 400001001 BEST FOODS INC 400002223 425551000 USEOFHOME 425551000
113. te address 15 Support Options 15 T Transmission Direct State 78 Piggyback 78 State Only 78 Tutorial 7 V Valid City Codes 108 Drake Software Manual 1119 Copyrighted Material 120 2004 DRAKE SOFTWARE Drake Software Manual Copyrighted Material
114. ted on the city return enter the city code here If the mileage test does not apply to this move place an X here Press Page Down for a new screen AUTO MILEAGE FOR SCHEDULE C Press Shift or Right Click For Help Enter mileage information on the AUTO screen Type AUTO see Figure 32 on page 56 Fields Delivery Van Delivery Truck Description Delivery Van Delivery Truck Date Placed in Service 01 01 2004 05 01 2004 Business Miles 12357 22335 Commuting Miles 0 0 Both vehicles were used primarily by the owner and neither was available for personal use Amelia maintains a policy prohibiting personal use of the vehicles However because there are no commuting miles on either vehicle policies regarding commuting are not necessary Opt to let the software determine the mileage rate Make sure to answer the Yes or No questions on this screen to ensure acceptance by the IRS These fields are required Press ESC to return to the Data Entry Selection Menu Drake Software Manual Copyrighted Material 56 2004 DRAKE SOFTWARE Figure 32 Auto Expense Worksheet for Schedule C AUTO screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Auto Expense worksheet for Schedule C Which Schedule C Si Description Date placed in service Of the total number of miles you drove your vehicle in 2004 enter the number of miles you used your vehicle for Business Commu
115. than paper checks The direct deposit account must be in the taxpayer s name and cannot include the name of another person If married filing joint the account can be in either the taxpayer s or the spouse s name or both If married filing separate the account can be a joint account or in the name of the taxpayer but not only in the name of the other spouse Payable through accounts are not acceptable for direct deposit After completing the screen press PAGE DOWN to rekey account number information If the direct deposit information for the state return is the same as the federal return enter X in the Use the same account for state refund field It is not necessary to re key the information on the SDD screen Use the SDD screen to arrange a direct deposit of state refunds The account information on this screen is transmitted After completing the screen press PAGE DOWN to rekey the information Direct deposit policies differ from state to state Check with the specific state for more information Review the screen It is not necessary to enter Direct Deposit data for the Carter s return Figure 38 Federal Direct Deposit DD screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Direct Deposit Information Name of financial institution Routing transit number Depositor account number Type of account Michecking Wisavings Use the same accou
116. the electronic return is transmitted and then is retained in the tax preparer s office for three years If the PIN screen is completed within the software Form 8879 is produced when electronically filing otherwise Form 8453 is produced To complete the PIN screen the taxpayer and spouse must choose a 5 digit number to serve as their signature This may be entered by the preparer The preparer must also enter a 5 digit number on the PIN screen This number is self selected but must be used for the entire season STATE E FILING Each state has its own application requirements for Electronic Return Originators ERO and users of bank products Refer to the following table to determine if a state application is needed to electronically file returns to that state or if an application is required to offer bank products Bank State State EF Application Required Products Applica EF Center tions Required Alabama All EROs are automatically accepted Memphis Alaska No tax Philadelphia Arizona EROs must send a copy of IRS application Philadelphia and or acceptance letter Arkansas All EROs are automatically accepted Memphis California EROs must complete state application Yes Philadelphia Colorado All EROs are automatically accepted Philadelphia Connecticut All EROs are automatically accepted Andover Delaware All EROs are automatically accepted Andover Drake Software Manual Copyrighted Material
