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1. 1 Wages tips 2 Federaltaxwih Figure 5 5 New in 2008 Verification fields for wages and federal withholdings If the verification amounts do not match the amounts entered in the equivalent boxes at the top of the W2 screen an EF message will be generated Amounts must be cor rected before the return can be e filed NOTE Activate this option from Setup gt Options gt Data Entry tab To indicate a foreign employer on the W2 screen enter the city and country in the city field of the employer address then select Foreign from the State field a dot appears in the field Leave the ZIP code field blank See example in Figure 5 6 87 Personal Service Income W 2 1099 MISC Drake Software User s Manual we ero A n iTe oe gt fk sae ov iat relia o ttn Titi ite i a PEPE LEPEU 7 2 RUE MOUFFETTE E Incare of address continuation a Note Theemplover s compicte inforeprtton is aaa c Employer s name address city state ZIP code Figure 5 6 Entering foreign employer information on W2 screen Screen code FEC If no W 2 was issued by a foreign employer use the Foreign Employer Compensa tion screen accessible from the General tab to enter employee employer and income information NOTE For information on the foreign income exclusion Form 2555 see Excluding Foreign Income on page 110 Statutory Because all statutory employees must file Schedule C for expenses related to W
2. SUPPORT DRAKESOFTWARE COM 828 524 8020 This page intentionally left blank Drake Software User s Manual Tax Year 2008 support DrakeSoftware com 828 524 8020 Copyright Drake Software User s Manual Copyright The 2008 Drake Software Manual Drake Tax Software and any other related materi als are copyrighted material All rights are reserved by Drake Enterprises LTD including all ownership rights This document associated software and related mate rial are the property of Drake Enterprises LTD Drake Enterprises LTD hereby authorizes you to download display print and repro duce the material in this document in an unaltered form only for your personal non commercial use or for non commercial use within your organization Copyright trademark and other proprietary notices may not be removed 2008 Drake Enterprises LTD All rights reserved 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 Tax are registered trademarks of Drake Enterprises LTD Other product names mentioned in this manual may be trademarks or registered trademarks of their respective companies ii Tax Year 2008 Drake Software User s Manual Table of Contents Ta
3. If A or B is selected the activity is considered a currently passive activity because A is rental real estate and B is other passive activity NEW FOR If General partner is selected on the K1P screen self employed income is automatically reduced by any amount entered in the Section 200 B 179 deduction field The unreimbursed partnership expense flows to a separate line on Part Il of Schedule E K 1 Exports K 1 data can be exported from an 1120S 1065 or 1041 return in Drake to an individ ual return in Drake To export K 1 data you must first have the following items e An 1120S 1065 or 1041 return completed in Drake Tax Year 2008 105 Farm Income Drake Software User s Manual e An individual return in Drake for the partner or beneficiary listed in the 1120S 1065 or 1041 return To export K 1 data into an individual return 1 Open the 1120S 1065 or 1041 return that contains the data to be exported 2 Click View to calculate the return and open View Print mode 0 0 3 Click the K1 Export button in the View Print mode toolbar The Export K1s 0 screen lists all taxpayer SSNs for exporting All rows are selected by default KIE ss 4 optional Click a row to clear it if you do not wish to export K 1 data to all indi viduals listed 5 Click Export When the Export complete dialog box opens click OK The transferred data is highlighted in the K1 screen of each personal return that received the
4. Letter Options Select the result letter templates to be used for each package Include privacy letter with returns Include engagement letter with returns Include customized supplemen tal letter with returns Select this option to print the privacy disclosure letter with every return Select this option to print engagement letters for all packages At the end of the letter template are spaces for client and preparer signatures Print a customized letter that can be used for various purposes See Table 2 14 on page 37 NOTE Tax Year 2008 To override the default letter for an individual client see Overriding Letters Setup on page 50 27 Software Setup Optional Items on Return Drake Software User s Manual Options under the Optional Items on Return tab are described in Table 2 9 Table 2 9 Setup Options Optional Items on Return Option Date on return Description This date is pulled from the date on the computer To change this date enter the required date on the PRNT screen If desired select to print dates for tax payer and spouse signatures excluding 1040 Print dates for taxpayer and spouse signatures excludes 1040 Select this option to print the signature dates on the return Taxpayer phone number Select this option to print the taxpayer s phone number entered on screen 1 Third party designee Select the third party designee name to print on
5. High recommended for cable dsl with audio larger screen Subject General v View Tutorials gt Appointment Scheduler Launch Tutorial gt Binary Attachments Launch Tutorial p California W 2 CG Launch Tutorial gt Check Print Launch Tutorial pth Peete T E E E N Sb Stem Figure 10 5 Connection speed options and tutorial list Before launching a tutorial select an appropriate connection speed Next click Launch Tutorial for the tutorial you want to view Tutorials do not need to be com pleted in the order listed Each tutorial has its own quiz Tutorial quizzes test your knowledge of the subject and if yov re an administrator the can help you track student progress To access a quiz 230 Tax Year 2008 Drake Software User s Manual Online Support Practice Returns Videos Report Card Admin Tax Year 2008 select Quizzes from the View drop list see Figure 10 5 and click Launch Quiz for the desired tutorial NOTE Tutorials are added throughout the season so check for new tutori als often To view tutorials for Drake Client Write Up select Client Write Up from the Subject drop list See Figure 10 5 Practice returns have been designed as hands on tools to help your firm become famil iar with the basics of data entry and e filing in Drake Software To access practice returns in ETC click Practice Returns The Practice Returns page is opened dis playing instructions and a
6. Payment Amount The amount of the payment In most cases this amount is calcu lated automatically based on the other information entered If this field is left blank and the interest amount is entered in the Annual Interest field the program displays the calculated payment amount in this field Payment Type The payment type Select one of two types of payments Fixed Payment or Fixed Principal The default is Fixed Payment Date of First Payment Due date of the first payment This entry is used to determine the dates for subsequent payments To send the schedule to the printer click Print To save it for viewing through Reports gt Report Viewer click Save designate a filename and click Save The program stores all EINs and related data in the EIN database for later retrieval Use the Edit EIN Database tool to add edit or delete an employer s information Adding or Editing Employer Information To add an employer to the EIN database 1 2 3 4 5 From the Home window go to Tools gt Edit EIN Database If editing Enter or select the EIN to edit or begin typing the name of the employer and select it when it appears in the list below Click New if adding or Edit if editing Modify or complete the fields in the Edit EIN Employer Listing dialog box Click Save Deleting Employer Information Tax Year 2008 To delete employer data from the EIN database 1 2 3 4 From the
7. 400001001 Taxpayer 400001001 JOHN amp JANE lt DOE Spouse 400002001 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup Figure 7 9 Search EF Database window z 3 Click Go To scroll through the records use the arrows at the bottom of the screen or press PAGE UP or PAGE DOWN on your keyboard To close the EF database click Exit Tax Year 2008 191 EF Database Drake Software User s Manual Database Content General Information Bank Direct Deposit Info 192 The EF database stores data about the return and the associated bank products fees and reject codes Different types of data are stored under tabs See Figure 7 9 The F1 General Information tab displays basic taxpayer information along with e IRS acknowledgments Federal code and date transmission date filing status and refund amount or balance due are displayed in the left column This data is from the most recent transmission record for the client file e State acknowledgments Under State the middle column displays the state code and date filing status and refund amount or balance due This data is from the most recent transmission record for the client file e Reject Codes On the right side of the window are fields for the reject code form ID form number and sequence number Double click a reject code to jump to the F4 Reject Code Lookup tab See Reject C
8. All bank screens include an Additional Information section with a field to indicate when the bank application was signed This information is required and must be com pleted before a bank product can be approved Bank Product Transmission 210 Several transmissions occur when you transmit the tax return with bank information using Drake e Drake transmits the tax return to the IRS and the banks e The IRS sends an acknowledgment to Drake If the return has been accepted Drake transmits this information to the bank e The bank sends an acknowledgment back to Drake e Ifthe bank approves a RAL it sends a Check Print Authorization acknowledg ment This acknowledgment allows you to print the check and is normally posted on the Wednesday of the following week if the return is sent by noon Thursday e Ifthe bank declines a RAL it flips the RAL to a non loan product at its own discretion If the non loan product is approved the bank sends an acceptance ack The bank also posts a Fees to ACH Automated Clearinghouse acknowledgment when applicable to inform preparers that their fees have been distributed to their direct deposit account Tax Year 2008 Drake Software User s Manual Processing the Loan Check Your system picks up any new bank acks whenever you initiate a connection transmit or receive from EF gt Transmit Receive with Drake Processing the Loan Check The following process is necessary for
9. 2 Select the Sets tab All applicable sets in the return are displayed in the tree view Figure 6 8 AlFoms Sets EF EF Signature Client Preparer Federal New Jersey 7 ae De tate Figure 6 8 Example of a return that has five applicable printer sets 3 Select the sets to print 4 Click Print to open the Print Selection dialog box If you click the arrow next to the Print icon select Print Selected Forms 5 optional Select any printing options shown in the Print dialog box 6 Click Print again All of the selected items are printed Quick Enhanced mode allows you to print whatever document is currently in view Printing a Printing a single form in this manner is referred to as quick printing Single Form To quick print a single form from enhanced mode 1 Open View Print mode for a return The All Forms tab is shown by default 2 Click a form or document name to display it in the viewer pane In the example in Figure 6 9 the 1040 form is selected for viewing 172 Tax Year 2008 Drake Software User s Manual Setting Up View Print Options All Forms Sets EF i Figure 6 9 Click the form to view Shortcut Click 3 Click the arrow next to the Print icon then click the Quick Print selection CTRL Q to print the form in view Data Entry Print Selected Form s Ct z Quick Print 1040 Ctrl Q Federal aide z ects ome 7 Figure 6 10 Click
10. Approval Code from Drake Confirm Approval Code Step 3 Process Approval Code Process aain ane PE S a a jA na a gat Figure 2 6 PPR window 2 Enter the number of PPRs to activate on the computer item 3 in Figure 2 6 and click Get Code 3 An approval code appears in the Approval field Re enter the code to confirm in the Confirm Approval Code field item 4 in Figure 2 6 4 Click Process to activate the PPRs 5 Click OK M p 0 RTA NT Be sure you are connected to the Internet before trying to activate PPRs If the items under For This EFIN item 1 in Figure 2 6 read UNKNOWN then you are not connected to the Internet Restrictions Ifyou are a PPR client be aware of the following PPR restrictions and notes and Notes e If computers are connected to a server Install your software on the server Activate your PPRs from the server e If computers are stand alone computers Install the software on all comput ers You can activate the PPRs from any of the computers For instance activate Tax Year 2008 19 Software Setup Purchasing PPR Returns Drake Software User s Manual three PPRs on one machine four on another and eight on a third for a total of 15 Activate PPRs as you use them or activate them all at once PPRs cannot be transferred Once a PPR is activated it cannot be moved to another computer however after a return is created filled out with client name and
11. Change in name address Change in filing status Change in amounts on original return override fields filled automatically if you selected to autofill data o the 1040X screen Change in number of exemptions Addition of children not reported on original return Explanation of changes to income deductions and credits Change in donation to Presidential Election Campaign Fund Any additional changes in income will be incorporated into the amended return Attach a copy of the original return to the printed 1040X before mailing the amended return to the IRS NEW FOR 2U08 Extensions Screen code EXT 154 The original 1040 can be viewed and printed from View Print mode even if it has been amended See Archive Manager on page 176 To apply for an extension using Drake 1 Open the return for which an extension application is being filed 2 From the Other tab click Extension Forms 3 Make the applicable selection from the 4868 drop list if filing Form 4868 or the 2350 drop list if filing Form 2350 Selections are described in Table 5 20 Table 5 20 Extension Forms Screen Selections for Forms 4868 and 2350 Code Description x Produces Form 4868 or Form 2350 whichever is selected Produces Form 4868 and indicates the amount of payment being sent A Produces Form 2350 Firm information rather than taxpayer information is printed on the return label B Produces Form 2350 Taxpayer s name and address ar
12. Installation amp Setup 65 About State Returns Drake Software User s Manual Heads Down Data Entry Heads down data entry provides an efficient method of data entry when working from a proforma interview sheet Information on this method is provided in the Heads down Data Entry section of Chapter 4 Preseason Preparation About State Returns When a return is prepared Drake automatically generates state returns based on data entered for the federal return Calculation is based on the state entered on screen 1 for resident state and on the state codes indicated on other forms W 2 Schedule C 1099 Schedule B etc Click the States tab in data entry to view a list of states Click any state from the list or enter the two letter state code in the selector field to access the Data Entry Menu for that state It is not necessary to return to the States tab to enter a new state code Access city screens by entering a city code into the selector field Another option is to open a state menu then click the Cities tab if available Cities are listed with their two letter codes Practice Returns and Test Returns 66 Practice returns are available on the Drake Support Web site to help new Drake Soft ware clients become more familiar with how data is entered in Drake For more infor mation on how practice returns can help you see Practice Returns on page 231 Test returns are located on the software CD
13. NEW FOR rides drop lists 200 8 You can now print envelope coversheets for city returns federal returns and state returns Filing When a return is generated Drake also prints federal and state filing instructions Instructions Dates on the Return Return Indicators Billing Format Tax Year 2008 Default settings are established at Setup gt Options gt Optional Documents tab Use the PRNT screen to override the default and force or suppress the filing instructions Use the PRNT screen to override the following dates printed in the return e Current date shown on return e Due date shown on letter and filing instructions These changes cannot be set globally from Setup By default the program displays certain indicators such as Hurricane Katrina on applicable returns Use the PRNT screen to force certain indicators to be displayed The following global setup options are set from Setup gt Options gt Billing tab and can be changed on the fly from within a return Table 2 18 Billing Options that Can Be Changed on the Fly Option Choices Billing Statement Format Total only Forms and total Forms prices and total Bill by time Charge per form Custom Paragraph None Top of bill Bottom of bill 47 Making Changes on the Fly Drake Software User s Manual Use the override fields on the BILL screen in data entry to override established defaults For more on the BILL screen see Overridin
14. NOTE Complete the lines below ONLY if the Form 5405 credit was NOT originally calculated in Drake Software Original credit fram Form 5405 Line 6 Amt of credit previously recaptured Figure 5 20 Form 5405 Information box on HOME screen The software will now calculate the recapture of any outstanding installment pay ments related to Form 5405 the year the house is sold Click F1 in this box for addi tional information Complete the override fields in the Form 5405 Information box only if the residence was not calculated in a prior version of Drake Software Click F1 in either of these fields for further information Like Kind Exchanges Screen code 4562 Screen code 8824 Screen code 4562 100 If an asset has been traded and needs continued depreciation and there is an increase in basis that needs to be depreciated you can link like kind exchange information to the appropriate depreciation details To enter an asset as a like kind exchange 1 Open the 4562 Depreciation Detail screen for the asset that the taxpayer traded or gave up 2 Make an on screen notation to indicate that the asset was traded for example type an A before the description 3 Open the 8824 Like Kind Exchanges screen and complete the fields for the like kind exchange 4 Calculate the return In View Print mode view Form 8824 and note the amount calculated for the Basis of like kind property received line Generally this
15. data entry bank screens in 209 basics of 57 66 classic DOS mode 25 colors 41 customizing 30 EF override options in 188 forms based 263 grid 25 58 85 141 heads down 72 help resources within 235 maximizing screens 24 menu 57 practice returns 231 printing client labels from 259 screen captures 65 setting CSM statuses from 219 setup options 24 Spanish 25 special features in 159 163 trial balance import business packages only 302 upper mixed case 25 date shown on return 28 47 DCNs Document Control Numbers assignment of 14 Index changing 187 staggering 187 DDM see Document Manager debit cards for bank products 206 debt cancellation 109 deceased taxpayer 84 deductions claiming for depreciation 140 domestic production activities 116 foreign tax credit 121 itemizing 117 118 printing Schedule A 117 section 179 expensing 142 self employed health insurance 113 tuition and fees 115 deleted files in the CSM 222 deleting see also editing appointments 81 archived returns 177 checks 212 CSM records 223 duplicate entries from the CSM 223 e mail messages 237 employer data 261 files from Drake 253 firm information 15 flags 60 records from CSM display 223 reports from My Reports 272 reports from online EF database 195 rows in grid data entry 58 screens in Drake 58 text from letter templates 38 dependent of another 84 dependents see also exemptions child care expenses 118 claiming if married filing sepa
16. Donot use MACRS tables Options include Qualified Indian Reservation Property Stopping Depreciation on an Asset To stop depreciation on an asset that was not sold enter the asset s remaining basis in the Salvage Value field fourth item on the left side of the 4562 screen The asset will be updated to next year No additional depreciation will be taken since the accumu lated depreciation equals the depreciable basis Depreciating Sold Assets To indicate the sale of an asset for depreciation purposes complete the applicable fields in the If sold section of the 4562 screen See Figure 5 52 Group Sales To enter group sales in Drake 1 Open a 4562 screen for the first asset of the group sale 2 Complete the applicable fields for the asset including Date sold and Property type fields and all fields under Group Sale Information Figure 5 52 Group Sale Information Group sale number Group sales price Group expense of sale Figure 5 52 Screen 4562 fields to complete for the first asset of a group sale 3 Open a 4562 screen for the next asset in the group sale 4 Complete the applicable fields for the asset In the If sold section only the Date sold Property type and Group sale number fields are required 5 Repeat steps 3 and 4 for all assets in the group sale N Complete the Date sold Property type and Group sale number UTE fields for all assets in a group sale The Group sales price and Group
17. Drake Software User s Manual Self Employment Tax Table 5 9 Other Credits Calculated in Drake Screen Form and Credit 8864 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 8874 Form 8874 New Markets Credit 8880 Form 8880 Retirement Savings Credit 8881 Form 8881 Credit for Small Employer Pension Plan Startup Costs 8882 Form 8882 Credit for Employer Provided Childcare Facilities and Services 8885 Form 8885 Health Coverage Tax Credit 8896 Form 8896 Low Sulfur Diesel Fuel Production Credit 8907 Form 8907 Nonconventional Source Fuel Credit 8908 Form 8908 Energy Efficient Home Credit 8909 Form 8909 Energy Efficient Appliance Credit 8910 Form 8910 Alternative Motor Vehicle Credit 8911 Form 8911 Alternative Fuel Vehicle Refueling Property Credit 8912 Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds 8930 Form 8930 Qualified Diaster Recovery Assistance Retirement Plan Distribu tions and Repayments Self Employment Tax See Self Employment Tax Schedule SE on page 112 for instructions on complet ing Schedule SE in Drake Unreported Social Security and Medicare Tax In Drake a single screen accessible from the Taxes tab is used for Form 4137 Social Security and Medicare Tax on Unreported Tip Income and Form 8919 Uncollected Social Security and Medicare Tax on Wages Additional Tax on Retirement See Retirement Income 1099 R etc
18. Exception numbers 01 and 06 Part I line 2 apply only to distributions from qualified employee plans not to those from IRAs annuities or modified endowment contracts To force Form 5329 from the 1099 R open the 1099 screen and select the applicable box under the Special Treatments for this Distribution section Form 5329 is gener ated if a 1 is entered for the distribution code in box 7 of the 1099 screen 1 Early premature distribution no known exception Drake Software Data Entry Help i lOl x Box 7 Distribution Code Direct entry Enter the code that has been assigned to the Form 1099 R distribution by the payer Valid codes include CEE T e i OF wo Ao pwn ow Early premature distribution no known exception Early premature distribution exception applies Disability Death Prohibited transaction Section 1035 exchange An exchange of an annuity contract into a new annuity contract is treated as a tax free exchange Normal distribution Excess contributions plus earnings excess deferrals taxable P3 58 costs May be eligible for 5 or 10 year tax option Excess contributions plus earnings excess deferrals taxable in current year Excess annual additions under section 415 Charitable gift annuity Direct rollover to IRA You need not file Form 5329 Direct rollover to qualified plan or tax sheltered annuity Distribution from a Roth IRA Loans treated as deemed distributions under sec
19. Ready for EF Make sure the return has not already been transmitted and accepted Check the EF database EF gt Search EF Database see EF Database on page 191 or Open the return and check the Return Data section of the TRAC screen Check to see if the return contains forms are not e filable Step 3 Transmit Return M p 0 RTANT Never transmit from more than one computer unless the tax soft Shortcut Press CTRL T to open the Transmit Receive dialog box 184 ware is installed on a dedicated server Transmitting and receiv ing from more than one computer can lead to duplicate DCN rejections and can affect your ability to print checks To transmit a return 1 Ensure that the Internet connection is working properly and that the returns to be transmitted have been selected for e filing See Step 2 Prepare the Transmission File on page 182 From the Home window select EF gt Transmit Receive to open the Transmit Receive dialog box which displays the types of returns to be e filed optional To review and possibly eliminate files from the send queue click Review The Transmit File Editor lists individual returns To remove a return from the queue select it and click Remove Tax Year 2008 Drake Software User s Manual E filing a Return Receiving Acks Only 4 Click Send Receive The Report Viewer displays the EF Transmission Record NOTE The EF Transmission Record list
20. See EF Override Options in Data Entry on page 188 Detail Use detail worksheets to enter up to 30 items for a numeric field Totals are calculated Worksheet automatically To use a detail worksheet 1 Select the numeric field to which the worksheet will apply 2 Double click or press CTRL W A Detail Worksheet is opened Figure 3 18 Detail Worksheet Sort Options F1 Description Ascending F2 Description Descending F3 Amount Ascending F4 Amount Descending Tile SCHEDULE C LINE 8 ADVERTISING Description Amount RADIO 400 rerevrsron 600 EWSPAPER 150 _ E L pem ee ee ne ee EN pws nan Figure 3 18 Detail worksheet with data entered 3 Enter a worksheet Title 64 Tax Year 2008 Drake Software User s Manual Data Entry Screen Captures Calculator Macros Tax Year 2008 Enter a Description and Amount for each item Do not skip lines As needed use F1 F2 F3 and F4 to sort items in the list Press Esc Drake saves your work and displays the total in the data entry field Note that the field is shaded to indicate a worksheet is present Default is red Part Il Expenses 8 Advertising Al 9 Car and truck expenses i 10 Commissions and fees 41 Contract labore Figure 3 19 Shaded worksheet field Detail worksheets are not e filed with the return To print a description on a statement without a corresponding dollar t enter a sla
21. To establish the server computer 1 From the Home window in Drake select Setup gt Directories Paths 2 Select 3a This is the server 3 Click OK Now that the server computer has been established the workstations must be set up To set up the workstations complete the following steps from each workstation Open and log in to Drake From the Home window select Setup gt Directories Paths Select 3b This is a workstation Select the drive letter for sharing client files RUN optional To allow the workstation to access shared files other than client files select Admin Override and select the shared drive letter for all other shared files oF aidha f T wpe OT Oat aaa fii a n fatima rt tate Lt ttt LI fina picts 3 Software install d on server and workstations secondary network setup On 3b This is a workstation IV To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below dicate server drive letter for sharing client ai Paths Drive Letter for State Programs F _ 5 aths determined by configuration selected above Path for 2008 Data H DRAKEOS DT HS Path for 2007 Data H DRAKEOMDT AN Path for Print File HADRAKEOS PFY 5 K alr Shared drive letter for all other shared files EF Firm Pricing Letters etc option e omes Figure 2 4
22. item 3 in Figure 5 48 Put a check mark in the box of the applicable return type Withdrawal from Multiple Accounts All states require that only one account be designated for direct debit of funds To have a state balance due electronically withdrawn from an account other than the account indicated for federal complete the fields in the Account 2 section of the PMT screen To have a balance due from another state withdrawn from a third account complete Account 3 NOTE Neither the federal nor the state balance due can be paid from more than one account Direct Debit of Estimates To indicate direct debit of estimates only select Estimates Only from the Federal selection drop list By default the estimate payment amounts and dates see Figure 5 48 are calculated from the information entered on the ES screen or in the override fields in screen 1 Use the fields on the PMT screen to override that data Tax Year 2008 137 Third Party Designee Drake Software User s Manual Third Party Designee To set up a preparer as a third party designee the preparer s PIN must first be entered in Preparer Setup A default third party designee can be set up for all returns You can override the default for a single return as needed For All Returns Default To set up the third party designee for all returns go to Setup gt Options Optional Items on Return tab and make a selection from the Third party designee drop list Third part
23. mode will be displayed when in Print mode F8 Edit Printer Settings used to edit print settings for a selected printer Select Printer Select the printer to activate the fields below Printer Type DPI Override Select the printer type from the drop list Change the dots per inch DPI setting GDI Windows Printer Select this option to use GDI print drivers instead of PCL You must select this option to print special fonts on letters GDI printing is generally slower than PCL printing Adjust Margin Select this option if printed forms are running off the lower edge of the paper Check Adjust Use this field if text is being printed too high or low on checks ment Vertical Enter whole numbers to adjust the printed text a 1 4 inch at a time Enter 1 to move the type 1 4 inch 2 to move 1 2 inch etc Positive numbers move the placement down negative numbers move the placement up Printing Sets The Printing Sets feature allows you to print multiple sets of returns for different pur poses To define printing sets 1 From the Drake Home window go to Setup gt Printing gt Printer Setup Sets log box Tax Year 2008 2 Click the Sets button at the bottom of the window to open the Copies Per Set dia 43 Software Setup Changing Print Sets for a Single Return Setting a Print 44 Order 6 Drake Software User s Manual Select a category from For
24. 172 setup procedures 13 45 Setup Wizard 9 sharing files 21 shipment letters 6 shortcut keys 55 58 Social Security benefits 108 Social Security Numbers applying one number to two returns 254 changing 251 mismatch on W 2 88 PPR 20 printing on bill 28 replacement by PTIN 16 test returns 66 verifying 25 soft fonts 43 246 software updates 244 Spanish screens 25 splitting a return MFJ to MFS 63 xix Index SSN see Social Security Numbers ST field 62 staggering DCNs 187 state see also state programs see also state returns FAQ screens 200 mandates Appendix E state programs downloading prior year 233 setting paths 22 setup options 29 state returns accessing 66 e filing 200 statutory employees 88 stolen checks 214 storing files in the DDM 287 289 print files 26 student loan interest deduction 115 Super RAL 205 supplemental income 103 106 support see Drake Support suppressing documents on the fly 45 e filing of a return on the fly 189 e filing of returns globally 29 EIC calculations 132 Form 1116 Foreign Tax Credit 93 forms options for 26 system requirements 7 T tax courses ETC 229 Tax Planner 292 297 tax returns see returns taxable distributions 108 refunds 93 tax exempt organizations 4 test returns 66 testing e file transmission 180 printing of checks 211 third party designee 138 139 tracking return data TRAC screen 163 trial balance import 299 309 troubleshooting acknowledg
25. 50 5 cents per mile The rate for miles driven on or after July 1 2008 is 58 5 cents per mile Enter business miles into the appropriate fields for accurate calculation of mile age rates Example shown in Figure 5 54 Current Year Mileage Business Before 07 01 10000 After 06 30 10000 M Force Mileage Figure 5 54 Separate business miles for accurate mileage rate calculation The calculation is shown on the WK_AUTO worksheet generated with the return Figure 5 55 Standard Mileage Rate Calculation Total Business miles driven January 1 to June 30 10 000 X 505 eee eens 5 050 Total Business Miles driven July 1 to December 34 10 000 X 585 e eee eee 5 850 Is ay Oe LOO IRE AERA E EEEE EOE lt BT E SORE OS Figure 5 55 Example of standard mileage rate calculation NEW FOR The Standard Mileage Rate Calculation and How it is reported sec 2008 tions Figure 5 57 are new to the WK_AUTO worksheet in 2008 Expense Fields Added in 2008 In the past interest and property tax were entered as codes under Other Expenses The Auto Expense Worksheet now has expense fields for interest and property tax as shown in Figure 5 56 Business use percentage is automatically applied Expenses Garaga nnn Gag ia An SARERA RRR a INSURAN CBs ctersreccse Apply LICENSES ecccccccccccccccccseeceseesee Other Expenses me Note DO NOT key the business use TCS E percentage for a a r thi
26. Archive archive resource Update the viewed return to reflect any changes made Yes by another preparer working in the open return Refresh F Switch to the cascade view from prior years Yes Basic View Export parent information into child s Form 8615 Kid Yes die Tax this button is visible only for Individual 1040 sacl Ennon returns with qualifying dependents See Exporting Data for Kiddie Tax on page 124 0 0 Open the K 1 Export tool This button is visible only for No 0 certain business returns K1 Export Access Drake online help No Help Exit View Print mode No Wy Exit Use the arrows and Zoom icon Figure 6 6 when viewing in Enhanced View Print VOO SH Figure 6 6 Click arrows to move through the return click Zoom icon to zoom in or out When you click a form name the form appears in the pane on the right side of the win dow Choose which forms you wish to print from the list by putting a check mark in the box to the left of the form name Labeled tabs allow you to view sections of the return according to selected categories For example if you click the EF tab only the documents directly related to e filing are displayed in the tree view Tax Year 2008 Drake Software User s Manual Viewing and Printing a Return All Forms Sets A LIEF MESSAGES EFSTATUS 9325 r eT EE C Federal Worksheets Miscellaneous 7 4 Figur
27. Checkpoint Drake Software User s Manual Some screen helps include the following features e Links to form instructions e RIA Checkpoint s Form Line Finder RIA Checkpoint is an independent tax research tool for advanced research by tax pro fessionals To access Checkpoint from the Home window click the Research button or select Help gt RIA Tax Research When the RIA page is opened you have access to the following items e Extensive Federal Tax Handbook with answers to hundreds of tax questions e Public Domain Materials including federal tax case law and IRS rulings and memoranda some of which date back to 1860 e A Weekly Alert Newsletter for staying on top of fast breaking developments e RIA Tax Return Guides containing the latest data available for individual cor porate partnership and estate returns Guides are linked to the Form Line Finder e The Form Line Finder for quick convenient searching of the Tax Return Guides current and archival years by form and line e Calculators to help you quickly answer questions and provide advice to your cli ents RIA s 80 calculators are also great to use in conjunction with your Drake Tax Planner Broadcast E mails Broadcast e mails which inform you of the latest IRS alerts or software issues are sent to your 1040 com e mail address vour EFIN 1040 com Access broadcast e mails through Drake at Help gt Mail Interactive Support Drake provides interactive sup
28. Corrected or The W2 screen has check boxes to indicate that a W 2 was altered handwritten non Altered W 2 standard or corrected To indicate that a W 2 was altered or corrected from a previ ous W 2 select the appropriate box on the W2 screen 88 Tax Year 2008 Drake Software User s Manual Personal Service Income W 2 1099 MISC Substitute Form 4852 serves as a substitute for Form W 2 W 2c or 1099 R when a taxpayer W2 or 1099 R either did not receive one of these forms or an employer issued an incorrect form Form 4852 is not generally filed before April 15 Screen code 4852 Use the 4852 screen accessible from the Other tab to fill out Form 4852 NOTE The generated Form 4852 uses data entered on the corresponding W2 or 1099 screen for Form 1099 R W 2 Import New in 2008 if your client is an employee of a company that uses Talx W 2 eXpress that client s W 2 can be downloaded directly into Drake See the Drake Support site My Account gt W2 Block Purchasing for information on purchasing W 2 downloads and a list of companies that supply employee W 2s using this service To import W 2 information 1 From the Data Entry Menu of the client s return click Import gt W2 Import X T 2 Inthe W2 Download dialog box select Taxpayer or Spouse as applicable The Rea name and SSN of the selection is displayed below the Taxpayer Spouse drop list Schedule D Import Drake 2008 W2 Download 0 Taxpayer S pou
29. Enter the preparer s Central Authorization File Number assigned by the IRS Jurisdiction Enter the jurisdiction in which the preparer is authorized to practice before the IRS If the preparer is an IRS Enrolled Agent enter the EA number here Enter W 7 Acceptance Agent information for the preparer if applicable Click Save Security options are available to Admin login only Security settings must be estab lished before a preparer can begin working in the software To customize security settings for a preparer 1 2 3 4 From the Drake Home window go to Setup gt Preparer s Select a preparer and click Edit Preparer Select Security gt Custom Security In the Preparer Security Setup window select the menu items to which the pre parer is allowed access Items left blank are inaccessible to the preparer Drake 2008 Preparer Sect File EF Tools Reports Last A V Open Retum a Preparer can open T Cale and view returns but a Print cannot calculate or Iv View print them V Pre Prepared Entry M Quick Estimator PE oe Figure 2 5 Security setup 5 Click Save When prompted click OK Click Exit to close Preparer Setup 17 Software Setup Drake Software User s Manual Other options available under the Security button are shown in Table 2 4 Table 2 4 Preparer Security Options Security Option Description Set Security to Allow No Options Employee cannot access any part of the pro
30. Fee Override Fields Fees to be withheld from the bank product are established in the Banking Informa tion section of Setup gt Firm s You can override these fees from the bank screen If the option to override the e filing fee has been deactivated at Setup gt Firm s this option will be unavailable on the bank screen Tax Year 2008 209 Bank Product Transmission Drake Software User s Manual Opting Out Override the fees to be WITHHELD from the Bank Product max preparationifaet ns cece ee 0 Electronic Ming toaren aaa Figure 8 5 In this example the preparer has selected to waive the Tax preparation fee The Electronic filing fee field has been disabled from Setup gt Firm s If the taxpayer wants a bank product but the spouse doesn t select Spouse opting out of the Bank Product box in the Opt Out section If it s the taxpayer opting out but not the spouse select the Taxpayer opt out box Additional Product Offerings Each bank screen has an Additional Product Offerings section If the taxpayer wishes to have the proceeds of the bank product deposited into an account rather than distributed as a check enter the banking information in this section Note that the RTN Account number and Type of account must be entered twice Other Required Information All bank screens include a Military Personnel Dependent Identifier section This section is required and must be completed before a bank product can be approved
31. Figure 3 3 Q Drake 2008 Tax Software File EF Tools Reports Open Create Returi Calculate Print View Pre Prepared Entry Quick Estimator Exit ast Year Data Setup Help be Key Print View View Ctrl Ctrl Q Esc al 2 Logout Preparer 3 4 TEST RETURN PYND amp PYS LEELEE HAWAII PARTNERSHIP 5 agge annaa A a M a ra A Figure 3 3 Key combinations Creating and Opening Returns When you enter an ID number SSN or EIN in the Open Create a New Return dia log box the software searches both current and prior year files If it finds a client record in the prior year files only you are given the opportunity to update the record from the previous year s Drake Software into this year s program See Updating Cli ent Files on page 68 to perform an update Creating a Return To create a return in Drake 3 1 From the Home window click Open New or use the desired key combinations 2 Inthe Open Create a New Return box enter the ID number of the new return 3 Click OK Open New Tax Year 2008 55 Creating and Opening Returns Drake Software User s Manual 4 Click Yes when asked if you want to create a new return 5 In the New Return box Figure 3 4 select the return type and enter a client name Drake 2008 New Return Select the Return Type and enter the required information below This information is required based on the PPR Stat
32. Form 4562 Office in Home Screen code 8829 Enter information for Form 8829 Expenses for Business Use of Your Home on the 8829 screen accessible from the Adjustments tab Applying 8829 Data to a Form The 8829 screen can be applied to Schedule C Schedule F Form 2016 and Schedule K 1 for Partnership Select the form type from the For menu at the top of the 8829 screen Use the Multi form code box as needed the default is 1 See Associating One Screen with Another on page 62 Special The multi form code information must be modified slightly in the case that the 8829 Conditions screen is being associated with a Form 2106 Employee Business Expenses and the Form 2106 spouse has a 2106 form The program numbers all taxpayer 2106 forms before num bering the spouse 2106 forms as shown in Table 5 18 Table 5 18 Screen 8829 Multi form Codes for Form 2106 If the 2106 is for pAr Primary taxpayer 1 Primary taxpayer and it is the primary taxpayer s second 2106 2 Spouse and the primary taxpayer does not have a 2106 1 Spouse and the primary taxpayer does have a 2106 2 Spouse and the taxpayer has two 2106 forms 3 150 Tax Year 2008 Drake Software User s Manual Net Operating Losses Depreciation of Home Generally home depreciation data should be entered under Part III of the 8829 screen If the home was placed into service during the current tax year however leave Part HI blank start
33. SBBT RAL Advance RAL RT Refund Transfer For specific details regarding each bank product go to the Drake Support site Support DrakeSoftware com and select Partner Programs gt Bank Partners M H RTANT A bank product option cannot be changed once the IRS has IRALs RALs Non Loan Products acknowledged the return To qualify for an Instant RAL or IRAL a taxpayer must have a W 2 An IRAL allows taxpayers to immediately receive a portion of their expected federal refunds The loan is approved or denied on the spot so the taxpayer can receive a check within moments of applying If the bank accepts the loan application the return is sent directly to the IRS If the application is denied the taxpayer has the opportunity to select a different bank product To qualify for a RAL a taxpayer must have an income source other than Schedule C The RAL amount is based on the taxpayer s anticipated federal tax refund A RAL allows the taxpayer to receive the amount of a refund within a matter of days within 48 hours in many cases If the taxpayer s RAL application is denied the bank flips the RAL to a non loan product see Table 2 RAL eligible refund amounts vary by bank and can range up to 9 999 99 The loan amount is paid in full when the IRS deposits the actual refund directly into the bank The bank could withhold preparer fees through this loan process A preparer can print the RAL check once the loan is
34. Setting Up Scheduler Options Use the Scheduler Setup feature to establish the logged in preparer s default settings for appointment durations automatically filled data and calendar views Only the logged in preparer s calendar and view are affected by any changes NEW FOR Scheduler setup options are now organized via a General tab and a 70 8 Calendars tab 76 Tax Year 2008 Drake Software User s Manual Setup Establishing Daily Schedules Tax Year 2008 Scheduler Click the Setup icon in the Scheduler toolbar The Scheduler Setup consists of two tabs a General tab for default settings and a Calendars tab for setting viewing options for calendars Options are described in Table 4 2 Tab Table 4 2 Scheduler Setup Options Setup Option Description General Appointment duration Set the default appointment time displayed in the Appointment Detail dialog box see Schedul ing Appointments on page 13 Values are 15 30 60 75 or 90 minutes Scheduler times Appointment reminders Set the intervals of time to be displayed on the calendar grid rows of the Appointment Sched uler see Figure 4 12 Values are 15 30 and 60 minutes Activate the appointment reminder establish how far in advance to receive a reminder of an upcoming appointment You can also select this option on the fly when setting up an individual preparer s appointment Open Setup Schedule for Set up a prepare
35. Steps 3 4 and 5 6 Click OK The program is now set up to share client files and if selected share other files EF Pricing Letters etc M H RT NT Do not change the Directories Paths settings during tax season If a change is necessary contact Drake Support 12 Tax Year 2008 Software Setup Drake Software User s Manual Software Setup Perform setup procedures after installing the software and before attempting to pre pare or e file returns Some setup procedures are required others are optional Table 2 3 Setup Procedures Required and Optional Required Setup Procedure Optional Setup Procedures Firm s See Firm Setup on page 14 Options See Options Setup on page 24 ERO See ERO Setup on page 15 Pricing See Pricing Setup on page 33 Preparer See Preparer Setup on page 16 Macros See Macros Setup on page 34 Directories Paths See Directories and Paths Setup on page 20 Letters See Introduction to Letters in Drake on page 35 Update Profile See Update Profile Setup on page 22 Colors See Color Setup on page 41 Pay Per Return See Pay Per Return Setup PPR Clients Only on page 19 Printing See Printing Setup on page 41 Prior year Drake clients can bring forward most required program settings from last year s program See Updating Settings
36. The taxable amounts from these screens flow automatically to Form 1040 For more on the MSA and HSA forms see IRS Pub 969 N Lines 1 coverage indications and 2 HSA contributions for the DTE year of the 8889 screen are required if Form 8889 is to be e filed with the return Gambling Income amp Loss Screen code W2G Use the W2G screen accessible from the General tab to enter gambling income and loss information from Form W2 G Data from the W2G screen is carried to line 21 and line 22 if applicable of Form 1040 NEW FOR The W2G screen now has check boxes for Lottery Winnings and Electronic Games of Skill Not all states tax the gambling winnings 200 B from lotteries or electronic games Select the boxes as applicable but first press F1 in a field to access further information on each item Cancellation of Debt Screen code 99C Use the 99C screen to enter data from Form 1099 C Cancellation of Debt From the For drop list at the top of the 99C screen select 1040 to indicate a non business debt Select one of the other available choices as applicable to indicate a business debt The For list selections along with the line on the tax return where the cancelled debt amount flows are shown in Table 5 5 Table 5 5 Cancellation of Debt For Where Flows on Tax Return Field Item 1040 Form 1040 Other income line C Schedule C Other income line E Schedule E Rents received line
37. amount becomes the adjusted basis of the new asset unless an additional amount was incurred in obtaining it 5 Open the 4562 screen for the new asset In the Description field make a notation to indicate that the asset was traded for example type an A in the description NOTE EXAMPLE If a Ford 150 is traded for a Chevy Blazer the descrip tions on the 4562 screen might be A Ford F150 and A Chevy Blazer This notation makes the traded assets easier to identify Tax Year 2008 Drake Software User s Manual Retirement Income 1099 R etc 6 Enter any increase in basis as the beginning cost The depreciation on the old asset continues over the life remaining and depreciation for the new asset starts using the 8824 basis for the correct number of years Retirement Income 1099 R etc 1099 R Items Not Reported on 1099 R Substitute 1099 R Rollover of Pensions Annuities Tax Year 2008 Use the 1099 8606 and ROTH screens as applicable to enter most retirement income data Screens 3 and 4 include fields for entering retirement data directly into the generated 1040 Amounts entered in these fields are combined with any corre sponding calculations from the 1099 8606 and ROTH screens Use the 1099 screen to enter data including distribution amounts from Form 1099 R Use screen 3 for IRA and pension distribution amounts that were not reported on a 1099 R Enter total and taxable portions of the
38. e you have security rights to install patches established in Setup gt Preparer s 23 Software Setup Drake Software User s Manual e you have permission established in Tools gt Updates to see the message regard ing the updates ready for download e your system is not up to date in other words it needs the updates that are avail able for download If these conditions are met when you log into Drake you will see an Updates are available message in red text on the Home window If updates are available go to Tools gt Install Updates and follow the instructions for installing updates Options Setup Options setup is not required for completing or e filing tax returns Data Entry Options The tax software is shipped with the most common preferences set as the defaults Use Setup gt Options to view or change the defaults for the various options available Options are categorized into tabs as shown in Figure 2 11 Drake 2008 Setup Options Data Entry Customize data entry functionality by indicating your preferences below Billing States EE Administrative Options Data Entry Calculation amp View Print Form amp Schedule Options Optional Documents Optional Items on Return Select To Tum ON 2 Language for menus and data entry screens 5 English z nP Er A a a STE ON T n Ai spans Figure 2 11 Options tabs from Setup gt Options From the Home window go to Setup gt Options and selec
39. on page 101 for information on entering data related to retirement income and taxes Advance EIC Payments Enter advance EIC payments from Form W 2 in Box 9 of the W2 screen This amount flows to the Advance EIC payments line of Form 1040 Tax Year 2008 123 Household Employment Taxes Drake Software User s Manual Household Employment Taxes Screen code H Use screen H accessible from the Taxes tab for Schedule H Household Employment Taxes Other Taxes Screens for the following forms are available under the Taxes tab in Drake Table 5 10 Other Tax Forms That Can Be Calculated in Drake sane Form and Tax 4137 Form 4137 Tax on Tips 4970 Form 4970 Tax on Accumulation Distribution of Trusts 4972 Form 4972 Tax on Lump Sum Distributions 8611 Form 8611 Recapture of Low Income Housing Credit 8615 Form 8615 Kiddie Tax 8814 Form 8814 Parents Election to Report Child s Income If both parents are deceased go to the MISC screen and select Both parents deceased in the Form 8615 section Exporting Data for Kiddie Tax New in 2008 the 8615 Export feature allows exporting of parent data to a child s Form 8615 The process consists of two main steps 1 exporting the data from the S615Expot parents return and 2 importing the data into the dependent s return Exporting To export a taxpayer s information into a Form 8615 for the dependent Parent Information 1 Open the taxpaye
40. on page 70 for details Logging in as Admin Log in as Admin before entering setup information The Admin login can access the following features not available to other logins e Preparer setup security features in Setup gt Preparers e Additional features in Setup gt Firm s and Setup gt Directories Paths e Administrative options in Setup gt Options Administrative Options tab e Additional tracking information on the TRAC screen in data entry NEW FOR 2U08 Setting an Admin Password Shortcut Double click the ADM row to edit it Tax Year 2008 Preparer Security on page 17 To set a password for the Admin account A preparer can now be given full administrative rights See Setting up 1 From the Drake Home window select Setup gt Preparer s 2 Click the Administrator ADM row then click Edit Preparer 3 Enter a password in the Password field Passwords can be up to eight characters alphabetic and or numeric and are not case sensitive 4 Re enter the password in the Password Repeated box 13 Software Setup Drake Software User s Manual 5 Click Save then click Exit IMPORTANT Firm Setup An Admin password is not required If your firm chooses to have an Admin password keep a record of the password Drake can not retrieve lost or forgotten Admin passwords Firm setup must be completed before preparing and e filing returns If data is inaccu rate or missing tax
41. pee eee tre ot Ce went wees haves pert ee ee ere s3974 OUT OF BALANCE _ PTR TB Figure 14 8 Out of balance amount is highlighted if columns are out of balance In addition to credit and debit totals the main trial balance worksheet shows the net income loss to be calculated for line 1 of Schedule M 1 after all entries and adjust ments are made in the software NOTE The data cannot be imported if the worksheet is out of balance Saving a File To save a file click the Save icon or select File gt Save from the menu bar To re name a file when saving select File gt Save As For more information on file names in the trial balance program see Naming Convention on page 301 Importing Data into a Return N Not all trial balance data can be imported directly into a return For DTE information on program limitations see Special Conditions on page 305 Once a trial balance worksheet has been set up for a client in Drake the trial balance information can be imported into the program and calculated into the return N If you are already in the Trial Balance Import tool for the selected UTE return go to the Trial Balance Import window in Drake and start at Step 3 of the following procedure To import a trial balance into a return 304 Tax Year 2008 Drake Software User s Manual Trial Balance Import esse 1 Open the return to which you will import the trial balance information aon 2 Clic
42. review the imported amounts to DTE ensure that all data was imported If the data appeared to import correctly an M 1 adjustment could be necessary 6 Complete all 8825 or RENT screens in data entry as applicable for the individual rental properties or items 7 Delete the 8825 and RENT screens that were imported from the trial balance the screens reflecting the total rental expenses N To delete a screen in data entry open the screen and press DTE CTRL D If a multiple forms list appears ensure that the screen to delete is selected then click Delete Binary Attachments Binary or PDF files can be attached to certain tax forms These attachments are gen erally signature or third party documents such as a copy of a signed lease or a signed appraisal statement In some instances the IRS requires that a document be attached to an e filed return in other instances a document can be attached voluntarily to sup port or explain an entry in the return In either case a document must be printed scanned into the computer and attached to the return in order to be e filed with the return New for 2008 you can attach PDF files to federal corporate 1120 S corp 1120S partnership 1065 and tax exempt 990 returns for e filing A new PDF Attach ments screen is accessible from the Data Entry Menu The PDF Attachment Process Three main steps are involved in the PDF attachment process in Drake 1 Creating a PDF document to b
43. to the left of Other Information optional Amount is optional not required for import but could require direct entry in the software enter as negative number Some deficits must be entered as negative numbers import includes the calculated Used for total purchases when calculating cost of goods change in inventory sold COGS in the return the program takes the change in inventory into account for the Schedule A calculation Form or Schedule may be Non financial information such as names of officers for a required Schedule E must be completed in Drake in addition to the financial data entered in the worksheet All does not carry notes are accompanied by further instructions in the column to the left of the Other Information column as shown in Figure 14 11 SCH2 Detail Typically a balance sheet subsidiary schedule SCH2 detail screen for Schedule L is required for an item marked do not carry on the trial balance 306 Tax Year 2008 Drake Software User s Manual Trial Balance Import Account Title Debit Import to screen line Form Page Sch and or line Other Information s ae e athe se lianan i han te reno MY ene ye ak ie e120 Seh L ine ca namie T ttn Pre ct rE ree pig le pete ge a ee eB Ge OEE mt ge HPN Pg OR PON Pet ge yt BO agg PIL p Pan gaat me U S government securities 0 L line 4 cold Form 1120 Sch L line 4 Tax exempt secur
44. whichever is desired If a bank is selected in Setup gt Firm s and a bank product is indicated in the return s BANK screen then the RAL application is included in the forms produced with the return 203 About Bank Products Drake Software User s Manual To print a blank form without going through the return go to the Home window and select Tools gt Blank Forms select Federal and choose the application for your bank Note that applications are multiple pages as shown in Table 8 1 Table 8 1 Bank Application Forms Available in Drake Bank Application Form Chase CH_APPL PG through CH_APPL PG4 4 pages Republic RB_APPL PG through RB_APPL PG5 5 pages RCB RCB_APPL PG through RCB_APPL PG6 6 pages SBBT SB_APPL PG through SB_APPL PG4 4 pages See Tools gt Blank Forms for other bank related blank documents Banks typically have specific minimum and maximum refund requirements For more information consult the bank application N Do not confuse the RAL Application with the bank application that DTE an ERO must fill out online for Drake For more on the Drake bank application see Preparing to Offer Bank Products on page 207 Service Bureau Requirements If your firm collects tax returns for e filing from outside companies or individuals it might be considered a service bureau Service bureaus can be required to provide additional information when applying for bank products A preparer or
45. 1 Click Add Condition See Figure 12 7 on page 273 2 In the Filter Condition Editor dialog box select a Keyword Name 3 Select a Comparison option and a Value if required Figure 12 8 Condition Filter Settings Keyword Name aci zl Comparison faes i Value 50000 Ask about this Condition each time the Filter is used Figure 12 8 Comparison is at least and Value 50000 selected for AGI keyword Ifa value is required the Value field appears A value can be alphabetic or numeric For example if AGI is selected with a comparison of is at least the value must be numeric Do not use commas when entering numbers If Tax payer s Last Name is selected with a comparison of starts with the value must be alphabetic 4 optional To allow a user to modify this condition when running a report select Ask about this Condition each time the Filter is used 5 Click OK The new condition is displayed in the Filter Manager Figure 12 9 Basic Search Conditions for the Selected Filter Return Type is Any Edit Additonal Search Conditions for the Selected Filter Schedule C is present Add Condition AGI is at least 50000 ae Edit Condition Delete Match All Conditions Match Any Condition Figure 12 9 New condition AGI is at least 50000 is displayed 6 optional Repeat the previous steps to add more conditions as needed 7 Select Match All Conditions for
46. 181 EIC see Earned Income Credit EIN database about 62 261 editing 260 updating from prior year 69 EITC see Earned Income Credit election options 153 electronic filing see e filing funds withdrawal see direct debit games of skill 109 return originator see ERO Electronic Training Center ETC 227 232 e mail address books 238 broadcast 236 checking during EF transmission 29 Form 9325 to taxpayer 29 program in Drake 236 240 sending a client file return to Drake 237 to Drake Support 5 employee business expenses 110 employer information in EIN database 261 employers foreign 87 who use Talx W 2 eXpress 89 engagment letters 27 enhanced view print mode 168 173 entering data see data entry envelopes 27 47 259 ERC Electronic Refund Check 205 ERD Electronic Refund Deposit 205 ERO Electronic Return Originator applying for status 180 opting out of bank products 208 overriding defaults 48 setup 15 16 179 SSN indicator setting 29 error messages audible notification of 26 estate returns 5 254 estimated payment coversheet 27 estimated tax 125 130 adjustments ETA screen 127 applying overpayments to 128 codes in Drake 127 direct debit of 137 paid in 2008 125 payment reminders 257 payments for 2009 126 penalties 130 underpayment of 129 vouchers for 126 xi Index estimating 1040 results Quick Estimator 264 ETC see Electronic Training Center exemptions 85 86 see also
47. 2008 When planning reports for your office consider beginning with a pre defined report that already includes most of the information you require Whenever you modify a pre defined report the modified version is saved as a new report in My Reports See Setting Up a Report on page 267 for more information To create a new report format 1 From the Home window click Report gt Report Manager to open the Report Manager See Figure 12 1 on page 265 2 Click New Report 271 Filter Manager 5 6 Drake Software User s Manual Select one of the following report types e Electronic Filing amp Banking For a report based on the EF database e Tax Return Data For a report based on data entry information Click OK to open the Report Editor Step 1 window Using the instructions in Setting Up a Report on page 267 as a guideline enter the report formatting and filtering information Click Save Deleting a Report Only a report in the My Reports category can be deleted To delete a report 1 2 3 4 5 From the Home window click Report gt Report Manager to open the Report Manager See Figure 12 1 on page 265 Click to expand any category Categories have a or to their left reports do not Select single click the report to delete Click Delete Report Click Yes when prompted to confirm the deletion If you have run the report you are asked if you want to dele
48. 2008 iii Table of Contents Drake Software User s Manual Other Income 24cs 4 aac sha hace Ge daa aOR aw CRAs AEA EWER KES Bd ERRER ER AOS 108 Educator EX Penses cosine det doeeevsadatasiedlseetdadeatacwadlotesteathedacodade 110 Employee Business Expenses vu sc me we age pay oe ones Oa Oe a AE ER a Re RR 110 Health Savings Account HSA Deduction 0 0 00 ccc cc eee nee 111 MOINS Expenses 26 gt 1 a4 cl seas Medea webu wad fe ewan sade DEEE aa iea taken ne 111 Self Employment Adjustments 1 0 0 0 0 cc cece eee eee e eee eee e eee neeees 112 Petal Hes speras Yq Se he Ca LEE eR Se es RR ah oa SS TSG Nae ie eae 114 AMMONY Paid fs dace bas GEARS eh IER KAS ERS 8 ER LAR CARERE ESEA EEA 115 IRAAdj stMmentS serce ik deve th ee eREEEE CARRE NER E EATERS EAE RES OAR RRS 115 Student Loan Interest Deduction 0 0 0c ccc teen nee 115 Edu ation EXCnses 4 344 kaon testte EErEE ETERRA REPEC REE Kae eo Eai 115 Domestic Production Activities Deduction usasa n anaana erare 116 Other Adj StMENTS 4 04 inde imee pen E EEE A ER E E AORE ESAE EEEE 116 It mi ed Ded ctions ss 4sswavciae ae ee a a E EE ta EE EEEE E E 117 Alternative Minimum Vax essed pase es eas ee 0k5S 4 ee pas peed Rea aoe pa ees 118 Child and Dependent Care Expenses Credit 4c ca4ccidnanebceiendaders band abeea bana 118 Flderhy Disabled Credit y s5ca 8 wana ene aree sis nee oh ek Oa ee eS EE EESE R 120 Home Energy Credits 5 2 9 64 aintes oe deh ae hh e
49. 4 Click a package button The Flag Fields for Review window for that package is opened Note that this window resembles the Data Entry Menu gi Select a screen to open it 6 Choose one ofthe following options e Flag a field for a screen Click the fields to flag or right click it and select Flag Field For Review When Screen Is Created The field is flagged with the word Screen e Flag a field for all new returns Right click a field and select Flag For Review When Return is Created The field is flagged with the word Return as shown in the example in Figure 3 13 A a B Business code D Employer ID Figure 3 13 Field has been flagged for all new returns NOTE Click a field a second time to remove the flag 7 Press ESC to exit each window press ESC again to exit the Flag Fields for Review window then click Exit to return to Setup Options 8 Click OK to save your changes and close Setup Options Override amp Fields that allow overrides are preceded by an equal sign and display red text by Adjustment default Data entered in these fields replaces or overrides program calculations Fields Peco eraser 100 Direct entry field arenes 100 Override field behest NS i 100 lt lt Adjustment field j Pee ee E Figure 3 14 Direct entry override and adjustment fields Fields that allow adjustments are preceded by a plus minus sign and display blue text by
50. 4562 Part I Election to Expense Expensing Section 179 If screen 6 contains a section 179 expense override clear that field and enter the amount on the 4562 screen The entry appears on Form 4562 To expense the entire amount of tangible property under section 179 select EXP as the depreciation method To expense only a portion of the tangible property under sec tion 179 enter all information as if depreciating the full amount then enter the amount to expense in the 179 Expense Elected this year field Figure 5 51 An amount in this field overrides system calculations aaea AE ea a E E O Salvage value 179 Expense Elected this year 179 Expense ALLOWED this year 179 Expense Elected in prior years 179 Expense ALLOWED in prior years BONUS CEPrBClAtlOM cc cscsccscsccssceceserccsressucesesse prio bonus depreciation raaraa sdgcrsecdscsecsuindssesncetustesse a a NOE a a a Figure 5 51 On the 4562 screen select EXP 1 to expense entire amount under 179 use the 179 Expense fields 2 if expensing only a portion of the amount If the amount must be carried to a listed property make an entry in the Listed Prop Type field in the top right of 4562 screen See Listed Property Type on page 142 For returns that are being prepared in Drake for the first time the NOTE prior section 179 expense must be entered manually for the depreciation to be calculated correctly In the future the 179 Expen
51. Acknowledgement Codes A Accepted by IRS R Rejected by IRS see reject codes op oO pocewe Transmit arr D Duplicate return is a duplicate of a previously filed return or DCN Rejected by IRS transmitted gt acknowledgment Lai E filing process X Problem with the transmission rotu complete E Imperfect return Ack file was not posted to your EF database Run Repair Index in Drake D Drake Software User s Manual Appendix C Keywords Appendix C Keywords Keywords are used in the Reports and Letters programs in Drake Report Keywords Report keywords appear as columns in reports Figure C 1 Reports are generated from the Report Manager Balance Due As Of 11 06 2008 Preparer Name Taxpayer ID eo Name Retum Type AGI Balance Due Linda Jarman Drake Software 600001030 AR 1040 65 798 00 2 910 00 ANTI Sees Nina Rogers 400001006 LORI BARRELL 1040 29 940 00 2 066 00 NAGI ty a n T T E N ET O T N Steere Figure C 1 Report keywords appear as column headers in reports To view report keywords select Reports gt Report Manager from the Home window and choose to either open a new report or edit an existing report The Select Report Columns section of the Report Editor Step 1 dialog box lists keywords for each column category Figure C 2 shows the keywords for the Return Results category Select Report Columns ategories Available Columns Selected Report Columns Return Results AGI
52. Add Update Security Password e From the Tab Security section click Secured or Unsecured for a whole report category e From the Report Security section click Secured or Unsecured as desired for a specific saved report To exit the report security screen choose another tab in the EF database Tax Year 2008 Drake Software User s Manual Online EF Database Tools Three functions are available from the Tools tab Run 94x Report Download ABC Voice Files and Generate Contact List 94x Reports Ifyou use Drake s Client Write Up to e file 940 941 and 944 reports and returns the online EF database allows you to run reports on those clients To run a report 1 2 3 4 Remove a check mark to exclude 940s 941s or 944s All three items are 6 From the online EF database toolbar click Tools Click Run 94x Report and choose the Tax Period End Date Enter the EIN or leave the text box blank to include all 94x returns in the report included by default From the Status drop list choose one of the following status options e Include all returns in report e A Include only returns with A accepted acks e P Include only returns with P pending acks e R Include only returns with R rejected acks e S This status not active for these reports Click Submit ABC Voice Also on the Tools tab the option to Download ABC Voice File applies only to prepar Files ers using the ABC Voi
53. Alimony Received Select gt Alt Min Tax Applied _ lt Unselect _ lt Unselect Balance Due Child Tax Credit Additional _ lt lt Unselect Al _ lt lt Unselect Al All Dividends Ordinary Total Estimated Tax Paid Prior Year Estimated Tax Payment 1 Estimated Tax Payment 2 Figure C 2 Keywords are listed under available columns To view a keyword description click the keyword then place the mouse pointer over it A keyword description appears as shown in Figure C 3 Select Report Columns Categories Available Columns Return Results AGI Alimony Received Alt Min Tax Balance Due Child Tax Credit Adag Dividends Ordinary pamaen Ta Paid Estimated Tax Paner 2 Figure C 3 Place mouse pointer over a selected keyword to see the description For instructions on creating and editing reports see Chapter 12 Reports Tax Year 2008 C 1 Appendix C Keywords Drake Software User s Manual Letter Keywords Letter keywords appear as bracketed phrases within the letter templates of the Client Communications Editor Figure C 4 p BASE tare eaie AVO ays betut yourup pUaidii hr ate 1 you ne ato re _ Please bring all tax related materials including W 2s 1099s charitable con year s tax return and two forms of identification i We look forward to preparing your return this year If you have any questions please contact us at lt Paid Preparer Phone gt i Sincere
54. Bank acknowledgments are shown in Table 7 3 Bank acknowledgments are usually processed within hours of IRS acknowledgments depending on volume Table 7 3 Bank Acknowledgment Codes Code Description Bank Product Accepted Bank product application has been approved Bank Product Rejected Bank product application has been rejected Check Print Checks are available for printing Prep Fees Deposited Preparer fees have been deposited State acknowledgment codes are not listed here as codes and processing times vary Trouble Described below are some troubleshooting steps for commonly received acks shooting o Acks A B ack typically occurs if program updates are missing If you received a B ack download and install the latest updates see Install Updates on page 243 then recalculate the return and re transmit An R ack indicates that the return has been rejected and includes a reject code show ing the reason for the rejection Look up reject codes in the EF database see Reject Code Lookup on page 193 address the issue and re transmit Be sure to download and install the latest updates see Install Updates on page 243 and check your Drake e mail for new tax developments 186 Tax Year 2008 Drake Software User s Manual E filing a Return A D ack occurs if a submitted return is a duplicate of a previously filed return or DCN Check the EF database to see if the
55. Click OK Click Yes to continue Click Exit NONA To remove password protection repeat the previous steps When you click OK you will be asked if you want to remove the password protection Unlocking Client Files If files are automatically locked upon e file acceptance they can be viewed but not changed after e filing The option to lock files automatically is available in Setup Options see E filing Options on page 29 To unlock a client file that has been locked 1 From the Home window select Tools gt File Maintenance gt Unlock Client Files 2 Enter the SSN or EIN of the return 3 Click OK The file can now be modified in data entry Deleting Files from the Program A client file is created when a return is prepared A print file is a temporary file that is created when a return is calculated Print files are used for e filing and are automati cally removed from the system after the designated number of days See Setup Options Calculation amp View Print on page 25 to view or change the number of days to store print files Deleting To manually delete print files Print Files From the Home window select Tools gt File Maintenance gt Delete Print Files Click the file to delete To delete all files click Select All Click Delete Click OK to return to the Home window RON gt NOTE Since print files appear on the EF transmission selection list you might want to delete print files
56. Electronic Filing To include a client for transmis Client s ID Number Double Clicking on a client will allow you to verify modify the EF documents that 4 appropriate selections click Continue to complete the process Client Name Status EF Documents TEST TWO T Ready ForEF 1040 YA760 PHROZINTOWES TE Ready For amp CADEN RESIDENTH f Returns eligible for HERBALIST TEST G LAMB TEST J amp MAR CADEN PYRESIDEN Ready ForEF 1040 VA760PY 561 CADEN RESIDENTH No EF Docu 1 218 LAMB TEST J amp MAR Returns selected GIBSON JACK G TEST RETURN EYN NoEF Docu Br E Figure 7 2 Eligible returns are indicated by check boxes 2 Select the boxes of the returns to transmit Use the Select All or Unselect All but tons as needed TIP Click column headers to sort returns by column 3 optional Double click a return to open an EF Transmission Detail box for the return This box displays the client name ID number EF status and federal and state including piggyback documents to be filed and allows you to finalize the specific documents to be transmitted Click Save to retain any changes you make 4 Click Continue The Report Viewer shows the EF Selection Report which lists all returns that are awaiting transmission See Report Viewer on page 276 for details on Report Viewer features 5 Click Exit to close the Report Viewer NEW FOR The EF Selection Report EF Transmission Record and Bank
57. Entry 400006665 CARTER WILLIAM amp AMELIA i Drake 2008 Grid Data Entry Press lt F3 gt to access the detail screen for the current item Click on a column header to sort data click again to reverse the sort To delete an item click on a row number and then press Ctrl D Hold the Control key down to select more than one item at a time First Name Last Name Suffix SSN Relation Months Date Of Birth Child Care E 1 Carolyn 400 00 1012 DAUGHTER 12 01011988 2 Richard 400 00 9876 SON 12 12181984 a A Rt paassa sgpetensitntnditnnrat mahaian aa manii gaa anin PO T a E E s Figure 3 7 Grid data entry To access grid data entry from full screen mode press F3 on the keyboard Press F3 again or click Item Detail to return to full screen mode To delete a row select a row number and click Delete or press CTRL D At the prompt click Yes Tax Year 2008 Drake Software User s Manual Data Entry Existing The Existing Forms List is displayed if more than one instance of a screen has been Forms List saved ina return N An Existing Forms List does not appear if setup options are set DTE for grid data entry Disable automatic grid data entry under the Data Entry tab in Setup gt Options Existing Forms List 2 Dependents FirstName LastName ssN_ Relationship Date of Birth 1 Caron 239211123 DAUGHTER 01011988 2 Richard 245622235 SON 12181984 new
58. Estimated Taxes 2008 Payments on Screen 5 2008 Payments on ES Screen Drake Software User s Manual amounts on the ES screen You can also enter the total amount on screen 5 or use the 2210 screen for underpayment of estimated tax Use screen 5 to directly enter the amount of estimated taxes paid in 2008 The pro gram assumes that the payments were made in four equal amounts on the standard estimate due dates Note that the Estimated tax payments field is an adjustment field if 2008 payment amounts are entered on both screen 5 and the ES screen they will be combined during calculation and the sum shown on Form 1040 Use the ES screen to enter by quarter the 2007 overpayment and the estimated taxes paid in 2008 The program applies the standard estimate payment dates If any of these dates are different enter the correct date in the applicable override field Estimated Taxes Paid in 2008 Federal Date Paid Amount Paid Overpayment BUNT OP cheshire ae ene lt _ from 2007 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter N Ability to enter varying amounts Date fields are patema override fields Figure 5 38 Entering estimate taxes paid in 2008 Estimated Payments for 2009 Printing Estimate Vouchers ES Code zl 126 Estimated payments for 2009 are shown on the payment vouchers in View Print mode All Forms Sets EF Federal Miscellaneous Figure 5 39 ES Vouchers in View Print
59. F Schedule F line 10 Other income line 4835 Form 4835 Other income line 982 Form 982 Total amount of discharged indebtedness excluded from gross income line Foreign Earned Income Enter foreign earned income amounts on the appropriate income screen W2 C FEC etc see Foreign Employers on page 87 Foreign earned income is calculated into the total income shown on line 22 of Form 1040 Tax Year 2008 109 Educator Expenses Drake Software User s Manual Excluding Ifthe taxpayer qualifies for the foreign earned income exclusion use the 2555 screen Foreign accessible from the Other tab to complete Form 2555 Foreign Earned Income The Income _ income from the 2555 screen flows to the 1040 as a negative number in other words it is subtracted excluded from the total income shown on line 22 of Form 1040 Foreign income must be included in total income via a W 2 Sched N ule C etc before it is excluded from total income using Form 2555 UTES The 2555 screen consists of five screens or pages Press PAGE Down to proceed to the next page of the 2555 screen To create a new second 2555 screen for the spouse press CTRL PAGE DOWN Educator Expenses Screen code 4 According to the IRS educators might be able to deduct some expenses paid for pur chases of books and classroom supplies even if deductions are not itemized In Drake enter educator expenses in the Educator expenses field o
60. FOR Enhanced mode allows viewing and printing from the same window and 2008 makes it easier to see how the printed return will look Enhanced View Print is now the default view print mode in Drake It consists of five main components described below and labeled in Figure 6 5 168 Tax Year 2008 Drake Software User s Manual Viewing and Printing a Return 1 A toolbar includes many of the options that Drake clients are accustomed to see ing in View Print mode click an icon to activate it See item 1 in Figure 6 5 2 A viewing tool allows zooming and scrolling See item 2 in Figure 6 5 3 Category tabs group documents within a return select a tab to view all documents within the category on the tab See item 3 in Figure 6 5 4 A tree view showing all documents in a return can be expanded or collapsed See item 4 in Figure 6 5 5 A viewing panel displays the selected document See item 5 in Figure 6 5 Z 9 wW Data Entry Print Refresh Basic View Help Exit ELECTRONIC FILING MESSAGES MUST be corrected before electronic filing is allowed Name s Your social security number DAWN amp GARY GREEN 400 000 1001 gg Miscellaneous 122 THE FOLLOWING W 2 s HAVE ERROR 122 1 0122 Form W 2 Employer Identification Number EIN must be numeric The first two digits of the EIN must be a valid District Office Code Employer Name must be present W 2 Indicator must equal N or s Note Th
61. Issued After 1989 157 Form 8820 Orphan Drug Credit 122 Form 8822 Change of Address 157 Form 8826 Disabled Access Credit 122 Form 8828 Recapture of Federal Mortgage Subsidy 158 Form 8829 Expenses for Business Use of Your Home 150 Form 8834 Qualified Electric Vehicle Credit 122 Form 8835 Renewable Electricity Refined Coal and In dian Coal Production Credit 122 Form 8839 Qualified Adoption Expenses 122 Form 8844 Empowerment Zone and Renewal Community Employment Credit 122 Form 8845 Indian Employment Credit 122 Form 8846 Credit for Employer Social Security and Medi care Taxes Paid on Certain Employee Tips 122 Form 8847 Credit for Contributions to Selected Commu nity Development Corporations 122 Form 8857 Request for Innocent Spouse Relief 156 Form 8859 D C First Time Homebuyer Credit 122 Form 8861 Welfare to Work Credit 122 Form 8862 Information to Claim Earned Income Credit After Disallowance 157 Form 8863 Education Credits 115 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 123 Form 8866 Interest Computation Under the Look Back Method 158 xiii Index Form 8867 EIC Preparer Checklist 131 Form 8874 New Markets Credit 123 Form 8879 IRS e file Signature Authorization 139 140 Form 8879 F E file PIN Authorization 5 Form 8880 Credit for Qualified Retirement Savings Con tributions 122 Form 8880 Retirement Savings Credit 123 Form 8881 Credit for Sm
62. Return Information to service bureau or franchisor has NOT been signed by the taxpayer and joint taxpayer if applicable Figure 8 2 Check boxes on CONS screen for disclosure to service bureau franchisor Electronic Signatures To obtain electronic consent you must have the taxpayer and spouse if MFJ enter their names and the date onto the CONS screen The Consent to Disclosure of Tax Return Information will be generated with the return and will include the name of the service bureau or franchisor from Setup gt ERO If your firm uses a service bureau or franchisor the CONS screen must be used even if the client refuses to sign the form If the client declines to give consent select the second box in the NOTES Paper Consent section of the CONS screen See Figure 8 2 A service bureau or franchisor must be entered in Setup gt ERO in order to produce the correct letter from the CONS screen and ensure that consent is obtained for every return See ERO Setup on page 15 Taxpayer Requirements RAL Application Tax Year 2008 For a taxpayer to be eligible for a bank product the return must be eligible for e filing In most cases the taxpayer must be 18 or older If married filing jointly both taxpay ers must be 18 or older Check with your bank for state specific age requirements Both preparer and client must complete all parts of either the Refund Anticipation Loan RAL Application or the non RAL Agreement
63. S corporation file to import into a Drake C corp file 256 Tax Year 2008 Drake Software User s Manual Letters Letters The Letters tool allows you to print batches of certain client letters at a time The let ters available for batch printing listed in Table 11 2 are those that do not typically accompany a tax return Table 11 2 Letters Available from Tools gt Letters gt Letters Type of Letter Suggested Purpose of Letter Post season letter Thank clients for their business remind them that you are available for additional tax preparation assistance Pre season letter Touch base with 2007 clients encourage clients to use organizers Estimate payment reminder Remind current year clients that estimate payments are due provide instructions for sending payments Appointment reminder Set up 2008 appointments with 2007 clients EF status letter Provide acknowledgment status of e filed return You can also use the Letters tool to print batches of pre addressed mailing labels envelopes and postcards N The information provided here applies to letters that can be printed DTE in batches For more information on the other types of letters avail able in Drake see Introduction to Letters in Drake on page 35 Printing Letters To print one or more letters 1 From the Home window go to Tools gt Letters gt Letters 2 From the Client Letters dialog box select a letter type Figure 11 12 S
64. SSN is now applied to both the original return and the new return In the future when you enter the SSN to open a return you will be asked which return you wish to open When you use other features of the program where SSNs are entered such as in the Client Selection dialog box in Tools gt Letters gt Letters you will be prompted to indicate which return the program should use Importing Data from QuickBooks Preparing a QuickBooks File Tax Year 2008 Two main steps are needed to import client data from QuickBooks into Drake 1 pre paring the QuickBooks file and 2 performing the import Always back up Drake files and the QuickBooks files prior to importing client files Before you can import QuickBooks files into Drake Software you must first place the QuickBooks files into an import file inside QuickBooks To create the import file from inside QuickBooks Select Report gt Accountant amp Taxes gt Income Tax Summary Click Print to open the Print dialog box Select the option button to the left of FILE Select ASCH text file Press Print D O B U D S Enter a file name of eight characters or fewer with no spaces 255 File Maintenance Drake Software User s Manual Importing To import data from a QuickBooks import file into Drake Software QuickBooks Data 1 From the Home window select Tools gt File Maintenance gt QuickBooks Import 2 Click Next 3 Instep 1 enter the name of the import file cr
65. Software CD A manual is also available on the Drake Support Web site Training Tools gt Manuals gt CWU Tax Year 2008 297 Client Write Up 298 Drake Software User s Manual This page intentionally left blank Tax Year 2008 1 4 Business Packages New Features This chapter covers two significant new features of the business packages in 2008 the trial balance import and binary PDF attachments Trial Balance Import Available in the corporate 1120 S corp 1120S and partnership 1065 packages the trial balance import allows data to be imported into a tax return from a trial bal ance worksheet Drake s specially designed trial balance template and importing function has the fol lowing benefits e Eliminates the need to duplicate entries e Eliminates data entry errors by automatically importing data to the correct fields e Allows preparers to merge basic accounting functions with tax preparation This feature is available for the 1120 1120S and 1065 packages in Drake NOTE A flow chart of the trial balance importing process is available as Appendix F Trial Balance Import pages F 1 to F 2 of this manual Preparing to Use Trial Balance Import Tax Year 2008 The trial balance import function can be used only on returns that exist in the 2008 version of Drake Software If you haven t already create a client file in Drake 2008 or update an existing client file from the prior year Like several other f
66. Software User s Manual Drake Document Manager Audit Log Audit Log of Activities on Document Consent to Use af Tax Return Information This screen shows the activities that have been performed on this document along with the date time and the person logged into the machine at the time AuditLog For Consentto Use of Tax Return Information Status x Path c DrakeDDM CLIENTS G GREEN DAWN 400001001 Description Consentto Use signed by both taxpayers Actions taken on this document New File 12 27 2008 10 24 00 New File Right click to enter description 12 27 2008 10 24 00 Imported from C 7216 Consents Consent to Use of Tax Return Information doc 12 27 2008 10 24 00 NROGERS Document opened 12 27 2008 10 24 03 NROGERS s Ok Cancel Figure 13 9 DDM Audit Log If desired enter a description of the document in the Description field Figure 13 9 Setting New in 2008 you can choose a status for any document in your filing system The sta i rl tus will be listed in the Status column in the DDM window See Figure 13 5 atus To change the status of a document 1 Select a document from the Audit Log list and right click it 2 From the right click menu choose Properties or click a document and press F9 3 From the Status drop list choose Final Review or Draft Figure 13 10 Drake Document Manager Audit Log Audit Log of Activities on Document Consent to Use of Tax Return Information This screen
67. State Programs The Install State Programs dialog box is displayed 2 Choose to install state programs from a computer drive or from the Internet If the selected location has state files available those files are displayed in States Avail able panel If the States Available panel remains empty select another location Location of State Installation Files Install State s from this Drive CADRAKEOS C Install State s from the Internet Figure 11 13 Install state programs from computer CD or Internet a Choose states to be installed 4 Click Install The progress bar identifies the states being retrieved and installed Tip Check for updates after installing state programs to ensure that you have the most up to date information Repairing State Program Files If the state program files currently on your computer or server are already more recent than the state program files you have chosen to install the current files will not be 262 Tax Year 2008 Drake Software User s Manual Scheduler Scheduler replaced If you need to overwrite the current state files contact Drake Support or click the Help button of the Install State Programs dialog box for more information The Scheduler tool is used for scheduling and maintaining client appointments For information on using this tool see Scheduler on page 74 Tax Rates for Ohio Cities Use the City Tax Rate Editor to edit and add tax rates credits and addre
68. To set the status of a return from within the CSM 3g 1 Right click a return record in the Client Status Manager list 2 Select Set Client Status A status list is displayed 3 Select a return status from the list csM The status is updated in the Status column Setting a Status from Data Entry To set the status of a return from within data entry click the CSM button from the amp Data Entry Menu toolbar to display a status list then select a return status from the list The status is automatically updated in the CSM Opening a Return from the CSM Returns can be opened or created from the CSM To open a return from within the CSM highlight a client record from the list and click Open or press CTRL O or use the right click menu The return is opened to the General tab in data entry When you exit the return you are returned to the CSM To create a return from within the CSM Shortcut Press 1 Click the arrow next to the Open button and select New Client CTRL N to open A A the Open Client 2 Enter the SSN or EIN for the return in the Open Client File dialog box File dialog box 3 Press Open then click Yes When prompted you can begin entering data for the new return Tax Year 2008 219 Customizing the Display Customizing the Display Drake Software User s Manual Because custom views are saved and displayed according to the logged in preparer each preparer can set his or her own display To cu
69. Transmission Date Ack Date Ack Code Selected columns New Report Edit Report Delete Report Report buttons f Figure 12 1 Report Manager window Tax Year 2008 265 Report Manager Drake Software User s Manual Report Categories Four report categories are provided in the Report Manager Table 12 1 Report Categories Report Category Description Client Reports Criteria for these reports consist of data that is not directly related to e filing including client contact data preparer and revenue data return details status and tracking data and summary data EF Bank Reports Criteria for these reports consist of data related to e filing and banking including bank product status tracking check and sum mary data and EF status tracking and summary data My Reports Reports that you create either by editing one of the pre defined reports or by starting with a blank report are automatically stored in My Reports Other Report Options This category gives you access to the reporting capabilities of the CSM the Scheduler and the Fixed Asset Manager and allows you to compile depreciation lists and hash totals As shown in Figure 12 1 the Report Manager uses a standard tree format Click to expand a category list click to collapse the list and hide the reports in the category Only those reports in My Report can be deleted To delete a report select single click it and click Delete Repo
70. User s Manual 4 Wait for the program to finish scanning the files This update takes about one minute for every 2 000 client files 5 Click Exit The program searches the indexes for existing data whenever an employer is entered Updating Settings Apply your firm s 2007 software settings to the 2008 program to save preseason prep aration time Once the settings are brought forward for the year they can be individu ally adjusted M P RTANT SE previously updated item can cause a loss of current To update settings from 2007 1 Open the 2008 version of the program 2 Goto Last Year Data gt Update Settings 2007 to 2008 to open the Update Set tings dialog box Drake 2008 Update Settings Update Settings The application has detected Drake 2007 on the drives listed below Recently updated items are not preselected Selecting these items could cause loss of __current year data Get update settings from drive E Hard Drive _ Preparer Information Firm Information Preparer Schedules ERO Screen Document Manager Letterhead Reports Client Status Manager Setup gt Options Pricing Federal Pricing State City _ Letters Continue Exit Figure 4 4 Update Settings dialog box 3 Select the drive that stores the 2007 data to bring forward 70 Tax Year 2008 Drake Software User s Manual Organizers and Proformas 4 Select the setting categor
71. User s Manual Signing the Return No Third Party Designee To indicate that no one other than the taxpayer is allowed to discuss the return with the IRS go to the PREP screen and select No from the drop list in the Third Party Des ignee section See Figure 5 49 If no third party designee is indicated in Setup gt Options the No box is marked on the third party designee line of Form 1040 NOTES If Yes is selected on the PREP screen the PREP screen fields over ride any third party information in setup If you select Yes but leave the other fields blank the third party section of Form 1040 will be blank Signing the Return An e filed tax return must contain electronic signatures of both the taxpayer and the Electronic Return Originator ERO in order to be accepted Electronic signatures are produced using Personal Identification Numbers PINs Form 8879 Form 8879 an electronic signature document used to authorize e filing allows tax payers to select a PIN signature or have the software choose a random number for them It also authorizes the ERO to enter the taxpayers PIN signatures authorizing electronic debit for tax payments N According to the IRS instructions the signed Form 8879 does not DTE need to be mailed to the IRS but instead must be retained by ERO for three years See Form 8879 instructions for more information Screen code 8879 Use the PIN screen accessible from the General tab to complete For
72. Verify SSN when creating new return Required double entry of SSN or EIN helping eliminate erroneous entries Classic Mode Simulate DOS data entry Enable Windows standard keystrokes CTRL X cut CTRL C copy CTRL V paste SHIFT CTRL X autofill amended screen SHIFT CTRL C calculate return SHIFT CTRL V view return Small cursor Use a small cursor in data entry fields Autofill preparer and firm number on new return Automatically enter the firm number and preparer number where required on data entry screens Magnify data entry Activate Preparer Fee override Enlarge the active field for easier reading Allow preparers to use the Fee Override field on screen 1 If the check mark is removed no preparer except when logged in as Admin can access Fee Override Activate W2 wage and federal with holding verification fields To ensure accuracy of data entry your firm can require that wages and fed eral taxes withheld amounts are entered twice on the W2 screen Language for menus and data entry screens Choose between English and Spanish Language for field specific help in data entry Choose between English and Spanish Letter case for data entry Choose between all uppercase letters and a mixed case of uppercase and lowercase letters Override Field Indicator Format override fields in data entry Adjustment Field Indicator Format adjustment fields
73. Year 2008 2 Throughout tax season install updates daily at Tools gt Install Updates Installation amp Setup Read this section before installing your 2008 Drake program The initial shipment of the software sent in early December includes e Federal packages 1040 1120 1120S 1065 1041 990 706 and 709 e 2008 year end update of Drake s Client Write Up CWU accounting payroll and accounts payable program The 2009 version will be released in January e PDF995 software required for printing PDF files e Shipment letter Practice returns e IRS publications e Drake Software User s Manual Software for state programs e filing banking the Tax Planner the Document Man ager city tax rates pre prepared data entry and RIA tax research will be included ina subsequent shipment in January Federal and state programs are updated with each software release thereafter M P I RTANT Hold onto your packing slip This slip includes your serial number and your Drake customer account number both of which are needed for installing the software and subsequent CD updates System Requirements Tax Year 2008 To run Drake Software your computer operating system must be Windows 98 or later and must meet or exceed the following system requirements e Windows 98 2000 NT XP ME Vista Windows NT users must have Service Pack 4 0 or higher available from www microsoft com e Pentium class processor operating at 166 M
74. a ene ef ie Fill out the information below to purchase more returns for your EFIN Credit Card Number 444555666777 Expiration Date MMYY 0110 Name Street Address on statement Noodles Alfredo fi 234 Main Street Zip Code on statement 361 0 Number of Returns to Purchase fi 5 Help PPR List Exit Figure 2 7 Purchase more PPR returns 3 Enter the number of returns to purchase 4 Click Purchase Directories and Paths Setup 20 Use Directories and Paths Setup to manage the locations for data access and storage From the Home window go to Setup gt Directories Paths After completing the screen click OK Information on screens is provided in the following sections Tax Year 2008 Drake Software User s Manual Software Setup Directories Paths settings must be configured before you begin NOTE using the program These settings should not be changed during tax season For details on setting network configurations see Run ning Drake on a Network on page 10 For assistance contact your office IT professional or Drake Support Sharing Files Share only the Drake client files among the computers on your network or share all of on a Network the Drake files with your network recommended 1 From a workstation not the server go to the Drake Home window and then to Setup gt Directories Paths 2 To share just the client files e Insection 3b This is a workstation put a check mark in
75. a 4562 screen for the home and enter the data shown in Table 5 19 Table 5 19 Screen 4562 Fields to Complete for First Year 8829 Screen 4562 8829 Information or Text to be Entered For Select 8829 Multi form code Enter the instance of Form 8829 to be associated with this 4562 screen See Associating One Screen with Another on page 62 Description Enter a description of the asset Date Acquired Enter the date the home was placed in service Cost Basis Enter the smaller amount the cost of basis or the fair market value This amount would normally be entered in Part Ill of the 8829 screen Do not include the cost of the land Business Use Leave this field blank default is 100 Method Select SL Straight Line Federal column Life Enter the number 39 Federal column Land cost Enter the cost of the land only This amount should not be included in Cost Basis above This amount would normally be entered in Part III of the 8829 screen Main Home for 8829 Select this box if the asset was the main home This information is posted to the bottom of Form 8829 when the return is generated Net Operating Losses This section explains where carrybacks and carryforwards of net operating losses NOLs can be entered in Drake Carrybacks from Future Years Screen code 3 Enter NOL carryback amounts from future years on screen 3 in the NOL carryback field Figure 5 60 This field can
76. a taxpayer has a checking or savings account funds can be deposited directly into the taxpayer s account bypass ing the wait for a paper check See Direct Deposit on page 134 to enter direct deposit information The most frequently used method of bank product delivery is a cashier 5 check printed in the tax preparer s office See Printing Checks on page 211 The debit card is another method of receiving funds from certain RALs and non loan products The card can be reloaded with other products Check banks for availability NOTE Banks provide certain non loan products for state refunds Check with your bank for a list of eligible states and products Bank Denials A RAL can be declined for a number of reasons such as duplicate SSNs prior RAL debt SSN reported as deceased or MFS return To view a loan status code or bank decline reason 1 From the Home window select EF gt Search EF Database 2 Click the F4 Reject Code Lookup tab 3 Select either Loan Status Codes or Bank Decline Reasons to view the corre sponding codes in the lower window If you select Bank Decline Reasons spec ify a bank in the Category list A RAL reverts or flips to a non loan product see Table 8 2 if an application is denied 206 Tax Year 2008 Drake Software User s Manual Preparing to Offer Bank Products Preparing to Offer Bank Products To offer bank products you must set up your system with both Drake
77. ah ae pine eee at Pe a pe he i a ee ee 257 AMMOTIZAUOM sources scien thee PASSER eed eee adhe Rae asians Kbke GRE RRU RARER ORS 260 FEIN Database ects eee a e Suk E E aes tate E ace cat E ane lara E E E amuse A 261 Install State Protams 6 cada kkk ode hen eee de bag ne E R EERE EREE EERE REEE 262 Scheduler 2 aia 5y Vea ad radia e Mee eo Wa EEE EEE EE epee ee ee ease and 263 Tax Rates for Ohio Cites tasked nn dtadica ent daes dp SeGui aoe 6k eUe ae daa ARETE OR 263 Forms Bas d Data Pity tye 32625606345 04 bee Nik r RESET RATERS GAAS RES RAE RO 263 Quick Estimator 6 fins gente chase hess ahaa eR GO eh oes dene cha e awe ebieses 263 REDONS osese rei A EE EEEE 265 Report Manager 6 6 iin vibe RaW ww de AK e oE REEERE HACE PRERE LAR ORR Rik NEA 265 Setting Upa Reports ciaxssasetawveeiekus peau dae epase eee eeN we hae eukink e 267 Filtet Manet 4 ca tacos pee ea eae eee Gas Pere eee ae ee ee ee ben eae 212 Report VIEW el iy cebu cide takes hee oe4 Reed eae ETEA EEEN TEREE EEE ees 276 Depreciation As ga cre oae es og eh eae ta a ee wee a ta en E a et ee 276 Fixed Asset Managers 204 ies de 40 ded hatae dh aaa ad AS Adee de heed AES AE ERE 277 Client Status Manager CSM Reports 0 0 ccc eect eens 279 Hash Totals v4 acs chs CRG KG RASA KE RHEE R RAR ARE ERE RI ER ERM REA RERE RRNA AS 219 Site PPE UC saccade sees A ERa 281 Document Wandeer 44 ccttgwbeetheee Ee n EE e r a ET RE R 281 Tax Plane aerea SAAR ah She E E GR E SUSE E E E 292 C