117. the screen must be deleted to prevent e filing errors Change the DCN of the return CTRL M Change the Declaration Control Number in a return by opening the return and selecting CTRL M Activate the pop up calculator F10 Available in Data Entry Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 1103 POP UP CALCULATOR FUNCTION There are three ways to enter numbers and their operators 1 using the numeric keypad on the keyboard 2 using the numbers on the typewriter keyboard or 3 using the mouse to click the numbers and operators Function Operator Instructions Addition Enter the number to be added and press Subtraction Enter the number to be subtracted and press Multiplication is Enter the first number in the equation and press Then enter the second number and press on the screen to complete the calculation Division Enter the number to divide and press Then enter the number that divides the first number Press ENTER on the keyboard or on the screen to complete the calculation Clear a number NUM LOCK Press the NUM LOCK key on the numeric key pad to clear the current calculation Insert calculation total in Data F1 or F1 Insert With the desired total in the summary field press F1 Entry field Result Tab on the keyboard or the F1 Insert Result Tab on the screen The calculator disappears a
118. ting Saat Other You your spouse have another vehicle available for personal use Your vehicle was available for use during off duty hours You have evidence to support your deduction If yes the evidence is written You want system to figure mileage rate Force mileage Expenses Garage rent Tt x Insurance Licenses Other Expenses Parking fees Rental fees Force expenses Screen 1 of 2 Press Page Down for a new screen Press Shift or Right Click for Help ENTERING PARTNERSHIP INFORMATION SCHEDULE K 1 Partnership information is entered on the Schedule K 1 To open the Partnership K1 type K1 in the selector field see Figure 33 on page 57 Field Data TS T Partnership ID 561122334 Partnership Name Dynamic Distributing This is a passive activity X This partner is a limited partner X Make sure to pay attention to the help text Shift to see to where or if information carries Enter the following amounts from the K1 Line Amount 1 2756 5 65 Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 57 Press ESC to return to the Data Entry Selection Menu Figure 33 Schedule K1 for 1065 K1 screen Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Screen 1 of 1 Schedule K 1 for 1065 TS F E gt T C MM Passive Activity No fa Partnership ID 56 34 Partnership Name DYNAMIC DISTRIBUTING Address opt
119. tion must be created individually for each firm 1 From the menu bar go to Setup gt Firm s 2 Enter the firm information A yellow field indicates required information 3 Click SAVE to save the information Click CANCEL to exit without saving changes Figure 8 Firm Setup Drake 2004 Firm Setup Number Fim Name EFN il Drake Software 111111 01002 0 0 Firm Name Drake Software Address 235 E Palmert City St Zip Franklin INC 28734 Email Address o Federal EIN 123456789 State ID Number o EFIN m DCN 01002 Non Paid Prep Telephone Number _ 9295248020 Fax Number Contact Name Mr Jones HELP REQUIRED FIELD Enter the Firms 10 digit phone number Save Cancel Help Banking Select Bank B1 BankOne X RAL Prep Fee Bonu Prep Fee State Bonu Prep Fee Electronic Filing Fee If offering bank products indicate which bank you are using and set preparer and Electronic Filing fees on the Firm screen Drake Software Manual Copyrighted Material 20 2004 DRAKE SOFTWARE ERO Electronic Return Originator ERO Setup is required only if you plan to do one or all of the following in the software E file a return Access Your EF Database from EF gt Search EF Database gt F10 Use the E mail to Drake function Help gt Email to Drake Download service packs using Tools gt Install Updates The temporary EFIN Electronic Filing Identi
120. tional dependent screen for the second child s information Enter the following information Fields First Dependent Data Second Dependent Data First Name Carolyn Richard SSN 239 21 1123 245 62 2235 Relationship Daughter Son Months in home 12 12 Date of Birth 07 11 1995 12 18 1984 Qualifying Child Care Expenses 3450 Drake Software Manual Copyrighted Material 42 2004 DRAKE SOFTWARE Fields First Dependent Data Second Dependent Data Hope Credit Expenses 4200 If Over 18 and a Student X Figure 21 Dependent Information Screen 2 Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA Dependent Information CAROLYN Es n CCG Os 07 11 1995 Qualifying child care expenses incurred and paid in 2004 Portion of qualifying expenses provided by your employer Hope Credit qualified expenses paid Lifetime Learning Credit qualified expenses paid If over 18 and a student If over 18 and disabled Not eligible for EIC State codes Not eligible for Child Tax Cred Not US Citizen or Resident Alien If the relationship is SON DAUGHTER or CHILD and months in home is NOT 0 zero the default is that the child lived with Child lived with you you If months in the home is 0 zero Child did NOT live with you due the default is child did not live with to divorce or separation you due to divorce or separation Other dependent Not a dependent If the relationship is NOT one of t
121. to 100 or you can enter 100 in the Business use field Both of these methods produce the same results A is incorrect Although you can leave the Business use field blank and it will default to 100 it is not the only correct answer B is incorrect Entering 100 in the Business use will also produce the correct results but this is not the only option available C is incorrect It is not necessary to calculate this item outside the program The correct answer is C Put a in front of the number Always indicate a negative number in Drake data entry with a dash negative symbol A is incorrect When working with paper tax forms a parenthesis would appropriately indicate a negative number but in Drake data entry this is never the case B is incorrect ALT R does not turn numbers red in data entry D is incorrect This statement is false because answer C is correct Enter in front of a number to indicate a negative number Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE Appendix DATA ENTRY NAVIGATION 1101 Action Keyboard Keys Move cursor forward one field ENTER TAB or use the DOWN Arrow Move cursor back one field SHIFT TAB or UP Arrow Move cursor within a field RIGHT LEFT Arrows Delete character behind the cursor BACKSPACE Delete character before the cursor DELETE Insert character within existing text INSERT on Mo
122. tronically file a return without a PIN b A third party designee must be chosen c A Form 8453 is produced signed and sent to the applicable IRS Service Center within three business days of the IRS acceptance d A Form 8453 is produced that must be signed and kept in the business office for one year 5 Ifa state return is sent as a piggyback with the federal return what happens to that state return if the IRS rejects the federal return a The piggyback state return goes on to the state and is rejected by the state b The piggyback return goes on to the state and is accepted by the state c You cannot send a state return with a federal return They must all be sent directly to the state DOR d The piggyback return is not processed and may be sent again with the corrected federal return Drake Software Manual Copyrighted Material 86 2004 DRAKE SOFTWARE ANSWERS PART 4 1 The correct answer is A Contact the IRS at 1 866 255 0654 and ask to be added to the ERO list This statement is false because a taxpayer must fill out an 8633 ERO Application and finger print card and submit it to the IRS to be considered B is incorrect This statement is true Call the IRS or Drake Support to request a fingerprint card C is incorrect This statement is true Print an 8633 from Tools gt Blank Forms gt Select 1040 gt 8633 and 8633 PG2 D is incorrect This statement is true Send a fingerprint card along
123. tted to Drake 1 Click ACKS ONLY to continue 2 The program connects and retrieves the acknowledgements 3 The program automatically disconnects from Drake after the transmission is complete TEST TRANSMISSIONS Before attempting to transmit any actual tax returns it is recommended that EROs first transmit test returns Vv CAUTION V Do NOT transmit any test returns that contain social security numbers other than those in the 400 00 and 500 00 series included in the software Any other returns are processed as actual tax returns and the ERO could be charged with filing fraudulent tax returns Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 83 TEST TRANSMIT THROUGH DRAKE 1 A preparer with a new IRS EFIN must contact Drake Accounting to update his her client information Call 828 349 5900 2 Goto SETUP on the Menu Bar and complete the following screens e Firm Information e Preparer e ERO State ERO Information Make sure the current year password is correct from the Drake packing slip Clients evaluating Drake may call 828 349 5900 to obtain a password 3 Open and calculate the first five test returns provided in the software 400 00 1001 through 400 00 1005 View the returns for Messages If there is a message correct the error before calculating the return again Select EF gt Select Returns for EF on the Menu Bar Choose the test returns to transmit 5 Transm