78. and current type of bank product amount depos ited debt code Loans Bank products Checks Reports by check status check data and EFIN Fees Preparer and bank fees Summary Summary reports by date EFIN preparer and ZIP code plus a sum mary of all returns bank products and preparer fees Tools 94x reports for Client Write Up users ABC Voice Files client contact information lists see 94x Reports on page 197 Multi Office Multiple office reports see Multi Office Manager MOM on page 197 Manager MOM Tax Year 2008 Drake Software User s Manual Online EF Database Viewing a Report Saving Report Criteria Deleting Reports To select a report category click one of the report buttons shown in Figure 7 11 777777 Online EF Database j Drake ieee Fetus Dr Thee the A ntl SOS Nn an a a aa Te iia Figure 7 11 Online EF database report categories To view a report Click a category button to select a report category Figure 7 11 2 Enter a Start Date and End Date The report pulls information from only those returns with records that fall within the date range selected 3 optional for multiple EFIN offices only Select Restrict to Multisite and choose an EFIN to restrict reporting to returns for a particular EFIN 4 Enter any other report criteria desired Criteria differ for each report type 5 Click Run Report Click the Print a
79. applied to estimated tax Estimated tax penalty SN Se Oe ee ee ee na a D a Figure 5 41 Entering overpayment amounts Note that the screen 5 field is an override When both screen 5 and ES contain a total overpayment amount the program uses the screen 5 entry however if the ES screen contains quarterly amounts only and no total the program calculates and uses the total of those quarterly amounts That calculated total overrides the screen 5 amount OP Codes Ifa taxpayer is applying an overpayment to the 2009 estimated tax it is necessary to indicate how that overpayment should be applied on the estimate vouchers You can do this by selecting an OP code on either the ES screen or screen 1 see Figure 5 40 NOTE If a code is selected on both the ES screen and screen 1 the pro gram uses the override code from screen 1 E Select an overpayment code from the OP Code drop list Codes are described in Eiend Table 5 12 Code descriptions can also be viewed by pressing F1 in an OP Code field Table 5 12 Overpayment Codes in Drake OP Description Code blank Does not apply overpayment to 2009 refund entirely A Applies the overpayment to the vouchers in order until it is completely applied R Applies overpayment to first voucher and refunds the remainder 128 Tax Year 2008 Drake Software User s Manual Estimated Taxes Table 5 12 Overpayment Codes in Drake OP Description Code E Makes the estimate equal t
80. as authorized by La Revised Statute 47 1520 The electronic filing requirement will be phased in as follows E 1 Appendix E State E filing Mandates Drake Software User s Manual Maine Massachu E 2 setts Michigan e For returns due on or after January 1 2008 30 percent of the authorized individ ual income tax returns must be filed electronically e For returns due on or after January 1 2010 the number of electronically filed returns must be 60 percent e For returns due on or after January 1 2012 90 percent must be filed electroni cally Add Acts 2008 2nd Ex Sess No 11 enacted R S 48 77 A to dedicate percentages of the sales tax collections from motor vehicle leases and rentals to the Transportation Trust Fund beginning July 1 2008 This information is not separately reported on the sales tax return and there is no space to add the lines to the current tax return Man dated electronic filing for motor vehicle leasing and renting dealers was selected because it is the most cost effective means to obtain the required sales tax data Maine Rule 104 states that a tax return preparer for 2008 who prepared more than 200 original Maine tax returns in 2007 must file by electronic data submission in 2008 For all returns filed in 2008 a person preparing original Maine tax returns for sales use or service provider with a tax liability of 200 000 or more for any one tax for the 12 month period ending Septembe
81. balance templates are saved in the TB folder of your Drake08 soft ware The file name consists of the client name as entered in Drake plus TB for trial balance plus the xls suffix assigned to all Excel files as shown in Figure 14 4 Excel file Drake08 TB COMPANYNAMFHTB x1 s suffix TB indicates File Location Name of Client trial balance file Figure 14 4 Example of trial balance template file name Tax Year 2008 301 Trial Balance Import Drake Software User s Manual To change the name of a file in Excel select File gt Save As and assign the new name Template Structure The trial balance template consists of three title rows and six columns The Entity Name and Year End title rows can be edited double click a row to change the title Columns are described in Table 14 1 Table 14 1 Trial Balance Template Columns Column Description Account Title Title of account Debit Credit Debit and credit amounts Import to Screen and line in Drake to which the debit or credit amount is imported Form Page Sch and or line Location of the amount on the printed return Other information Additional details for preparers see Details for Pre parers on page 305 Displayed at the bottom of the trial balance worksheet are the calculated amount for Schedule M 1 line 1 the credit and debit totals and a cell showing whether or not the balance sheet is out of balance and if
82. be available as blank forms If a state prohibits printing blank state forms contact the state revenue office to obtain blank forms To view or print a blank form in Drake 1 From the Home window go to Tools gt Blank Forms The Blank Forms window displays form categories names and descriptions for each tax package 246 Tax Year 2008 Drake Software User s Manual Click a column header to sort forms in ascending or descending order IMPORTANT PON on Repair Index Files Individual Corporate Sub S Partnership Fiduciary Tax Exempt Estate Tax Packages Proformas Official Name Description fee a 1040 PG U S Individual Income Tax Return Arkansas 1040 PG2 U S Individual Income Tax Retum Arizona 10404 PG U S Individual Income Tax Return Califonia 10404 PG2 U S Individual Income Tax Return Colorado 1040EZ PG Income Tax for Single and Joint Filers Connecticut 1040EZ PG2 Income Tax for Single and Joint Filers District of Columbia 1040NR PG U S Individual Nonresident Income Tax Return Delaware 1040NR PG2 U S Individual Nonresident Income Tax Retum anon 1040NR PG3 U S Individual Nonresident Income Tax Return onda Form U Pa Return Georgia Form Names Descriptions Hawai Categories at a e rowan a omera Betun Idaho 1040NREZ PG2 U S Individual Nonresident Income Tax Return Illinois 1040PR PG Planilla para la Declaracion de la Contribucion Federal Sobre el tra Indiana 1040PR PG2 Planilla para la Decla
83. box a Drafts box and a Trash box To open a box click it in the left pane e Out Messages appear here after they have been sent e Drafts If you attempt to close a message before sending it you are prompted to save a draft of the message in your folder to be completed later To accept click Yes To discard the message click No e Trash Deleted messages are stored in Trash To permanently delete a message select it and click Delete Messages deleted from Trash cannot be recovered To compose a new message click New Enter an address in the To field a subject in the Subject line and a message in the text box at the bottom Messages cannot be sent without a subject To send the message click Send NEW FOR 70 0 B building recipient lists for e mails Attaching Files Tax Year 2008 The Compose Message window has been redesigned to facilitate To reply to a message click the message then click Reply or with the message open click Reply The original message is included in the reply message To forward a message click the message then click Forward or with the message open click Forward To delete a message click the message and click Delete or with the message open click Delete Deleted messages go to the Trash box When contacting Drake Support with an issue you might be asked to send a client file DDM file Drake Software program file or other file To send a file attachment using Drake e mai
84. check line of Schedule A There is also a direct entry field for this line on screen A Do not enter duplicate amounts NOTE When a Donee ID number is entered on the 8283 screen the pro gram automatically stores the number in the EIN database Alternative Minimum Tax Screen code 6251 Use the 6251 screen accessible from the Taxes tab to enter information for Form 6251 Alternative Minimum Tax Forcing Form 6251 Although Form 6251 is computed on all returns it is generated with a return only when needed You can force this form to be printed for a single return You can also set up the option to force this form to be generated with all returns Fora Single To force Form 6251 to be printed for a single return go to the PRNT screen of the Return return and select the Print 6251 box in the Items to Print section of the screen For All By default Form 6251 is produced with a return only if it is required To have the pro Returns gram print Form 6251 for all returns go to Setup gt Options gt Forms amp Schedule Options and clear the Print Form 6251 only when required check box Child and Dependent Care Expenses Credit Screen code 2441 Use the 2441 screen accessible from the General tab for Form 2441 Child and Dependent Care Expenses NOTE Enter dependent care information on screen 2 Dependents Enter provider information on the 2441screen 118 Tax Year 2008 Drake Software User s Manual Child and Dependent Care E
85. checks 214 lottery winnings 109 macros see also shortcut keys in the Fixed Asset Manager 279 setup 34 symbols used in 34 viewing from data entry 34 mailing labels 258 mandates Appendix E margin adjustments letters 39 marketing kits 233 married filing separately see MFS filing status maximizing screens 24 maximum minimum fees 33 meals and entertainment 110 medical savings accounts MSAs 109 message center e mail 54 pages EF MESSAGES 182 MFS filing status claiming dependents 86 ineligibility for child care credit 119 splitting a joint return 63 using Quick Estimator 264 Midwestern Disaster Areas education credits 115 software changes 4 mileage XV Index and moving expenses 112 prior year 150 rates 95 117 148 military 84 addresses 84 and EIC 132 data required for bank products 210 processing codes 84 related tax forgiveness 157 ministerial income allocation see clergy MOM see Multi Office Manager months in home dependents 86 mouse 55 moving expenses 111 MSG state EF message pages 184 multi form code MFC fields 62 Multi Office Manager MOM 30 194 197 199 multiple EFINs 195 multi screen forms 59 N net operating losses NOLs 151 153 network data paths for a 22 installing Drake on a 11 options 10 peer to peer 11 187 server only option 11 sharing files on a 21 new features this year 1 5 non loan products 205 non paid preparers 14 non passive activities 105 non profit contri
86. click Next to open the Basic Search Conditions dialog box Edit settings as desired see Search Condi tions on page 272 and click Continue 7 Select an option for displaying the depreciation list e Print to Printer Send the list to the printer When the Print dialog box is opened click Print e Export to File Save the report as a csv file To open the saved file go to your Drake08 Reports folder Click OK Using Fixed Asset Manager Macros Use the Fixed Asset Manager macros to run a set of standard reports at one time To set up a macro in the Fixed Asset Manager 1 From the Home window select Reports gt Fixed Asset Manager 2 Click Edit Macros to open the Fixed Asset Manager Macros dialog box This box has three drop lists one for type of Report one for Depreciation method and one for Style 3 Select a report depreciation method and style for each report to be printed under the macro 4 Click Save to save your changes and return to the Fixed Asset Manager dialog box Figure 12 11 on page 278 To run the macro select Auto Code Print as the report type and click Run Report Client Status Manager CSM Reports Hash Totals For information on running CSM reports see CSM Reports on page 222 The Hash Totals report displays the number of forms and schedules generated on a selected return By consulting these totals the data entry operator can be reasonably sure that the correct values have b
87. client address labels Single Client Address Print a label for a single client address Birthday Addresses Print a batch of address labels for clients whose birthdays fall within a specified range Firm Addresses Print one or more address labels for a firm EF Service Centers Print address labels for e filing service centers IRS Mail To Address Print labels for IRS mailing addresses State Mail To Address Print labels for state mailing addresses User Defined Print user defined mailing labels Labels for Folders Print labels for folders Prior Year Clients Print address labels of prior year client addresses 4 Enter the requested information if necessary then click Next 5 Recommended 6 labels are three across and ten down Avery 5160 or 8160 7 258 If the Filter Selection dialog box opens Set filters as desired then click Next See Filter Manager on page 272 for information on filtering Select any Basic Search Options then click Continue For more information on search condi tions see Search Conditions on page 272 Position the mailing labels as needed If you re printing to a page of blank labels and one or more of the labels has already been used the first available label refers to the position of the first label on the sheet available to be printing on Click Finish after the program has scanned the files Tax Year 2008
88. code autofill feature e Options to choose color schemes and select the default calendar view For more on using the Scheduler in Drake see Chapter 4 Preseason Preparation The letters program has an improved letter editor now called the Client Communica tions Editor It also offers the following new letter templates e EF Status Letter Informs clients of the acknowledgment code s received when e filing e Engagement Letter Generic letter outlining the responsibilities and expecta tions of both client and the tax preparer e Customized Supplemental Letter Template that can be used for various pur poses such as customer surveys client coupons etc e Grantor Trust Statement Grantor trust statement cover letter 1041 package In addition the result letters for all packages have expanded capabilities for e filed returns that have multiple state or city tax types For more information on using letters in Drake see Introduction to Letters in Drake on page 35 See also Letters on page 257 for instructions on batch printing letters New to the 1040 Package Tax Year 2008 The following features are new to the individual 1040 package in 2008 e AUTO Expense Worksheet The improved AUTO screen can now be associ ated with Schedule C Schedule E Schedule F or Form 4835 It has new fields for interest and property tax and a new section for keeping a running total of business mileage from year to yea
89. converting to Roth 102 income not reported on 1099 R 101 penalty computations 102 114 IRAL Instant RAL 205 IRS Regulation 7216 Consent to Use and Disclosure of Tax Return Information 1 16 201 203 itemized deductions 117 K K 1 exports 105 KB see Knowledge Base key combinations 55 58 keyboard 55 keywords Appendix C Kiddie Tax 124 125 Knowledge Base KB 225 L labels 258 language Spanish 25 letterhead for bills and letters 39 letters about 35 38 available templates 37 batch 257 259 bringing forward from last year 40 Client Communications Editor 35 customized supplemental 27 default templates 27 editing a template 38 engagement 27 envelopes 259 estimate payment reminders 257 keywords Appendix C letterhead 39 mailing labels 258 margins adjusting 39 new features this year 3 overrides LTR screen 50 printing 43 257 privacy 27 restoring 40 setup 38 viewing 40 lifetime learning credit 115 like kind exchanges 100 Tax Year 2008 Index listed property types 142 live payroll see Client Write Up loans see bank products locking client data files 29 screens 30 logging in as ADMIN 9 to Drake 9 54 to ETC 228 to online EF database 194 logging out of Drake 54 long term care insurance 109 losses capital gains and 96 net operating NOLs 151 153 non recaptured 98 of assets screens for entering 96 on Schedule C 95 passive activity 105 supplemental 103 104 using the LOSS screen 152 lost
90. data path and file name should be displayed in the 1 Import File Name field Figure 5 19 and the transactions dis played in the Schedule D Transaction Information grid below it Tax Year 2008 97 Sales of Assets Drake Software User s Manual 1 Import File Name C DRAKEO8 FT FILENAME XLS bal Figure 5 19 File name includes data path file name and file extension 5 From the Start import at field select the line at which to start the import For example if the Item 1 row in the transaction list is column header information choose to begin import at item 2 6 Click Next 7 After verifying that the information is correct click Finish Screen D is opened listing all imported transactions If more than one screen D is required an Existing Forms List is shown Double click a row to view the screen Sales of Assets 1099 S Transactions Use the 4797 screen to enter non recaptured losses These fields are located in the Part IV Decline in Business Use section of screen 4797 For sold property listed on Form 4797 depreciation sometimes must be recaptured as ordinary income For information on depreciating sold assets in Drake see Depreciating Sold Assets on page 145 Enter data from Form 1099 S Proceeds from Real Estate Transactions on the 4797 screen Select 1099 S transaction located near the top of the 4797 Installment Sales Screen code 6252 To enter an installment sale 1 For the sold as
91. default Data in these fields adjust program calculations by the amount entered A positive number increases the calculated amount a negative number decreases it Tax Year 2008 61 Data Entry ZIP Code Database EIN Database Bank Name Database Screen Fields Associating One Screen with Another 62 Drake Software User s Manual When a ZIP code is entered on a data entry screen the city and state fields are filled automatically by default from the program s ZIP code database There is no need to enter the city and state When new employer data is entered into a screen the program stores the EIN busi ness name and business address in the EIN database The next time the EIN is entered on a W2 1099 or 2441 screen the business name and address automatically appear in the appropriate fields The program retains the names of all financial institutions when they are entered for the first time in data entry The next time the first few letters of a saved name are entered the program auto completes the entry automatically fills the field with information by displaying the whole name To add edit or delete entries from the bank name database place the cursor in a bank name field and press CTRL SHIFT E and follow then instructions that are displayed Many screens in Drake have fields labeled TS F ST and City These fields shown in Figure 3 15 and described below are used to apply the data on the screen
92. directory Drake calculates the balance due and generates payment vouchers Form 1040 V but it does not generate estimate vouchers by default To have the program print estimate vouchers you must indicate this manually You can do this in one of two ways e Select an estimate ES code on the ES screen shown at left e Select an ES code at the bottom of screen 1 Figure 5 40 Tax Year 2008 Drake Software User s Manual Estimated Taxes Fed ST Estimated Tax z z Overpayment code Ta z z Invoice NUME On eee Se E a ae E RE a Figure 5 40 Estimated Tax ES code overrides on screen 1 Note in Figure 5 40 that the screen 1 fields are overrides If selections are made on both screens the program disregards the ES screen selection and uses screen 1 Estimate ES codes are shown in Table 5 11 ES Codes Table 5 11 Estimate Codes in Drake o Description blank Does not generate estimate vouchers P Generates estimate vouchers with no dollar amounts X Generates estimate vouchers with payments rounded to nearest 5 T Generates estimate vouchers with payments rounded to nearest 10 F Generates estimate vouchers with payments rounded to nearest 25 H Generates estimate vouchers with payments rounded to nearest 100 All vouchers include the taxpayer s SSN name and address Overriding The program divides the estimate amounts equally among the four vouchers To have Voucher different payments a
93. e Entering data to calculate the amount of recapture in a year of sale if Form 5405 First Time Homebuyer Credit was taken on the home NEW FOR The Form 5405 Information box allows you to link the HOME screen to 70 0 B the 5405 screen It has two override fields to be used only if the first time homebuyer credit was not calculated in a prior year version of Drake Updating from the Prior Year Schedule D Section 121 Calculation Conversion to Business Use Tax Year 2008 A Primary Residence Calculations worksheet WK_ 211 9 previously Worksheet for Sale of Home is generated with the return It consists of up to three pages e Worksheet 1 Adjusted Basis of Home Sold e Worksheet 2 Gain or Loss Exclusion and Taxable Gain on Sale of Home Worksheet 3 Reduced Maximum Exclusion These worksheets are for informational purposes only to allow the basis in the home to be tracked If no date of sale is entered only Worksheet 1 contains data when gener ated with the return New this year the following fields in the HOME screen are included in the Drake update routine each year e Date home was purchased e Basis of home fields e Form 5405 check box stating that First Time Homebuyer Credit was taken These fields will be updated as long as there is not a date in the Date home was sold field Once the home is sold there is no need to continue tracking the basis The home sale flows to Schedule D only if the gain on the sal
94. expense of sale are required for only the first asset listed Tax Year 2008 145 Auto Expenses Drake Software User s Manual The sales price and the expenses will be pro rated among the assets based on the basis of the assets and will flow to Form 4797 Sales of Assets Form 4797 Ifthe Date sold and Property type fields have data the asset data flows to Form Sales of 4797 Sales of Assets If only the Date sold field contains data nothing flows to Form Assets 4797 For a Section 1250 property an entry in the Form 4797 line 26d depreciation field flows to that line of Form 4797 An entry in the Form 4797 other Part III deprecia tion field flows to the appropriate line of Form 4797 depending on the property type Installment Unlike Form 4797 Form 6252 Installment Sales is not generated automatically if the Sales If sold fields are completed For information on entering installment sales see Installment Sales on page 98 Depreciation Elections GO Zone The GO Zone Act of 2005 establishes tax incentives and bond provisions to rebuild Elections hurricane devastated local and regional economies The Income tab has two screens for entering GO Zone information e GO Zone Depreciation Elections GO Use if 1 all depreciable assets listed are qualified GO Zone property 2 taking the 50 bonus depreciation on all qualified GO Zone assets listed or 3 both e Depreciation Detail Screen 4562 Use to indicate tha
95. financial accounts in foreign countries must file Part Ill Schedule B regardless of the income amount New in 2008 this data is entered in the Schedule B Part III section of the INT screen along with other Schedule B data Schedule B Part lll Foreign Account Questions Enter on the first 1099 INT only z Foreign bank account zl Foreign trust Foreign countty Figure 5 11 Schedule B Part III fields on INT screen NEW FOR If the return includes a Schedule B the Foreign bank account and Foreign trust items must be answered Both are Yes No questions If 2008 either question is left blank and Schedule B is part of the return a NOTES page will be generated State Revised in 2008 State specific information includes a drop list to designate Massa specific chusetts Oklahoma or Tennessee for bank interest a field for state ID numbers for Information Mississippi Minnesota and New Hampshire returns and choices for Illinois returns State specific information z bankinierost ea a N E T E T NA IGS Ger FOr aay ANE MNES NE e e E A e Wes neers Stata tax wiihheldonthis aa INT a AA A AA A EA AAE A Aa A A z IL Schedule M interest source description Figure 5 12 State specific fields on INT screen 1099 OID Enter interest from Form 1099 OID Original Issue Discount on either screen 3 Interest income field if less than 1 500 or the INT screen if 1 500 or more Foreign Interest and Dividends Use the INT a
96. firm can be considered a service bureau if e The preparer accepts returns from other businesses that the preparer does not own e A preparer issues Form1099 for contract labor at other locations e A preparer contracts with another tax preparer to provide e filing and RALs e A preparer issues W 2s to a non employee who performs functions as a preparer Your firm is not a service bureau if it issues W 2s to employees who are under direct control of the firm and collect returns at the other locations Types of Bank Products Bank products include Refund Anticipation Loans RAL Instant Refund Anticipa tion Loans IRALs and certain non loan products Table 8 2 It is important that your client understand that RAL and IRAL checks are loans and not actual refunds Clearly explain the cost of the loan the APR and any other disclosures Show your client the bank documents and explain all costs checks deposits and the timing of 204 Tax Year 2008 Drake Software User s Manual About Bank Products payments Check the taxpayer s ID to verify identity before offering bank product ser vices Table 8 2 Available Bank Products in Drake Tax Year 2008 Bank Instant RALs RALs Non Loan Products Chase First Advance RAL RAL Bonu Republic Now RAL RAL RCR ERC Electronic Refund Check Reduced Cost RAL ERD Electronic Refund Deposit RCB Real Time Loan RAL Super RAL ERC RET Refund Electronic Transfer Direct Deposit
97. firms that print bank product checks inhouse If your firm does not print the checks post the bank acceptance acks to the EF data base so the bank selected by taxpayer can process the check Testing Check Print Before printing checks you might want to run a test print to ensure that checks will print correctly One test check for each bank is loaded into Drake when you test print a check the program uses this test check To print a test check 1 Ensure that paper for printing has been loaded into the printer Drake recom mends using a blank sheet of paper for testing check printing 2 From the Home window select EF gt Check Print If no checks are ready a mes sage prompts you for reprint of previous checks Click Yes 3 At the bottom of the Reprint Checks dialog box click Test See Figure 8 6 4 Click Print in the Print dialog box Printing Checks Before you print checks e Be aware that the appropriate IRS and bank acknowledgments must be received before you can print checks e Make sure the computer for EF transmissions has the correct date e Make sure the check number on the computer matches the check number on the physical check M p I RT A NT Do not transmit from more than one computer unless the program Tax Year 2008 is on a dedicated server Transmitting and receiving from more than one computer can affect the ability to print checks correctly To print a check for a bank product 1
98. for a dependent Education Credits Use the 8863 screen to enter education credit information for the taxpayer or spouse Use the Education Expense Information section of screen 2 to enter education credit information for a dependent If a dependent does not qualify for an education credit the software does not apply this information when calculating the federal return NOTES On screens 2 and 8863 check the Midwestern disaster area box es as applicable to indicate that the taxpayer and or spouse attended an eligible institution under the Heartland Disaster Tax Relief Act of 2008 Hope and When entering education expense information complete either the Hope Credit field Lifetime or the Lifetime Learning Credit field If both fields have data the program generates Learning an EF message and the return cannot be e filed Tax Year 2008 115 Domestic Production Activities Deduction Drake Software User s Manual 1098 T Enter amounts from Form 1098 T Tuition Payments Statement on the 8863 screen NOTE Use screen 3 to enter the amount received from any taxable schol arship that was not reported on a W 2 or 1098 T Domestic Production Activities Deduction Screen code 8903 Use the 8903 screen accessible from the Adjustments tab for Form 8903 Domestic Production Activities Deduction Entering Data from Multiple 8903 Forms Only one Form 8903 can be attached to a taxpayer s return To e file data from multi ple 8903 form
99. for all clients To search for a client s appointment in the Scheduler 1 From the Drake Home window click Scheduler 2 Click Search Appts to open the Scheduler Search dialog box Select a date from the Start at this Date drop list The program searches for all appointments scheduled for this date and after 4 Enter one or more keywords in the Enter Search Terms field The program will search all Appointment Detail information for these keywords 5 Click Search Results are displayed in the Scheduler Search window as shown in the example in Figure 4 17 81 E filing Preparation Drake Software User s Manual Drake 2008 Scheduler Search Enter Search Terms maple Start at this Date 1 3 2009 Date Name IDNumber_ PrepName Time 01 15 2009 TEST MAPLE 400001005 nrogers 1 00 PM 01 31 2009 TEST MAPLE 400001005 nrogers 11 30 AM Figure 4 17 Scheduler search results Double click an appointment row to view appointment details Creating Appointment Reports The Scheduler works with the Reports feature in Drake to provide a variety of reports based on preparer appointment data To generate a Scheduler report 1 From the Drake Home window click Scheduler Click Reports Set the report s date range by selecting a Beginning Date and an Ending Date Select a report type Report types are listed in Table 4 3 s Reports APON Table 4 3 Scheduler Report Types Scheduler Report Descr
100. gram Set Security to Allow All Options Employee can access all parts of the program except for Admin only features Set Security Equal to Existing Preparer Employee is given security settings to match those of another preparer on the list Front Office Employee can access the Scheduler only Administrator Employee can access all parts of the program including Admin only features Admin Only To remove security rights from all preparers other than Admin go to Remove Rights Setup gt Preparers and click Remove Rights NOTE To remove rights for an individual employee set that person s secu rity to Allow No Options SS To create a preparer s daily schedule s Schedule 1 2 3 4 5 From the Drake Home window go to Setup gt Preparer s Select a preparer and click Edit Preparer Click Schedule Select day in times and out times Click Apply to All or Clear All as needed Click Save See Scheduler on page 74 for more information on using the Drake Scheduler To print a list of preparers entered into the program From the Drake Home window go to Setup gt Preparer s Click Print The Report Viewer displays the current preparer listing Click Print then click Print again Click Exit to close the Report Viewer then click Exit again to close Preparer Setup See Report Viewer on page 276 for more on using the Drake Report Viewer To search for
101. in the IRS e file Program to the IRS in order to receive an EFIN If you are a new ERO and are not a CPA EA attorney banking official or officer of a publicly held company you will also need to submit a fingerprint card LJ Authorized EROs do not need to file Form 8633 unless 1 their firm or filing information has changed since 2007 or 2 they are going to start e filing business forms this year You can revise your Form 8633 online at www irs gov after signing up for the IRS e services program L Obtain IRS publications Order publications from the IRS or print them directly from the IRS Web site Contact the States L Obtain state applications Some states require e file applications and many states now enforce e file mandates Contact those states early to apply State data is available on the Federal State Facts page at the Drake Support site L Check state requirements for bank products Check with your state for special applications to offer bank products Contact applicable states that could require different forms L Check for state e filing mandates Mandates vary from state to state Ll Check state requirements for business returns E filing requirements vary Contact Drake E Notify Drake of changes Inform us of changes to your firm s EFIN phone address contact person e mail etc E mail accounting drakesoftware com call 828 349 5900 or make changes online at the Drake Support site Pre
102. into the Form Form 1116 1116 FTC Information fields If these fields include data but a Form 1116 is not required and you don t want one generated select 1116 NOT required See Figure 5 13 to view the check box as it appears on the DIV screen For more on Form 1116 in Drake see Foreign Tax Credit on page 120 Taxable Refunds Screen code 99G Enter state and local taxable refunds for 2008 on the 99G screen Form 1099 G Cer tain Government Payments Taxable refund amounts are calculated and carried to the Taxable refunds line of Form 1040 Because the amount shown on this line can be affected by limitations computed from the Drake worksheets the program allows you to adjust it Screen code 3 To adjust the taxable refund amount shown on the 1040 go to screen 3 and enter the amount of 2007 state or local refund the taxpayer received in 2008 Be aware that no calculations are done on the amount entered on screen 3 Use the 99G screen if you want the system to compute the taxable amount N A flagged Taxable refund field indicates that the displayed amount UTE was carried forward from a prior year return Clear the field by pressing F4 if the amount is correct or by entering a new amount Alimony If the taxpayer received alimony in 2008 enter the amount on screen 3 in the Alimony received field Enter paid alimony information on screen 4 Self Employment Income Schedule C Screen code C Screen C Self Employed In
103. its naming convention New customizable default descriptions allow you to eliminate the step of typing a description by selecting pre established descriptions Tax Year 2008 Drake Software User s Manual Document Manager To set up default descriptions in the DDM 1 From the DDM menu bar click Setup gt Options The Document Manager Setup Options dialog box is opened Figure 13 3 Document Manager Setup Options xj Setup Options Use this screen to set configurations for Drake Document Manager Document Manager Data Path F DrakeDDM Clients Browse Use this scan device X Turn off scanner interface r Build index when DDM starts M CED Edit list of Common Documents O Reset list of Common Documents Figure 13 3 Choose 1 to edit the list 2 to reset the list 2 Click Edit Common A txt file is opened listing the default common document names Default names are W 2 Social Security Card and Driver s License In the example in Figure 13 4 the user has added Birth Certificate to the default list P common txt Notepad File Edit Format View Help Social Security Card Add Common Document Names on separate lines then save close this file w 2 Driver s License Birth certificate 4 e EI T E os T E E E tee a menace A E Figure 13 4 Common document names user has added Birth Certificate 3 Add or edit names as desired then click File gt Save or press CTRL S to save yo
104. line 2 requires detail Rent Line 1 RENT line 1 Other Rental Exp requires detail Schedule K line 6 K line 6 senna Spe EI proms an SOLAR ue Figure 14 13 Rental expense rows on an S corp trial balance worksheet When imported the rental expense data entered on the trial balance worksheet appears on either the 8825 screen if real estate rental or the RENT screen if rental other than real estate 308 Tax Year 2008 Drake Software User s Manual Binary Attachments Because the trial balance worksheet has only one detail screen per rental type the importing function does not accommodate entities with multiple rental properties or expenses however the following procedure allows the trial balance to remain in bal ance if there are multiple rental properties or expenses To accommodate entitles with multiple rental properties or expenses 1 Calculate the totals for both types of rental expenses 2 Enter the income totals on the trial balance sheet and the expense totals on the applicable detail sheets Figure 14 13 ad Ensure that the balance sheet is in balance 4 Import the trial balance worksheet into the return The applicable screens in data entry now contain the figures entered on the trial balance worksheet 5 Compare the M 1 line 1 amount on the trial balance to the M 1 line 1 amount on the calculated return to ensure that they match N If the amounts do not match
105. list of available practice returns Figure 10 5 Practice Returns Individual Practice Return 1 View Return View Solution Individual Practice Return 2 View Return View Solution Individual Practice Return 3 View Return View Solution Individual Practice Return 4 View Return View Solution Goo arene ne OO tere nar Figure 10 6 List of practice returns on the Practice Returns page Click View Return to view the basic return scenario in a PDF document Use data entry to prepare the return according to the scenario Once you ve calculated the return go back to the Practice Returns page and click View Solution to compare your return to the solution return Drake ETC offers 19 basic and intermediate practice returns for the 1040 package and one practice return each for the 1120 and 1065 packages To practice e filing and working with bank products scroll to Electronic Filing and Banking and click View Return Follow the instructions located on the PDF document In 2008 Drake ETC offers three Drake 101 videos covering administration data entry and e filing To access videos in the ETC click Videos The Videos page dis plays a list of available videos Click Launch Video to view a video Click Report Card from an ETC screen to view training progress test and quiz results and CPE credits earned for a selected year To re print a CPE certificate scroll down to the CPE Credits section and click print for the desired certifica
106. lt lt Unselect All GA Georgia HI Hawaii IA lowa ID Idaho v Help Save Cancel Figure 2 10 Update Profile Setup 5 Click Save For more information on setting employee security levels see Set NOTES ting up Preparer Security on page 17 The Update Profile Setup dialog box can also be accessed and modified from Tools gt Install Updates Automated Automated updates are possible for offices that have a continuous Internet connection Updates Notification of Updates Tax Year 2008 To automate updates 1 From the Drake Home window go to Setup gt Update Profile 2 Click Activate AutoUpdates 3 Select a download time from the Hour and Minute lists 4 Select the type of update installation to use e Auto install updates Select this option to have the updates automatically installed after they are downloaded e Manually install updates Select this option if you want to manually install the updates from Tools gt Install Updates after they are downloaded 5 Click Save NOTE All instances of Drake must be closed at the time of download The downloading computer or server must be left on and online New in 2008 when you log into the program you can immediately see if program updates are available and ready for download even if your firm does not enable automatic updates This new feature can be accessed if e the program detects that the machine is connected to the internet
107. mode to an employee _ Log in to Drake as Admin From the Home window go to Setup gt Preparer s Select a preparer and click Edit Preparer Click Security gt Front Office Scheduling Only Click Save aR wn Exit Preparer Setup after you have saved your changes NOTE Preparer logins and Front Office mode assignments must be estab lished in Drake before the Scheduler can be used effectively Accessing the Scheduler Scheduler Tax Year 2008 From the Home window select Tools gt Scheduler or by click the Scheduler icon The Appointment Scheduler has four main sections a toolbar across the top a calen dar overview in the left column tabs for selecting calendar types and the schedule grid which shows scheduled appointments in the selected calendar type Figure 4 12 shows an example of the Appointment Scheduler window in Preparer mode 75 Scheduler Drake Software User s Manual Drake 2008 Appointment Scheduler Time Name Comments January 2009 Sun Mon Tue Wed Thu Fri 28 29 30 31 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 18 19 20 21 23 25 26 27 28 29 30 February 2009 Sun Mon Tue Wed Thu Fri 12 34A Be abr 7 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26 1 2 3 4 5 6 9 10 11 12 13 SD Today 9 22 2008 v Till Figure 4 12 Displayed in the Appointment Scheduler window are a toolbar 1 a calendar overview 2 calendar tabs 3 and scheduled appointments 4
108. of the 8889 screen flows to the Other Taxes section of Form 1040 and is marked with a notation of HDHP Form 1099 H Payment amounts from Form 1099 H Health Coverage Tax Credit HCTC Advance Payments can be entered on the 8889 screen Moving Expenses Screen code 3903 Use the 3903 screen accessible from the Adjustments tab to enter data for Form 3903 Moving Expenses Tax Year 2008 111 Self Employment Adjustments Drake Software User s Manual Form 3903 Qualification Due to time and distance limitation exceptions Drake does not prevent Form 3903 from being calculated even if the taxpayer does not meet the mileage test As the preparer you must determine if the taxpayer qualifies for the moving expense deduc tion See IRS Pub 521 for details Multiple Moves If there are multiple qualifying moves within a single year use a separate 3903 screen for each move Press PAGE DOWN for additional screens Self Employment Adjustments Table 5 6 lists screens in Drake for entering adjustments to self employment income Table 5 6 Self employment Adjustment Screens Screen Purpose SE Self Employment Adjustment Schedule SE SEHI SE Health Insurance Self Employed Health Insurance Deduction 4 Adjustments Adjustments to SE SEP SIMPLE and Qualified Plans Screen codes The SE and SEHI screens are located under the Adjustments tab Screen 4 is located SE SEHI under the General tab Self Empl
109. of the form as a record In addition send a copy to the RAL bank along with the corresponding voided checks Cancellations Tracking amp Post Season Procedures Cancelling a Loan Cancellation procedures vary by bank Check with your bank for the correct proce dures for cancelling a loan request and determine if the following instructions apply Tax Year 2008 215 Cancellations Tracking amp Post Season Procedures Drake Software User s Manual To cancel a loan that has been accepted by the RAL bank some EROs must print complete sign and submit to Drake a loan cancellation request available in Tools gt Blank Forms as CANCEL PG If the check has already been printed the voided original must accompany this form If no check has been printed indicate this on the form with the ERO s initials If required to submit this document send the completed form and cancelled check as applicable to Drake Software Loan Cancellations 235 East Palmer Street Franklin NC 28734 Note that Drake does not accept faxed copies of checks M H RT ANT A loan cannot be cancelled if a debit card is used A cancellation is not processed if the direct deposit to the IRS has already occurred Tracking Prior Year Information New in 2008 the TRAC screen in data entry now displays prior year bank product information for federal returns Prior Year Bank Product Information 1040 Only NOTE These amounts are rounded to the nearest whole d
110. on installing PDF995 see Printing Setup on page 41 File The DDM stores files in a file structure You have several choices here build a file Structure structure entirely from scratch create an automatic file structure by integrating the DDM with the tax software or implement a combination of both approaches Among the benefits of integrating the DDM with the tax software e The DDM s default file structure contains a Clients filing cabinet drawers labeled 0 9 and A Z folders in each drawer for each client labeled by last name or business name a Tax subfolder and a 2008 subfolder a Drake Document Manager File Setup Documents Help a Q N N Ga P s A EF New Folder New File Open Sean Import Copy Rep Open the currently selected document rag Filing Cabinets amp Clients _ 9 0 1 1040 my6 111111111 H 1120 5 564654566 2 H Oo D E 1120 Clients P Tax Bp 2007 2008 Figure 13 1 Cabinet named Clients 1 Drawer with unique label 2 Client folder 3 Tax subfolder 4 2008 tax return subfolder 5 e When you create a return for a new client in Drake the New Return dialog box requires you to enter the client s name Once a client s name is entered a client folder is automatically created in the DDM 282 Tax Year 2008 Drake Software User s Manual Document Manager g e The Doc Mgr button in data e
111. on the right To finish click Done The Local Address Book can be filled with e mail addresses of your choice To add an address click the Add icon at the top left corner of the dialog box Enter first name last name and e mail address Click Save Click an e mail address from the left pane and click Add under Recipient List to add the address to the recipient list on the right To finish click Done An address book from outside of Drake can be imported into your Local Address Book Click Import and browse to the address book file and click Open The Report Generated Recipient List option allows you to run a customized report from your client and EF data to generate a list of e mail addresses The keywords selected during the query are then used to create e mail Keywords inserted into the body of the e mail message fill with the client s information To create a report gener ated recipient list 1 Click To from the New Message window and select Report Generated Recipi ent List 2 From the Report Manager window select to run a predefined report edit a pre defined report or create a report from scratch The report generated is used to cre ate an e mail list For details on creating reports see Chapter 12 Reports 3 When reporting is complete Click Yes to send a custom e mail message to each client whose file includes the selected report data Click No to send a generic e mail message to all e mail addresses g
112. or more NJ Resident Income Tax Returns must use one of New Jersey s three electronic filing services to electronically file all NJ Resident Income Tax Returns for their clients New Jersey partnership returns with 10 or more partners must be filed electronically In addition beginning January 1 2007 partnerships that are subject to tax payments are required to make estimated installment payments electronically New for 2009 All practitioners who prepared 25 or more 2007 returns are required to file their clients 2008 returns electronically Because of this mandate the New Jersey Division of Revenue anticipates another substantial increase in the number of e filed returns Starting in calendar year 2008 preparers who prepared more than 25 individual income tax returns in the previous tax filing season are required to file all returns E 3 Appendix E State E filing Mandates Drake Software User s Manual New York using electronic means Electronic means includes electronic filing or printed returns with 2D barcodes Preparers who were subject to the mandate in a previous year or who file more than 100 original returns in the previous calendar year and who use tax preparation soft ware are required to e file returns A 50 return penalty is applied to practitioners who fail to file electronically unless their client opted out or they can establish reason able cause Preparers who were subject to the mandate in a previous year o
113. package or product offering sheet generic letter client coupon etc Standard engagement letter for tax services E file Status Letter Provides clients with an acknowledgment summary of their e filed returns available for all applicable packages Privacy Policy Generic privacy policy for clients K 1 Cover Cover letter for a shareholder partner or fiduciary receiving a Schedule K 1 S corp partnership and fiduciary packages only K 1 Amended Cover letter for a shareholder partner or fiduciary receiving a Schedule K 1 that has been amended S corp partnership and fiduciary packages only Grantor Trust Statement Cover letter for grantor trust statement fiduciary package only Letters Setup Editing a Letter Template The Client Communications Editor is opened to the last letter viewed 38 Use the Client Communications Editor to edit letter templates set up the letterhead for letters and client bills and preview letters To edit a letter 1 2 From the Home window go to Setup gt Letters This opens the Client Commu nications Editor window Click Open and select a package and letter to edit The right pane displays the selected template To edit the letter contents add edit or delete any text as you would in a word processing program like Microsoft Word From the toolbar above the tem plate specify font properties typeface bold italic underlined and alig
114. return has been transmitted more than once If the return has been accepted during a prior transmission there is no need to re trans mit N D acks could be caused by transmitting from multiple computers DTE from a peer to peer network no dedicated server or if DCNs are not sufficiently staggered See Staggering DCNs following Staggering Each computer assigns a Document Control Number DCN to every calculated DCNS return Every return created after the first return is assigned a DCN in sequential order starting with 01001 01001 01002 01003 etc If an office is not networked and uses multiple workstations for data entry each workstation must adjust its DCN counter M P l RTANT Stagger the starting DCNs before creating 2008 returns To stagger the DCNs complete the following steps on each workstation 1 From the Home window go to Setup gt Firm s 2 Double click the firm or select it and click Edit Firm The bottom half of Firm Setup becomes active 3 Change the DCN Serial Number Figure 7 4 Drake suggests choosing starting DCNs that are at least 2 000 numbers apart EO I T S EN E Federal EIN 000000000 2 State ID Number F EFIN 000000 DCN Serial Number 03000 Non Paid Prep Figure 7 4 DCN Serial Number field in Firm Setup 4 Click Save to save changes or click Cancel to exit without saving changes Depending on the amount chosen to stagger the numbers each workstation now pro duces DCN
115. sales of assets are listed in Table 5 1 These screens can all be accessed from the Income tab of the Data Entry Menu Table 5 1 Screens for Entering Gains and Losses Screen Screen or Form Name D Schedule D Capital Gains D2 Loss Carryovers and Other Entries not an IRS form 2439 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 4255 Form 4255 Recapture of Investment Credit 4684 Form 4684 Casualties and Thefts 4797 Form 4797 Sales of Business Property 6252 Form 6252 Installment Sale Income 6781 Form 6781 Gains and Losses From Section 1256 Contracts and Straddles 8824 Form 8824 Like Kind Exchanges HOME Worksheet for Sale of Residence not an IRS form 99C Form 1099 C Cancellation of Debt When forms require identical data such as when amounts from the 4684 and 6252 screens must be carried to Form 4797 Drake prints the data on the appropriate forms Capital Gains Losses Carryovers Scre en codes D D2 96 Screen D Capital Gains and Losses Use the following screens to enter data for Schedule D Capital Gains and Losses e Screen D Capital Gains amp Losses e Screen D2 Loss Carryovers and Other Entries These screens are available under the Income tab of the Data Entry Menu Use screen D for basic information about short and long term capital gains and losses Following are some guidelines for entering data on this screen e Descriptio