124. tup gt Directories Paths and for the Drive letter for State Programs select the drive letter of your CD drive Drake Software Manual Copyrighted Material 2004 DRAKE SOFTWARE 159 State forms automatically generate based on data entered on the federal return Calculation is based on the State entered on the Name amp Address screen for Resident State as well as the State codes indicated on W 2s Schedule C 1099 Schedule B etc For specific information pertaining to the state State Data Entry screens are available On the Data Entry Selection Menu type the two letter state code for the desired state and press ENTER Screens of available state forms appear see Figure 35 below For a list of valid city codes see Valid City Codes on page 108 or press SHIFT in the Resident City field on federal screen 1 Review the state data entry screens It is not necessary to enter state specific data for the Carter s return Figure 35 State Return s Data Entry Selection Menu Drake 2004 Data Entry 400006666 CARTER WILLIAM amp AMELIA A S Bl x Calc View Print Split Exit On each of the forms screens you will notice several symbols e Ifthe field is marked Override indicated by an symbol an entry in the field overrides any calculations or federal data normally associated with that item see Figure 36 on page 60 e I
125. ve to the last field on the screen END Move to the first field on the screen HOME Create additional Data Entry screens e g W 2 1099 schedules etc PAGE DOWN or CTRL PAGE DOWN Return to previous screen exit ESC Note Use the mouse to position the cursor in a desired field OVERRIDES AND ADJUSTMENTS TO RETURN CALCULATIONS Override Fields Adjustment Fields Data Entry fields that allow overrides are preceded by an equal sign An amount entered in these fields overrides program calculations Data Entry fields that allow adjustments are preceded by a plus sign An amount entered in these fields adjusts program calculations Enter a negative number to subtract an amount Drake Software Manual Copyrighted Material 102 2004 DRAKE SOFTWARE HoT KEYS Action Hot Keys Additional Notes Access help text during Data Entry SHIFT With the cursor in the field press Shift for Data Entry information If selections are listed select the desired choice and press ENTER to insert data Exit a Data Entry screen without SHIFT ESC Press ESC to exit and save changes in Data Entry saving changes Verify a valid Social Security ALT After the SSN has been entered press Alt for Number SSN verification Insert the current date in any date ALT D CAUTION CTRL D deletes the screen field Cal
126. w or print only in Setup gt Options gt Calculation amp View Print Tab the calculation summary screen will display after pressing CTRL V Press ESC or the SPACE BAR to continue When the View Mode screen opens use one of these methods to select a form 1 Double click the form to view 2 Use the up down arrow keys to move through the list Press ENTER when the desired form is highlighted In the open form use PAGE UP or PAGE DOWN or the up down arrow keys to scroll Press ESC to close the form and return to the list Drake Software Manual Copyrighted Material 68 2004 DRAKE SOFTWARE To return to data entry click DATA ENTRY or press CTRL E When you view a return a red MESSAGES page or yellow NOTES page may be present See Messages Pages on page 79 for information about these features PRINT FILES When the return is calculated a print file is created A print file must exist before the return can be selected for electronic transmission From the Menu Bar go to Setup gt Options gt Calculation amp View Print Tab and select the Number of Days to Store Print Files PRINT When satisfied with the return press CTRL P to open the Print Mode screen see Figure 46 on page 69 Similar to View Mode a list of forms displays From this point choose to print single or multiple copies of
127. work setup 3a This is the server 3b This is a workstation Indicate server drive letter for sharing client files To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below Paths Drive Letter for State Programs DE v Paths determined by configuration selected above Admin Override V Path for 2004 Data D RAKED DTME Path for 2003 Data ADRAKEOSDTSA Path for Print File DRAKEO4 PF Shared drive letter for all other shared files EF Firm Pricing Letters etc optional x HELP Select the CD ROM drive to access state programs on CD 4 Open a return 5 Complete the federal return screens 6 Access the state screens by typing the two digit state code in the selector field at the bottom of the Data Entry Selection Menu in data entry Cities are found on the City tab within the appropriate state Drake Software Manual Copyrighted Material 6 2004 DRAKE SOFTWARE INSTALL STATE AND CITY PROGRAMS 1 Insert the 2004 Drake CD into your CD drive 2 Open the Drake Program Go to Tools gt Install Updates The Update Manager opens see Figure 2 below 3 Select the CD drive letter from the drop down menu at the bottom of the page Click Install State Program Figure 2 Update Manager Drake 2004 Update Manager This will check for available updates and download them to your machine now