116. screen in Drake for entering estimate data Electronic Tax Administration The office within the IRS with management oversight of the IRS electronic commerce initiatives Estimated Tax Adjustment screen in Drake for determining amount of estimated taxes when significant changes in the following year may affect a client s income tax Electronic Training Center Drake s online training center featuring tax courses tutori als and practice returns Electronically Transmitted Documents Electronic Transmitter Identification Number An ID number assigned by the IRS to a participant in the e file program Federal code generally a drop list at the top of an applicable screen Tax Year 2008 Drake Software User s Manual FMS HOH INT IRC IRS ITIN KB LLC LTR MACRS MB MFC MFJ MFS MOM MSG NOL P ack PAN PDF and pdf PIN PPR PTIN Tax Year 2008 Appendix D Acronyms amp Abbreviations Financial Management Service The agency of the Department of the Treasury through which payments to and from the government such as Direct Deposits of refunds are processed Head of Household Interest screen in Drake Internal Revenue Code Internal Revenue Service Individual Taxpayer Identification Number A tax processing number for certain non resident and resident aliens who cannot obtain a Social Security Number SSN Knowledge Base The Drake Software Knowledge Base is a comprehensive search able dat
117. select this option to generate the warning as a note which does not prevent e filing Do not display any warning if RRC is not entered If this option is selected no warning will be generated no EF message no NOTES page Print EIC due diligence documents Print documents generated from the EIC1 EIC2 EIC3 and ElC4 screens Require applicable EIC due dili gence screens to be completed Require that the EIC1 EIC2 EIC3 and EIC4 screens be completed before the return can be e filed Locking Screens New in 2008 an administrator can lock or make inaccessible to other users selected screens To do so go to Setup gt Options gt Administrative Options select Use Customized data entry selection menu and click Customize After loading a menu click a screen s check box to make the screen locked visible or hidden Default is visible Examples are shown in Figure 2 12 and described below 30 Tax Year 2008 Drake Software User s Manual Software Setup Locked J7 BILL Visible gt V CHK Hidden gt T COMP M ELEC V EXT Adjust Client Bill Return Checking Information Tax Year Comparison Election Options Extensions 4868 amp 2350 Aa Ne maa T a OTT Figure 2 12 Locked Visible and Hidden screens Locked Menu items with a shaded check mark neither visible nor accessible e Visible Menu items with a black check mark ar
118. shows the activities that have been performed on this document along with the date time and the person logged into the machine at the time AuditLog For Consentto Use of Tax Return Information Path c DrakeDDM CLIENTS G GREEN DAWN 400001004 Description Consentto Use signed by both taxpayers a ee ee ee a N ee tae Figure 13 10 Choose a document status 4 Click OK txt doc xls Your computer must have Word and Excel installed in order to use the DDM to create new text txt Word doc and Excel xls files To create a new text Word or Excel file 290 Tax Year 2008 Drake Software User s Manual Document Manager New File File Security Other File Tasks Tax Year 2008 1 Inthe DDM toolbar click New File 2 Inthe menu that is displayed select New Text File New Word File or New Excel File The applicable program opens when you click a selection Save files to F DrakeDDM Cabinet Drawer Folder Subfolder using the desired drive as a replacement for F For instance correspondence to a customer might be saved at C DrakeDDM Clients Bob s Business 2008 with C the drive letter Clients the cabinet B the drawer Bob s Business the folder and 2008 the subfolder When DDM files are password protected a password must be entered before the files can be accessed DDM passwords have an eight character limit and are case sensitive To assign a password to a f
119. the IRS e Form 8633 Application to Participate in IRS e file Program e A set of IRS authorized federal fingerprint cards for each principal and responsi ble official of the company An established ERO must file Form 8633 only if the information in its original appli cation has changed N If you plan to e file business returns this year after filing only 1040 UTE returns in the past you must update your 8633 information or your e filed returns will be rejected by the IRS Form 8633 can be completed online using the IRS Web site or you can print the form in Drake from Tools gt Blank Forms To request federal e file program fingerprint cards contact Drake s Education Department at education DrakeSoftware com phone 828 524 8020 or contact the IRS e Help Desk at 866 255 0654 NOTE Drake s ERO online bank application has a new look and some new functionality Obtaining an EFIN All tax preparers who plan to e file must have a valid EFIN Once Form 8633 is pro cessed the IRS assigns the EFIN If your firm has applied for an EFIN but does not have one yet Drake will assign you a temporary one Your temporary EFIN cannot be used to e file returns but it does allow you to transmit test returns When you receive your EFIN forward a copy of the 8633 response letter from the IRS to accounting DrakeSoftware com so we can update your Drake customer account Testing Transmission Once you have an EFIN Drake strongly reco
120. the box to Suppress Federal State EF and all Bank Products X toggle heads down mode to OFF and save the data and escape the EF screen Introduction to Letters in Drake Drake s letters program generates various types of client letters from engagement let ters to the cover letter that accompanies the return In some cases letter content is automatically based on data from the tax return For example if a return with a federal balance due has been e filed and the client has opted to mail a check to the IRS the accompanying result letter will state the balance due amount provide the e filing information and give instructions for mailing the balance due Because so much of the letters program is automatic you may not need to edit the let ter templates at all If you do need to make changes Drake has provided numerous options for doing so Before making changes please continue reading this introduction to ensure that you understand how the templates and the Client Communications Editor are structured Parts ofa A letter in the Client Communication Editor contains three categories of letter ele Letter ments keywords text and conditional paragraphs Tax Year 2008 35 Software Setup Paragraph Nesting 36 Drake Software User s Manual lt Current Date gt lt Taxpayer Name and Address gt iti Text lt Greeting Title and Last Name gt Conditional Tox Paragraph lt Federal Electronic Filing Parag
121. the estimated penalty produces Form 2210F even if not required Does not calculate the estimated penalty If this option is chosen no form for underpayment of estimated tax will be printed with the return NOTE The program does not produce Form 2210 if the return is ineligible for e filing Tax Year 2008 129 Earned Income Credit EIC Drake Software User s Manual Prior Year Tax If a return is updated from the previous year the program displays the prior year tax by default in the Fed tax and State tax fields of screen 1 Figure 5 42 To override the amount shown enter a new amount Based on this amount program calculations determine whether the taxpayer should receive the underpayment penalty Income and payments are split equally among the four quarters If NOTE these figures must be adjusted enter the payment amounts on the 2210 screen An entry on the 2210 screen overrides the equivalent entry made on the ES Estimated Taxes screen Estimated Tax Penalty The program automatically calculates estimated tax penalty and displays the calcula tion on the Estimated tax penalty line of Form 1040 To override the system calcula tion use the Estimated tax penalty field on screen 5 Earned Income Credit EIC The IRS requires that certain questions be addressed on a tax return for a taxpayer to receive EIC These questions are located in the following locations within Drake e EIC Information section o
122. the main form of the return Rounding amounts Select Dollar or Penny rounding Dollar rounding is required for e filing Penny rounding prints penny amounts on all forms Billing Options under the Billing options tab are described in Table 2 10 Options Option Print taxpayer s SSN on the bill Table 2 10 Setup Options Billing Description Select this option to print the taxpayer s SSN on the bill Show preparer fees withheld from bank product Select this option to print the RAL Application fees withheld from the RAL amount on the bill Show preparer fees associated with bank product Select this option to print bank fees on the bill Print taxpayer s phone number on the bill Select this option to have the taxpayer s phone number as entered on screen 1 printed on the bill Print taxpayer s e mail address on the bill Select this option to have the taxpayer s e mail address as entered on screen 1 printed on the bill Sales Tax Sales tax percent to add to client s bill Enter a number greater than 1 For example 4 5 would represent a sales tax rate of 4 5 Billing statement format Select among seven formatting options including Billing by time preparing bill based on time spent preparing return multiplied by preparer s hourly rate as defined in Setup gt Preparers Billing by form preparing bill based on forms necessary to complete return by price
123. the release note To download software to convert data files from other tax programs into Drake for mat go to the Drake Support site and select Resources gt Conversions Choose a tax year and a brand of software Read the instructions available for downloading and printing before running the conversion From the Drake Support site select Training Tools gt Publications to download IRS publications search for federal and state tax forms instructions and news get tax tips download tax tables find federal tax estimators financial calculators and the lat est Drake Desk Reference and access the 1040 com Web site Advertise your business using the newspaper ads posters banners and radio spots available at the Drake Support site Select Training Tools gt Marketing Kits to access and order these resources visit links to other marketing resources and pick up free marketing kits from the IRS 233 Software Support Drake Software User s Manual Partner From the Drake Support site click Partner Programs to access information on Programs Drake s bank and other partners Dnet Internet Services NELCO Solutions forms and checks and Crown Money Map financial software Software Support Several support resources are available from within the Drake program itself Access Frequently Asked Questions FAQs searchable help data entry help and broadcast e mails FAQs Access the FAQ screen in any package by clicking Freque
124. the taxpayer T or spouse S See Figure 3 15 3 Click Split The software calculates the split If a calculation summary is dis aj layed press ENTER to cl h Calculation Results screen A played press o close eac u Three return results are displayed in the Return Selector the joint return and two sep arate returns Details for each return are listed as shown in Figure 3 17 Tax Year 2008 63 Data Entry Drake Software User s Manual LSSNVEIN Date Time Name Fed Refund State Refund Type C 400001004 10 27 16 55 45 BLOWNAPART TEST N SPLIT RETURN 21 FE O PER C 400002004 10 27 16 55 45 BLOWNAPART FREDA SPLIT RETURN 67E FL Oi PER C 400001004 10 27 16 55 45 BLOWNAPART TEST N 2531 FL 0 PER Filing JOINTLY will save 1875 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 Returns First then Click Save and View Help Print Save Select All UnSelect All fie Exit Figure 3 17 Results for split return 4 Check the desired files then click Print View or Save as applicable 5 Click Exit Selecting T or S at the top of individual screens indicates whether the screen applies to the Taxpayer or the Spouse The T S drop NOTES list for dependents is located on the right side of screen 2 Do not mark a return Ready for EF on the EF screen before splitting the return or all three returns will be marked eligible for e filing
125. to be printed with any of the following other forms indicate this by selecting the applica ble box in the Select Form section of the PIN screen e Form 4868 Application for Automatic Extension of Time to File U S Individual Income Tax Return e Form 2350 Application for Extension of Time to File U S Income Tax Return e Form 9465 Installment Agreement Request e Form 56 Notice Concerning Fiduciary Relationship Note that the electronic signature form is required with Form 4868 only if making a payment For Forms 4868 and 2350 the program produces Form 8878 IRS e file Sig nature Authorization for Form 4868 or Form 2350 NOTE Prior year AGI amounts are required to e file Form 2350 9465 or 56 Enter this information in the appropriate fields on the PIN screen Special Conditions Power of Ifthe return is being signed by someone with Power of Attorney for the taxpayer indi Attorney cate this information on the MISC screen and enter the name of the person signing Because Form 2848 is not e filable a transmittal Form 8453 is produced with the paper document indicator marked for Form 2848 NOTE Form 2848 itself is not printed automatically it must be completed on the 2848 screen in order to be generated with the return Taxpayer Ifthe taxpayer is signing the return for the spouse mark the box in the Signing for Signing for Spouse section of the MISC screen and add an explanatory statement using the SCH Spouse screen See U
126. to a Drake integrated file structure As each level is created an icon representing that level appears in the left pane of the DDM Cabinets are the top level of the filing structure The Drake filing system creates a Cli ents cabinet but you might want to separate clients by return types and have an Indi vidual and a Business cabinet instead Regardless of the structure you choose cabinets are required for storing drawers and folders To create a cabinet in the DDM 1 Click New Cabinet 2 Enter a cabinet name in the Input dialog box 3 Click OK The new cabinet appears in the left pane Repeat these steps to create more cabinets NOTE File cabinets cannot be stored inside other file cabinets Each cabinet is for Level 1 storage Drawers are for Level 2 storage and folders are for Level 3 storage Add drawers to cabinets for file storage The Drake filing system uses drawers labeled 0 9 and A Z To add a drawer to a cabinet 1 Highlight the cabinet you want to use 2 Click New Drawer 3 Enter a drawer name in the Input dialog box 4 Click OK The new drawer appears in the left pane Repeat these steps to create more drawers Documents are stored at the folder level When you create a return in Drake and if you ve integrated your DDM with Drake the Drake filing system automatically cre ates the client folder with a subfolder labeled Tax and subfolders for the tax year To create additional folders or subfold
127. to the tax payer or the spouse or both on federal state or city returns Schedule C ts B z elo st fm z cry PT zl Figure 3 15 Screen code examples for Schedule C e TS or TSJ Select T if a screen applies to the primary taxpayer S if it applies to the spouse or J if it applies to each spouse equally Default is T e F Code indicates whether the screen data should be used in calculating the fed eral return Data is not carried to the federal return if a zero 0 is entered here e ST Code indicates whether the screen data should be used in calculating a spe cific state return If this field is blank the software uses the resident state by default The data is not carried to any state or city if a zero 0 is entered here e City Code indicates the source of the income on city returns Press F1 in a screen field to view all acceptable codes for that field Drake allows you to associate one screen with another such as when an asset needs to be associated with a Schedule C To connect screens complete the For field and the Multi form Code field if applicable at the top of the asset screen For the For drop list select the form to associate with the current form For example in a 4562 you would select C to associate it with a Schedule C Figure 3 16 Tax Year 2008 Drake Software User s Manual Data Entry Form 4562 For c ea A C E F 2106 4835 AUTO 8829 o Multi form code 2 1 9
128. 0 package also include the ability to attach PDF files to e filed returns See Chapter 14 Business Packages New Features Fiduciary Trust 1041 Package The Fiduciary Trust 1041 package now has Form 8879 F E file PIN Authorization for e filing Several new forms have been added to the package including a worksheet for allowable miscellaneous deductions subject to the 2 floor WK_AMID generated by line 15b of Form 1041 Estate 706 Package As part of Drake s Estate 706 tax package the program now supports Form 706 A United States Additional Estate Tax Return and Form 706 CE Certificate of Payment of Foreign Death Tax New E filing Features Among the program changes in e filing this year e Customer Account Numbers In addition to your EFIN your Drake customer account number is now required in Setup gt ERO Your customer account number is provided on your packing slip e Expanded EF Select The EF Select button on the Calculation Results screen now sends federal returns federal returns with state piggyback returns and direct state returns to the e filing queue This button is also now available for all applica ble packages e Check Print Alert The program now provides an automatic alert when check print records are ready to be transmitted e EF Reports EF selection reports transmission reports and bank acknowledg ment reports have a new look this year The EF selection reports also inclu
129. 015 at 3 31 45 153145 in the afternoon Deleting an Archive To delete an archive of a return from the Archive Manager 1 From View Print mode of the return select Archive gt Archive Manager 6 Click the row of the archive to delete Click Delete You are prompted to confirm the deletion 4 Click Yes to delete the file from the archive Delete Once deleted the previously archived file cannot be recovered Restoring an Archive When you restore an archive you replace the open version of a return with an archived version Drake recommends that you preserve the existing client data before restoring an older version of a return A built in prompt will suggest that you archive the latest version of a return before restoring an older version To restore an archive 3 1 From View Print mode of the return select Archive gt Archive Manager Click the row of the archive to restore Restore Click Restore A program prompt suggests you to create a new archive of the cur rent version of the return before restoring the older version e To create a new archive click Yes The Archive Client Return dialog box is opened so you can name and save the new archive e To proceed without creating a new archive click No A final warning is dis played click OK to proceed 4 When the archive has been created click OK Tax Year 2008 177 Archive Manager Drake Software User s Manual This page intentionally left blank 17
130. 04 using for farm income amp expenses Form 1041 107 Schedule F Profit or Loss From Farming applying expenses to 147 150 depreciation schedules for 141 entering data for 106 107 Schedule H Household Employment Taxes 124 Schedule J Income Averaging for Farmers and Fishermen 106 Schedule K 1 Share of Income Deductions Credits etc applying expenses to 150 cover letters 38 entering data for 105 106 exporting from business returns 105 printing page 2 26 Schedule R Credit for the Elderly or the Disabled 120 Schedule SE Self Employment Tax 112 Scheduler 74 82 establishing daily schedules 77 new features this year 74 reports 82 266 searching 81 Tax Year 2008 Index screen captures 65 search conditions in Filter Manager 272 274 searching appointments 81 business codes 94 city codes 84 CSM 221 DDM 286 Drake Software User s Manual 1 EF database 191 federal and state publications 233 Help feature in Drake 234 Knowledge Base 226 preparers 18 reject codes 193 reports 272 student records ETC 231 section 179 expensing entering data for 142 143 for general partner on K1P screen 105 report of assets 277 security Document Manager 283 levels online EF database 196 of client files 252 preparer 17 selecting a filing status 83 self employment see also Schedule C Profit or Loss From Business adjustments 112 113 clergy see clergy foreign income 110 tax 112 service bureaus 204 207 sets printing
131. 08 Drake Software User s Manual EF Override Options in Data Entry Marking Ready for EF At the top of the EF screen is a Ready for EF drop list If the option is selected in Setup you must select Ready for EF before the return is put into the send queue for e filing even if it is otherwise eligible and ready to go Because you must manually indicate that each return is ready to be e filed selecting this option can help prevent accidental e filing of returns To choose this option go to Setup gt Options gt EF tab and select Require Ready for EF indicator on EF screen Suppressing E filing To suppress e filing of a return that is otherwise eligible to be e filed 1 Open the return and go to the EF screen accessible from the General tab 2 Select one of the following boxes as appropriate e Do NOT send Federal suppresses e filing of the federal return see Figure 7 6 e Do NOT send any states suppresses e filing of all state returns see Figure 7 7 e Suppress federal state EF and all bank products suppresses e filing of both the federal and state returns plus any bank product The selected returns are not e filed until the selected check boxes are cleared E filing Special Returns and Forms To e file an extension or to e file Form 9465 Installment Agreement Request only or to file Form 56 Notice Concerning Fiduciary Relationship only 1 Open the return and go to the EF screen accessible from th
132. 105 rentals see also Schedule E Supplemental Income and Loss by clergy 116 converted from home use 99 farm 106 repairing index files 247 report cards ETC 231 reports appointment 82 creating 267 CSM 222 deleting 272 depreciation list 276 filters 269 275 hash totals 279 in Drake 265 279 keywords Appendix C Multi Office Manager MOM 198 Tax Planner 296 reprinting checks 212 Republic Bank 205 requirements e filing see e filing EIC due diligence 1 131 for bank product eligibility 203 service bureau 204 system for running Drake software 7 resetting check stock 214 restoring see also backup and restore files archived returns 177 client files 248 249 color settings 41 CSM data 223 xviii 2008 Drake Software default color palette basic view print 174 letter templates 40 print order settings 44 statuses in the CSM 219 Tax Planner data 297 RET Refund Electronic Transfer 205 retirement income 101 103 returns amending 153 archiving 176 177 business 1120 1120S 1065 5 299 312 calculating 165 168 181 comparing data between 159 creating 55 e filing process 179 200 e mailing to Drake 237 estate 706 5 extensions 154 fiduciary 1041 5 gift 709 155 indicators on 47 ineligible for e filing 191 non resident 155 NOTES pages 167 opening 56 219 pay per return PPR 19 20 practice 66 231 preparation of 83 163 pre prepared entry 263 printing 168 requesting copies from IRS 156 splitting 6
133. 1120 11205 1065 1041 990 706 ee eeeeee OK Cancel Figure 3 5 Open Create a New Return dialog box Tax Year 2008 Drake Software User s Manual Data Entry 2 Inthe Open Create a New Return dialog box Figure 3 5 perform one of the following tasks e Enter the ID number of the return item 1 in Figure 3 5 e Select a return type item 2 in Figure 3 5 Returns are displayed in the grid to the left Click on a row to select a return 3 Click OK The Data Entry Menu is opened for the select return Data Entry Returns are prepared in Data Entry mode Access data entry screens from the Data Entry Menu Throughout data entry press ESC to save your data exit the open screen and return to the Data Entry Menu Pressing Esc from the Data Entry Menu returns you to the Home window Also in data entry you can use the TAB key the UP ARROW and DOWN ARROW keys and the PAGE UP and PAGE DOWN keys to move from field to field Data Entry Menu The Data Entry Menu is displayed when you open a return It consists of a toolbar tabs form codes the selector field and the status bar See Figure 3 6 Drake 2008 Data Entry 400001003 Brown Jeff DAR a WB Menu bar Perform aja g eo amp J tasks amp access Calculate View Print Split DocMgr TaxPlanner Import CSM Email program features General income Adjustments Credits Credits Taxes Other States Tabs Access data entry screens
134. 135 Electronic Funds Withdrawal Direct Debit Drake Software User s Manual Direct Deposit of State or City Refund Multiple State Refunds GA ME Refunds To have a state or city refund deposited into an account select the state abbreviation from the State City selection field for the account If this field is left blank no state refund will be deposited into the account Federal selection Figure 5 47 State City selection drop list If the taxpayer receives refunds for more than one state or city return and wants to have refunds deposited into separate accounts indicate this on the DD screen by choosing a code from the State City selection drop list for that account Figure 5 47 To have the refunds from all eligible state returns deposited into one account select A from the State City selection drop list Georgia and Maine have unique requirements for direct deposit Note the fields at the bottom of the DD screen if e filing a return for one of these states Electronic Funds Withdrawal Direct Debit Screen code PMT Use the PMT screen accessible from the General tab to indicate that the balance due funds are to be electronically withdrawn direct debited from the taxpayer s account Program Defaults and Overrides By default the program indicates that the entire balance due the Amount You Owe section of Form 1040 is to be electronically withdrawn on the return due date unless ot
135. 2 Employees income a W2 screen and a C screen must be created for a statutory employee To indicate a statutory employee on a tax return Screen code W2 1 On the W2 screen for the employee select Stat employee line 13 2 On the C screen for the employee select Statutory employee OR qualified joint venture Screen code C 3 On the W2 screen select the associated Schedule C from the F code list W2 Wage and Tax Statement Ts T I F x b EmployersFeq zero Exclude this W 2 from Federal Statutory employee wages for Schedule 2 Statutory employee wages for Schedule Statutory employee wages for Schedule Statutory employee wages for Schedule Statutory employee wages for Schedule Statutory employee wages for Schedule Statutory employee wages for Schedule Statutory employee wages for Schedule 30th por upon ae E te Ren HM AO aman a aanilthn 1 Wages tips 2 Fede s annnanana agoa Ste EE s ase ouan e oW Figure 5 7 W 2 in this example is associated with the second 2 Schedule C entered The selected Schedule C will now indicate that the taxpayer was a statutory employee ITIN SSN_ If the client has an Individual Taxpayer Identification Number ITIN on screen 1 and Mismatch on the SSN on the W 2 does not match that ITIN enter the SSN from the W 2 in the W 2 ITIN SSN Override field at the bottom of the W2 screen Press F1 from this field for more on e filing returns with ITIN SSN mismatches
136. 232 partner programs 234 shipment letters 6 Drake Support 225 241 Drake Tax Planner see Tax Planner due diligence screens for EIC 131 E Earned Income Credit EIC advance payments 123 Tax Year 2008 2008 Drake Software blocking EIC calculations 132 due diligence 1 131 in data entry 130 132 interview questions 30 preparer checklist 131 economic stimulus payments 134 editing see also adding and deleting firms 15 letter templates 38 41 printer settings 42 45 education credits 115 expenses 115 student loan interest deduction 115 educator expenses 110 EF see also e filing database 191 194 database online 194 messages 167 status page 29 e filing acks 185 187 checking e mail while 29 combining steps for 29 delaying 161 eliminating EF messages 182 extensions 155 189 fees 208 identification numbers see EFINs imperfect returns 188 installment agreement requests 156 mandates Appendix E marking Ready for EF 189 messages 167 new features this year 5 online database 194 override options 188 overview Appendix B PDF attachments business packages only 309 PIN signature for 139 process 179 200 requirements for first year e filers 16 returns with ineligible forms 191 Schedules C and C EZ 95 state tax returns 190 suppressing 29 test returns 66 test transmissions 180 transmitting a return 184 troubleshooting 184 186 EFINs obtaining 180 Tax Year 2008 Index setting up multiple 195 EFSTATUS page
137. 241 Fax Cover Letter for Support Drake Software User s Manual 242 Tax Year 2008 1 1 Tools This chapter covers the various tools and file maintenance capabilities available on the Tools menu and includes details on other Drake tools and accessories Install Updates Install updates regularly to ensure that you have the latest version of Drake Updates include modifications to reflect the most recent tax law changes If you haven t installed updates yet you must first create an update profile See Update Profile Setup on page 22 To download and install updates 1 From the Home window select Tools gt Install Updates 2 Click Check For Updates After comparing your files to the available updates the system displays the updates you need the total number of files involved and the size of the download Figure 11 1 Totals 10 Approx 0 544 MB __ Component No Updates 1040 amp Program 2 0 128 MB 706 Estate Tax 1 0 032 MB 1041 Fiduciary 1 0 086 MB 709 Gift Tax 1 0 013 MB 1065 Partnership 2 0 147 MB 1120 C Corp 1 0 065 MB 11205 Corp 1 0 048 MB 990 Tax Exempt 1 0 025 MB _ as Exit Get Updates Figure 11 1 Details of files to be updated Tax Year 2008 243 Install Updates Drake Software User s Manual 3 Clear uncheck any components that you do not want to download 4 Click Get Updates When all files have downloaded click Exit N If your update profile is set to
138. 3 state 29 66 190 statuses of 217 storing information in DDM 281 292 tax exempt organizations 990 4 309 312 test 66 tracking information on 163 updating from prior year 67 71 viewing and printing 168 176 RIA Checkpoint 236 River City Bank 205 Roth IRAs 102 rounding amounts 28 royalties 103 RRC screen Recovery Rebate Credit 134 RT Refund Transfer 205 S S corporations changing from C corps 254 sale of residence 98 sales tax 163 Santa Barbara Bank amp Trust 205 Tax Year 2008 2008 Drake Software saving previously prepared returns 176 scanners 8 284 288 scanning DDM files 288 PDFs for e filing business packages only 309 Schedule A Itemized Deductions and application for tentative refund 152 auto expenses on 149 depreciation schedules for 141 entering data for 117 118 printing 26 46 Schedule B Interest and Ordinary Dividends entering data for 90 91 order of items listed on 26 printing 26 46 Schedule C Profit or Loss From Business applying expenses to 147 150 depreciation schedules for 141 e filing 95 entering data for 93 95 for clergy 116 for statutory employees 88 foreign income on 110 Schedule C EZ Net Profit From Business 95 Schedule D Capital Gains and Losses entering data for 96 importing data from spreadsheet 97 sale of home 99 Schedule E Supplemental Income and Loss activity types 105 applying expenses to 147 depreciation schedules for 141 entering data for 103 1
139. 8 Tax Year 2008 r E filing This chapter provides an overview of the e filing process and outlines procedures for e Setting up an e filing account e Testing your e filing system e E filing a tax return e Reading acknowledgment codes e Preparing and processing loan checks for bank products Drake tax software incorporates IRS regulations where feasible to ensure that returns are e filed correctly however as a tax preparer you should be well versed in the IRS rules and processes Before tax season begins all tax preparers should e Consult IRS Publications 1345 and 1346 for information on the processes laws and regulations for e filing income tax returns e Know the applicable e filing and banking requirements e Consult bank handbooks and brochures regarding bank products NOTE A detailed flow chart showing the e filing process as it occurs for most tax preparers is included in Appendix B Preparing to E File In order to e file tax returns your firm or office must be an Electronic Return Origina tor ERO and have an Electronic Filing Identification Number EFIN ERO and EFIN information must be entered in Setup gt ERO before a return can be transmitted Tax Year 2008 179 Preparing to E File Drake Software User s Manual Applying for ERO Status The IRS accepts ERO applications throughout the year Be aware that processing can take up to 45 days If you are a new ERO this year you must submit the following to
140. 99 1 is assumed if left blank Date Busi Description Acquired Cost Basis u Depreciable asset is to carry to the second 2 Schedule C of the return Figure 3 16 Select C to associate the asset with Schedule C Ifa return has multiple instances of the selected form enter the instance of the form in the Multi form code field For example if there are two Schedule Cs and you want to associate an asset with the second Schedule C created in the return you would enter a multi form code of 2 See Figure 3 16 example For Schedule E rental properties assign each property a separate NOTE multi form code and associate the assets with individual properties accordingly Three properties will be printed on each Schedule E but the multi form code will refer to each property not each Schedule E Splitting a The MFJ to MFS function splits a Married Filing Jointly MFJ return into two Mar Joint Return ried Filing Separately MFS returns You have the choice of saving one two or all of the returns When you open a return that has been split you are prompted to select which version to open N If you save the MFS return any version of it can be opened later for UTE more data entry Do not save both versions if planning to e file the MFJ return The MFS returns can be viewed without being saved To split a joint return 1 Open the joint return 2 Review the return to ensure that each screen clearly applies to either
141. ARTER ROBINSON Street 7842 WEEPING WILLOW LN city AUDUBON sT NJ z p 081067842 Phone Day 201 555 1111 Evening Cell Ext Ext Email Comments M Add Reminder I Private Appointment T Recuring Appointment Figure 4 15 Appointment Detail dialog box 3 Select the Date Time and Duration of the appointment if necessary 4 Complete the applicable client information fields If a client record already exists in Drake enter the SSN EIN and press TAB The program automatically completes the Name Address Phone Client Type and Appointment Type fields If NOTES you replace data in an autofilled field in the Scheduler this informa tion is not overwritten in the client record in Drake You can also use the Lookup feature to access data for a client For more on this feature see Finding a Client Record on page 81 Tax Year 2008 79 Scheduler NEW FOR 2U08 Entering Overlapping Appts Finding Next Available Appointment 80 Find Next Appt 7 Drake Software User s Manual Assign the appointment to a preparer by selecting a name under Preparer s To clear a selection click the name a second time The Group Meeting feature allows multiple preparers to be selected for an appointment Under Preparer s click additional names to add pre parers to the group meeting optional Override selections made in Scheduler Setup by selecting or clearing the Add Remin
142. Ack 200 B acknowledgments Report have a new look this year The selected returns are now in the send queue and are ready for transmission EF Select The EF Select button is available in all packages and is located at the bottom of the Button Calculation Results window The button is activated if the calculated return is eligi ble for e filing Figure 7 3 Tax Year 2008 183 E filing a Return Trouble shooting Return Selection Drake Software User s Manual Po el apes oe fe te oat T i sen i te An ae AE g DCN 0 904101 01006 gt Total Tax Owed 2 566 Eligible For E F EF Select Back Continue Figure 7 3 EF Select button at bottom of Calculation Results window By clicking EF Select you can send federal returns federal returns with state piggy back returns and direct state returns directly to the e filing queue NOTE The option to pause at the Calculations Results window must be selected in Setup gt Options gt Calculation amp View Print tab If a return is not in the EF Return Selector consider these troubleshooting actions Recalculate the return Eliminate any EF message pages Remember to check state MSG pages and the federal MESSAGES From the Home window go to Setup gt Options and select the EF tab to see if Require Ready for EF Indicator on EF Screen is selected If it is go to the EF screen in the return In the EF Ready box at the top select X
143. Annual Report Arkansas Individual OtherTax1 LLC Franchise S corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Fiduciary OtherTax1 Franchise Connecticut Individual OtherTax1 Business Entity Tax S corporation OtherTax1 Business Entity Tax Partnership OtherTax1 Business Entity Tax Tax Year 2008 C 3 Appendix C Keywords Drake Software User s Manual Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description District of Partnership OtherTax1 Franchise Columbia Individual OtherTax1 Franchise Fiduciary OtherTax1 Franchise Florida Individual OtherTax1 Stamp Fiduciary OtherTax1 Stamp Corporation OtherTax1 Stamp Kansas S corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Individual OtherTax1 Franchise OtherTax2 Homestead Fiduciary OtherTax1 Franchise Corporation OtherTax1 Franchise Michigan Individual OtherTax1 Single Business Tax Minnesota Individual OtherTax1 Property Tax Credit Mississippi S corporation OtherTax1 Franchise Corporation OtherTax1 Franchise Missouri S corporation OtherTax1 Kansas City OtherTax2 St Louis Partnership OtherTax1 Kansas City OtherTax2 St Louis Individual OtherTax1 Kansas City OtherTax2 St Louis Fiduciary OtherTax1 Kansas City OtherTax2 St Louis Corporation OtherTax1 Kansas City OtherTax2 St Louis New Hampshire Partnership OtherTax1 Interest and Dividends
144. B pulls out matches to any words in the sentence Exact Keyword Match Finds exact keyword matches to the search terms entered 3 Click Search All related articles appear in order of relevance with the most rele vant listed first Click an article title to open the article If only one article in the KB meets the search criteria the KB opens that article window Matches to your keywords are highlighted From within each KB article you can use the icons at the top right corner of each screen to return to the previous article print or e mail the article save the article to a browser s Favorites folder or save the article to another location Figure 10 2 q gt e H Figure 10 2 Navigation icons available in KB articles Ifa Related Articles link is at the bottom left corner of an article window there are other articles in the KB that are related to the one you queried Click Related Articles to view a list of links to other articles Click Close to return to the original article Drake encourages you to respond to any article you read in the KB The suggestions are often used to improve the KB for our clients In the bottom left corner of an article window click Feedback to open the feedback window After entering your feedback click Submit The Drake Electronic Training Center ETC offers a convenient way to train your office staff with tutorials practice returns and interactive tax courses Offering train in
145. D screen contains fields for completing IRS Form 8888 Direct Deposit of Refund to More Than One Account NOTES This section refers to refunds that are not in the form of bank prod ucts Account information for bank products must be entered on the applicable bank screen See Additional Product Offerings on page 210 Required Information The name of the financial institution the bank s routing number RTN the client s account number and the type of account checking or savings are required The RTN Account number and Type of account information must be entered twice Figure 5 44 or an EF message is generated Name of financial institution RTN Account number Type of account M Checking M Savings Repeat Account Information M Checking M Savings Figure 5 44 Repeat account information for RTN account number and type of account 134 Tax Year 2008 Drake Software User s Manual Direct Deposit Direct Deposit of Federal Refund Ifa single account is entered on the DD screen the information flows to the Refund section of Form 1040 If multiple accounts are entered the program produces Form 8888 You can enter up to three accounts Form 8888 According to the IRS instructions the following conditions must apply for the tax Conditions payer to file Form 8888 e The taxpayer cannot choose to get any part of the refund as a check e The account indicated for the refund deposit is a checking savings or othe
146. DIV and INT screens include the most frequently used Form 1116 fields to the 1116 and because Form 1116 is generated automatically if these fields contain data it might Screen not be necessary to enter anything at all onto the 1116 screen If however a return includes a less common foreign income factor such as a carryover you must enter that information on the 1116 screen New in 2008 you can link the DIV and INT screens to a 1116 screen so that the gen erated Form 1116 incorporates the appropriate data from all applicable screens To link the Foreign Tax Credit information in a DIV or INT screen to an 1116 screen 1 Complete the Form 1116 FTC Information section of the DIV or INT screen See Figure 5 13 Enter a number into the FTC field of this section See Figure 5 13 Close the screen Open the 1116 screen accessible from the Credits tab to be linked Type the FTC number from Step 2 into the FTC field Figure 5 14 Screen code 1116 ROON 92 Tax Year 2008 Drake Software User s Manual Taxable Refunds Form 1116 Foreign Tax Credit P TSJ z i Type of income taxed Resident country aoe ater a Oe ae oa eee a Figure 5 14 FTC field at top of 1116 screen The program uses this FTC number to associate the 1116 screen to the other screens and calculate the correct information for Form 1116 Suppressing By default Form 1116 is generated with the return if any data is entered
147. Data gt Update 2007 to 2008 2 Click Next 3 Select filters optional then click Continue 4 optional Select additional items to bring forward See Figure 4 2 M p l RTANT All returns are updated according to selections in the Update Options box Once returns have been updated the updates cannot be reversed To avoid oversights update each return individually 5 Click Update 1040 Once the program has updated the returns it displays a report listing the returns that were updated Click Exit to close the Report Viewer Building the EIN Name Index Each time an employer is entered on a screen for a form W 2 W 2G 1099R 1099G 8283 or 2441 that employer s name identification number EIN and corresponding information is automatically added to the EIN database To update EINs and name databases from 2007 1 Open the 2008 version of the program 2 Select Last Year Data gt Build EIN Name from 2007 The Build EIN and Name Index dialog box is opened Figure 4 3 Drake 2008 Build EIN and Name Index Build EIN and Name Index This procedure scans each client file to Build the EIN Database and the Name Index File The process will take about 1 Minute for every 2 000 Client files EIN Name Index Options Both EIN and Name EIN Only C Name Only Figure 4 3 Build EIN and Name Index dialog box 3 Select the indexes to update and click Continue Tax Year 2008 69 Prior Year Updates Drake Software
148. Drake U Access EF amp Banking Practice Access practice returns on the Drake Support Web site Train ing Tools menu A 4 Tax Year 2008 Drake Software User s Manual Appendix B E filing Overview Appendix B E filing Overview The flow chart on the following page shows an overview of the e filing process for most Drake preparers Included are definitions of acknowledgment codes acks Tax Year 2008 B 1 PROCESS E FILING FEDERAL RETURNS Drake compe Address the Test eee identified issue _ transmission aum successful T Review return to If NOT accepted a ensure that it is B R D or X ack oO ready to e file T ack x Drake Pick up amp process i L transmission Transmitting P T or B ack gt ae P ack successful g acknowledgments ACCEPTED Wait for IRS ack Mark ready for EF gt Transmit return A ack or ack l d l Drake Acknowledgement Codes ME eceive Transmit Transmit return transmitted gt if P ack Receive ack g P Processing Wait for IRS ack return acknowledgment to IRS T Test transmission successful Q Ready to e file B Bad transmission rejected by Drake Install updates and try again d IRS
149. Drake Software User s Manual Letters Printing a Client Label From Data Entry Envelopes Tax Year 2008 8 Click Print NOTE The Mailing Labels tool can also be used to run reports See Chapter 12 Reports Drake provides a convenient way to print a mailing or folder label from data entry To print a single label 1 N o N Ensure that the label printer is installed properly per the manufacturer s instruc tions and that the label sheet is properly loaded In data entry go to screen 1 of the open return Right click on the screen not a field and select Client Labels gt Name Format from the right click menu Select the name format LastName FirstName or FirstName LastName Right click on the screen not a field again and select Client Labels Choose from the following label types e Mailing Label e Folder Label SSN EIN Name or Name only Select the label printer from the Print dialog box Click OK to print the label This option is designed for use with a dedicated label maker such NOTE as the DYMO LabelWriter 400 Label Printer Data can be printed on any label size but DYMO Label Writer labels size 30252 are rec ommended because they work well for folder and mailing labels Size 30252 labels are included in the DYMO printer starter kit To print addresses on envelopes Ensure that envelopes are loaded properly into the printer From the Home window go to Tools gt Letter
150. E nontaxable combat pay is automatically accounted for in the pro gram calculation If you enter a combat pay amount on the 8812 screen this amount overrides the W2 amount Blocking EIC Calculations In some cases a taxpayer might not be eligible for EIC even though the information on the tax return indicates otherwise To block the program from calculating EIC type NO into one of the EIC Blocker fields in Drake EIC blocker fields are located on screens 8867 and 5 Additional Child Tax Credit and Combat Pay The 8812 screen contains override fields for the following items 132 Tax Year 2008 Drake Software User s Manual Other Payments e Combat pay applicable to Additional Child Tax Credit and EIC e Total earned income for Form 8812 Additional Child Tax Credit The program automatically calculates the amount for earned income If Form 8812 is applicable the program makes the calculations and generates the form Use the Addi tional Child Tax Credit field on the 8812 screen only if you need to override the cal culation for total earned income See EIC and Combat Pay on page 132 Other Payments Use the following screens to enter other payments from credits Table 5 15 Other Payments from Credits Screen Name of Form 2439 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 4136 Form 4136 Credit for Federal Tax Paid on Fuels 8801 Form 8801 Credit for Prior Year Minimum Tax Indivi
151. Facts Click a federal document or select a state from the States drop list to view state information Select another state v Louisiana 2008 State DOR Homepage amp View 2007 data Piggy Back Yes Direct Filing No Online Yes State Only Yes MOn re aT E aA A ON aT a T G R E a Bem Figure 10 8 Example of a state page in Federal State Facts If viewing a state page see Figure 10 8 example you can click View 2007 data to see the prior year version of the same Federal State Facts Click State DOR Homep age to open the state s department of revenue Web site Drake Forums 232 The online Drake Forums allow Drake clients to interact with other Drake clients Par ticipation in Drake Forums is strictly voluntary To access Drake Forums from the Drake Support site select Resources gt Forums First time users must register before participating read the text on the Forums page regarding registration requirements Tax Year 2008 Drake Software User s Manual NOTE Online Support then click Click here to Register Instructions for signing up for Drake Forums are provided on your screen Once you are registered for the forums click Click here to Login on the Forums page After logging in click FAQ for further instructions Click User CP to set up your user profile The Drake Software Forums are strictly voluntary and should not be used as a substitute for obtaining help from Drake Support Other Availa
152. For Used for associating an asset with a form or schedule see Associating One Screen with Another on page 62 Description Field supports 42 characters Per IRS regulations only the first 24 char acters are transmitted in e filed returns Additional characters are dis played in red Date Acquired Date the asset was placed in service Cost Basis Depreciable basis of the asset press F1 for further details Method Depreciation method Life Class life press F1 for a recovery period listing If EXP section 179 is selected as the depreciation method useful life recovery period entered in the Life field is used to calculate depreciation adjustments for Form 6251 Alternative Minimum Tax See Section 179 Expense on page 142 for more on section 179 The default business percent use is 100 Enter a number in this field only if business percent use for the asset is not 100 If business use dropped to 50 or less complete the Business use field and select the Recapture box under Other Information The program recaptures any excess section 179 or depreciation and carries it to Form 4797 Part IV and to the Other income line on the form being associated with the 4562 screen EXP cannot be the selected method if the Recapture box is marked The Method field must contain an acceptable IRS method for the recapture to be calculated correctly A selection in the Listed Prop Type field is required for an asset t
153. From the Home window select EF gt Check Print to open the Bank Product Selection box 2 Choose to print checks or to print the Truth In Lending Agreement TILA disclo sures for non check bank products debit cards direct deposit etc 3 Click Continue The Selection window for checks or TILA shows the items available for printing 4 Select the items to be printed or use Select All or Unselect All 5 Click Continue The Check Print Options dialog box displays the client s name ID number check amount and check number 211 Processing the Loan Check Drake Software User s Manual 6 Choose from the available options listed in Table 8 4 Table 8 4 Check Printing Options Check Print Option Print this check on ___ Description Prints the check on the displayed check number Delete this Client s check Deletes the check from the system The check will not be displayed for printing again Skip this Client s check for now Excludes the check from the current print job Print ALL selected checks start ing on __ Prints all previously selected checks starting at the displayed check number The first time you print checks you are presented with the opportu NOTE nity to set up a check range Click the Setup Checks button to choose bank and set up the check range You can also use Setup Checks to change the check number if necessary 7 Click Continue 8 Click Print Immedia
154. Home window go to Tools gt Edit EIN Database Enter or select the EIN to delete or begin typing the name of the employer and select it when it appears in the list below Click Delete Click Yes when prompted to confirm the deletion Click Exit to close the EIN Employer Database dialog box 261 Install State Programs Drake Software User s Manual Printing a List of EINs To print a list of EINs from the EIN database 1 From the Home window go to Tools gt Edit EIN Database Print 2 Click Print The Print EIN Employer Listing dialog box displays sorting options 3 Select to sort the list by EIN Company Name City State or Zip Code 4 Click OK A preview ofthe list is displayed in the Report Viewer 5 Click Print to open the Print Drake Report dialog box 6 Click Print Print Export EIN data to another program if desired From the Report NOTE Viewer click the down arrow on the Export icon and select a for mat If you click the Export icon not the arrow the program auto matically exports the data into Excel Install State Programs Use Install State Programs to install or repair state program files This can be done by accessing the Internet the latest CD or any drive location that has the needed pro gram files For networked offices sharing information all users must close Drake before installing state programs To install state programs 1 From the Home window select Tools gt Install
155. Hz or higher Installation Drake Software User s Manual e 540 megabytes MB available hard drive space minimum performance requires at least 100 MB available hard drive space plus 7 MB for each state program e A minimum of 64 MB RAM for Windows 98 2000 or NT e A minimum of 128 MB RAM for Windows ME XP or Vista e VGA monitor capable of 800 X 600 resolution and 256 colors e Internet Explorer 6 0 or later e CD Drive e Adobe Acrobat Reader for viewing PDF files NOTE If using Windows Vista it might be necessary to upgrade your ver sion of Adobe Acrobat Reader to version 8 0 or later To take maximum advantage of the software s features you need e A Hewlett Packard HP compatible laser printer e High speed Internet access or a 56K modem e A backup media source such as a USB drive memory stick floppy disk etc e A document feed scanner Drake supports all TWAIN compliant flat bed and document feed scanners for use with the DDM NOTE Installation Using Windows Vista A system administrator or user with OS access must install your tax software Step 1 If you do not have Windows XP and want to back up your data on CD you must use your CD burner software not the Drake backup tool to perform the backup If you have Windows XP you can back up directly to the CD without other software Before installing the software close all open programs on your computer Table 2 1 outlines the instal
156. IN compliant Review scanner specifications before making a purchase When you scan a document using the DDM the program automatically locates and uses your system s default scanner A Scanner Cannot be Located message implies that the scanner is not TWAIN compliant or has been improperly installed To scan a document into the DDM 1 Select a folder in which to store the file 2 From the toolbar click Scan then select Use Scanner Bed or Use Document Feeder 3 From the Input dialog box click a file type to select it Scanned documents can be saved as PDF BMP GIF JPG TIF or PNG files Figure 13 7 lig w pzy o Enter a name for this document Or select a Common Name C JPG Common BMP C TIF Documents C GIF C PNG w2 Social Security Card Birth Certificate E I Enable Duplex Scanning if available Figure 13 7 In this example PDF is the selected file type 288 Tax Year 2008 Drake Software User s Manual Document Manager Linking a File gt Link File DDM Audit Log Tax Year 2008 4 Enter a name for the file If a default name has been assigned for a commonly scanned document select it from the Common Documents drop list In the Figure 13 7 example Social Security Card is being selected 5 Click OK TIP To facilitate search and retrieval of DDM files establish a naming convention and use it consistently The Common Documents drop list new in 2008 can help you ach
157. Individual OtherTax1 Interest and Dividends Fiduciary OtherTax1 Interest and Dividends C 4 Tax Year 2008 Drake Software User s Manual Tax Year 2008 Appendix C Keywords Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description New Jersey S corporation OtherTax1 Composite Partnership OtherTax1 Composite Fiduciary OtherTax1 Composite New York S corporation OtherTax1 NYC Income Partnership OtherTax1 NYC Income Individual OtherTax1 NYC Employment OtherTax2 NYC Business Tax Corporation OtherTax1 NYC Income OtherTax2 MTA Surcharge Ohio Individual OtherTax1 School District Pennsylvania Individual OtherTax1 Spouse if a split return S corp Partnership OtherTax1 S corp Partnership Info Return Rhode Island Partnership OtherTax1 Composite Individual OtherTax1 Composite Fiduciary OtherTax1 Composite Tennessee Individual OtherTax2 Franchise and Excise Tax S corporation OtherTax2 Franchise and Excise Tax Corporation OtherTax2 Franchise and Excise Tax Partnership OtherTax2 Franchise and Excise Tax Texas S corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Individual OtherTax1 Franchise Corporation OtherTax1 Franchise C 5 Appendix C Keywords Drake Software User s Manual This page intentionally left blank C 6 Tax Year 2008 Drake Software User s Manual Appendix D Acronyms amp Abbre
158. Locate the file and double click it to attach it Whole folders cannot be attached NOTES To remove a file from the Attachment s listing in the right pane Click the file to select it then click Remove 4 Click Done 5 Type a message optional and click Send New in 2008 the Compose Message window has been redesigned to facilitate build ing recipient lists for e mails Address When composing e mail messages you have several address book options Click To Book _ in the New Message window to access these options The Drake Support Address Book displays general e mail addresses at Drake such as for support accounting spanish support and federal and state programmers To insert 238 Tax Year 2008 Drake Software User s Manual Interactive Support Report Generated Recipient List Alternative an address in your message click a General e mail address a Federal programmer category double click the desired state or highlight the state and click OK If a taxpayer s e mail address is entered on screen 1 of their return it can be accessed from the Drake Software Client Address Book To fill this address book for the first time go to Tools gt Repair Index Files see Repair Index Files on page 247 After repairing the index files return to the e mail program click New click To and then select Drake Software Client Address Book Choose an address from the left pane and click Add to add it to the recipient list
159. New Record eee vn ye e ston amebneh nnn N tn ntnng Figure 3 8 Existing Forms List To open a screen from the list double click a row or select it and click Open To open a new blank screen select New Record Multiple Many clients require multiple instances of such forms as W 2 and 1099 In most cases Instances of press PAGE DOWN to open a new instance of the open screen a Form Some forms have more than one page or screen If you are in a multiple screen form pressing PAGE DOWN moves you to the second page of the screen In these cases press CTRL PAGE DOWN to open a new instance of the form Each time a new screen is produced Drake indicates the record number on the status bar The number of records is also shown on the Data Entry Menu ae AIT ete ee OT pe tert a M Over 18 and a student M Chilg 7 f enera j I Over 18 and disabled M chil Income Adjustments ioe r sepa M Not eligible for Child Tax Credit r 1 ETET OEE I Not US Citizen or Resident Alien El 7 Dependents 2 Income 3 4 Adjustments 5 Payments Record 2 of 2 Press Page Down for New Screen Figure 3 9 Multiple instances are shown in status bar and Data Entry Menu Field Flags Use field flags to set certain fields apart for review Flagged fields are shaded default is green and must be manually verified cleared prior to e filing To flag a field click the field to activate it then press F2 You can also do this by right
160. RS e file Return be e filed in lieu of the ineligible forms and that the ineligible forms be mailed Form 8453 must indicate which forms are being mailed separately To produce Form 8453 for ineligible forms that will be mailed 1 Open the return and go to the EF screen accessible from the General tab 2 Select the appropriate forms in the Form 8453 Paper Document Indicators box Figure 7 8 Form 8453 Paper Document Indicators I Form 1098 c I Form 8332 Check all paper document indicators that apply For l Form 3115 I Form 9858 more information on the paper document indicators I Form 3468 I Form 9964 click the Screen Help button at the top of the screen M Form 4136 l Form 8885 l Form 5713 F Schedule D 1 Form 8283 Worksheets 1 4 from Pub 517 Figure 7 8 Form 8453 section of EF screen When the return is generated Form 8453 is included with the applicable boxes marked to indicate what forms will be mailed Click Screen Help at the top of the EF screen for more information on Form 8453 EF Database The EF database is a searchable database that displays information about all returns your office has e filed for the current tax year To search the EF database 1 From the Home window click EF gt Search EF Database 2 Enter an SSN EIN or name in the SSN EIN Name To Search For field of the Search EF Database window Figure 7 9 To browse all records leave this field blank SSN EIN To Search For SSN Name
161. SM ssc scabs cscwedde tet dashedecwnasdo ted daadeedenakds 219 Customizing the Display cuca a pk hn ok ea ees Pa ee a ee Ey Pe RS 220 Searching Updating and Pillenne 4 9c54 deb ead ea anenun KheS GE 0a Rea RSI ER RES 221 CSM REPONS eer aae eg fenestra a a eat aaa Sek aa alg Hh ele daiwa edie ieee HE Gre eek 222 Exporting CSM Data 4c iaada tnd ace t head pad Sake Ope eee had hb agen bine stewed 223 Adminsonly Feat r s 4 24 ovo vs sah se te eee ede Cae dN Gd bee de dae ee eas 223 Resources and Support i iii 225 Drake Software Manual 025 043 0688 epee hain neran 225 Online SUpport yi lt 5 eh ive RAR ASE AER RGAE VER BERGENER REE VEDEA EENE ha G 225 Software Support ci oae bend we eeae eat byes een ew eaeee ahaa eee ue eee seater ae peas ee 234 Inter ctive SUPDON 4 emeret dns Ent EKE OR KSLA RAR Sed RRER Cd REE aU eRe Rh ded 236 Fax Cover Letter fot SUpport 64 0kon des kenere cas konia E EE E EEE EE E EEEE E a e 241 TOOS E a 243 Tasta UpdatES maree E gece Ae hata wa E A aa ee ee ne a 243 Download Fouts 23 244 4 6 tases de dt dh siit rts ad REESE EE bead aRA DACAAR O RES 246 Blank Forms s resentas desede petanken aie peaa ae aad a dee iaee ai aai 246 Tax Year 2008 v Table of Contents Drake Software User s Manual Repair Index PileSce csc 0c a ud doce de ds dk eek dee eRe Se RKC VEERE TEE RAR EEA 247 Pile MaImenence settet asnetdo tee vsabedaatedle estate tatwadletes teat ei ana aayi 248 Letters reena oe pete eae ee eve Siete
162. SSN it counts toward your total of used PPRs and can at that point be moved to another computer For details on transferring returns see Backing Up and Restoring Files on page 248 Each return a PPR Each return created counts as one PPR Do not create unnecessary returns in the software Use Drake test returns to practice data entry SSN verification A required SSN verification field on the New Return screen helps reduce errors Use care entering SSNs SSNs or EINs entered on screen 1 cannot be edited Once a return has an SSN or EIN entered the return counts toward your total and cannot be added back to your PPR bank of activated but unused returns The Tools gt File Maintenance gt Change SSNs on File feature is now available in the PPR package but you will be charged for another PPR if you use it Changing or correcting names Names can be changed but you will be charged for another PPR Read only When opening a prior year return you are prompted to pay for the return or open it in read only mode Entries cannot be made from read only mode Quick Estimator A return entered in the Quick Estimator counts as one PPR Your computer must be connected to the Internet in order to purchase more PPRs using the process described below 1 From the Drake Home window go to Setup gt Pay Per Return In the bottom section of the Pay Per Return dialog box enter credit card and address information See _ NT
163. See Customized Drop Lists on page 31 You can also indicate the following adjustments from the BILL screen e To include Form 8888 on the bill if the taxpayer is paper filing and depositing the refund into multiple accounts e To adjust the bill as needed for a self prepared or firm prepared e filed return The BILL screen also allows you to override the date printed on the bill and add a short note separate from the custom paragraph to the bottom of the bill Pricing fora To override Pricing Setup and establish prices for a single return Single Return 1 In View mode of a return right click a form and select Setup gt Form Properties The Properties dialog box is displayed Figure 2 24 Tax Year 2008 49 Making Changes on the Fly Drake Software User s Manual W 1040 Properties DRAKEOS PR FED PER x 1040 Properties Update the 1040 description pricing and number of copies on a Per Form basis If the FORM INFORMATION or PRICING is changed the return must be recalculated in order to see the changes Individual Income Tax Retur 1040 m Form Information m Number of Copies Form 1040 EF Signature fo Form Description U S Individual Income Tax Return Est Ext fo Federal Record 2 Client fi Preparer fi m Pricing Peel i Apply to this retum Apply to all returns oot 1 Form Price 50 00 State jo Item Price J 0 00 Not available K1 fo IV Include on the Bill S
164. T file then click OK Click Install Updates under Download amp Install Program Updates in the Update Manager and wait for the updates to be installed 245 Download Fonts Drake Software User s Manual You can remove the media storage device once the updates have been installed Download Fonts Special software based fonts or soft fonts are required for printing tax forms Because most laser printers do not come with these fonts installed you might need to download them to the printer s memory each time the printer is turned on Drake includes downloadable software fonts that work with HP compatible laser printers and allow preparers to produce federal and state tax forms By default fonts are down loaded with each print job If the printer is turned off however the fonts will need to be downloaded manually whenever the printer is turned back on To manually download fonts 1 From the Home window go to Tools gt Download Fonts 2 Click Download The Download Fonts dialog box is opened 3 Click Download As downloading proceeds the font download status is shown 4 Click Exit when the download is complete N To set up options for downloading fonts go to Setup gt Printing gt DTE Printer Setup Under the F7 Options tab select an option from the PCL Soft Font Option drop list Blank Forms Print blank tax forms worksheets and interview sheets from Blank Forms Some forms not available in data entry might
165. The SSNs for these returns begin with 400 00 and consist of various forms and schedules to show how different tax scenarios are prepared in Drake To open a test return type a test SSN in the Open Returns window and press ENTER Test returns can be used to test e filing Test returns with SSNs from 400 00 1001 through 400 00 1005 are eligible for e file testing Tax Year 2008 4 Preseason Preparation This chapter provides instructions for bringing forward information from last year printing proformas or organizers for clients mailing preseason materials setting up schedules and learning to use the software See Appendix A Preseason Checklist for a convenient list of preseason tasks to consider as you get ready for tax season Prior Year Updates If your firm used Drake last year you can save time by updating prior year returns settings letters and EIN data Before updating you should 1 back up your files and 2 ensure that your program s 2007 data path points to your firm s 2007 data files To check the 2007 data path 1 Log in to Drake 2008 as Admin 2 From the Home window select Setup gt Directories Paths 3 Look at the Path for 2007 Data field Figure 4 1 Bee Letter for State Programs Z Paths determined by configuration selected above Admin Override Path for 2008 Data FSDRAKEOSDTSA Path for Print File Shared drive letter for all other shared files EF Firm Pricing Letters etc op
166. Topics articles receiving the most hits Search for other articles using word searches See item 2 in Figure 10 1 see also Searching the KB following Browse View the Hot Topics in the KB including the latest questions about the soft ware and the CWU manuals Click a topic to view its subtopics or articles FAQ View articles we believe to be most pertinent These change frequently so check back often Glossary View a list of relevant tax and Drake software terms Searching To search for a topic or article in the KB the KB 1 Inthe Search tab Figure 10 1 enter a keyword in the Search field 226 Tax Year 2008 Drake Software User s Manual Online Support Navigation Icons Related Articles Feedback Drake ETC Tax Year 2008 2 optional Direct your search by selecting options from the Search Using and Search Within drop lists Search Using options are described in Table 10 2 Table 10 2 Options Available in KB Search Using Drop List Search Option Description All Words Searches for articles containing all search terms entered Any Word Searches for articles containing any one of the search terms Exact Phrase Searches for articles containing the exact phrase entered Boolean Allows connector words to be used in conjunction with keywords to aid in searching Use and not and or Natural Language Query Allows you to enter a sentence in the Search field The K
167. WOT WET TESS Ty Ie hal Reve ate S wke Declaration Control Number DCN Tapaers rame WILLIAM an ee Spotnse s rame Figure 7 5 DCN on Form 8879 in View mode Once the DCN has been changed the return can be re transmitted The IRS conditionally accepts imperfect returns if either of the following events occur when a return is filed e A dependent s SSN or name on a Schedule EIC does not match the SSN or name in the IRS master file e A dependent s SSN or name on Form 1040 does not match the SSN or name on the IRS master file To e file an imperfect return 1 Open the return and go to the EF screen in data entry 2 Under Additional Options select Imperfect return election 3 Calculate the return Drake displays a NOTES page indicating the return is imperfect The IRS gives condi tional acceptance but an E ack is still returned Processing an imperfect return can take up to six weeks Because IRS acceptance is not guaranteed for an imperfect return NOTE no piggyback returns or bank products can be e filed with an imper fect return The availability of the Imperfect return election option is determined in Setup Options EF Override Options in Data Entry 188 By default the program e files all eligible federal and state forms when you transmit returns The EF Selection Screen allows you to override the program defaults on a per return basis Tax Year 20
168. abase consisting of support solutions and articles of interest providing support around the clock Limited Liability Company Letter override screen in Drake Modified Accelerated Cost Recovery System Megabytes Multi form code Married Filing Jointly Married Filing Single Multi Office Manager State EF message page Net Operating Loss Processing a successful transmission Passive Activity Number Portable Document Format Personal Identification Number Pay Per Return Preparer Tax Identification Number An ID number issued by the IRS which paid tax return preparers can use in lieu of disclosing their Social Security Number SSN on returns that they prepared D 3 Appendix D Acronyms amp Abbreviations R ack RAL RET RRC RT RTN SSN ST Sub S T ack TS TSJ TILA txt TY UNVER xis ZIP D 4 Drake Software User s Manual Reject transmission Refund Anticipation Loan A RAL is money borrowed from a financial institution by a taxpayer that is based on a taxpayer s anticipated income tax refund Refund Electronic Transfer Recovery Rebate Credit Refund Transfer Routing Transit Number A number assigned by the Federal Reserve to each financial institution Social Security Number State code generally a drop list at the top of an applicable screen S corporation Test transmission Taxpayer or Spouse Taxpayer or Spouse or Joint Truth in Lending Agreement Text file
169. ady includes most of the information you require You can however create a new report if none of the pre defined reports meet your template needs The steps for these procedures are similar but it could be easier to learn how to create reports by working first from a pre defined report Several tasks some of them optional are involved in creating a report These tasks are listed in Table 12 2 and are described separately in the following sections Table 12 2 Tasks Involved in Creating a Report Task Window Used Assign report title and description Assign columns keywords Report Editor Step 1 Formatting of Reports Assign filters Assign sorting summary order Indicate to summarize report data Indicate to use prior year data Assign a report output file name Report Editor Step 2 Filtering of Reports Assigning a Title and Description The Report Title is displayed on the actual report the Report Description is for informational purposes and is displayed in the Report Manager s Sample Report box To assign a new title and description to a report 1 From the Home window click Report gt Report Manager to open the Report Manager Figure 12 1 on page 265 2 Click to expand any category Categories have a or to their left reports do not 3 Select single click the report to use as a template 4 Click Edit Report The Report Editor Step 1 window i
170. ailing forms as 139 printing 45 saving returns as 176 PDF995 45 penalties Tax Year 2008 2008 Drake Software estimated tax 130 for early withdrawal of savings 114 IRA 102 114 penny rounding 28 pensions self employment 113 piggyback returns 190 PIN signatures auto generating for taxpayer 29 in data entry 139 140 of preparer 17 postcards 260 power of attorney 17 140 PPR purchasing 20 setup 19 20 practice returns 66 231 preparer add on fees 14 checklist for EIC 131 mode in Scheduler 75 PIN signature 17 security settings 17 setup 16 19 pre prepared entry also forms based data entry 263 presidential campaign 84 previously passive activities 105 pricing for a single return 49 maximum minimum fees 33 per item and per form 33 setup 33 printer setup 41 45 printing see also viewing bank applications 29 bank product fees withheld 28 bill summary 27 calculation details 168 carryover worksheets 26 checks 211 data entry screens 65 date of signature 28 depreciation schedules 26 documents only when required 29 EF status page 29 EIC due diligence documents 30 estimate vouchers 126 filing instructions 27 forms in a certain order 175 forms in a return 172 forms only when required 26 from enhanced view print 168 labels 259 letters batches 257 Tax Year 2008 Index list of EINs 262 list of firms 15 list of preparers in a firm 18 on the fly 45 optional worksheets 26 options 173 176 organizers an
171. ake Advantage of Drake Resources L Electronic Training Center ETC For tax courses tutorials videos and testing go to Drake Software com ETC Ll Tutorials The 2008 tutorials can be accessed through the Help menu or go to the Drake Sup port site Enter your EFIN and password then go to Training Tools gt Tutorials U Drake User s Manual Familiarize yourself with this manual and use it as a resource for learn ing how to use the software and prepare individual returns Practice returns Use our practice returns to learn program navigation and data entry Drake Web site Add Support DrakeSoftware com to your Favorites list Drake Knowledge Base Practice using Knowledge Base at the Drake Web site Drake forum Sign up for the Drake Forum at the Drake Web site RIA online Review the features offered with RIA online Online EF Database Review and practice using the online EF database Ooovovoveo do Execute your marketing plan Consider running radio spots hanging posters or banners and encouraging word of mouth marketing Drake Software offers marketing ideas online at Drake Software com marketing Tax Year 2008 A 3 Appendix A Preseason Checklist Drake Software User s Manual Prepare for E Filing U Research and verify e file requirements Review any state e file mandates E Complete settings Preparer Firm and EF e filing settings in Drake L Send test transmissions to
172. ake Software User s Manual EF Database e Information on direct deposits not involving bank loan fields can be found at the bottom of the window For the federal state and Bonu RAL Direct an account type and number are displayed for each type of direct deposit Fees Miscel The F3 Fees Miscellaneous Info tab contains general return information about the laneous Info taxpayer the firm and fees distribution Reject Code The F4 Reject Code Lookup tab is a search tool for accessing and understanding Lookup IRS reject codes To look up an IRS reject code for a federal return 1 From the Drake Home window select EF gt Search EF Database and click the F4 Reject Code Lookup tab Figure 7 10 Select a federal return type 1040 1120 1120S 1065 or 1041 Enter the reject code in the Reject Code field 4 Click Go The IRS explanation of the code is displayed in the lower box ON arn Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup i C 1041 Category 20 11205 Loan Status Codes FED X C 1065 C Bank Decline Reasons C IIRAL Reject Codes Reject Code s0 Pint 1040 FED Reject Code 50 This typically occurs when either there s a statement reference on a form but no corresponding statement or there is an entry in a field that can only contain a statement reference Official language Statement Record The only valid entry in a Required Statement Record f
173. ake your check or money order payable to the U 5 Treasury and write your Social Security number and lt Current Tax Year gt Form 1040 on the check or money order If you want to review credit card and other payment options available call 800 2PAYTAX or 888 PAY 1040 lt End Paragraph gt Figure 2 18 Conditional paragraph Many conditional paragraphs are nested within larger ones Different nesting levels are indicated by different colors In Figure 2 19 the Federal No Dir Debit Paper Paragraph from Figure 2 18 is nested inside the Federal Balance Due Paragraph The green and purple text show where each paragraph begins and ends Tax Year 2008 Drake Software User s Manual Software Setup lt Federal Balance Due Paragraph gt Your federal return reflects a balance due of lt Federal Balance Due gt lt Federal No Dir Debit Paper Paragraph gt Include your payment and Form 1040 V with your return For faster processing and to prevent errors make your check or money order payable to the U S Treasury and write your Social Security number and lt Current Tax Year gt Form 1040 on the check or money order If you want to review credit card and other payment options available call 800 2PAYTAX or 888 PAY 1040 lt End Paragraph gt lt End Paragraph gt Figure 2 19 Nested Conditional Paragraph In this example the Federal No Dir Debit Paper Paragraph is generated only if the Federal Balance Due Paragraph
174. all Employer Pension Plan Star tup Costs 123 Form 8882 Credit for Employer Provided Childcare Facil ities and Services 123 Form 8885 Health Coverage Tax Credit 123 133 Form 8888 Direct Deposit of Refund to More Than One Account 135 Form 8889 Health Savings Accounts 111 Form 8896 Low Sulfur Diesel Fuel Production Credit 123 Form 8901 Information on Qualifying Children Who Are Not Dependents 121 Form 8903 Domestic Production Activities Deduction 116 Form 8907 Nonconventional Source Fuel Credit 123 Form 8908 Energy Efficient Home Credit 123 Form 8909 Energy Efficient Appliance Credit 123 Form 8910 Alternative Motor Vehicle Credit 123 Form 8911 Alternative Fuel Vehicle Refueling Property Credit 123 Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds 123 Form 8914 Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals 4 157 Form 8917 Tuition and Fees Deduction 115 Form 8919 Uncollected Social Security and Medicare Tax on Wages 123 Form 8930 Qualified Disaster Recovery Assistance Re tirement Plan Distributions and Repayments 4 Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically 29 Form 9465 Installment Agreement Request 140 156 189 Form RRB 1099R railroad benefits 108 Form SSA 1099 Social Security Benefits Statement 108 Form W 2 Wage and Tax Statement 26 87 89 Form W 2G Gambling Income and Lo
175. all return types select All Return Types Select Allow MFS 1040 Returns to include returns with a status of Married Filing Separate Return Result Result types of the returns to include in the report Example if Balance Due is selected only returns with a balance due will be included Select Any Result to include all results Activity Status of returns to include in the report To include both active and inactive returns select Any Status Type Preparer and Firm Preparer and firm of returns to include in the report To include only those returns handled by a specific preparer or firm in the report select a preparer or firm name as applicable To edit basic search conditions 5 Click Edit in the Basic Search Conditions for the Selected Filter box Select items within the main categories optional To include applicable test sample returns for example Drake returns that begin with 400 00 in the report select Allow Test Sample Returns optional To allow a user to modify conditions when running a report select Ask about the Basic Search Conditions each time the Filter is used Click OK to save the changes to the basic search conditions You can add as many as ten additional search conditions Use the Additional Search Conditions feature to further specify the types of data to include in the report To add a new search condition in the Filter Manager 273 Filter Manager Drake Software User s Manual
176. also be used to amend the current year amount or to adjust carryback amounts calculated from the LOSS screen Tax Year 2008 151 Net Operating Losses Drake Software User s Manual ree A Ena a po ptt prn e f fm mee E S T a ye ty ato peti setak LS on a a Note Program will figure taxable portion of 2008 SS benefits 21 Other INCOME Real estate tax recovery Press Ctrl Page Down for New Screen Press F1 or Right Click for Help Screen Help Figure 5 60 NOL carryback field on screen 3 An amount entered here flows to the Other income line of Form 1040 Carryforwards from Prior Years Screen code Use the LOSS screen to enter NOL carryforward amounts from prior years Enter LOSS amounts for each year using the three columns shown in Figure 5 61 Amount Available for Used Prior Carryover back to 2008 Used in 2008 1990 nn J SU M tt epee lt a alt ated O lie torn ste siosati 5 aai mi _ _ wpe tone Me LUTE taf oe eo A 2006 2007 2008 Figure 5 61 LOSS screen columns for NOL carryback carryforward Never add a LOSS screen for a current year NOL The program carries forward any current year NOL and displays the carryforward on the WK_CARRY worksheet The results of your data entry are NOTES reflected on the WK_NOL worksheet To have the program calculate whether there is a NOL for the cur rent year go to the NOL screen and select Calculate 1045 page 2 ONLY See NOL Ca
177. ancellation viii 2008 Drake Software of debt 109 of loans bank products 215 capital gains and losses see also Schedule D Capital Gains and Losses carryovers from prior years 97 carryback of net operating losses 151 carryforward of net operating losses 152 153 carryover worksheets 26 cashier s checks 206 casualties and thefts 96 CD shipments 8 change of address 157 changing client SSN or EIN 251 return types C corp to S corp etc 254 Chase Bank 205 check register 213 checks 209 lost or stolen 214 resetting check stock 214 test printing 211 Child Tax Credit 121 child care expenses 118 119 church income see clergy city codes 62 tax rates for Ohio 263 classic DOS mode 25 clearing flags 60 clergy expenses 111 income allocation 116 indicating on W 2 113 self employment tax 112 Client Communications Editor 35 client files see files Client Status Manager 217 223 client statuses in CSM 217 Client Write Up 297 codes acknowledgment acks 185 187 business 94 city 62 error in e filing 182 ES estimate 127 extension form 154 F federal 62 filing status 83 form 57 FTC foreign tax credit 120 investment credit 143 IRS debt 192 miscellaneous 160 multi form MFC 62 Tax Year 2008 2008 Drake Software non paid preparer 14 OP overpayment 128 proforma 72 reject 193 searching 94 special processing 84 ST state 62 tax treatment 94 TS TSJ 62 underpayment 129 unformatted schedule 162 colo
178. and the bank Your firm must also submit an online bank application to Drake each year This appli cation is separate from the application discussed in RAL Application on page 203 Drake Application To offer bank products with Drake firms must submit applications to Drake annually To complete and submit a bank application 1 From the Home window click Support 2 Enter your EFIN and password 3 Select to My Account gt Bank Application 4 Select to create a new application new TY2008 or to carry prior year data for ward old TY2007 and click Go to Main Bank App Page 5 Select a bank from the New Bank list if necessary and add any Collection Sites Service Bureaus and Sub Offices Click Edit App for Main EFIN Complete the application Yellow fields are for required information NO 8 Click Proceed to Confirmation You can now view or print the application as desired If necessary go back to make changes 9 Select the Confirmation Box then click Submit Application Once you have submitted the application contact the bank to order check stock and complete any additional agreements Bank Setup and Access Once you have selected a bank activate the bank in Drake data entry so the bank information is accessible from the General tab To activate a bank in data entry 1 From the Home window select Setup gt Firm s 2 Double click the firm or select a row and click Edit Firm Banking Info
179. anual Software Setup Table 2 13 Macro Symbols Symbol Action New Perform the assigned task on a new record For example C New opens a new C screen The aster isk bypasses the Existing Forms list and must be present for the New function to work properly Home Return to first field on a screen If Home is inserted into a macro the cursor moves to the first field on the screen End Move to last field on a screen If End is inserted into a macro the cursor moves to the last field on the screen FF Cursor jumps ahead a prescribed number of fields For instance FF 5 would jump the cursor ahead five fields This macro is not compatible with macros that use or are initiated in heads down mode FB Cursor jumps back a prescribed number of fields For instance FB 5 jumps cursor back five fields FJ Cursor jumps to the prescribed field number For instance FJ 25 would jump the cursor to field 25 Obtain field numbers by viewing the screen in heads down mode This macro is not compatible with macros that use or are initiated in heads down mode Prevents a macro from clearing a flagged field If a single macro is to allow data entry in multiple fields use heads down mode and right angle brackets gt to jump to a field Tip Example The macro EF gt 25 gt X gt would open the EF screen EF gt toggle heads down data entry mode to ON enter field 25 25 gt select
180. applicable the out of balance amount Figure 14 5 see also Figure 14 8 on page 304 A ef me TOT nee S tee et eet Salari s and wis Shareholder 6 Smploy es Waste removal 1 ihe Income Loss Schedule M 1 line 1 100 600 m 549 350 OUT OF BALANCE Y Figure 14 5 Schedule M 1 amount 1 totals 2 and indication of balance 3 Following are instructions and guidelines for using the trial balance template to assemble financial data for importing into data entry Entering Financial Data When a new trial balance file is opened for a return all debit and credit amounts are zero 0 All data must be entered manually into the template N Some data cannot be imported from the trial balance and must be DTE entered directly into the data entry fields within the program For more on these categories of data see Special Conditions on page 305 302 Tax Year 2008 Drake Software User s Manual Trial Balance Import Direct Entry Most cells in the trial balance worksheet are view only In a new template editable debit and credit cells are indicated by a dollar amount 0 Detail Worksheets Some cells require more detail than can be entered on a single line These cells are indicated by buttons Form 1120 pip detail required detail require gs 3 line 7 does not carry Form 1120 t Figure 14 6 Example of cells that require worksheets Click a worksheet butt
181. approved Preparer fees are deposited into the pre parer s account within days after the check is printed Non loan bank products allow taxpayers without bank accounts or who are denied RALs to way to receive a refund check minus all applicable fees from the preparer s office rather than waiting for IRS refund M P i RTA NT The taxpayer must understand that a non loan bank product is not Tax Year 2008 a loan The check reflects the actual refund with bank and pre parer fees deducted 205 About Bank Products Drake Software User s Manual To provide a non loan product a bank sets up a temporary account for direct deposit of the taxpayer s refund Once the IRS has deposited the refund into the temporary account the bank deducts applicable fees and issues the money to the taxpayer Distribution Methods Bank products can be distributed by direct deposit cashier s check or debit card Fees are charged for each method Notify your client that the following fees can be sub tracted from the refund amount e Tax preparation fees e E filing fees e RAL Bonu ERC preparation fees e A 2 Drake processing fee included on all bank products e Bonu Deposit Account fee included on all Bonu checks e Bank RAL Fee included on all RALs e Additional transmission software add on fee In addition a 12 95 technology fee will be charged for each Chase bank product Most bank products include a direct deposit option If
182. ar round on Drake Software topics such as connections conversions networking and other customer service needs To reach any department call 828 524 8020 or fax 828 349 5718 Additional phone numbers and contact information are provided in Table 10 4 Table 10 4 Contacting Drake Support Department Contact Accounting Accounting DrakeSoftware com E filing EF DrakeSoftware com Support General Support Drake Software com 828 524 8020 Support State specific XXstate DrakeSoftware com XX is state abbreviation Examples nystate DrakeSoftware com for New York dcstate DrakeSoftware com for District of Columbia Conversions Support Support DrakeSoftware com 828 349 5546 Client Write Up Support Client wu DrakeSoftware com 828 349 5547 Get answers to software questions using the fax cover letter provided on the following page Drake replies to faxes with faxes not phone calls Tax Year 2008 Drake Software User s Manual Fax Cover Letter for Support Fax Cover Letter for Support Name Company Name EFIN Phone Number Fax Number To department or individual Computer Operating System select one O Windows 98 O Windows 2000 U Windows Vista Li Windows NT U Windows ME U Windows XP Are you working on a Network Ul Yes U No If this fax is concerning a prior year Drake Program Year program what year Give us a brief description of the situation Tax Year 2008
183. arer notes from the NOTE and PAD screens Select this option to produce a comparison sheet containing the current year s return and those of past years This option produces a return summary with every return prepared Bill summary This option produces a summary of the taxpayer s bill with each return Federal filing instructions State filing instructions Displays detailed federal filing information including the date to file form to be filed address to file and payment amount The instructions are listed as FILEINST PG in View mode Activated by default Clear to disable or use the PRNT screen to activate or disable on the fly Displays detailed state filing information including the date to file form to be filed address to file and payment amount The instructions are listed as STINST PG ST refers to the state abbreviation for example OHINST PG for Ohio instructions Activated by default Clear to disable or use the PRNT screen to activate or disable on the fly Referral coupons Enter the number of sheets per return or the coupon amount Envelope Sheet Choose the size of envelope on which to print the addresses of the taxpayer the IRS Service Center the state tax department the city tax office Estimated Payment Coversheet Select this option for 1040 and 1041 returns with quarterly taxes An IRS Ser vice Center must be selected and this item marked to activate this option
184. as a variety of online and software help resources to give you 24 hour access to the latest information Si te gustaria hablar con alguien en espanol llame al 828 349 5500 y trataremos de conectarle con uno de nuestros agentes de apoyo que hablan espanol Drake s written documentation is designed and Drake s support employees are trained to help tax preparers make the most of the tax preparation software and to use it successfully Drake does not however provide tax law advice Knowledge of tax preparation is the responsibility of the tax preparer Support is provided as an aid to tax return completion only The accuracy of the return filed with the IRS and various state tax authorities is the responsibility of the tax preparer Drake Software Manual The Drake 2008 Tax Software Manual is available on the software CD An online ver sion at Support DrakeSoftware com gt Training Tools gt Manuals is updated as tax season progresses Save the manual to your computer or print your own copy Online Support A reliable Internet connection is necessary to take full advantage of Drake s many online support resources These resources are accessible from Drake s Support Web site at Support DrakeSoftware com Knowledge Base The Knowledge Base KB is a searchable database of support articles and is avail able 24 hours a day The KB consists of articles submitted by clients programmers the IRS and state departments of revenue T
185. at postpones the effective date of penal ties imposed by this section to tax returns that are to be filed after Dec 31 2008 Beginning with tax year 2005 tax preparers that file 101 or more income tax returns in a filing period are required to file all such returns using scan technology or electroni cally If a preparer or multiple preparers affiliated together in the same establishment pre pared 101 or more returns in the prior calendar year they must submit all Utah Indi vidual tax returns electronically or using 2 D bar code technology Electronic Filing Mandate If a tax professional prepares 100 or more individual income tax returns he she is required to file electronically E 5 Appendix E State E filing Mandates Drake Software User s Manual West Virginia Wisconsin Income tax preparers who filed more than one hundred personal income tax returns last year and will be using tax preparation software to complete one or more of these returns must file them electronically for the current tax year Paid preparers who prepared 100 or more Wisconsin Individual returns must e file all Wisconsin Individual returns Tax Year 2008 Drake Software User s Manual Appendix F Trial Balance Import Appendix F Trial Balance Import The flow chart on the following page shows an overview of the trial balance importing process The trial balance import feature is new in 2008 for corporate 1120 1120S partnership 1065 and exe
186. ate amp Local General Sales Tax Deduction Worksheet accessible from the General tab to determine which tax is better to take the state sales tax or the income tax Lines 1 and 4 of this screen are calculated by the software but you can enter overrides as necessary As applicable lines 2 3 and 7 should be completed in order to calculate the maximum deduction More information the STAX screen is available by clicking F1 in the individual fields 163 Special Features in Data Entry Drake Software User s Manual This page intentionally left blank 164 Tax Year 2008 Return Results This chapter covers calculating viewing and printing returns A return must be calcu lated before it can be viewed printed or e filed Calculate returns as often as needed Calculating a Return To calculate a return from data entry open a return and click Calculate By default results are displayed in the Calculation Results window See Figure 6 2 on Calculate page 166 You can also calculate one or more returns from the Home window without having to open data entry To calculate returns from the Home window 1 Click Calculate The Batch Calculation dialog box Figure 6 1 displays up to the last nine returns calculated Each return is indicated by a function F key Batch Calculation Enter SSN EIN and press the ENTER key to add it to the list of returns to calculate or press F1 F9 to add returns that are listed on this s
187. ate the order in which forms are printed 1 From the Drake Home screen go to Setup gt Printing gt Printer Setup 2 Click Set Form Order to open the Sort Form Order window 3 Select a package series and choose a set type Normal Default is the established IRS order 4 Forms are listed with their order number in parentheses to the left To change the sequence in which the forms are printed click and drag form names until the forms are listed in the desired order 5 Click Save NOTE To back up the print order and to restore to another machine choose to back up the setup files from Tools gt File Maintenance gt Backup Tax Year 2008 Drake Software User s Manual Making Changes on the Fly Document Manager DDM Setup PDF Printer Setup The Drake Document Manager is a stand alone application that can be integrated with Drake Software For details see Document Manager on page 281 To implement the Drake file structure 1 From the Home window go to Setup gt Printing gt Document Manager 2 Enter the path of the DDM or click Search to find the DDM location If the DDM is found in more than one location you must choose one 3 Select Allow Drake to Set up Document Manager Client Folders recom mended The Drake structure is established in the DDM directory and the DDM button is acti vated in data entry PDF Printer setup installs PDF995 which allows you to print files as PDF files Use t
188. ating Fields Grid Data Entry Tax returns are prepared in Drake by entering pertinent information on specific data entry screens Entries are used to calculate the federal state and city tax returns To open a screen use one of the following methods e Keyboard From any tab type a form code in the selector field Press ENTER e Mouse Select a tab and click the screen name Use the following methods to exit save reset and delete screens in Drake e Press ESC to save your changes and exit a screen e Press SHIFT ESC to exit a screen without saving your changes e Press CTRL U to reset a screen to the last save e Press CTRL D to delete a screen If multiple occurrences of a screen exist for example if a return has two 1099s an Existing Forms List is opened Select the screens to delete then click Delete You can also access these features by right clicking the screen and selecting shortcuts A blinking cursor indicates an active field Click a field to activate it Following are keyboard only methods of moving from field to field e Press TAB to move the cursor forward one field e Press SHIFT TAB to move the cursor back one field e Press CTRL 4 or CTRL T to move the cursor up or down one field respectively Grid data entry allows faster data entry for the Dependents INT DIV and 4562 screens In Grid Data Entry mode click a field to activate it then type data directly into the field Drake 2008 Grid
189. ation schedule for this year Optional worksheets Produce all optional worksheets associated with a return W2 1099R forms Produce and display in View Print mode all W 2 forms with the return Carryover worksheet Produce any carryover worksheets associated with the return Print Page 2 of Schedule K 1 Produce and print page 2 of Schedule K 1 for 1120S 1065 1041 1040A EZ suppress Automatically suppress Form 1040A or 1040EZ Form 1045 page 2 NOL Automatically produce Form 1045 page 2 if the return has NOL Select to turn ON ___list if greater than Produce lists of these forms when the selected number in the drop list is exceeded 26 Tax Year 2008 Drake Software User s Manual NOTE Software Setup Many settings can be adjusted on the fly from the PRNT screen See Making Changes on the Fly on page 45 Optional Options under the Optional Documents tab are described in Table 2 8 Documents Table 2 8 Setup Options Optional Documents Option Folder coversheet Description This option generates a folder cover sheet containing the taxpayers names and the name address and phone number of the preparer s firm Generate return NOTES page when applicable Prior year s comparison form Return summary Clear this selection to prevent program generated NOTES pages from being produced with each return This option does not affect prep
190. ave Cancel Figure 2 24 Pricing on the fly 2 Edit the description of the form and edit the price listed per form or per item 3 Choose to Apply to this return or Apply to all returns Applying to all returns changes the pricing file for all returns 4 Change number of copies if desired 5 Click Save NOTE For pricing on the fly changes to take effect on the client bill the return must be recalculated Overriding Letters Setup Letters options and defaults can be set from both Setup gt Options gt Optional Docu ments tab and Setup gt Letters Use the LTR screen to override these global options on a per return basis Access this screen from the Other tab or type LTR into the selector field and press ENTER The LTR screen allows you to make the following changes to the letters in a return e Have a result letter other than the default printed with the return e Enter a personalized letter greeting e Add a custom paragraph In addition it provides these override options e Force print a letter for a paper filed return or extension application even if the return application is eligible for e file e Force print a letter for an e filed return or extension application even if the return application is ineligible for e file 50 Tax Year 2008 Drake Software User s Manual Making Changes on the Fly e Force or suppress a customized supplemental letter engagement letter or pri vacy policy letter Defa
191. be marked before a return can be selected for e filing Lock client data file after EF accep tance Note Log in as Admin to edit or unlock a file that has been transmitted and accepted Give preparers access at Tools gt File Maintenance gt Unlock Client Files through security settings Print bank application when keyed on return Select this option to produce a bank application any time data has been entered on a bank screen Print 9325 when eligible for EF Print Form 9325 acknowledgment and General Information for Taxpayers Who File Returns Electronically for every eligible return Suppress federal EF 1040 only Print EF status page Alert preparer when bank product is not included Activate imperfect return election in data entry Allow selection for EF from the Cal culations results screen Select this option to prevent e filing of any 1040 return Select this option to have the EF Status page printed whenever a return is eligible for e filing Select this option to alert the preparer after each calculation that there is not a bank product entered on the current return Activates Imperfect Return Election check box on EF screen in data entry Allows preparer to send the currently active return directly from the Calcu lations Results window to the e filing queue The return is then transmit ted automatically the next time you e file returns Enable prompting before automatic transmissio