128. y from Setup gt Options gt Calculate View Print Tab d Press CTRL E True or False You can electronically file live returns with the temporary EFIN given to the user by Drake Software Which of the following methods of payment or refunds can be executed with Drake a An automatic withdrawal of funds from taxpayer s bank or savings account on a selected date in the future b A direct deposit into the taxpayer s bank or savings account c A refund check printed in the tax preparer s office d All of the above True or False A Broadcast Email is an email sent from Drake Software to inform clients of impor tant changes to the software and items of interest from the IRS True or False EIN SSN telephone numbers and dates must be entered with dashes or slashes to prevent confusion Drake Software Manual Copyrighted Material 114 2004 DRAKE SOFTWARE 23 How can you access the CCH online Master Tax Guide Plus a Purchase the product through CCH and obtain a login and password b Select Tax Help from the toolbar c From the Menu Bar select Help gt CCH Tax Research d Both b and c are correct 24 Which of the following are offered with the Drake Software package a The ability to email Drake b Blank federal and state forms for viewing and printing c Electronic filing and Bank products d All of the above 25 True or False You can electronically file an amended return using the X screen in
129. yback enter X Figure 57 Schedule K K screen Drake 2004 Da xi 722110 RESTAURANT FOOD Bess SS JANE DOE 40 0009999 a f Schedule K Inpu Press Shift or Right Click for Help ae go FORM 4562 DEPRECIATION The items in the tables below are used 100 for business so leave that field blank 100 is the default The date placed in service is 06 04 1986 The cost and depreciation basis are the same amounts Type 4562 to access the Depreciation screen see Figure 58 on page 95 Enter the following information and press ESC when complete Prior Depreciation Description Cost Method Life Fed State Glass Building 8914 90 ARP 19 8914 90 8914 90 Tiling 8150 ARP 19 7652 85 7652 85 Drake Software Manual Copyrighted Material 94 2004 DRAKE SOFTWARE Prior Depreciation Description Cost Method Life Fed State Roofing 6183 ARP 19 5805 84 5805 84 Air Cond 6000 ARP 19 5634 00 5634 00 Leasehold 49682 22 ARP 19 46651 60 46651 60 Leasehold 1330 45 ARP 19 1249 29 1249 29 Gas Range 5000 M 5 5000 00 5000 00 Deep Fry 2984 40 M 5 2984 40 2984 40 Exhaust Fan 4631 12 M 5 4631 12 4631 12 Refrigerator 17058 38 M 5 17058 38 17058 38 Equipment 669 25 M 5 669 25 669 25 Equipment 670 91 M 5 670 91 670 91 Equipment 152 88 M 5 152 88 152 88 Equipment 181 20 M 5 181 20 181 20 Oven 5142 29
130. you will notice several symbols e Ifthe field is marked Override indicated by an symbol an entry in the field overrides any calculations or data normally associated with that item e Ifthe field is marked Adjust indicated by a symbol any data entered in that field will be added to the calculated amount normally associated with that field To reduce an amount in an adjust field enter a negative figure e All other entries are direct no entry made means nothing appears on the form Figure 16 Field Specific Help Text Birth Date Direct entry Enter the age or date of birth in the MMDDYYYY format or an X to indicate over 65 It is important the correct age be entered here The age will affect the outcome of Forms 8615 6251 and Schedule R as well as the exemption amount on Form 1040 Some States also require date of birth for age exemptions NOTE For electronic filing and bank product purposes full date of birth is required PREPARING THE 1040 EVALUATION RETURN In this section we will enter a practice return and work through various data entry screens to become comfortable with Drake Software The following sections provide step by step instructions for calculating viewing printing and electronic filing a return 1 On the menu bar select File gt Open Returns 2 Inthe Open Returns window see Figure 17 on page 38 type the following SSN without dashes in the blank field

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