192. ble Resources Drake Software Downloads Prior Year State Programs Release Notes Conversions Publications Marketing Kits Tax Year 2008 NOTE The Drake Support site offers a wealth of additional resources such as information about webinars trade shows training sessions update schools Drake s Tax Planner the Drake Document Manager and Client Write Up You can also view helpful publi cations and download prior year Drake programs prior year release notes and soft ware for converting data files from other tax software programs into Drake The Download Center is available by clicking Resources gt Download Center After you enter your EFIN and password the Download Center page displays the software and education training materials available for download Click an item to download it Drake s prior year software for state programs is available by selecting Resources gt Prior Year States and selecting the year to download From the list of states and revi sion dates click a state and follow the instructions that appear on your screen For 2003 to 2005 state updates are accessed through the software from Tools gt Install Updates Software release notes from prior years are available on the Drake Support site To access release notes select Resources gt Release Notes On the Release Notes page select a year and update category to view the listing of releases and release dates Click a note link to view
193. ble of Contents ejigero Cells Mennrere coer come E E tte res ferret rT rrr 1 IRS Changes amp Requirements yay 40254 0ean kee es KES GREK EOE eee ORY RES CRE EN 1 What s New in Drake for 2008 62 ccctcada ce pacle ead bouts Hea ee tas eae Renn Geedtnse 4 2 Contacting Drake SUpport 20 lt 2cc5buxahG esi nee is P EENEG PA ENEE aa NEET RERE VEE 5 Installation amp Setup sssessussssnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn nnen nnnn nnnm 7 System R guireM ntS eass ineen Peer doedt teaches da E a A aar E E Peale bed wom tae 7 die iE TG esere r e a ewe eae r GS a a a ae ee 8 Running Drake on a Nework 44 444 0546 lt 40atea end en Chad eee eee eere 10 SONWALE SETUD Era ae a ae eae eee ane ae ee wee eee ey See ae ee re er are ae 13 Making Changes on the Fly lt i ssc vendGd ns tna dd dies Bald dnd Oe 0dS OEE ETRLATEREORMEEAS 45 te N re me rer irene en nnn E verre 53 Logging In and OUt 4 2426 254 ee4 pee hee Reed ed E EEI PRR ERE Ges Ei 54 Th Home Wind W core wa se wok So ware gin ene Re ae Se een E ee ee en oe 54 General Navigati n x tov dsuad ee artuten bera Er ERATEN PERA CETE EE beeen 54 Creating and Opening Retumis vs20 lt isdssduese tet oandddatuattydeivesbodaawanees 55 Dat ENY cnc cece kine PRA aR RER vikit CRASAS E Aa KEE EARR EEA OAR GR RR 57 About State RUINS eese cian eia aa iE i E a E EE E ae ak EE aoe Bh E E e Ss 66 Practice Returns and Test Returns cscs cecaeabevee Gs hen beeu died deeb Pad ees ee 66 Pre
194. butions 102 NOTE screen 160 notepad PAD screen 161 NOTES pages about 167 generating only when applicable 27 Now RAL 205 NWClient network link 10 O office in home 150 Ohio city tax rates 263 online EF database 194 197 opening see also accessing see also activating see also creating Drake tax software 9 53 password protected files in the DDM 291 xvi 2008 Drake Software returns from the CSM 219 returns in Drake 56 screens for additional dependents 85 test returns 66 the DDM 283 the EF return selector 182 the Report Manager 267 the Scheduler 75 the Tax Planner 292 trial balance templates business packages only 301 optional documents with return 27 items on return 28 options setup 24 45 order of forms 175 organizers 71 74 overflow statements 25 overlapping appointments in Scheduler 80 overpayments 128 override fields 25 61 overriding bill amounts 49 EF options 188 letters setup 50 preparer fees 25 setup options 47 52 P PAD screen preparer notepad 161 paper document indicators 191 paper jams 215 parsonage allowance 116 see also clergy partner programs 234 passive activities 105 activity loss limitations 105 activity numbers PANs 104 income 90 121 password protecting client files 252 DDM files 291 online EF database reports 196 pause option for calculations 26 168 Pay Per Return see PPR payroll see Client Write Up PDF files e filing business packages only 309 312 e m
195. by Name and Address A Itemized Deductions Schedule category Dependents STAX Sales Tax Worksheet Income 2106 Employee Business Expense Adjustments Earned Income Credit Payments 8867 EIC Paid Preparer s Checklist Estimated Taxes EIC1 EIC Due Diligence Qualifying Child 4 Child Care Credit EIC2 EIC Due Diligence Income F gt Data entry screens Recovery Rebate Credit EIC3 EIC Due Diligence Head of Household Click a screen name ElC4 EIC Due Diligence Additional Notes to open it Wages Gambling Income Electronic Filing and Banking 1099 R Retirement Republic RAL or ERC 1099 DI Dividend Income Consent to Use of Tax Return Information 1099 INT Interest Income 3 Consent to Disclosure of Tax Return Information 1099 G Government Payments Direct Deposit Form 8888 1099 MISC Miscellaneous Income Electronic Funds Withdrawal RRB 1099 R Railroad Retirement 8879 8878 e file Signature 1099 SSA Social Security EF Options Override Form codes Foreign Employer Compensation Each screen has Notes about the return a unique code Frequently Asked Questions Preparer Notepad Selector field Type Enter Screen State or City Code a form code and press ENTER Status bar General info on open return Return Status In Progress Return Type Individual Tax Return Current Package Federal Figure 3 6 Data Entry Menu Tax Year 2008 57 Data Entry Drake Software User s Manual Working in a Tax Return 58 Managing Screens Navig
196. cation Pro grams 108 Form 1099 R Distributions From Pensions Annuities Re tirement or Profit Sharing Plans IRAs Insurance Contracts etc 101 Form 1099 S Proceeds from Real Estate Transactions 98 Form 1116 Foreign Tax Credit 92 93 120 121 Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 157 Form 2106 Employee Business Expenses 110 Form 2120 Multiple Support Declaration 157 Form 2210 Underpayment of Estimated Tax 129 Form 2350 Application for Extension of Time to File 140 154 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 133 Form 2441 Child and Dependent Care Expenses 118 119 Form 2848 Power of Attorney and Declaration of Repre sentative 17 157 Form 3468 Investment Credit 122 141 Form 3800 General Business Credit 122 Form 3903 Moving Expenses 111 Form 4136 Credit for Federal Tax Paid on Fuels 122 133 Form 4137 Social Security and Medicare Tax on Unre ported Tip Income 123 124 Form 4506 Request for Copy of Tax Return 156 Form 4562 Depreciation and Amortization 26 140 146 Form 4797 Sales of Business Property 98 141 146 Form 4835 Farm Rental Income and Expenses 107 Form 4868 Application for Automatic Extension 140 154 Form 4952 Investment Interest Expense Deduction 117 118 Form 4970 Tax on Accumulation Distribution of Trusts 124 Form 4972 Tax on Lump Sum Distributions 124 Form 5405 First Time H
197. ce File tool For more information call Versicom at 937 438 3700 Contact Lists To build lists containing contact information on your clients PS ee YS From the online EF database toolbar click Tools Click Generate Contact List Enter report criteria by selecting or clearing the check boxes To further restrict the results enter start and end dates to search Click Run Report optional To export the report into an Excel file click the Excel icon You are asked whether you want to open or save the file Click Open or Save as desired If you click Open you will have another opportunity to save it from within Excel Multi Office Manager MOM The Multi Office Manager MOM is the online version of the CSM See Chapter 9 Client Status Manager for more on the CSM Designed for the multi office envi ronment MOM allows you to track the work flow of multiple offices providing a Tax Year 2008 197 Online EF Database Drake Software User s Manual snapshot of your entire business Reports and statistics on demographics return status return type bank payments fees and billing information are available Companies with multiple EFINs that wish to use MOM must have NOTE an EFIN hierarchy configured The data available in MOM depends greatly on the hierarchy structure For details on creating an EFIN hierarchy see Building a Hierarchy on page 196 Transferring For CSM data to be transferred to MOM the s
198. chedule for drop list The Setup Schedule dialog box is opened for the selected preparer ta From the Select day list select a day of the week 4 Choose the In and Out times for that day As times are selected they appear on the schedule grid 5 Repeat for each day of the week Or to apply the selected times for every day of the week at once click Apply to All 6 Click Save Click OK to exit the Scheduler Setup When you view a preparer schedule the rows Ia 6 indicating a preparer s out times will be shaded a different color from the rows indi Ja 6 cating the preparer s in times New in 2008 you can select certain calendar viewing options These options are shown in the Calendar Settings section of the Calendars tab Figure 4 13 Calendar Settings Calendar view start time Current Time z Default calendar tab displayed at login Daily E Calendars in my view V Dal M Weekly Calendar M Preparer Calendar Figure 4 13 Calendar Settings section under Calendars tab These features are described with the Scheduler Setup features in Table 4 2 on page 77 For more information click the Help icon in the Scheduler To change the default colors displayed in the Scheduler calendar 1 Click Setup 2 Select the Calendars tab The default colors are displayed under Colors Colors f Use application default colors C Use custom created colors z Scheduler grid background color Preparer scheduled
199. ciable 141 GO Zone 146 group sales 145 on Schedule C 95 sales of 96 section 179 expensing 142 sold 145 traded 100 associating two screens in data entry 62 attachments binary business packages only 309 312 PDF see PDF files unformatted schedules 162 audit log DDM 289 auto expenses 146 150 automated backup of files 250 automated updates 23 B backup and restore files 248 Vil Index bank name database 62 bank products see also banking see also checks applying for 203 207 check register 213 denial of 206 direct deposit of 192 distribution of 206 Drake banking partners 201 eligibility for 203 in data entry 209 loan cancellations 215 non loan 205 opting out of 210 processing checks 211 service bureau 204 settings 29 tracking prior year information 216 transmission of data 210 types of 204 206 withholding fees from 209 banking 201 216 bankruptcy 97 batch calculations 165 billing overriding setup options 47 setup 28 blank forms 246 blindness 84 Bonu Chase bank product 205 business see also business use 94 cancellation of debt 109 codes 94 depreciating home used for 144 expenses 110 mileage 95 147 148 use of home for 150 business use conversion of home to 99 percentage 104 142 148 150 C C corporations changing from S corps 254 calculating tax returns 165 168 181 calculations batch 165 global options for 25 pause option for 26 168 calculator 65 calendars in Scheduler 78 c
200. ckup dialog box shown in Figure 11 5 The Automatic Backup Settings dialog box is displayed Figure 11 6 Drake 2008 Automatic Backup Settings Automatic Backup Settings These settings affect the automatic backup program Please select a time and location to backup your files as well as which file types you would like to back up Activate Automatic Backups Backup Operation Select Files to Back Up Select time to perform r Client Files 1040 1120 automatic backup 11205 1165 etc 1 00 AM Sd Select backup type r Setup Files Pricing Setup All files X Information Files Select a backup location System Files CSM EF l CA I Database IRS Bank and Scheduler Files This will not change the location of manually backed up files Free space on disk is 11 9GB Figure 11 6 Automatic Backup Settings dialog box 3 Inthe Backup Operation box choose a time type and location for your backup e Time Select a time from the Select time to perform automatic backup drop list e Type Selecta type from the Select backup type drop list Choose All Files for a full backup choose Only changed files for an incremental backup 250 Tax Year 2008 Drake Software User s Manual File Maintenance e Location Click the backup icon and browse to the desired location 4 In the Select Files to Back Up box choose which files should be automatically backed up e Client Files To back up client files located in t
201. clicking in the field and selecting Flag For Review The field is displayed with a shaded background Figure 3 10 Tax Year 2008 59 Data Entry 60 Flagging Fields Globally Drake Software User s Manual 2210 Options 2210 Code 2007 Fed tax 2007 State tax sag Figure 3 10 Flagged fields When a return with flagged fields is calculated an UNVER message page is gener ated This page must be removed in other words all flagged fields must be cleared before the return can be e filed To clear a flagged field place the cursor in the field and press F4 To clear multiple flagged fields in a return at once press CTRL SHIFT SPACE in the Data Entry Menu An administrator can designate certain fields to be flagged in all returns When flags are set globally they apply to all returns Global flags can be one of two types for screens or for new returns e Screens When a field is flagged for a screen an unverified flag produces an EF message page only if the screen exists for the return For example the Employer ID field on the C screen is flagged an EF message for the unverified field will be produced only if a Schedule C is present on the return and the Employer ID field has not been verified If there is no Schedule C on the return the program does not require verification of globally flagged fields for the C screen e New Returns When a field is flagged for all new returns an unver
202. come covers Schedule C Profit or Loss from Business Sole Proprietorship Access screen C from the Income tab Several screens in Drake such as the 99M AUTO and 4562 screens can be associated with a Schedule C using the For and Multi form Code boxes of those screens See Associating One Screen with Another on page 62 Tax Year 2008 93 Self Employment Income Schedule C Drake Software User s Manual Program Defaults for Screen C NEW FOR Prior to 2008 screen C included check boxes for the program default 2008 selections described below These boxes have been removed a box needs to be selected now only if the program default does not apply The program s default accounting method is cash Select Accrual or Other as appli cable for accounting methods other than cash If Other include a description The program s default position for material participation is that the taxpayer materi ally participated in 2008 If the taxpayer did not materially participate select Did NOT materially participate in 2008 The program s default inventory valuation method is cost If the valuation method is not cost select the correct method under Part III Cost of Goods Sold The program s default position for at risk investments is that all investments are at risk If this is not true for your client select Some investment is NOT at risk Business Codes CTRL SHIFT S to You can use the search function to locate a spec
203. completed This form cannot be e filed and is not available in Drake but can be accessed from the IRS Web site See Form 8892 instructions for further details on submitting a 709 extension request to the IRS Requests Claims and Other Forms The screens described in this section are all available from the Other tab of the Data Entry Menu or by typing the screen code into the selector field and pressing ENTER Most forms listed here are e filable unless otherwise specified and most can be obtained in Drake from Tools gt Blank Forms NEW FOR Screen 9022 for Form TD 90 22 1 Report of Foreign Bank and Finan 2008 cial Accounts has been redesigned in 2008 per IRS revisions Applications and Requests Additional screens for application and request forms are listed in Table 5 21 Table 5 21 Application and Request Forms Available from Other Tab in Drake Screen Form Notes 970 Form 970 Application to Use LIFO Inventory Method 1045 Form 1045 Application for Tentative Refund Press PAGE DOWN to access the NOL screen This form is not e filable See Net Operating Losses on page 151 for more on the NOL screen 4506 Form 4506 Request for Copy of Tax Return To request a transcript of a tax return use Form 4506 T available in Drake at Tools gt Blank Forms or call 800 829 1040 8857 Form 8857 Request for Innocent Spouse Relief If Question 3 on this screen is answered Yes do not file Form 8857 File Form 8379
204. creen Click OK to start the batch calculation F1 400001015 CAESAR TEST amp CLEO F2 400001010 PHROZINTOWES TEST F3 400001008 LUCKY TEST F4 400001007 BEHAVIOR TEST F5 400001006 BARRELL TEST F6 400001005 MAPLE TEST F 400001004 BLOWNAPART TEST amp FRED F8 400001003 ERTIA TEST F9 400001002 LAMB JOHN amp MARY Help 0K Cancel Figure 6 1 Batch Calculation dialog box Tax Year 2008 165 Calculation Results Drake Software User s Manual 2 Using one of the following methods indicate the returns to calculate e Press the function key of a return to calculate The return s identification num ber SSN EIN appears in the field to the left of the list e Type the SSN EIN of a return into the top field and press ENTER 3 Repeat the previous step until all returns are indicated 4 Click OK The program calculates the returns By default results are shown in the Calculation Results window See Figure 6 2 NOTE This method can also be used to calculate a single tax return with out opening it Calculation Results When you calculate the results of a return from data entry the Calculation Results window is displayed by default The Calculation Results window consists of a Sum mary tab and a Details tab See Figure 6 2 Calculation Summary The Summary tab shown in Figure 6 2 has four main sections the calculation sum mary EF Messages Return Notes and Fee Type an
205. creen accessible from the General tab to enter data for the Recovery rebate credit line of Form 1040 The RRC screen has three fields e Economic stimulus payment received as shown on Notice 1378 e Nontaxable veteran s disability death benefits received in 2008 e By pass the recovery rebate credit calculation check box If a return was updated from 2007 and there was a positive estimate amount on the REBATE worksheet this amount is shown as the Economic stimulus payment received This field will be flagged for verification M p 0 RTANT Before you verify this field confirm the exact amount received from the IRS A link to the IRS How Much Was My 2008 Stimulus Payment page is available on the RRC screen for this purpose If there is no entry other than 0 or a positive amount in the Economic stimulus payment received field an EF message is generated and the return cannot be e filed To have the program bypass calculation of the credit select the By pass check box on the RRC screen You can select to have the EF message displayed as a note on the NOTE NOTES page or to have it not displayed at all Set up these options in Setup gt Options gt Administrative Options tab For more on these options see Admin Options on page 30 Direct Deposit Screen code DD Use the DD screen accessible from the General tab to indicate that a refund is to be deposited directly into the taxpayer s account The D
206. ct Form Type X P Pastor using this arries 2106 amount to CLGY worksheet c 0 Exclude from Federal fe Irr A AERO AS Mileage information continued sayeth ae we a Fe ae ae eT ey E Figure 5 29 Select P to indicate clergy When P is selected the program will carry the employee business expenses to the clergy worksheets WK_CLGY1 and WK_CLGY72 when the return is generated See Ministerial Income Allocation on page 116 for more on data entry for clergy Directing Data Entry to Form 2106 To associate the data from a 2106 screen to that of another screen such as the 4562 screen for depreciation or the 8829 screen for business use of home 1 On the 2106 screen select T for taxpayer or S for spouse as applicable 2 Go to the screen to be linked to the 2106 data 3 From the For drop list select 2106 Use the Multi form code field as needed See Associating One Screen with Another on page 62 for more on multi form codes See Screen Help on the 2106 screen for more assistance in directing data entry to Form 2106 Health Savings Account HSA Deduction Screen codes Use the 8889 screen accessible from the Adjustments tab to enter HSA data for 8889 HSA Form 8889 Health Savings Accounts Fields 1 coverage indications and 2 HSA contributions for the year of this screen are required in order to e file Form 8889 Qualified HSA Distribution An amount in the Qualified HSA distribution field
207. ct Summary Report Detailed Report or both 296 Tax Year 2008 Drake Software User s Manual Client Write Up e Copies Select the number of copies to print TIP To save your printing options as the default click Save Selection 3 optional Click Print Preview to preview your selection Use the scroll bar to view additional pages 4 Click Print Backing Up To back up or restore Tax Planner files amp Restoring Files 1 Click Backup Restore from the Tax Planner toolbar 2 Select Backup or Restore oN Choose a backup or restore location or browse to the location gt Choose the client files to back up or restore Select All Clients to select all Tax Planner client files To choose specific clients click Select Clients and enter a cli ent s Tax Planner filename Browse to a location as needed 5 Click OK Client Write Up Client Write Up CWU is free to Drake clients and is shipped on every release of Drake Software You can use CWU to prepare and print both live and after the fact payroll and such forms as W 2 1099 940 941 943 944 941SS and 944SS A num ber of reports including multi column profit and loss reports pre posted reports com parative or single column balance sheets and payroll reports are also available Templates are included to allow easy creation of a Chart of Accounts and there is an export function to carry this information into Drake Software Install CWU from your Drake
208. ctions describe actions that cause the data in cells to change Entering To make a direct entry in a cell click the cell and enter an amount Use this same pro Data cess to override the amount in a calculated cell You can also copy cut and paste amounts in a Tax Planner cell using typical Windows procedures for copying cutting and pasting data Using In some cases a worksheet is available for additional data entry Worksheets The Detailed Worksheet is similar to the CTRL W worksheet in data entry To attach a detailed worksheet select the desired cell and press CTRL W Use the Detailed Worksheet dialog box to add edit and remove items for the cell Drake Tax Planner Detailed Worksheet Enter the description and amount for the item Click Add to place this item in the list below Item Description Amount Rich Mann 25000 Description OU Cash M P Kunious Remove Edit Clear All Exit Total 3000 Figure 13 12 Adding items to a Detailed Worksheet dialog box Tax Year 2008 295 Tax Planner Drake Software User s Manual For example to add an item enter a description and an amount then click Add Once all items are entered click Exit The total is shown on a blue background Figure 13 13 Income Items Wages Nontaxable combat pay Taxable interest Nontaxable interest Dividends Qualified dividends Taxable refunds Alimony Business income Schedule C Capital gain loss Schedu
209. d Amount Also displayed are the DCN and the specific return results such as refund and balance due __Totalmeame TaxableIncome TotalTax Refund Balance Due Payment Method Eligible For EF Federal 80 268 0 Receive Check 8 Four divisions of Summary tab ow highlighted item in the list below to fix the problem Results Summary EF Messages Return Notes and Description right click for full description Schedule C E or F or Form 4835 has a loss and the at risk question Federal Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ O008b must Fee Type and Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ 0008b r Amount Federal 29 Tax Return Identification Page 1 EFIN of Originat must Anator SEQ OO08b must EFIN of Originator SEQ 0008b must PS TTT fem ANNAL Federal 29 Tax Return Identification Page 1 Federal 23 Tax Return Identiic jgz w amp Sienta WITH FOLDING IS HIGHER THAN MAX TAX RATE NON STANDARD W 2 KEYED NON STANDARD W 2 KEYED DCN OL J gt Total Tax Refund Current Program Calculation Complete SEE MESSAGE PAGE fy R EF Continue Description Press lt ENTER gt key or Click Here to Continue Figure 6 2 Calculation Results window 166 Tax Year 2008 Drake Software User s Manual Calculation Results EF Messages Return Notes Fee Type Amount The Summary shows to
210. d Entry box see Figure 2 15 is activated with the item properties Make changes and click Save Click Save Changes to save your changes when exiting the Edit Entries dialog box NOTES Drop lists can also be created for the Adjustments and Payments field of the BILL screen When viewing a customized drop list in data entry click F1 to see the item descriptions Tax Year 2008 Drake Software User s Manual Software Setup Pricing Setup Use the scroll bar or arrow keys to find forms Double click a form to select it quickly Minimum amp Maximum Fees Use the scroll bar or arrow keys to find forms Tax Year 2008 You can set Drake up to calculate the prices to charge your clients and to generate the client s bill with the return Use Pricing Setup to enter prices Prices can be defined for each form and on some forms for each item You can also enter minimum and maximum charges for a completed return NOTE Bank product and e filing fees are established in Setup gt Firm s To set up pricing 1 From the Home window go to Setup gt Pricing 2 Select a package from the Form Categories All forms for that package are dis played in the grid below 9 Select a form in the grid and press ENTER 4 optional Edit the Form Description This description is printed on the client bill if Include on Bill is selected Do not edit the form name 5 Enter pricing information in the Per Item and Per Form fie
211. d during the interview process 2008 Form W 2 Wage and Tax Statement e e Employer s name address city state ZIP code s name address city state ZIP code a CS oc eae a aa Aae mer i 1 Mike an G Se ae ROD 9 anh nS ns an oe AE slide Na gpa ana R Figure 4 6 Sample of W 2 page from a proforma Tax Year 2008 71 Organizers and Proformas Drake Software User s Manual Blank proformas and organizers can be viewed and printed from Tools gt Blank Forms See Printing Organizers and Proformas for Clients on page 73 for informa tion on printing an organizer or proforma for selected clients Entering Information from Proformas Use proformas during the interview process or have a data entry operator enter tax information from proformas following the interview Each sheet in a proforma has special codes printed on the left side of the page For example Figure 4 6 shows that the proforma code for the W2 screen is 2 6 As an alternative to the screen code of W2 the data entry operator or tax preparer can use the screen s proforma code 2 6 To access a screen by entering its proforma code 1 From the Data Entry Menu press CTRL I to change the selector field 2 Enter the proforma code numbers one in each text box The Figure 4 7 example shows that a 2 and a 6 would be entered to access the W2 screen Enter Interview Sheet Number and Section 2 6 Figure 4 7 Example Ent
212. d proformas 73 preparer fees withheld 28 printer sets 172 referral coupons 27 return as PDF 45 return summary 27 sets 43 setup see printer setup SSN on bill 28 Tax Planner 296 tax returns 168 taxpayer phone number 28 third party designee 28 using the PRNT screen 45 privacy letter 27 private mortgate insurance PMI 104 processing acknowledgments 185 loan checks for bank products 211 proformas 71 74 property listed 142 on Schedule E 103 qualified Indian reservation 145 rental of 104 sale of 104 section 179 expensing 143 tax for vehicle 147 149 type and usage 104 publications IRS Drake etc 233 purchasing PPRs 20 W 2 downloads 89 Q Quick Estimator 20 263 quick print 171 QuickBooks imports 255 R railroad benefits 108 RAL Refund Anticipation Loan 205 RAL Advance 205 RCR Reduced Cost RAL 205 Ready for EF indicator 29 real estate 103 105 307 xvii Index Real Time Loan 205 receiving acks only 185 recent files 54 Recovery Rebate Credit 134 bypass calculation 134 RRC screen 2 134 setup options 30 referral coupons 27 refunds direct deposit of 134 136 Regulation 7216 Consent to Use and Disclosure of Tax Return Information 1 16 201 203 reject code lookup 193 reject codes see also acknowledgments due to multiple 2106 forms 110 foreign tax credit 121 looking up 192 193 troubleshooting acks 186 release notes 233 rental real estate with active participation
213. data Farm Income NEW FOR The Auto Expense Worksheet AUTO screen can now be applied to 2008 the F and 4835 screens See Auto Expenses on page 146 Entry fields for the following farm related forms are located under the Income tab Screen codes e Schedule F Profit or Loss From Farming can also be used with Form 1065 4835 r fed e Schedule J Income Averaging for Farmers and Fishermen e Form 4835 Farm Rental Income and Expenses N Record crop insurance and disaster payments for Schedule F and DTE Form 4835 on the Crop Insurance and Disaster Payments CIDP screen Schedule F Profit or Loss From Farming Screen code F Use screen F accessible from the Income tab for Schedule F Profit or Loss From Farming NEW FOR Prior to 2008 screen F included check boxes for program default selec 200 B tions described below These boxes have been removed a box needs to be selected only if the program default does not apply Screen F The program s default accounting method is cash Select Accrual if the taxpayer s Defaults accounting method is not cash The program s default position for at risk investments is that all investments are at risk If this is not true for your client select Some investment is NOT at risk 106 Tax Year 2008 Drake Software User s Manual Unemployment Compensation The program s default position for material participation is that the taxpayer materi ally participated in 2008 I
214. dditional options for sorting data calculating numeric data using prior year data and assigning an output file name are available from the Report Editor Step 2 win dow Figure 12 3 on page 269 Under Additional Report Options choose a keyword by which to sort reports If for example you re building a report on Clients and you want to sort the results by the clients last names by ZIP code or by state choose an appropriate option from the list This list includes all the keywords in the report in addition to taxpayer ID tax payer last name ZIP code preparer number firm number DCN when the return was e filed and federal acknowledgment code Select the Summarize the Report Data box to have the program calculate and total each column Not all reports benefit from summarizing Edit your report and add such keywords as Count Average and Percentage to enhance the summary The program queries current year data by default To have a report run prior year data select the Use Data from 2007 box Enter a report output name in the Report output file name field This name must be fewer than nine characters You will use this name to locate the report in the Report Viewer See Report Viewer on page 276 NOTE New reports overwrite existing reports of identical output names in the Report Viewer To have multiple instances of the same report you must rename the newer output file Creating a Report Format Tax Year
215. de more data and can display up to 12 columns In addition you can now view the most recent EF transmission report e ERO Online Bank Application This year the ERO online bank application features a new look and some new functionality For more information on e filing in Drake see Chapter 7 E filing Contacting Drake Support Tax Year 2008 In addition to the manual on screen Help and online resources Drake offers unparal leled telephone and e mail support Use one of the following methods to consult a member of the Drake Support team e E mail Support Support DrakeSoftware com Recommended for simpler Drake Software questions Contacting Drake Support Drake Software User s Manual e Telephone Support 828 524 8020 Recommended for more complicated Drake Software questions Drake Support Hours 2008 2009 December 1 2008 April 20 2009 Monday Friday 8 a m 10 p m ET Saturdays 8 a m 6 p m ET April 21 November 30 2009 Monday Friday 8 a m 9 p m ET Saturday 9 a m 5 p m ET For more on the many helpful resources provided by Drake Software see Chapter 10 Resources and Support M p 0 RTANT State and federal tax rules and regulations can change at any time Read the Drake shipment letters and broadcast e mails throughout the season to stay up to date on the latest changes to the software and in the state and federal tax laws Tax
216. dent s last name differs from the taxpayer s Tax Year 2008 85 Exemptions Drake Software User s Manual Selecting Months in Home By default the program calculates the return as if a dependent lived with the taxpayer for the entire year Complete the Months in Home field on screen 2 only if the depen dent did not live with the taxpayer for all 12 months If 0 months are selected for a son or daughter the dependent is classified as one who did not live with the taxpayer due to divorce or separation If 0 is selected for another type of dependent parent grandchild etc the program classifies them as Other Dependent regardless of the relationship To override these classifications select the applicable boxes in the Additional Information section at the bottom of screen 2 See Additional Dependent Information on page 86 Claiming a Dependent for Split Returns If taxpayers are married filing separately MFS and you plan to split the return to see if filing separately is more beneficial use the TSJ drop list on screen 2 to assign the dependent information to the correct persons A TSJ code should also be selected if the state has a married filing separate combined option The program default is T Belongs to the Primary Taxpayer TSJ x State z State codes Figure 5 4 Fields for TSJ State new in 2008 and State codes Entering State Data for a Dependent Enter data into the screen 2 sta
217. dependents change in for amended return 154 release of claim to 157 existing forms list 59 exporting see also importing check register 213 client data 252 CSM data 223 Kiddie Tax data 124 reports to spreadsheet format 195 Schedule K 1 data 105 extensions 154 F F federal code 62 FAQs 234 farm income 106 107 fax cover letter for support 241 federal state facts 232 fee overrides allowing 25 preventing 208 fee types 167 fees add on 14 calculated 167 charging for bank products 14 in EF database 193 minimum and maximum 33 pricing setup 33 reports 222 reports of bank and preparer 194 setting 187 Tax Planner 49 Fees to ACH bank acknowledgment 210 field flags see flags file maintenance 248 256 files automated backup 250 backing up 248 changing types 254 client vs print 253 deleting from Drake 253 e mailing client files to Drake 237 exporting 252 locking after EF acceptance 29 password protecting 252 restoring 248 structure of in DDM 287 2008 Drake Software unlocking 253 filing electronically see e filing instructions 27 status selection 83 filters and filtering see also reports CSM data 221 report data 269 fingerprint cards 180 firm setup 14 15 First Advance RAL 205 first time homebuyer credit 133 Fixed Asset Manager 277 flagging fields see flags 59 flags activating 59 clearing 30 customizing 30 in all returns global 60 fonts for printing tax forms 43 246 foreign account reporting 158 ea
218. der Private Appointment or Recurring Appointment boxes at the bottom of the Appointment Detail dialog box Click Save The appointment will now be displayed on the schedule grid New in 2008 you can enter appointment times that overlap If an appointment con flicts with another appointment you are asked if you want to save the appointment anyway If Yes the calendar displays a Multiple Appts note as shown in Figure 4 16 Selected Date Weekly Calendar Preparer Calendars Name Comments E W E N E E T Figure 4 16 Example of Multiple Appts notification To view the multiple appointments scheduled double click the Multiple Appts row Appointments are shown in the Open Appointment grid To view appointment details double click an appointment To locate the next available appointment time in the Scheduler a a a S From the Appointment Detail dialog box click Find Next Appt Choose a preparer from the Preparer drop list Select a Starting Date The program searches all times after the selected date optional Specify a day of the week and set a range of times to search Click Find The next available appointment time for the preparer is displayed Tax Year 2008 Drake Software User s Manual Finding a Client Record Changing Appointment Details Deleting an Appointment Q Delete Scheduler To view the details of a selected appointment time click Select Click Start Over to run another s
219. der Updating computers without Internet access click the second option to read a portable data drive from another computer then click OK to close the warning box The Read Update List button appears PPA pug FE Re FE BERG Lt Ee a LP 9 tng Updating computers without Internet access Choose this option to copy updates from another C computer to this one A portable data drive floppy disk USB drive etc must be in the computer g Choose this option if you are reading a portable data drive brought from a computer that needs updates Read Update List Help Update Profile Exit Figure 11 3 Option 2 Read Update List button 4 Click Read Update List then browse to the location of the storage device 5 Select PATCHLIST TXT and click Open If update files are needed they are cop ied to the media storage device If no updates are needed you are prompted to click OK 6 Remove the storage device from the computer To copy the updates complete these steps from the computer that needs the updates NOOR Connect the media storage device to the computer From the Home window select Tools gt Install Updates Under Updating computers without Internet access click the first option to copy updates from another computer to this one then click OK to close the warn ing box Buttons for Step 1 and Step 2 appear See Figure 11 2 Click Get Updates From Drive Step 2 Browse to the location of the storage device Select PATCHLIST TX
220. diahat tut iennet AEE de ane EAE AER GERERE 179 E filinga R t riossrerenegr reier ienkear e hE EEE Y ie a T EE steeds oes 181 EF Override Options in Data Entry 0 0 ccc cc cece eect e ence nent eenes 188 EF Database ic baleen rearen e pea bukadures tater detnndadan dated aR 191 Online EF Databasen eeni ke areas ee ea es E eae eae E As a E E E 194 Copying EF a4 446 cache ter pareit en EATE EE T EAE EA EEEE CAE REESE 199 About State Filing sesse wee oh Soeur ek keadaaan ie aeaaaee aana tetrad be EE a a 200 Bei sce ssaca vine net cttittbeoetentenceneteaanesiannaiciandcceienneiseoatbieeieceandannaanaal 201 About Bank Products e944 card nwadetake eas een een en bose hate Cle d aon pet ebas 201 Preparing to Offer Bank Products si 4 lt 0 24 04 02 sa edn es E RG REGS EER RES 207 Using Bank Screens in Data Entry 0 0 ccc cc cece eet ene e en ebaeeeas 209 Bank Product Transmission lt 1 i she does caw dea Ra PSs odes 4 eae de sha Cae 4 EES 210 Processing te Loan Check a12 o0 cet catowe th iocds ce nent eG th enkod sedeadeoeeddasd 211 Troubleshooting Check Printin s 05 0 4 208000 dnn sands deaenadisdkeaeaddawneenee d 214 Cancellations Tracking amp Post Season Procedures 0000 c eee e eens 215 Client Status Manager ae ee eee 217 About Client SIAUISES 0034 sac cnaes eed eed UALS hae e eA ne eek wee ew Sea 217 Setting Statuses cere havaa iti nape LRRN EEEE EAA Es SAE EER RE REE ER CREM 219 Opening a Return from the C
221. download updates but not install DTE them you will need to re open Tools gt Install Updates before going to the next step o Click Install Updates 6 Click Yes to continue If you select No the process is stopped If another com puter on your office network is in Drake you are directed to reboot your system 7 Click Proceed to begin installing the updates 8 When files are installed click Exit The 1040 amp Primary component is required and cannot be cleared Selecting components to download from the Download Manager ensures that no time is wasted on unnecessary updates If compo NOTES nents appear in the Download Manager that you do not wish to download consider modifying you update profile by clicking the Update Profile button at the bottom of the Update Manager dialog box see Figure 11 2 or by selecting Setup gt Update Profile from the Home window Copying Updates to Another Computer Copying updates is necessary for a computer that does not have Internet access The process of copying updates has three main steps 1 getting an update list 2 loading the updates onto a media storage device and 3 copying the updates to the computer You need a media storage device such as a USB flash drive or floppy disk and the Drake program on a computer with Internet access Getting an To get an update list complete these steps using the computer that needs the updates Update List Connect a media storage device to
222. duals Estates and Trusts 8885 Form 8885 Health Coverage Tax Credit These amounts flow to the Payments from line of Form 1040 Use the Other payments field on screen 5 to force an amount to NOTE flow to the Payments from line of Form 1040 Be aware that no other documentation justifying the forced amount is automatically included with the return First Time Homebuyer Credit Screen code 5405 Tax Year 2008 The Housing and Economic Recovery Act of 2008 gives first time homebuyers a tem porary refundable tax credit equal to 10 of the purchase price of the home up to 7 500 This credit is effective for homes purchased on or after April 9 2008 and before July 1 2009 The credit is a loan that must be repaid in equal installments over a 15 year period It is in essence a 15 year interest free loan for most qualifying homeowners Use the 5405 screen accessible from the Credits tab for Form 5405 First Time Homebuyer Credit Enter the purchase price in Part II Credit If someone other than the spouse held an interest in the home enter only the taxpayer s share of the purchase price The software calculates the 10 limitation based on the purchase price Note that the fields on screen 5405 for the home address are overrides Entries here will override the default address from screen 1 133 Recovery Rebate Credit Drake Software User s Manual Recovery Rebate Credit Screen code RRC Use the RRC s
223. dules as needed however unless the software specifically directs you to use the SCH screen for a statement the statement will not be eligible for e filing 161 Special Features in Data Entry Drake Software User s Manual Types of Ifthe Type of attachment field of any SCH screen is blank the text is attached to the Attachments return as a statement Type of attachment options are shown in Table 5 24 Table 5 24 Attachment Types and How They Appear in View Print Mode ar View T Description ype escriptio Print x Preparer s EFT note use for including voluntary information thatis EF_NOTE related to the tax return but unlike a statement is not required E Explanation for certain IRS code elections where no official IRS ELECTION form is designed for that purpose R Explanation for certain regulatory elections where no official IRS REG_NOTE form is designed for that purpose blank Statement to be added to the return STATMENT Title A title is required for each unformatted statement to be attached to the return Statement Each statement should be assigned a unique statement number Be aware that some Number statements might be generated automatically and that the program might have already assigned a number to a statement Verify this by viewing the calculated return and checking for statements If a required statement has not been created yet the required statement number is dis played on the applicable l
224. e 174 mode the changes apply in both Enhanced and Basic modes Tax Year 2008 Drake Software User s Manual Setting Up View Print Options Setting Form Order New in 2008 you can change the order in which the documents of a return are printed To change the document printing order for a return 1 In Enhanced View Print mode elect Setup gt Form Order to open the Sort Form Order dialog box Figure 6 12 Drake 2008 Sort Form Order M Save Normal Default Client Set C EF Signature Set C Preparer Set Cancel Estimate Extension Set Federal Set Help 209 Messages Page a 300 Notes Page Exit 289 EF Status Xi 97 Form 1040 1 Form 1040NR Reset 2 Form 1040 i rece 3 Form 10404 nstructions 4 Form 1040EZ Click and Drag the form names to put them 5 Form 2210 in the desired order 91 Form 2210 6 Form 2210F 7 Schedule 8 Schedule B 9 Schedule C 10 Schedule C EZ 11 Schedule D 13 Schedule E 14 Schedule E Schedule F Schedule R Schedule SE Form 1116 Schedule J Form 2441 Form 3800 Figure 6 12 Sort Form Order dialog box 2 Select the printing set to which to apply the order changes Default is Normal 3 Click and drag the form names to put them in the desired order The document at the top of the list if it has been generated with the return will be printed first 4 Click Save To restore the default settings click Reset in the Sort Form Order dialo
225. e efficiently in 2009 IRS Changes amp Requirements Tax Year 2008 EIC Due Diligence The Taxpayer Relief Act of 1997 implemented paid preparer Earned Income Credit EIC due diligence requirements that included the completion and storage of Form 8867 EIC Checklist EIC worksheets and documentation of how when and from whom the EIC information was obtained The IRS has begun actively conducting compliance audits of paid preparers focused specifically on the EIC due diligence requirement In 2007 Drake eliminated the use of default answers on the 8867 screen In 2008 Drake has provided additional screens to help guide paid preparers in the EIC due diligence process during the client interview For information on these new screens see EIC Due Diligence Screens on page 131 Consent to Use and Disclose Tax Return Information IRS Reg 7216 provides guidance to tax preparers regarding the use and disclosure of their clients tax infor mation This regulation strengthens taxpayers ability to control their tax information and to make informed decisions regarding the preparer s use of that information If tax return information will be disclosed to parties outside of the tax preparer s firm then these regulations must be complied with Clients must sign the Consent to Use of Tax Return Information before the tax return is prepared and they must sign the Con sent to Disclosure of Tax Return Information before the tax info
226. e 138 Information Federal preparer information if the firm is not set up in Firm Setup e State preparer information if the firm is not set up in Firm Setup 48 Tax Year 2008 Drake Software User s Manual Making Changes on the Fly This screen has a field for the preparer s alternative PIN You can also select not to print the preparer s information on the letter bill or summary NOTE The alternative PIN must match the one created in Setup gt Preparers Overriding the Bill Amount Standard rates must be established in Pricing Setup by can change the billing amount on the fly either by overriding the total or by adjusting individual amounts Overriding To override the total amount on a client s bill go to screen 1 and enter the desired the Total amount in the Fee Override field located in the Return Options box NOTE If this box is not activated go to Setup gt Options gt Data Entry and select the Activate Preparer Fee override box Adjusting Use the BILL screen to adjust individual amounts on a client s bill The following Individual items are added to or subtracted from the bill using the BILL screen Amounts e Write in Adjustments such as for coupons and other discounts e Balance due from prior year e Tax Planner fees e Percentage increases and discounts e Sales tax percentage e Prior Payments NEW FOR You can now create user defined drop lists for the write in Adjustments 2008 and Payments screens
227. e 6 7 If the EF tab is selected only the EF specific documents are shown in tree view Category tabs and descriptions are provided in Table 6 2 Table 6 2 Category Tabs and Descriptions Tab Items Shown in Tree View All Forms Every form generated during production of the return Set Forms as distributed into the printer sets selected in Printer Setup EF All forms needed for e filing in addition to any EF message pages Federal All forms needed for filing the federal tax return Worksheets All worksheets produced while completing the return Miscellaneous Various items such as W 2 forms letters overflow statements depreciation lists bill summary direct deposit summary notes etc State All forms needed for filing the state tax return Tree View A tree view directory of all forms worksheets and other documents in a return allows Directory you to view at a glance the components of a return Expand or collapse the tree as necessary for your viewing needs Viewing The preview pane provides a preview of a selected document within the return To Panel preview a document click the document name in the tree view Viewing in Enhanced View Print To view a document in Enhanced View Print mode 1 Open Enhanced View Print for a return The All Forms tab is shown by default 2 Expand the tree view as needed and click the name of a form to view N To view a form click the form name do not select the box next to DTE the
228. e Allocable to the State 22400 RIE so Stee essere este ee Siere wie tee sib See See dis ae eise es ciao 271 Balance Due eee eee eens 271 1S ee ee ea ee ee eee 22400 PeneLe iosist cise weenie ewes aaia 22400 MM oid ee seeds eee eee soba SSS See Dew odes 271 Bal BUG ors eee se sews ee ee Meee cae eee 271 SL r TE Sebi ht snake fal ten lg entnndie ante Figure 6 4 Calculation Details tab Click Print at the bottom of the Details window to print the details displayed Viewing and Printing a Return View or print a return from either the Home window without opening a return or from within a return To view or print a return from Data Entry mode click View or Print If results are first displayed in Calculation Results click Continue to proceed To view or print one or more returns from the Home window Shortcut Press 1 Click the View or Print icon or select File gt View or File gt Print from the CUE OE GRR menu bar The Return Selector lists all recently calculated returns available for viewing or printing 2 Select one or more returns by clicking the box next to each return 3 Click View or Print Depending on your setup options Calculation Results could be NOTE opened at this point click Continue to proceed To change this option go to Setup gt Options Calculation and View Print and select or clear Pause option for calculation Enhanced View Print Mode NEW
229. e B Interest and Dividend Income Form 4562 Form 6198 Depreciation and Amortization At Risk Limitations Form 6251 Alternative Minimum Tax for Individuals Form 8582 Passive Activity Loss Limitations Summary Individual Diagnostic Summary appears as SUMMARY under Mis cellaneous tab in View Print mode Compare Tax Return Comparison compares current year return with returns from the two prior years and appears as COMPARE under Miscella neous tab in View Print mode See Comparing Data on page 159 for more on creating a Tax Return Comparison in Drake Tax Year 2008 Drake Software User s Manual Making Changes on the Fly Table 2 17 Items That Can Be Forced from the PRNT Screen Item Description WK_SSB Social Security Benefits Worksheet provided by IRS for Forms 1040 and 1040A allows taxpayer to see if any benefits are taxable Next Year Worksheet showing the depreciation to be carried forward to the next Depreciation Listing year Overriding Other Setup Options Envelope Coversheets When a return is generated Drake also prints envelope coversheets if selected for mailing with copies of the return to the taxpayer and tax authorities Default settings for envelope coversheets are set in Setup gt Options gt Optional Documents tab Use the PRNT screen to override coversheet options for a return Envelope numbers assigned by Nelco are provided in the Print Over
230. e General tab 2 Under Federal E file Override Figure 7 6 select the forms to e file FEDERAL E FILE OVERRIDE Choose one from the options below Tip If you want to send a federal form and NO state forms check the Do NOT send any states box on the right M 1040 M 4868 M 2350 M 9465 only MV 56 only Do NOT send Federal Figure 7 6 Federal E file Override options in this example Form 56 will be e filed Tax Year 2008 189 EF Override Options in Data Entry Drake Software User s Manual Be aware that if Form 9465 or Form 56 are ready to be e filed they will be transmit ted automatically By selecting 9465 only or 56 only you are indicating that the pro gram should transmit only those forms M p 0 RTANT Leaving the 1040 box blank does not prevent the 1040 from being transmitted if it is otherwise ready to be e filed If filing an extension the applicable box 4868 or 2350 must be selected on the EF screen in order for the program to transmit it E filing State Returns State returns can be e filed using one of two methods If e filed directly the state return is sent directly to the state If e filed piggyback the state file is attached to the federal return and the IRS then sends it to the state When you e file with Drake the program sends the resident state return piggyback by default Any other eligible state returns are sent directly to the applicable states To transmit a different state retur
231. e Options O Just those returns that were altered in Prior Year Data Entry amp Cale O Schedule A Descriptions O Schedule B Descriptions O Schedule C Other Expenses Descriptions O Schedule E Other Expenses Descriptions O Schedule F Other Expenses Descriptions O w 2 Alpha Information CO 1099 Alpha Information 1099 R 1099 M and 1099 RRB O 2441 Child Care Provider Names and SSNs O Update DD Direct Deposit Information O Update Misc Codes on Screen 1 Name and Address screen O Update Prior Year Tax Preparation Fee to the MISC Screen O Update SCH Unformatted Schedule screen O Do NOT Update Preparer and Firm Number Information C Update the Custom Paragraph of the LTR Screen 1 Do NOT Update Employee s Info w2 W2G 1099 99M RRB O Update 8283 s Donee s Information C Update Child s Information on Form 8814 O Update Taxpayer s and Spouse s PIN O Do NOT Update Bill Screen Information O Update Return Password SS J Help Select All Unselect All Update 1040 Cancel Figure 4 2 Individual Update Options box 2 optional Select additional items to update Click Select All to choose all items 68 Tax Year 2008 Drake Software User s Manual Prior Year Updates 3 Click Update 1040 Once the program has updated the return it opens the return to the Data Entry Menu Update To update all returns in a package not recommended Returns Globally 1 From the Home window select Last Year
232. e amount with the amount of Actual Expenses for Utilities Finally enter the Fair Rental Value of the housing used 116 Tax Year 2008 Drake Software User s Manual Itemized Deductions Parsonage Ifa parsonage is provided enter its Fair Rental Value If a separate Utility allowance is provided enter the amount with the amount of Actual Expenses for Utilities Itemized Deductions Itemized deductions should be entered on one of the following screens as applicable Screen codes e Screen A for Schedule A Itemized Deductions i i e 4952 screen for Form 4952 Investment Interest Expense Deduction e 8283 screen for Form 8283 Noncash Charitable Contributions Access screen A from the General tab Access screens 4952 and 8283 from the Adjustments tab NEW FOR Medical transportation mileage rates changed as of July 1 2008 On Schedule A in the Medical and Dental section enter the miles driven 2008 before July 1 and the miles driven after June 30 in the appropriate fields Schedule A Screen code A Use screen A to enter data for Schedule A Itemized Deductions Forcing Ifscreen A has been completed for a return the software determines which is more Schedule A advantageous for the taxpayer itemizing deductions or taking the standard deduc tion To force either type of deduction select the appropriate box at the top of screen A Figure 5 33 l Force itemized l Force standard Figure 5 33 Boxes at the top of screen A Print
233. e attached 2 Informing the program that a PDF document will be sent with the return Tax Year 2008 309 Binary Attachments Drake Software User s Manual 3 Attaching the PDF document for e filing These steps are described in the following sections Creating a PDF File To create a PDF file 1 Scan the document to be attached to the return TIP It s a good idea to use the DDM scanning feature for this step 2 Save the document to your client s DDM file your computer s desktop or any where you can readily find it Adding PDF Documents in Drake To indicate in the software that a PDF document will be sent with the return 1 Open the return in Drake From the Data Entry Menu click PDF Attachments or type PDF in the selector field and press ENTER Porat eate kor maitim lt 7 T Oe OD Di oewre psf eT An Pt eT ie Schedule O Controlled Group Info PMT Electronic Funds Withdrawal 4626 Alternative Minimum Tax PIN e File Signature CNTR Contribution Carryovers EF EF Options Override LOSS Loss Carryovers FAQ Frequently Asked Questions PRNT Print Options Enter Screen State or City Code PDF Figure 14 14 Select PDF Attachments or type PDF into the selector field and press ENTER 2 Fill out the columns on the PDF Attachments screen See Table 14 3 for exam ples Table 14 3 PDF Attachment Window Columns Name of Column Description Examples Reference Source Name or number of regulation IRS Pub x
234. e both visible and accessible Hidden Menu items with no check mark are not visible but can be accessed using the selector field Selections made here do not apply for users with Admin rights Customized Drop Lists New in 2008 your firm can create drop lists for the Miscellaneous Codes on screen 1 and the Adjustment and Payment description fields on the BILL screen Once you have created a drop list it appears in the selected field In Figure 2 13 a drop list has been created for Miscellaneous Code 1 and Code 2 on screen 1 As shown in the example Code 2 has the user defined referral codes BUSREF business reference and WOMREF word of mouth reference Miscellaneous Codes Code 1 Code 2 Code 3 Code 4 Code 5 Arrows indicate lt drop lists User defined codes established in Setup gt Options Figure 2 13 Screen 1 drop lists and user defined miscellaneous codes The instructions below explain how to create the drop list like the one in Figure 2 13 To create a drop list 1 From the Home window select Setup gt Options gt Administrative Options tab 2 Data Entry Customization Options V Use Customized data entry selection menu Customize user defined data enty fields Click the second Customize button Figure 2 14 Customize Figure 2 14 Customize user defined data entry fields In the Customizable Dropdowns in Data Entry dialog box double click a field s
235. e eligible for e filing To have a note delay e filing select Hold EF see Figure 5 65 for the note and the note shows up as an EF message When you are ready to e file the return return to the NOTE screen and clear the Hold EF box NOTE To have notes appear when a return is opened go to Setup gt Options gt Data Entry tab and select Show notes reminders to preparer when opening a return Notes to be Notes in the top section of the NOTE screen apply for the current year only To have Updated notes included in subsequent updates use the Miscellaneous Notes box below it Preparer Notepad Screen code PAD The Preparer Notepad PAD screen accessible from the General tab offers an area for keeping more extensive notes and other pertinent return information The contents of this screen are brought forward each year when the return is updated You can also access the PAD screen by pressing CTRL SHIFT N or by right clicking anywhere on a screen and selecting Preparer Notepad Press PAGE DOWN for addi tional PAD screens Unformatted Schedules Screen code SCH Tax Year 2008 The SCH screen is a tool for adding statements and explanations not supported else where in the return Some not all unformatted schedules can be e filed An unfor matted schedule can also be saved as an in house note for taxpayer and preparer records only SCH amounts do not flow to any other form or schedule NOTE Create as many unformatted sche
236. e exceeds the exclusion amount If Schedule D is generated both the gain on the home and the Section 121 exclusion if applicable appears on Schedule D The WK_2119 still appears in view but Schedule D is added to report the taxable gain on the sale The software calculates the section 121 exclusion using the number of days during the last five years that the taxpayer and spouse if filing MFJ used the home and the num ber of days the home was owned during the past five years Enter this information under the Reduced Maximum Exclusion heading on the HOME screen Ifa home was lived in and then converted entirely to rental or business use the trans action must be shown on Form 4797 Select the appropriate box on the HOME screen under the Miscellaneous heading to carry the applicable information to the 4797 99 Sales of Assets Exclusion for Surviving Spouse First Time Homebuyer Credit Drake Software User s Manual New in 2008 For two years after the death of a taxpayer a spouse is permitted to take the Married Filing Joint currently 500 000 exclusion for gain on the sale of a principal residence assuming the normal requirements for the exclusion are met To indicate that the surviving spouse is taking the exclusion check the Recently wid owed taxpayer eligible for MFJ exclusion box under Miscellaneous If first time homebuyer credit was taking on Form 5405 for the residence check the Form 5405 box Figure 5 20
237. e printed at the bottom of the form P Produces Form 2350 Taxpayer s name preparer s name and firm address are printed at the bottom 4 Fill in all applicable information For further instructions click the Screen Help button in the title bar of the screen Tax Year 2008 Drake Software User s Manual Special Returns E filing an If e filing an extension application complete the EXT screen then select the applica Extension ble form number on the EF screen accessible from the General tab For more infor mation on the EF screen see EF Override Options in Data Entry on page 188 Non Resident Alien Returns Screen code NR Use the NR screen accessible from the Taxes tab to enter data for Form 1040NR U S Nonresident Alien Income Tax Return The 1040NR in Drake consists of three screens Press PAGE UP or PAGE DOWN to move from screen to screen N Data from Form 1042 S Foreign Person s U S Source Income UTE Subject to Withholding should be entered on either the 2555 screen the NR screen or in the Other income field on screen 3 Gift Tax Returns Screen code 709 Form 709 U S Gift and Generation Skipping Transfer Tax Return consists of sev eral parts and schedules all located on the 709 menu accessible from the Taxes tab Drake 2008 Data Entry 400006665 WI a aR I View Print Calculate General General Information A Computation of Taxable Gifts B Gifts f
238. e the FTC sections of the INT and DIV screens to enter data regarding foreign interests and dividends respectively or use the 1116 screen FTC Code New in 2008 if an 1116 screen is to be linked with an INT or DIV screen for foreign interest and dividends you can enter an FTC code into the FTC box Enter this same number into the appropriate box of the INT or DIV screen For more on entering for eign interests and dividends see Foreign Interest and Dividends on page 91 120 Tax Year 2008 Drake Software User s Manual Child Tax Credit Required Statements A statement might be required with Form 1116 Fields that might require statements on the 1116 include the following Table 5 8 Form 1116 Required Statements Line Statement Number to be Assigned Item 1b foreign services box 4B stating the type and amount of each item of for eign services Other deductions 4C Passive Income 4D High w h Tax Income 4E Financial Services 4F Shipping 4G DISC Dividends 4H FSC Distributions 4 Lump Sum 4J 901 j Income 4K Income Resourced by Treaty 4L General Limitations Income Expenses definitely related to income 4M to list the expenses as a separate statement In addition if the return receives a reject code 0973 on Form 1116 a statement must be entered as statement number 8A 8B or 8C indicating the line of the form and stating how the foreign currency was converted into U S d
239. e value N Non Standard indicates that the Form W 2 was altered handwritten or typed or that a Cumulative Earnings Statement or a substitute Form W 2 was used The value S Standard identifies a Form W 2 that is a computer produced print an IRS form or an IRS approved facsimile Solution 1 Verify the Employer s federal ID no is correctly input on W2 Screen Figure 6 5 New in 2008 Enhanced View These five components are described in the following sections NOTE Basic mode the View and Print screens used prior to 2008 is available for those who prefer it see Table 6 1 Toolbar The View Print toolbar has several features from years past but it also has some new features Buttons are described in Table 6 1 Table 6 1 Enhanced View Print Toolbar 3 Leave View Print mode and return to Data Entry mode Data Entry Tax Year 2008 169 Viewing and Printing a Return Viewing Tool Category Tabs 170 Drake Software User s Manual Table 6 1 Enhanced View Print Toolbar Button Description New in 2008 7 Send document to the printer print sets print selected No previously avail S forms quick print form currently in view able in Print mode Print only Set up form properties color and order Access other Yes setup options available in the program Setup z Access archiving features including the Drake Docu Yes Previously Ep ment Manager DDM DDM was the only
240. earch Click Find More to view the next set of available times To find a scheduled appointment see Find Scheduled Appointment on page 81 The Lookup feature allows you to find a client s record and insert the client informa tion into an Appointment Detail dialog box To locate a client record while in the Appointment Detail dialog box 1 Click Lookup 2 Select clients from either a current year location or a prior year location 3 Select a client from the displayed list Clients are listed in alphabetical order by last name or business name 4 Click OK The list is closed and several fields are filled with client data Imported data is determined by what was entered on screen 1 in in Drake data entry To change the details of an appointment that has already been entered into the Sched uler double click the time slot of the appointment in the Appointment Scheduler When the Appointment Detail dialog box for the selected appointment opens make any changes necessary Click Save To delete an appointment from the Scheduler 1 Double click the appointment time slot in the Appointment Scheduler 2 Click Delete in the Appointment Detail toolbar 3 Click Yes to confirm the deletion 4 Click OK to return to the Appointment Scheduler Searching Appointments Find Scheduled Appointment Kd Search Appts Tax Year 2008 Find scheduled appointments by searching keywords from the Appointment Details information
241. eated from QuickBooks or click the button the right of the text box and browse to the QuickBooks file The file exten sion is txt Drake searches the local hard drive for the import file 4 Instep 2 enter a Client ID Number SSN or EIN 1 Import File Name C Documents and Settings esutton Desktop Perl 0406 txt 2 Client ID Number E j O T T a a T E AO OOT E E Figure 11 10 Step 2 Enter SSN or EIN 5 The program searches for a Drake file with the same EIN SSN e Ifno Drake file is found with that EIN SSN you are prompted to choose a Business Type Make your selection from the Business Type drop list Figure 11 11 then click Next 1 Import File Name C Documents and Settings esuttoni Desktopi Per10406 txt 2 Client ID Number 400000000 3 Business Type se Corporation 1120 Corporation 11205 Partnership 1065 Tax Exempt 990 Sole Proprietor 1040 a Ce seat a NOT On ate ae eS Figure 11 11 Step 3 Choose one of the business types listed e Ifa Drake file already exists you re asked to confirm the business type Click Yes to proceed 6 Click Finish to import the QuickBooks file into the Drake file After importing the QuickBooks files enter Inventory amounts and details for Other Deductions and items requiring details on the return N If the QuickBooks file type does not match you are prompted to DTE convert the QuickBooks file while importing for example if there is a QuickBooks
242. ecklist see EIC Preparer Checklist on page 131 In Setup Options Administrative Options tab you can select the option to require that the screens be filled out You can also select to view or not view these forms in View Print mode See Options Setup on page 24 See Screen Help FAQs and online help for further information and links to IRS doc uments and other resources relating to EIC M p 0 RTANT EIC due diligence requirements must be customized for each client based on the taxpayer s specific scenario The complexity of the law surrounding EIC prevents due diligence requirements from being standardized so a tax preparer must have a complete understanding of EIC law in order to comply with these requirements Software can help provide guidance on fulfilling these requirements but it cannot replace the knowledge a preparer applies to each taxpayer s sce nario EIC and Combat Pay You can override the amount of combat pay from the W 2 that is included in the EIC calculation You can also select to include combat pay in the calculation of EIC Screen code 8812 To modify how combat pay is calculated for EIC open the return and click Add Child Tax Credit Combat Pay under the Credits tab Enter a Combat pay amount to override the W 2 amount To force combat pay to be included in calculating EIC select Include combat pay in EIC calculation Combat pay entered on the W2 screen Box 12 with a code of Q NOT
243. ed Beginning the processing year 2001 tax professionals who prepared more than 100 returns in the prior tax filing season must file every individual income tax return elec tronically in the current tax filing season If returns are not e filed preparers are assess a 5 processing fee unless department requires the return to be filed on paper e a A tax refund or return preparer as defined in section 289A 60 subdivision 13 paragraph g who prepared more than 500 Minnesota individual income tax returns for the prior calendar year must file all Minnesota individual income tax returns prepared for the current calendar year by electronic means e b For tax returns prepared for the tax year beginning in 2001 the 500 in para graph a is reduced to 250 e c For tax returns prepared for tax years beginning after December 31 2001 the 500 in paragraph a is reduced to 100 e d Paragraph a does not apply to a return if the taxpayer has indicated on the return that the taxpayer did not want the return filed by electronic means e For each return that is not filed electronically by a tax refund or return preparer under this subdivision including returns filed under paragraph d a paper filing fee of 5 is imposed upon the preparer The fee is collected from the preparer in the same manner as income tax The fee does not apply to returns that the commissioner requires to be filed in paper form Paid preparers who filed 200
244. ed ad ASA RE AEA REM eA ERE EAA ORES 120 Pore Tax Cid peta thetdoee ereaGoiesdadkds the ventelatwckietetveste tad anaars 120 Child Tax Cr dit a ca in th CER PRAM PARE CAMERA ELUM LA CEREREA R ERR RR ES 121 Retirement Savings Contributions Credit lt lt ccna duc ees stad Kent een head hes He eae 122 Oher Credits eoe ang ea e wah Geel a a toe ee Wat ban Goan ene asian aia Oar ak 122 Self Employment Taxi i ieeu8Ga4 puen des Freed eh aaa oe ewe eadawst eee acess 123 Unreported Social Security and Medicare Tax 0 0 0 cece cece eee eens 123 Additional Tax on Retirement 5 244 lt d4aia ss Khd00s ds 4d Ga deen hese ae dead een ees 123 Advance EIG Payments s ivestotseventovatstedinses ac bow ia het et denbews dens 123 Household Employment Taxes nannan annann COREG RE RHEE R RE REREAD RE CER ORS 124 Other Taxes yi aie atv aan ee aad ead Soe AER ROA ERE DRE EERE EERE ORs 124 Estimat d ad 5 2 ea a ee Re a a oe Aa eee ee EAEE er eer at 125 Earned Income Credit BEIC ca ucecuc kun ttc en heka ded enads Rie ea kod PREEAA 130 Additional Child Tax Credit and Combat Pay 0 0 0 ccc eens 132 Other PayMmenis 236k 6654 ddewnwad doe ede AGE RACET EERE RE RENEE CEREA 133 First Time Homebuyer Credit e235 ou 2eei dated erinin kar EEn ER ROR Ges Eei 133 Recovery Renate Credit srs cas pee ego wae pen en Bees ratk Pepe a RS EER PESE S a 134 Direct D posit ci she ierre ei Eeen neha ees See PE ea CEH AeeR he ees 134 Electronic Funds Withdra
245. ed loan amount on the BANK screen if this is allowed by the bank A Prep fees w h entry overrides the Preparer Fees field on the BANK screen NOTE Remember the Quick Estimator should be used only for estimating taxes A full return should be prepared later Data from the Quick Estimator flows to the full tax program and might need adjusting Tax Year 2008 1 2 Reports The Reports function allows you to create printable reports based on data that has been entered into the program via data entry the CSM or the Scheduler Report Manager Use the Report Manager to create a variety of pre defined and customized printable reports From the Home window select Reports gt Report Manager Drake 2008 Report Manager Drake Software Reports The list below contains several standard report options First se Predefined reports are ample of the selected report appears at the bottom of the screen When you have selected od Report to continue in Client Reports amd EF Bank Reports Client Reports fe Bank Report My Reports 1040 Returns Accepted Edited reports and Contact List Business Clients new reports are DOA under 65 saved in My Reports Sample Client Report Sample EF Report Other Report Options Report description Report layout Sample Report amp Sample EF report that can be used as a starting point for generating new Custom Portrait reports Sample EF Report axpayer ID Taxpayer Hame
246. ed to Schedule A is not affected as shown in Figure 5 58 fn Pl a pe Pe mes ptt Pigs ope meee En open t nn Stee KE ee ee E et he tat ee ee es aed i 800 68 61 549 Other Expenses Total Expenses 6 ee ee ee ee ee ee ee ee ee ee ee eee ee nee 11 142 jrenStonactartioace Rate CAICH nanim gamit aan setae dian aleiihera an ll Gi veal nt assent aii TE ae ea ae a a How it is reported es shia deduction 2 6 2 2 eee ee ee ew ee we we ee eee were ene eens Figure 5 58 Taking expenses does not affect the amount of personal property tax that flows to the Schedule A See Figure 5 57 for comparison 149 Office in Home Drake Software User s Manual Prior Year s Mileage The Prior Year s Mileage field Figure 5 59 allow you to keep a running total of the mileage covered by the vehicle since being placed in service The total amount is used to calculate the cumulative business percentage for the life of the vehicle It is also used to calculate the business cost and sales price when the vehicle is sold Prior Year s Mileage Business Total Figure 5 59 New in 2008 Prior Year s Mileage fields Prior year mileage data is updated each year when you update your system Because this feature is new in 2008 this information must first be entered manually NOTE The Business mileage fields must be completed to compute busi ness use percentage for depreciation
247. eded Click Help for more on individual fields Click Finish Set printer options in the Print dialog box as needed then click Print The Amortization tool prepares loan repayment schedules for various loan scenarios To prepare a loan repayment schedule From the Home window select Tools gt Amortization Enter a Schedule Title to display at the top of the amortization schedule Complete all other applicable fields Fields are described in Table 11 4 Click Calculate The program creates the amortization schedule Calculate To print the schedule click Print To save it for later viewing using Reports gt Report Viewer click Save Table 11 4 Amortization Schedule Fields and Descriptions Amortization Schedule Field Description Loan Amount The original amount of the loan Amortization Periods The number of payments to be made over the life of the loan Example If the loan is for two years and monthly payments are required you would enter 24 2 years 24 months Payments Per Year The number of payments to be made each calendar year Tax Year 2008 Drake Software User s Manual EIN Database EIN Database Amortization Schedule Field Table 11 4 Amortization Schedule Fields and Descriptions Description Annual Interest The annual interest amount for the loan This amount is calculated automatically If the interest is unknown but the payment amount is known leave this field blank
248. een 4136 Form and Credit Form 4136 Credit for Federal Tax Paid on Fuels 3468 Form 3468 Investment Credit 3800 Form 3800 General Business Credit 5884 Form 5884 Work Opportunity Credit Form 5884 A Credits for Affected Midwestern Disaster Area Employers 6478 Form 6478 Credit for Alcohol Used as Fuel 6765 Form 6765 Credit for Increasing Research Activities 8396 8582 CR 8586 Form 8396 Mortgage Interest Credit Form 8582 CR Passive Activity Credit Limitations screen code CR Form 8586 Low Income Housing Credit 8609 Form 8609 Low Income Housing Credit Allocation and Certification 8801 Form 8801 Credit for Prior Year Minimum Tax 8820 Form 8820 Orphan Drug Credit 8826 8834 Form 8826 Disabled Access Credit Form 8834 Qualified Electric Vehicle Credit 8835 Form 8835 Renewable Electricity Refined Coal and Indian Coal Production Credit 8839 Form 8839 Qualified Adoption Expenses 8844 Form 8844 Empowerment Zone and Renewal Community Employment Credit 8845 Form 8845 Indian Employment Credit 8846 Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips 8847 Form 8847 Credit for Contributions to Selected Community Development Cor porations 8859 Form 8859 D C First Time Homebuyer Credit 8861 122 Form 8861 Welfare to Work Credit Tax Year 2008
249. een entered into the fields To generate a report of hash totals 1 From the Home window select Reports gt Hash Totals 2 Enter the SSN or EIN of the return to check 3 Click Continue The report is displayed in the Report Viewer See Report Viewer on page 276 4 Click Exit to return to the Home window Tax Year 2008 279 Hash Totals Drake Software User s Manual This page intentionally left blank 280 Tax Year 2008 1 3 Suite Products Integrate Drake Software suite products with Drake tax software to run your business more efficiently The suite includes the Drake Document Manager DDM Tax Plan ner and Client Write Up CWU programs All three products are free of charge and are installed from your Drake Software CD This chapter focuses on the DDM and Tax Planner For CWU instruction refer to the Client Write Up Manual available on the Drake CD and from Support DrakeSoft ware com Go to Training Tools gt Manuals Document Manager a A DDM Tax Year 2008 The DDM is installed with the tax software and can be accessed by double clicking the DDM icon on your desktop Listed below are just a few of the new DDM features you will see in the DDM in 2008 e Improved security Password option for opening the DDM e Default descriptions Can now be selected during the scanning process e Status Ability to indicate document statuses Draft Review Final Use the DDM to create an
250. elect Options gt Send to DDM to save the open file as a PDF to a selected DDM client folder See Document Manager on page 281 TENE e Case Options Select Options gt Case Options to choose the number of cases or years to view and print Click Set selection as default to set a number as a default setting 294 Tax Year 2008 Drake Software User s Manual Tax Planner Directories andPaths Directories and Paths Select Options gt Directories and Paths to select a path for the Tax Planner to use as its source for Drake data current path is dis played Enter a New path if necessary Files are saved to the specified location Working in the Tax Planner To begin working in the Tax Planner 1 Open the Tax Planner using one of the methods described in Opening the Tax Planner on page 292 Tax data automatically fills the planner for the current base year 2 In the Case Selector select the number of years or cases to use If you have already selected a default number the Case Selector does not appear Click OK 4 Begin entering or changing data to reflect the changes being planned or consid ered by the client See Entering Data on page 295 Note that the data in subse quent years adjusts to your entries 9 5 Click Save Planner gt Save or Save Planner gt Save As and select a name and location for the file Files are saved as DTP files unless you specify otherwise The following se
251. elect letter to print for clients Post season for 2008 Clients C Pre season for 2007 Clients C Individual Estimate Payment Reminder for 2009 C Scheduled Appointment Reminder for 2008 Clients C EF Status for 2008 Clients Figure 11 12 Letter choices in Client Letters dialog box 3 Click Next to open the Client Selection dialog box 4 Complete one of the following e Print a letter for specific clients Enter a client s SSN EIN and click Add Client Repeat for additional clients Click Next e Printa batch of letters Click Next to open Client Letters Filters Selec tion Select filtering and sorting options If a more complex filter is needed Tax Year 2008 257 Letters a 6 7 Mailing Labels Drake Software User s Manual click Edit Filters See Filter Manager on page 272 Click Next for Basic Search Conditions Click Continue to Scan Client Files Click Print Click Next If printing a batch of letters Click Continue to scan the client files Click Print To print mailing labels 1 2 3 Ensure that label sheets are loaded correctly into the printer From the Home window go to Tools gt Letters gt Mailing Labels Select a label type from the Select Label list Label selections are described in Table 11 3 Items with asterisks might require filtering of data before printing Table 11 3 Label Selections Available in Drake Label Description Client Addresses Print a batch of
252. em Colors Program screens inherit the color scheme used by the operating system Use Define e Use Custom Created Colors The Program text color and Program Custom Colors to reale anew Color background color boxes to the right become available Click a box to view the Windows color palette and choose a color 3 Click OK Data Entry To change the color of a specific area in data entry Colors 1 From the Drake Home window go to Setup gt Colors 2 Click a color box in the Data Entry Colors box A Windows color palette is opened 3 Select a color and click OK 4 Once all color selections are made click OK NOTE To restore the original color settings in Setup gt Colors click Restore then click OK Printing Setup Use the Printer Setup to e Establish the printer to be used with Drake e Integrate the Drake Document Manager DDM with your client files in Drake e Install a Print to PDF option that allows you to create PDF files Tax Year 2008 41 Software Setup Drake Software User s Manual Even if your office uses the same printer for tax returns and the DDM the DDM is a stand alone tool and requires separate setup from the Drake tax program NOTES The Windows default printer is automatically designated as the Drake default printer when Drake is installed You do not need to add or set up a printer in Drake if it is already set up in Windows Printer settings are carried forward automaticall
253. emplate Press CTRL N to quickly access the Rename Letter dialog box Restoring a Template Viewing Letters for Sample Return Bringing Forward a Template 40 Drake Software User s Manual Values are in inches for example an entry of 1 will adjust the margin one inch to the right and an entry of 1 5 will adjust it an inch and a half Values can also be entered in increments of 1 10 inch For example enter 1 to adjust the margin one tenth of an inch to the right see example in Figure Figure 2 21 N An entry of 0 will use the default margins The program does not UTE accept negative numbers or numbers with two decimal values such as 1 25 3 Click OK The appearance of the margin in the letter template will not change however when a letter is generated with a return you ll be able to see the margin change both in View mode and on the printed letter Each template has an assigned name see Table 2 14 To assign a new name 1 From the Client Communications Editor click Open and select a letter 2 Click Setup gt Rename Letter 3 Enter a new name for the letter in the Rename Letter dialog box 4 Click OK The new name is displayed in the Client Communications Editor title bar To restore a template to its original default format open the template and select Setup gt Restore Original Letter The Preview feature allows you to open View Print mode and view a sample return with one
254. enerated by the report 4 Ifyou clicked Yes a blank e mail message appears If necessary double click the To field to view addresses and remove any you don t want to include A Keyword Selector window also appears with a list of available keywords To add a keyword double click it from the Keyword Selector 5 Compose the message inserting keywords then click Send Each client receives the same e mail with the keywords personalizing the message Close the completed message before sending and you are prompted NOTE to save it in the Drafts folder The e mail is saved along with the gen erated report list and keywords To send the saved e mail click the Drafts box from the main screen The e mail program uses your 1040 com e mail address which is Reply your EFIN 1040 com for example 777777 1040 com This address is used for Address Tax Year 2008 both your sender and reply address To change this address to an alternative address 239 Interactive Support Phone Fax 240 Drake Software User s Manual 1 From the menu bar within the e mail program select Setup gt Options N Select Use Alternative Reply To Address 3 Enter an Alternate Address This address replaces your 1040 com address appearing as the sender and reply address on e mail messages you send 4 Click Save Work one on one with a Drake customer support technician to resolve software issues Drake s technicians are trained ye
255. ent year Asset Number Department Number Asset Descriptions Date Acquired Date Sold Gross Sales Price Depreciation Amount Cost or Other Basis Loss Gain Department Summary Asset summary report sorted by depart ment or schedule Produces an asset summary report sorted by department or schedule Year Summary Summary report of assets on a yearly basis grouped by department Each department has a summary line for each year up to 10 years prior Also totals depreciation for 11 years and prior Sorted by department then year Year Acquired Cost Prior Federal Depre ciation Current Federal Depreciation Total Federal Depreciation State Prior Depreciation State Current Depreciation and Total State Depreciation Tax Year 2008 277 Fixed Asset Manager Drake Software User s Manual Table 12 4 Fixed Asset Manager Report Types Report Type Report Description Items on Report Preference Report Asset list of assets placed in service after Asset Number Department Number Asset 1986 Description Date Placed in Service Method amp Recovery Period Basis Current Depreciation Alternate Depreciation and the Preference Amount Auto Code Print Report based on the macro setup for each client selected Reports can comprise any of the described reports and any valid options associated with them Running a Fixed Asset Manager Report To run a report using the Fixed Asset Manager 1 Fro
256. entered in Setup gt Pricing program prepares a bill summary along with whatever option is selected here unless the Bill Summary option is cleared at Setup gt Options Optional Documents tab Header on bill Select among options for the header to be printed on the bill Custom Paragraph Choose to have a custom paragraph printed on the bill Select a location then write the paragraph in the supplied text box 28 Tax Year 2008 Drake Software User s Manual Software Setup States To select options for state returns select the States tab then select a state abbreviation Retu rn from the drop list When the options are displayed select to activate or disable state Options options as desired and click OK Available options depend on the chosen state For more on specific states see the FAQ screen for each state program E filing Options under the EF options tab are described in Table 2 11 Some of these options Options can be adjusted for an individual return from the EF screen in data entry A change on areturn s EF screen does not affect the global settings selected in Setup gt Options Table 2 11 Setup Options EF Option Description Auto generate Taxpayer s PIN 1040 Only Taxpayers can choose their own PINs or the software can assign a ran domly generated PIN Require Ready for EF indicator on EF screen Select this option to require that the Ready for EF indicator on the EF screen
257. eport Title and Report Description as needed The Report Description text box is limited to 70 characters Note that the new information appears in the Sample Report box 6 Click Save or proceed to Step 5 of Assigning Columns following The program stores the report with the new title under My Reports Assigning Columns The various columns that make up your report are represented by keywords Select which columns appear and the order in which they are shown by selecting or ordering the keywords To choose the columns shown in a report 1 From the Home window click Report gt Report Manager to open the Report Manager See Figure 12 1 on page 265 2 Click to expand any category Categories have a or to their left reports do not 3 Select single click the report to use as a template 4 Click Edit Report The Report Editor Step 1 window is opened See Figure 12 2 Note that the columns currently appearing in the selected report are listed in the Selected Report Columns box 5 Select a category from the Categories drop list The available columns for that category are represented by the keywords in the Available Columns field 268 Tax Year 2008 Drake Software User s Manual Setting Up a Report 6 From the Available Columns list double click a keyword or single click it and choose Select The keyword column name moves to the Selected Report Col umns field Note that the new information a
258. equired To use the simple default graphic enter C DRAKI E08 CF LOGO BMP C indicates the drive letter to which the program is installed Change if necessary Leave blank for no logo Click OK The left margin of a letter can be changed to suit your printing needs To change the left margin of the default letter 1 In the Client Communications Editor select Setup gt Letterhead and Margins 2 Enter a number in the Left Margin Adjustment box Drake 2008 Setup Letterhead Set up Letterhead Logo Letter Bill Indicators Select desired options Coordinates Specify the top left position of the LOGO and FIRM INFORMATION Bitmap Path Filename Either key the path filename OR Browse Letter Bill Indicators Coordinates Use Logo on Letters Left most Column For Logo fe IV Use Firm Info on Letters Top most Row For Logo a Use Logo on Bill Left most Column For Firm Info E M Use Firm Info on Bill Top most Row For Firm Info a Bitmap Path Filename Path Filename for Bitmap Logo Browse DRAKEOS CF LOGO BMP Note Leave blank for no logo To print a logo a full path and filename are required Left Margin Adjustment Enter a value to increase the left margin for all letters Al Note Values are in inches and may be entered in 1 10th of an inch increments Entering 0 will use the default margins Figure 2 21 Left Margin Adjustment feature new in 2008 39 Software Setup Naming a T
259. er and spouse if Tax Year 2008 201 About Bank Products Drake Software User s Manual MFJ before the return is prepared The Consent to Disclosure of Tax Information must be signed and dated by the taxpayers before the return is e filed and the informa tion submitted to a third party Drake offers several options for making these forms available to your clients includ ing printing forms in bulk to be signed manually and having clients provide their sig natures electronically Both methods are described in the following sections Consentto The Consent to Use of Tax Return Information explains the IRS Regulation 7216 Use of Tax requirement to the taxpayer It must be signed before the return is prepared Information e Paper Forms To generate paper forms go to the PDF 7216 folder on the Drake CD and open either the PDF or Word version of the form Enter your firm s name at the top of the form then print Clients must sign and date this form manually Screen code USE Electronic Signatures To obtain electronic consent you must have the taxpayer and spouse if MFJ enter their names and the date onto the USE screen in Drake accessible from the General tab as shown in the example below BES pias ae a wy oo gt 2 e f F Be My atis Sa hes 2 e mime Ai ee P yi a aiii a e ites hai Y en om et aeta By signing below you including each of you if there is more than one taxpayer authorizes us to use the informati
260. er 2 and 6 to access the W2 screen 3 Press ENTER The applicable screen is displayed for data entry Heads down Combine the proforma codes and heads down mode to move efficiently to the proper Data Entry areas of a screen for data entry To work in heads down mode 1 Open a screen in data entry 2 Press CTRL N Numbers appear beside each field as shown in Figure 4 8 1 Wages tips 2 Federal tax wih g 58000 H 25000 3 Soc Sec wages 4 Soc Sec wh H 58000 25000 5 Medicare wages 6 Medicare tax wih Mant SGA mm A eM an ns am OA Figure 4 8 Numbered fields in heads down mode 3 Inthe Heads Down box at the top of the screen enter one of the field numbers in the first text box and press ENTER 4 Enter data for the field in the second text box and press ENTER The data is placed in the proper field and the system returns you to the line number box 72 Tax Year 2008 Drake Software User s Manual Organizers and Proformas Drake 2008 Data Entry Heads Down Mode t t Line number Field data Figure 4 9 Heads down data entry 5 Repeat for all other fields pressing ENTER after the data for each field is entered To return to the Data Entry Menu press ESC TIP Use CTRL N to toggle between heads down and data entry modes Printing Organizers and Proformas for Clients See Filter Manager on page 272 for more on using filters Tax Year 2008 To print organizers or proformas for selected clients 1 Fr
261. er Checklist Screen codes EIC 8867 IRS due diligence rules require that the preparer complete an EIC Checklist Form 8867 for each prepared return claiming EIC This checklist has four parts Part I All Taxpayers Part II Taxpayers With a Child Part II Taxpayers Without a Qualifying Child and Part IV Due Diligence Requirements In Drake Part II of this checklist is addressed in the EIC Information section of screen 2 Fields for Parts I HI and IV are located on the 8867 screen The 8867 screen allows preparers to electronically track data NOTE related to IRS due diligence requirements for Form 8867 Paid Pre parer s EIC Checklist In the event of a due diligence audit it pro vides an electronic record corresponding to the printed Form 8867 To complete the EIC Checklist for a return go to the EIC screen accessible from the General tab and mark all required boxes EIC Due Diligence Screens NEW FOR Supplemental EIC Due Diligence screens can help ensure that all data 2008 on the taxpayer s qualifying children reported income and filing status eligibility are thoroughly researched accurate and complete Because a thorough interview is necessary to ensure that all information is gathered about income deductions credits etc a comprehensive interview process should be part of a tax preparer s office operating procedures This same logic extends to EIC due diligence requirements Since individual tax scenarios chan
262. er If this form is being amended state the reasons for Section 1060 the change in the field provided 8862 Form 8862 Information to Claim Earned Income Credit After Disallowance 8914 Form 8914 Exemption Amount for Taxpayers An SSN or ITIN for the displaced person is required Housing Midwestern Displaced Individuals in order to claim an exemption amount NOTE To claim tax forgiveness for death in a combat zone or as a result of a terrorist or military action go to the MISC screen and select the appli cable code under Combat Zone Press F1 for more information Other Forms Screens for other forms available under the Other tab are listed in Table 5 23 Table 5 23 Other Forms Available from Other Tab in Drake Screen Form Notes W4 Form W 4 Employee s Withholding Allowance Certificate 56 Form 56 Notice Concerning Fiduciary Relation PIN and prior year AGI required enter this data ship and indicate Form 56 on the PIN screen 982 Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 8815 Form 8815 Exclusion of Interest from Series EE and U S Savings Bonds Issued After 1989 8822 Form 8822 Change of Address This form is not e filable Tax Year 2008 157 Requests Claims and Other Forms Drake Software User s Manual Table 5 23 Other Forms Available from Other Tab in Drake Screen Form Notes 8828 Form 8828 Recapture of Federal Mortgage S
263. ers 1 Highlight the drawer or folder that will contain the new folder or subfolder 2 Click New Folder 3 Enter a folder name in the Input dialog box 4 Click OK The new folder appears in the left pane within the drawer or folder you selected Repeat these steps to create more folders 287 Document Manager Drake Software User s Manual Working With Files in the DDM Once you have created cabinets drawers and folders you can begin adding files to the DDM The DDM supports many file types and allows you to import or scan files into the DDM or link to a file outside of the DDM Once added to a folder files are listed in the right pane of the DDM window NOTE Files can be added to the DDM from the toolbar or through the DDM s Documents gt Add Document menu Importing a To import a file into the DDM File Z Import Select a folder in which to store the document Na From the toolbar click Import 2 Browse to the document you want to import and click to select it 4 Click Save The DDM copies the document into the selected folder Scanning a Scan documents into the DDM using a flat bed or document feeder scanner A flat File bed scanner scans one page at a time creating a separate PDF document for each page A scanner with a document feeder scans multiple pages and makes one docu ment of many pages N To be compatible with the DDM a scanner must be TWAIN compli UTE ant Most new scanners are TWA
264. erver Only Install Drake on a server and link workstations to the server using a network link NWClient b All Workstations Install Drake on all workstations designate one station as the server All other workstations use the designated server to share files Table 2 2 Network Options A Comparison Server Only Preferred Setup All Workstations For firms with a robust network setup For firms without resources to use a single server Simplified setup and updates Updates must be installed to each computer No need to stagger DCNs Could be necessary to stagger DCN counter 10 Tax Year 2008 Drake Software User s Manual Running Drake on a Network Server Only Multiple Computers Tax Year 2008 Using the instructions in Installation on page 8 install Drake onto the server NOTE Drake can be installed on the server from a workstation if necessary Be sure to select the correct server drive Once Drake is installed on the server complete the following steps at each worksta tion 1 From the Windows Start menu click Start gt Run 2 Type F DRAKEO8 NWCLIENT NWCLIENT EXE into the Run dialog box sub stituting your server drive letter for F 3 Click OK The Drake tax program can now be accessed on the workstation Repeat this process at each workstation that will be using Drake Next set up directories and paths This can be done on the server o
265. es to the software throughout tax season Before you Install updates gt DAILY dining aX install the first update create a profile that customizes your office s update routine season To create an update profile 1040 updates are 1 From the Drake Home window go to Setup gt Update Profile The Update Pro ae by file Setup dialog box is displayed 2 Select which employee security levels should be able to view and download pro gram updates patches Figure 2 10 3 Select the return packages that are to be updated whenever your office installs updates Figure 2 10 4 Select states and cities to update Click an item and use the Select and Unselect buttons All items listed in the right hand column will be updated Figure 2 10 22 Tax Year 2008 Drake Software User s Manual Software Setup Display patch availability message P Everyone with rights to install patches x Everyone with rights to install patches 7 1040 amp Program Files 1W4lNo one prete your updates J 1120 Corporation V 990 Administrators M 11205 S Corporation MV 706 Estate Tax M 1085 Partnership M 709 Gift Tax Cc oo M Document Manager Installed States Cities States Cities To Update AK Alaska a AL Alabama a AR Arkansas Base amp 2 Arizona 7 CA California Select All gt gt 4 Fenat Connecticut DC Washington DC lt Unselect DE Delaware amp Cities FL Florida
266. etings You can now create and manage appointments internal meet ings and planning sessions that have multiple preparers in attendance Overlapping Appointments The Scheduler now allows schedules where two clients appointments must overlap ZIP Code Autofill When you enter the ZIP code for a client the city and state information is entered automatically Color Scheme Selection You can now choose new color schemes Calendar Settings You can now select a default calendar and establish which cal endars appear on your screen 74 Tax Year 2008 Drake Software User s Manual Scheduler Scheduler Modes Preparer Mode Front Office Mode 8 Security The Scheduler offers Preparer mode and Front Office mode Using Preparer mode a preparer has full access to his or her calendars Preparers can make appointments manage schedules and share calendars with other preparers Pre parer mode has three calendar types Selected Date Weekly Calendar and Preparer Calendars Preparer mode is the default setting for Scheduler users Designed for the receptionist and other personnel who manage appointments but do not prepare tax returns Front Office mode allows the user to set up viewing options and manage appointments Front Office users can access only the Preparer Calen dars Front Office mode is the default setting for the Admin login but it must be assigned manually to other personnel To assign Front Office
267. etup Options Administrative Options Option Use Customized Data Entry Menu Description Click Customize then select the package and package type to customize and click Load Menu When the data entry screen is opened click uncheck items to disable them in the Data Entry Menu Click Save The selected unchecked items will not be visible or accessible to any user other than Admin New in 2008 Screens can now be locked for all but Admin users See Locking Screens following this table Customize user defined data entry fields Use Customized Flagged Fields on all Returns Create option lists for the Miscellaneous Codes fields on screen 1 and the Adjustments and Payments fields on the BILL screen For step by step instructions on this new feature see Customized Drop Lists on page 31 Select this box click Flag and select a package type When the Data Entry Menu is opened click the desired screen and click each field to flag Click a field a second time to clear it Click Esc to save your changes Note This option is available for federal packages only Do not clear Admin flags when data is updated from prior year Flags set globally last year will still be set globally after updating data from Last Year Data gt Update from 2007 to 2008 If RRC is not entered display warn ing as a NOTES page not as an EF message By default this warning is generated as an EF message and prevents e fil ing
268. f alterna tives for entering longer names Below the E mail Text Msg field select any applicable boxes to indicate if a taxpayer is a Dependent of Another wants to donate to the Presidential Campaign fund is Blind or has a Stateside Military Address If the taxpayer is active military and requires a special processing code use the Special Processing Code drop list poet iment hg gave oo pmi pem fiaen a pp De pai peg pe Besttime to call AFTERNOON Print on return v Email Text Msg l Dependent V Presidential M Blind M Stateside Military of Another Campaign Address Special Processing Code for Active Military Street Address 221 BAKER T gee hil oo gt peat a T T T Aa Figure 5 1 Select applicable boxes and select military code if applicable Entering Residency Information To search codes CTRL SHIFT S Enter the taxpayer s address and state residency information in the area below the tax payer and spouse columns If a taxpayer is a part year PY resident of the state in the address select PY from the Resident State drop list The Resident City field is activated if a city return is required Press F1 in this field to access city codes To suppress a state return altogether select 0 from the Resident State drop list By default the program completes the City and State fields once the ZIP code is entered Suppress the tab to ZIP code field fea NOTES t
269. f screen 2 must be completed for each qualifying dependent e 8867 screen for Form 8867 Paid Preparer s EIC Checklist must be completed for the taxpayer claiming EIC In addition new EIC Due Diligence screens provide supplemental questions to help ensure a comprehensive interview of each taxpayer While the IRS does not require answers to these supplemental questions the new screens provide a means for collect ing valuable supporting documentation in case of a due diligence audit EIC Information for Dependent 130 If the taxpayer has EIC with qualifying dependents the EIC Information section of screen 2 must be completed for each qualifying dependent If item 13a is answered No items 13b and 13c can be left blank as shown in the example in Figure 5 43 EIC Information NOTE Upon completion of the EIC Information section on all applicable dependent screens go to the 8867 screen and complete Parts amp IV Part Ill may also be required if no dependents have a qualifying child status M Not eligible for EIC Yes No 10 11 13a 13b 13c Figure 5 43 One example of a completed EIC Information section screen 2 Ifa child is not eligible for EIC this ineligibility must be specified by selecting the Not eligible for EIC box above item 10 See Figure 5 43 Questions 10 11 and 13 can be left blank if this box is selected Tax Year 2008 Drake Software User s Manual Earned Income Credit EIC EIC Prepar
270. f the General tab provide fields for directly entering data into the 1040 However because many lines on Form 1040 require calculations from other forms and schedules some of the direct entry fields in screens 3 Income 4 Adjustments and 5 Payments are treated as overrides or adjustments to program calculations Taxpayer Demographics Screen code 1 Use screen 1 Demographics accessible from the General tab to complete the Label and Filing Status sections of Form 1040 Screen 1 also has fields to indicate contact information and other relevant details for the return Selecting a Filing Status Select a filing status from the Filing Status drop list at the top of screen 1 To save time type the filing status code Click in the Filing Status box then press F1 to view available codes or right click in the Filing Status box and select View Help If the primary taxpayer is married enter his or her information in the NOTE left column of screen 1 and enter the spouse s information in the right column If a married status is not selected the right column is not active Tax Year 2008 83 Taxpayer Demographics Drake Software User s Manual Entering Taxpayer Information Enter the full name date of birth occupation and contact information phone num bers and e mail address for each taxpayer in the appropriate fields Full names are limited to 35 characters for e filing Press F1 in a Name field to see a list o
271. f the taxpayer did not materially participate select Did NOT materially participate in 2008 1099 PATR Enter the distribution amount from Form 1099 PATR Taxable Distributions Received from Cooperatives in the Co op total distributions field on Screen F Form 4835 Farm Rental Income and Expenses Screen code 4835 Form 4835 is for individual returns only and is not available for the 1041 package Estates and trusts must file Schedule E Part I to report rental income and expenses from crop and livestock shares Farm Asset Depreciation Use the 4562 screen Depreciation Detail to create depreciation schedules for Schedule F and Form 4835 For more on depreciation see Depreciation on page 140 Unemployment Compensation Use screen 3 to enter full unemployment compensation for 2008 Enter prior year unemployment compensation amounts elsewhere in Drake as shown in Table 5 4 Table 5 4 Entering Unemployment Compensation in Drake Unemployment Compensation Information from 1099 G Where to Enter in Drake Screen 99G Fields As applicable Any prior year amounts repaid Screen A Field Other not subject to 2 limit Prior year supplemental employer provided amounts repaid Current year 2008 total Screen 4 Field Repaid sub pay previously reported Enter the repaid amount Screen 3 Field Unemployment compensation received adjust ment field added to 99G amount Curren
272. fied Plans Self employed health insurance deduction information entered on the SEHI or SEP screen will be adjusted by any entries made in the SEP and or SIMPLE and KEOGH fields on screen 4 Figure 5 31 29 Educator epesos 28 SEP andior SIMPLE contributions KEOGH contribution to defined contribution plan KEOGH contributions to defined benefit plan 29 Self employed health insurance deduction 30 Penalty on early withdrawal of savings in A paama ao aaiae MP n gel a E N O ET T i aa Ai Figure 5 31 Adjustment fields on screen 4 Tax Year 2008 113 Penalties Penalties Drake Software User s Manual This section covers penalties on early withdrawal Penalties on estimated taxes are covered in Estimated Tax Penalty on page 130 Early Withdrawal Penalty If the taxpayer is subject to the penalty for early withdrawal of savings enter the pen alty amount on screen 4 Do not duplicate entries in this field on the INT screen the 1099 INT asks for the interest or principal that was forfeited due to early withdrawal while screen 4 asks for the actual amount of the penalty IRA Penalty Computation Screen code 5329 Forcing Form 5329 from 1099 R 114 Use the IRA Penalty Computation screen to calculate what penalties apply regard ing IRA withdrawals This screen reflects IRS Form 5329 Additional Taxes on Quali fied Plans Including IRAs and Other Tax Favored Accounts NOTE
273. file click the Excel icon You are asked whether you want to open or save the file Click Open or Save as desired If you click Open you will have another opportunity to save it from within Excel 198 Tax Year 2008 Drake Software User s Manual Copying EF Data All data for the given report criteria is saved not just the data shown on the current page Once the report is exported and saved as a worksheet access it from either Excel or Access Copying EF Data Firms with multiple computers but no network might have to copy data from com puter to computer using a disk USB flash drive or other memory storage device M p RT ANT Copying EF data from one computer to another is not recommended for firms that use a network Copying to Another Location To copy EF data from a computer to a memory storage device 1 From the Home window select EF gt Copy EF Returns to Disk and select the boxes of the returns to copy Click Select All or Unselect All as needed TIP Click column headers to sort in ascending or descending order 2 Click Continue 3 Select the output drive from Select Drive then click Copy Files Figure 7 13 mens Eia e EOP in Fy rA Sn AT EDs mf seenen i aed he bacci oiii a eae Ba fe Select Drive JD CD ROM Drive DrakeO8 E xport x Figure 7 13 Copying files to CD 4 Click OK after files are copied Copying From a Storage Device To copy EF information from a data storage device
274. for returns that are not ready Tax Year 2008 253 File Maintenance Deleting Client Files Drake Software User s Manual To manually delete a client file from the database 1 From the Home window select Tools gt File Maintenance gt Delete Client Files 2 Enter the SSN or EIN of the client file to delete 3 Click OK 4 Click Yes to continue 5 Click Yes 6 Click Exit to return to the Home window NOTE If you are not accessing files on a network the deleted files go to the recycle bin Changing Return Types A return can be changed to another file type without having to create a new file When a return type is changed the following information is transferred e Name address telephone and county e Fiscal year e All depreciation data including screens 6 7 8 9 and 10 When a corporate return is converted to an S corp return the balance sheet and Sched ule A information also are transferred IM H RT ANT Not all data is transferred Before using Change File Type back Estate and Qualified Heir Returns 254 up the original file See Backup on page 248 To change a return type 1 From the Home window select Tools gt File Maintenance gt Change File Type 2 Enter the SSN or EIN of the file to convert and click OK 3 Select the new file type Individual Corp Sub S Corp Fiduciary Partner ship or Tax Exempt See Figure 11 9 4 Click OK 5 When the conversion is comp
275. form This is a printing function and is described in Printing from Enhanced View Print following Quick Print To print the form currently in view press CTRL Q or select Print gt Quick Print Printing from Enhanced View Print You can print selected forms selected sets of forms or individual forms in a return Tax Year 2008 171 Viewing and Printing a Return Drake Software User s Manual Printing To print tax return forms and other documents from Enhanced View Print Forms ina Return 1 Open Enhanced View Print for a return The All Forms tab is shown by default 2 Collapse or expand the tree view as needed then select the forms to be printed To print all forms in a set select all of the boxes in the tree view under All Forms NOTE If the main box of a set is selected all sub boxes are automatically selected Shortcut Press 3 Click Print to open the Print Selection dialog box If you click the arrow next to CTRL P for the rati Print Selection the Print icon select Print Selected Forms option 4 optional Select any printing options shown in the Print dialog box 5 Click Print again All of the selected items are printed Printing Default printer sets are established in Printer Setup but you can override the defaults Printer Sets from enhanced View Print mode To print specific sets of a return from Enhanced View Print mode 1 Open View Print mode for the return The All Forms tab is displayed by default
276. from 2007 and capital gain tax computa Other tion If Drake was used for the taxpayer in 2007 the gains losses and carryover fields Entries are updated automatically otherwise data must be entered manually Schedule D Imports Use the Schedule D Import tool to import capital gain and loss transaction data from an Excel or other worksheet into Drake Create a___ Before you can use the Schedule D Import tool you need a worksheet containing the Worksheet transaction data saved as a Microsoft Excel TAB or CSV file Columns must match those on screen D as shown in Figure 5 18 A B 0 D E F G H 1 TSJ 2 Enter all data to be imported into Drake and save the file Import Data To import the information complete the following steps F State City Description Acquired Sold SS eS E T O Ce EOT Tre l J Sales Price Cost or Basis S L Misc ar ete pag D r Figure 5 18 Screen D fields as columns in an Excel worksheet 1 Open the client s file to the Data Entry Menu and click Import gt Schedule D X Import CSM Import from the toolbar The Schedule D Import instructions are displayed Pienen 2 Click Next to open the Schedule D Import dialog box 3 To the right of the 1 Import File Name field click the button 4 Locate and select the file containing the transaction data that is the file to be imported Select the file and click Open The
277. g box Setting Up Drag Drop Ordering New in 2008 drag and drop ordering is available in Enhanced View Print mode This feature allows you to drag a form in the directory tree to another area of the tree and drop it into the new location To drag a form press and hold the mouse button on the form to be moved then move the mouse up or down To drop the form into the new location release the mouse button To activate drag and drop ordering select Setup gt Allow Drag Drop Ordering while in Enhanced mode Other Setup Options The following programs and setup options are also available in View Print mode e Drake Document Manager e Pricing setup See Pricing Setup on page 33 Tax Year 2008 175 Archive Manager Drake Software User s Manual e Printing setup See Printing Setup on page 41 e Printing sets setup See Printing Setup on page 41 When changes are made from View Print mode of a return those changes apply to the open return only They do not affect the default settings or any other returns Archive Manager New in 2008 the Archive Manager is a tool that allows you to archive returns and to 8 F review restore or delete the archived returns This means you can save various ver ane sions of a return such as an amended return and the original return prior to amending The Archive Manager is accessible from both Basic and Enhanced modes NOTE Archives are saved as PDF files and can be acces
278. g for businesses of every size from single user offices to multi office firms the ETC also provides tracking tools and interactive testing so individuals and group adminis trators can monitor their personal and collective progress 227 Online Support Drake Software User s Manual To access the Drake ETC go to the Drake Support Web site and select Training Tools gt Drake ETC NOTE ETC is free for Drake clients People who are not Drake customers can also use ETC but certain fees apply Creating an Before you can log in to ETC your office must have an administrator Admin ETC Account account Once the Admin account is established you can create student accounts and begin tracking student progress With their own usernames and passwords students can log in to ETC on their own N The CTEC fields in the Admin and student account sign up pages DTE apply to California preparers who want to receive CTEC approved credit To create an Admin account 1 Go to the Drake ETC home page and click the applicable Create admin account for the office link item 1 in Figure 10 3 New to ETC Q Drake Customers Create admin account for the office Non Drake Customers Create admin account for the office Log in to ETC 2 Login Name Password ogm Forgot your Password Click here Figure 10 3 Drake ETC home page account sign in boxes 2 Enter your EFIN and Drake password the password fro
279. g the Bill Amount on page 49 NOTE Write the custom paragraph for the bill in the Custom Paragraph field at Setup gt Options gt Billing tab Listing a Different Firm Preparer or ERO on a Return By default the program prints the information shown in Table 2 19o0n the return Table 2 19 Firm Preparer and ERO Data that Can Be Changed on the Fly Information Description Firm Firm 1 from Firm Setup first firm entered in Setup gt Firm s Preparer Preparer who fills out the return entered in Setup gt Preparer s ERO ERO from Setup gt ERO appears on Form 8879 IRS e file Signa ture Authorization To override any of these defaults for a return go to screen 1 of the return In the Return Options section select the firm preparer and ERO to be used Return Options Rit erence zl E Preparer ce z z Ovi Data Entry zl In RO zl Fe Figure 2 23 Setup override fields on screen 1 Ifa field is blank the program uses the default setting Select NONE if you want nothing printed on the applicable line on the return N The Data Entry field is for tracking purposes only UTES A firm or preparer must be entered in Firm or Preparer Setup in order to show up as an option in the override drop lists on screen 1 Overriding The PREP screen in data entry allows you to override the following data for a return Other Preparer Third party designee See Third Party Designee on pag
280. ge from year to year all clients including returning clients should be interviewed in order to obtain a clear picture for the current year tax return New in 2008 Drake is providing EIC Due Diligence screens You can use these screens as a tool for retaining the inquiries made of taxpayers to ensure that they meet EIC eligibility requirements Described in Table 5 14 these screens contain interview questions and fields that must be completed if required by selections made in Setup regarding EIC Table 5 14 EIC Due Diligence Screens New in 2008 Screen NE Screen Name Description Code EIC1 EIC Due Diligence Qualifying Child Screen contains questions pertaining to the age rela tionship and residency tests for a qualifying child EIC2 EIC Due Diligence Income Screen contains questions concerning the taxpayer s reported earned income EIC3 EIC Due Diligence Head of Household Screen contains questions pertaining to the tests for marriage qualifying person and cost of keeping up a home tests for Head of Household filing status Tax Year 2008 131 Additional Child Tax Credit and Combat Pay Drake Software User s Manual Table 5 14 EIC Due Diligence Screens New in 2008 Screen bei EIC4 EIC Due Diligence Additional Notes Space to record information about additional inquiries made in verifying the taxpayer s information These screens are supplemental to the required EIC Preparer Ch
281. ght 1977 2008 Drake Software Licensed Not Sold All Rights Reserved Acks to process Updated Prep ADMIN Drive Windows xP 10 13 2008 Reminders off A _Siatus bar Figure 3 2 Drake Home window 4 General Navigation Both the mouse and the keyboard can be used for navigating within the software 54 Tax Year 2008 Drake Software User s Manual Creating and Opening Returns Mouse Left button Move the pointer over an item and click the left mouse button to select that item When this manual instructs you to click or double click an item on the screen click or double click the left button on the mouse Right button During data entry right click the mouse anywhere on the screen to display a menu of common program functions Right click a specific field to undo cut copy paste delete or view Help for that field Keyboard Use shortcut keys to accomplish tasks without using the mouse Press ALT to display the underlined shortcut key for each menu name or item then press the desired short cut key For example from the Home window you can press ALT F O to open the Open Create a New Return dialog box Key combinations are another means of accomplishing tasks without using the mouse They consist of two or more key names connected by a plus sign To use a key combination press and hold down one key then press a second key Key combina tions are shown to the right of each menu item
282. hat could be used for personal entertainment recreation or amusement purposes An entry here lists the asset as Listed property on Form 4562 Depreciation limitations could apply The prior depreciation amount in this field is carried from the previous year if the information is available Otherwise enter this information directly Section 179 Expense 142 Drake calculates the amount up to the established current year limit for all properties expensed under the section 179 deduction If section 179 EXP is selected as the depreciation method on more than one 4562 screen the program expenses the first listed items first regardless of which schedule lists the asset The limitation occurs when the total of the expensed assets reaches the limited established for the current year again regardless of schedule Tax Year 2008 Drake Software User s Manual Depreciation To conform with IRS mandates Drake reports section 179 expense on the first Form 4562 generated with the return If multiple activities have section 179 expensing a section 179 summary is produced on the first Form 4562 All additional 4562 forms produced have only the Section 179 expense deduction lines completed NOTE Section 179 expense cannot be claimed on assets related to a pas sive activity Indicating Indicate section 179 expensing on the 4562 screen In most cases you do not need to 1 79 use screen 6 which contains override fields for Form
283. he Attach PDF button The EF PDF Attachments window displays the information entered on the PDF Attachments window in data entry A red X means the document has not yet been attached a green check mark indicates an attached document Drake 2008 EF PDF Attachments Required PDF Attachments The list below contains PDF Attachments that are required for electronic filing Select an item from the list and click Browse to locate the associated PDF file Items with a green check mark already have the PDF file Items with a red are missing the required PDF File Reference Description 3 1120 Instructions Attachment for Form 851 SUBSIDIARIES PDF D FSPJB x 1 4 TITLE FOR HOUSE ON MAPLE ST MAPLEHOUSETITLE PDF sence a E Aleta P gt A oan a to thm ey a oe a 4 Figure 14 16 The EF PDF Attachments window 4 Click the row of a document to attach o Click Browse 6 Browse to the proper folder select the PDF file to attach and click Open or dou ble click the file name Repeat for all documents with a red X When all documents have been attached to a completed return the return is ready to be e filed Tax Year 2008 311 Binary Attachments Drake Software User s Manual Printing Generated Documents In some instances Drake generates a document that must be printed signed and scanned back into the computer to be attached to the return For example if Form 851 Affiliations Schedule is present in a corporate return
284. he Drake08 DT folder e Setup Files To back up pricing and setup information files e System Files To back up CSM EF Database IRS Bank and Scheduler files 5 Click Save Click Exit to close the Backup dialog box The amount of free disk space is indicated in the lower right section NOTE of the Automated Backup Settings dialog box see Figure 11 6 If an attempt at automatic backup is ever unsuccessful due to insuf ficient disk space the backup will be stopped and you will receive a message stating that disk space was insufficient Automatic backup has now been activated Once this feature is activated you can view the backup icon in the system tray at the bottom of your screen Ea SOK Jy 6 10PM Figure 11 7 Automated backup icon in Startup menu The automated backup program is also added to the Startup menu and will continue to be in operation after the machine is rebooted Disabling There are two ways to turn off automatic backup Automated Backup Goto Tools gt File Maintenance gt Backup click the Automatic button and clear the Activate Automatic Backups check box e Click the icon in the system tray see Figure 11 7 click Stop and click OK Changing a Client s ID Number Changing a client s SSN or EIN in the program requires more than simply making the change in data entry To change a client s SSN or EIN in the software 1 From the Home window select Tools gt File Maintenance gt Cha
285. he articles cover such topics as Drake s Tax Year 2008 225 Online Support tax software and Client Write Up software changes in state and federal tax laws tax Drake Software User s Manual return troubleshooting using bank products researching tax law and much more The KB also includes the 2006 2007 and 2008 Drake Software manuals and the 2007 and 2008 Client Write Up manuals To access the KB go to the Drake Support Web site and select Resources gt Knowl edge Bases From the list of Knowledge Bases displayed click the Knowledge Base you want to view By default the Search tab for the selected KB is displayed Figure 10 1 Search for articles Powered by Knowledgebase earch using All Words Search Within All Knowledgebase s Latest Articles e How to Diagnose A Connection Problem e Common Acknowledgement Codes Alabama Penalty Assessed in Error Passport To Success Certificate of Completion KE Er A d an E Bho ns apna ite QI E E tenn alii nnn ton 02488 Broadcasts Vipe intnngie e 1040 Final E File Deadline e Return Preparation e Recovery Rebate Credit e 1040 Flow To Spreadsheet Figure 10 1 KB tabs item 1 KB search fields item 2 Begin your queries from the four tabs listed in Table 10 1 and shown as item 1 in Figure 10 1 Tab Table 10 1 KB Tabs Description Search View the Latest Articles entered or the Hot
286. he following procedure to install or upgrade PDF995 on your computer You must have a Drake CD inserted in your CD drive to install this program 1 From the Drake Home window go to Setup gt Printing gt PDF Printer 2 Select the drive of the Drake CD 3 Click Install 4 At the Installation Complete message click Exit To print files to PDF print the file as you normally would but select PDF995 as the printer NOTE PDF995 version 8 0 or later is required Even if you already have PDF995 on your computer you might need to upgrade to Version 8 0 Version 8 0 supports Windows Vista Making Changes on the Fly When you make changes on the fly you override program calculations and estab lished defaults set by either the program or by the preparer in Setup for a selected return The remainder of this chapter focuses on actions that can be taken while in data entry to override the global settings described previously Suppressing Forcing Documents Tax Year 2008 The PRNT screen allows you to indicate which forms should and should not be gener ated for a return regardless of program calculations and established defaults 45 Making Changes on the Fly Drake Software User s Manual Suppressing Table 2 16 lists items that can be suppressed using the PRNT screen 46 Items from Being Table 2 16 Items That Can Be Suppressed from the PRNT Screen Generated Item Description 1040EZ Prevents Form 1040EZ f
287. hedule E If a tax NOTE payer rents one unit of a duplex and lives in the other and an Sale of Property PMI expense applies to both units enter only the portion of the expense that applies to the rental and indicate 100 business use not 50 personal use If a property was sold and the Schedule E needs to be associated with data from a 4797 screen Form 4797 Sales of Assets use a passive activity number PAN code to tie them together To do so enter a number in the PAN box on screen E then enter the same number in the PAN box of the applicable 4797 screen To indicate that insurance includes Private Mortgage Insurance PMI mark the check box under item 9 on screen E NOTE To deduct PMI print the return and write PMI on line 9 of Sched Casual Rental of Personal Property 104 ule E The return must be paper filed To include as a write in adjustment of deductible expenses related to income from the rental of personal property engaged in for profit use the applicable field on screen 4 Do not duplicate entries from screen E When the return is calculated the screen E amounts are carried automatically to the appropriate fields of Form 1040 Tax Year 2008 Drake Software User s Manual Schedule K 1 Supplemental Income Screen codes K1 Screens for Schedule K 1 are accessible from the Income tab The program contains K1F K1S three types of K 1 screens listed in Table 5 2 Table 5 2 K1 Scree
288. hen the IRS Submission Processing Center receives the return it sends an ack to Drake which can be processed or picked up along with any acks from banks and state city taxing authorities by logging into Drake Software To process acknowledgments go to the Home window and select EF gt Process Acks The Process acknowledgments box displays progress This data is copied to the EF database for later access See EF Database on page 191 If no new acknowledg ments are found Drake asks if you want to review old ones After you read the acknowledgment file an Acknowledgment Report shows the acknowledgment code and Batch ID 185 E filing a Return Drake Software User s Manual Ack Codes Drake acknowledgment codes are shown in Table 7 1 Always re send any return that receives a B acknowledgment Table 7 1 Drake Acknowledgment Codes Code Description P Tax return transmitted successfully to Drake Return is being processed T TEST return transmitted successfully to Drake B Bad transmission IRS acknowledgment codes are shown in Table 7 2 IRS acknowledgments are usu ally processed within 24 hours Table 7 2 IRS Acknowledgment Codes Code Description A Tax return has been accepted by the IRS R Tax return has been rejected by the IRS D Tax return is a duplicate of a previously filed return or DCN rejected by IRS E Imperfect return see Imperfect Returns on page 188
289. herwise indicated using the override fields for each account entered See Federal override fields in Figure 5 48 If the return is e filed on or before April 15 the requested payment date cannot be later than April 15 If the return is transmitted after April 15 the requested payment date cannot be later than the current date Required Information 136 A Withdrawal selection item 1 in Figure 5 48 is required if the program is to direct tax authorities to electronically withdraw funds from the taxpayer s account Tax Year 2008 Drake Software User s Manual Electronic Funds Withdrawal Direct Debit Account 1 RTN Account number Type of account a oOo O I Checking M Savings Repeat Account Information F Checking M Savings Payment is for M 1040 p 4868 J 2350 Federal 1040 ES First Quarter Second Quarter Third Quarter Fourth Quarter Withdraw the following quarterly payments r Payment Amount PMN DI a A A SA State State payment amount Figure 5 48 Required fields on PMT screen withdrawal selection 1 account information 2 specified return 3 The name of the financial institution the bank s routing number RTN the client s account number and the type of account checking or savings are required As with the DD screen the RTN Account number and Type of account data must be entered twice item 2 in Figure 5 48 Finally the PMT screen must indicate the return to which the payment data applies
290. ield is a Statement Reference i e STMbnn For Required Statement Records any Statement Record number STMbnn occurring within a tax return must have a corresponding Statement Record O tenn nn netiens 210 tin ST TT na sii Figure 7 10 Looking up 1040 reject code on Reject Code Lookup tab 5 optional Click Print to print the code explanation if desired To search for a state reject code for an individual return select 1040 then select the state from the Category list before entering the reject code To view Loan Status Codes select that option You do not need to click Go Explana tions are displayed in the lower box To view Bank Decline Reasons select that option then choose a bank from the drop list You do not need to click Go Explanations are displayed in the lower box Leaving the EF Database Take one of the following actions to close the EF database or access another applica tion from within it e To return to the Drake Home window click Exit The EF database is closed e To open the Online EF Database click F10 Online DB or press F10 The EF database in Drake remains open Tax Year 2008 193 Online EF Database Drake Software User s Manual e To access data entry for a selected return click F5 Data Entry or press F5 The EF database is closed Peer to peer networks only For non transmitting workstations to NOTE view the EF database you must enter the drive letter of the trans mitt
291. ies to bring forward All items except for previously updated items are selected by default If there is a plus sign in front of an item click the plus sign to expand that item and view or select sub items If you select an item NOTES that has sub items all the sub items are selected by default If updating Pricing setup you will be prompted to enter a percent age increase to apply per item per form or both 5 Click Continue then Confirm the selections to start the update process 6 Click Exit when the status for each item is displayed as Completed Organizers and Proformas Proformas and organizers are tools to make information and record collection and interviewing easier for both preparer and client Available for the individual 1040 package organizers help clients prepare for their tax appointments Many organizer sheets feature two column layouts with one col umn containing prior year data and the other intended for entering current year data 2007 2006 Wages tips other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld Social Security tips Figure 4 5 Sample of W 2 page from an organizer Available for individual and business packages proformas have numbered fields cor responding to the fields on Drake data entry screens Proformas are designed to be internal documents and can be use
292. ieve consistency in naming W 2 Social Security Card and Driver s License are the selections NOTE that are shipped with Drake tax software See Setting Up Common Documents on page 284 for instructions on adding new selections such as Birth Certificate Create a link between a DDM file and a document outside the DDM The DDM main tains the link to the external document so that if the document is updated the link remains and you do not have to replace the document in the DDM To create a link to a file in the DDM 1 Select a folder in which to store the link Click the Link File button from the DDM toolbar Locate and select the document to link Click Open The link is indicated in the Type column of the DDM PON Last Modified 3 f8752_1 CLINKED PDF File D 10 30 2008 17 43 37 4 e e N Mae an er e e E adler Mitt te anni a d Figure 13 8 Link is indicated in Type column of DDM Each time an action occurs to a file the DDM makes note of it in an audit log An action includes importing linking exporting copying moving opening and renam ing The audit log records the action the date the action was taken and the user who performed the action It also shows the document name and path and has a field for entering a document description To access the DDM Audit Log select a file from the DDM document list and choose Properties from the right click menu or click F9 289 Document Manager Drake
293. ific business code Place the cursor in search codes the Business Code box field B and press CTRL SHIFT S In the Search dialog box enter a search term and click Go All codes that include the search term are displayed as shown in the example in Figure 5 15 Drake 2008 Data Entry Search Please input search data publishing Go Results 516110 Internet publishing broadcasting te eee Te eee ee aaa oe Figure 5 15 Example of a search using Data Entry Search Select the desired code and click OK or press ENTER Tax Treatment Codes New in 2008 screen C contains a Special tax treatment code drop list Figure 5 146 Special tax treatment code N Exempt Notary income D Meals are subject to the DOT hours of service Rules P Paper boy excluded from SE under age 18 Figure 5 16 Special tax treatment code drop list on screen C 94 Tax Year 2008 Drake Software User s Manual Self Employment Income Schedule C The codes themselves are not new to screen C Prior to 2008 these codes were options in the F field at the top of the screen Car and Truck Expenses Use the Auto Expense Worksheet AUTO screen to manage auto related expenses for Schedule C For more on this screen see Auto Expenses on page 146 Depreciation Use the Depreciation Detail 4562 screen to enter depreciable assets for Schedule C To open the 4562 screen without exiting screen C place the cursor in the Deprecia
294. ified flag produces an EF message page whether or not the screen has been opened for the return In the above example an EF message would be created even if no Sched ule C was present in the return In effect this type of global flagging would force the data entry operator to open the C screen even if only to clear the flag To prevent flagged fields from being overlooked all new return flags cause the corre sponding screen and tab names to appear as the color of the field flag Figure 3 11 Once the field has been verified the highlighted tab and screen names go back to their original colors Tacite men Pii e i SI erage GeneralCncome adjustments Credits Credits Taxes Cc Self Employed Income arm Co Op Income J Farmer s Income Averaging 4835 Farm Rental Income La BLOB gp MP TANI MOLE Rick anna Agere Sain am Figure 3 11 The C screen under the Income tab has a field flagged for all new returns To flag one or more fields in all returns 1 From the Home window select Setup gt Options gt Administrative Options 2 Select Use Customized Flagged Fields on all Returns 3 Click Flag to open a dialog box with buttons for all Drake packages Figure 3 12 Tax Year 2008 Drake Software User s Manual Data Entry Drake 2008 Flag Fields For Re Ll 1120 Corporate 11205 Sub S 1065 Partnership 1041 Fiduciary 990 Tax Exempt 706 Estate Exit Figure 3 12 Flag Fields for Review dialog box
295. iia ene antoi minni O a T ON ae cn oO Lb a ee Figure 14 3 Example of an unnecessary detail worksheet Remove unnecessary detail worksheets prior to import See Detail Worksheets on page 303 for more information on using detail worksheets in the trial balance Preparing Financial Data for Import To prepare the financial data for importing into the return the data must be entered into Drake s specially designed trial balance template Once this information is entered and saved it can be imported into the return Opening a Template The first step in preparing financial data for importing is to open a trial balance tem plate for the return and enter the financial data To open a trial balance template for a return EI 1 Open the return to the Data Entry Menu A 2 Click Import gt Trial Balance Import in the menu toolbar The preliminary Trial Balance Import dialog box is opened 3 Click Create New or Open Existing If opening an existing file click Open after selecting the correct file 4 Click Enable Macros in the Security Warning box that appears N In Microsoft Vista you will see a Security Warning message with DTE an Options button Click Options to open the Security Options dialog box then select Enable this content Click OK The trial balance template is displayed in Microsoft Excel Naming Whenever a new template is opened the tax software assigns it a default file location Convention and name Trial
296. ile right click a file and select Password Protection Enter the password twice then click Continue To open a password protected file double click to open the file or select the file and click Open Enter the password in the Password Protection dialog box then click Continue To remove or change a password right click the file to open the Password Protec tion dialog box Enter the password and click Continue When prompted to enter and re enter a new password do one of the following e Enter a new password twice to change the password e Leave the password fields blank to remove password protection Click Continue then click Yes if removing password protection NOTE To require a password for opening the DDM program see DDM Security at Startup on page 283 Other tasks that can be performed in the DDM are listed in Table 13 2 Table 13 2 Other DDM File Tasks Task Description N Select a file in the DDM document list then click Open Open fl Select a file in the DDM document list then click Copy Choose a location for storing the copied file then click Save Copy a Select a file in the DDM document list then click Rename Enter the new name B then click OK Rename 291 Tax Planner Drake Software User s Manual Table 13 2 Other DDM File Tasks Task Description Select a file in the DDM document list or select multiple files using the SHIFT or Aa CTRL keys then click E
297. iles Copying data and configuration files to other computers or for use as backups Locking and unlocking computers to control access The Automated Backup feature automatically creates a full or incre mental backup of client setup and system files daily at a specified time eliminating the need to remember to back up files See New in 2008 Automated Backup on page 250 for more information Backing Up and Restoring Files Use the Backup and Restore tools to prevent loss of client data or to move client files to another machine Files backed up to other locations can be used to restore lost data if necessary If multiple machines are used for tax preparation in one office files can be moved to other computers and uploaded to a single machine to create a master file M M l RTANT Back up your files often and store them at an off site location Backup To back up your files from the hard drive 248 Tax Year 2008 Drake Software User s Manual File Maintenance 1 From the Drake Home window select Tools gt File Maintenance gt Backup 2 Click Select a backup location and browse to the file storage location 3 Click OK to return to the Backup window Figure 11 5 Drake 2008 Backup Back up Files Enter a single SSN or choose one of the file groups to back up all files of the corresponding type To select specific files click the Advanced button Select a backup location al EN Select the type of file s to back
298. iles EF Firm Pricing Letters etc optiona AF zD Figure 2 9 Sharing all files Tax Year 2008 21 Software Setup Drake Software User s Manual e Click OK M p 0 RTANT Once a shared drive letter is set do not change it unless Drake Support instructs you to do so Changing a drive letter during tax season can cause problems in file storage and e file processing Setting State To indicate where state programs should be installed and updated Paths 1 From the Drake Home window go to Setup gt Directories Paths 2 Select a drive from the Drive Letter for State Programs list This location will be accessed for state programs If this field is set to None state programs will be installed and updated to the location where the Drake program is installed NOTES To access state programs from the Drake CD rather than installing them on the hard drive select the CD ROM drive from the list If you choose this option that states are not updated when updates are installed using Tools gt Install Updates 3 Click OK Setting Data The data path settings are determined by the chosen network configuration You Paths should not need to change the path settings after selecting the desired configuration To override a default path in Directories and Paths Setup select Admin Override then make the necessary path adjustments Click OK to save your changes Update Profile Setup Recommended Your firm will be installing updat
299. iles 197 accessing see also opening appointments 54 state returns in data entry 66 account numbers 5 acknowledgments acks Fees to ACH 210 codes for 185 187 e filing overview Appendix B processing 185 activating automated program updates 23 error message beeps 26 flags 59 grid data entry 25 heads down data entry 72 imperfect return election 29 macros 34 pay per return PPR 19 preparer fee override 25 prompting for check print transmission 29 state return options 29 W 2 verification option 25 adding custom paragraphs 28 51 employer information 261 firm information 14 preparer information 16 statements explanations to a return 161 student records ETC 231 add on fees 14 address book Drake e mail 238 addresses see also mailing labels change of 157 foreign 84 in care of 84 military 84 taxpayer 84 adjustment fields 25 61 ADMIN logging in as 9 Tax Year 2008 Index administrative options setup 30 administrative rights assigning 18 administrator login see also ADMIN logging in as in CSM 223 in ETC 228 231 passwords 13 Scheduler options 76 advance EIC payments 123 alimony 93 115 Alternative Minimum Tax AMT 118 amended returns 153 amortization codes 144 schedules 260 applications for bank products 203 207 appointments see also Scheduler calendars 78 changing details of 81 on the Home window 54 overlapping 80 scheduling 79 searching 80 Archer MSAs 109 archiving returns 176 177 assets depre
300. iling A EF Message return with an EF message page cannot be e filed Pages To eliminate an EF message page 5 1 Calculate the return and go to View Print mode ae 2 In the left hand column of the All Forms tab click the message page to view e EF message pages are displayed in red e EF messages are listed by error codes e Unverified fields are identified after the EF messages It s easiest to view all EF messages from View Print mode but NOTE individual issues can be viewed and in some cases accessed from the Calculation Results window See Calculation Results on page 166 3 Correct the issues that are preventing e filing 4 Re calculate the return Repeat the above steps until all federal and state EF message pages are eliminated and the return is eligible for e filing Step 2 Prepare the Transmission File Tip To bypass this step select the return directly from the Calculation Results screen See Figure 7 3 on page 184 To prepare the transmission file Shortcut Press 1 From the Drake Home window select EF gt Select Returns for EF The EF CTRL S to open Return Selector displays a list of recently calculated returns Those eligible for e the EF Return So ah Selector filing are indicated by a check box Figure 7 2 182 Tax Year 2008 Drake Software User s Manual E filing a Return Drake 2008 EF Return Selector EF Return Selector The EF Return Selector allows you to select clients for
301. iling Program e file Corporations in Florida must file and pay their income tax electronically if the corpo ration paid 20 000 or more in tax during the State of Florida s prior fiscal year July 1 June 30 File FL corporate income tax with the Florida Corporate Income Franchise and Emergency Excise Tax Return Form F 1120 and file through the Internal Reve nue Service s 1120 Federal State Electronic Filing Program using approved software New Indiana law went into effect Jan 1 2008 requiring most tax preparers to file Indiana individual income tax return electronically Tax preparers who file 100 or more Indiana tax returns annually are obligated to follow this new law The requirement applies to any paid preparer that prepares 50 or more Kansas Individ ual Income tax returns during any calendar year The requirement will be based on the number of Individual Income tax returns including resident nonresident and part year returns filed by the tax preparer in a calendar year The combined total of the returns prepared by all employees at all of the tax preparer s locations will be used to determine whether or not the tax preparer is subject to the electronic filing require ment If a tax preparer files 50 or more in 2009 then 90 of the returns must be elec tronically filed The electronic filing mandate requires tax preparers filing more than 100 individual income tax returns to do so electronically beginning January 1 2008
302. in data entry Use grid data entry format for Choose to activate grid data entry for the Dependent Dividend Income Interest Income and 4562 screens See Grid Data Entry on page 58 Calc amp Options under the Calculation amp View Print options tab are described in Table 2 6 View Print Options Table 2 6 Setup Options Calculation amp View Print Option Description Auto calculate tax return when exiting data entry Returns are automatically calculated every time you exit the return Display client fee on calculation screen Allows the fees charged for return preparation to appear on the Cal culation Results screen Print only one overflow statement per page Each overflow statement is printed on a separate piece of paper Go directly to form when accessing View or Data Entry mode Go from a data entry screen to the corresponding form in View mode when CTRL SHIFT V is pressed When the Data Entry button is clicked in View mode the program returns to the data entry screen Tax Year 2008 25 Software Setup Drake Software User s Manual Table 2 6 Setup Options Calculation amp View Print Option Audible notification of calculation error messages Description The program produces a beep to indicate an error message Layout for depreciation schedule Select Portrait to produce the depreciation schedule vertically using 8 5 x 11 paper select La
303. ine of the form in View mode Figure 5 66 neal ES cree te Fa Ame me rn Ama b Check if line 1a is compensation for personal an Py IE en services as an employee your total compensation from all sources is 250 000 or more and you used an alternative basis to determine its source see instructions Deductions and losses Caution See pages 14 and 15 STATEMENT 4 STATEMENT HAN of the instructions 2 Expenses definitely related to the income on line 1a attach statement 1 223 Sap Prowpta shape ofotherseductio ia wth 1 Figure 5 66 Statement indications on Form 1116 Foreign Tax Credit Once the statement is created the program assigns it a number in ascending order as shown in Figure 5 67 H y G_ zw ihe a i CompereAatiOn Ter p rsonat moianez services as an employee your total compensation from all sources is 250 000 or more and you used an alternative basis to determine its source see instructions tement 2 Deductions and losses Caution See pages 14 and 15 of the instructions 2 Expenses definitely related to the income on line 1a attach statement me 1 223 E aa T aa a a aaa Figure 5 67 Statement indications on Form 1116 Foreign Tax Credit 162 Tax Year 2008 Drake Software User s Manual Special Features in Data Entry In house To indicate that an SCH screen should be an in house note and not sent to the IRS Note select In house Note at the bo
304. ing Ifscreen A has been completed for a return Schedule A will be generated even if Itemized the standard deduction is being taken You can set up the option to have the software Deductions generate Schedule A only when it is required To print Schedule A only when it is required go to Setup gt Options gt Form amp Schedule Options tab and select Print Schedule A only when required Mortgage Use the Interest You Paid section of screen A to enter mortgage interest not reported Interest Paid on Form 1098 Mortgage Interest Statement For mortgage interest that is reported on Form 1098 use the 1098 screen N If using the 1098 screen to report interest from Form 1098 do not UTE enter an amount in the Home mortgage interest and points reported on Form 1098 field under Interest You Paid on screen A Tax Year 2008 117 Alternative Minimum Tax Drake Software User s Manual Form 1098 C Ifthe taxpayer has Form 1098 C Contribution of Motor Vehicles Boats amp Airplanes the amounts should be entered on either screen A if less than 500 or the 8283 screen if more than 500 Additional Itemized Deductions Screen codes Use the 4952 screen to enter data for Form 4952 Investment Interest Expense Deduc 4952 8283 tion Use the 8283 screen to enter data for Form 8283 Noncash Charitable Contribu tions Screens are accessible from the Adjustments tab in data entry Calculations from the 8283 screen flow to the Gifts by cash or
305. ing machine in the Shared Drive Letter field in Directories and Paths Setup See Directories and Paths Setup on page 20 Online EF Database 194 Support The Online EF database displays real time data on e filed returns You can run reports on returns loans and checks search for e filing information for a single SSN or EIN access the Multi Office Manager MOM view CSM data for one or multiple offices and check the status of each IRS Service Center To access your Online EF database from within the software 1 From the Home window click Support If you are already in the EF database click F10 Online DB 2 Enter your EFIN and password and click Log In 3 Go to My Account gt EF Database 4 Enter your EFIN and password again and click Login By default the database displays information for the current tax year To view another tax year select the year from the drop list near the top right corner of the page Above the tax year drop list is the SSN Lastname Lookup field To find information on a specific return enter the SSN or last name in this field and click Go Most of the buttons at the top of the Online EF database screen are for viewing and running reports Reports available are listed in Table 7 5 Table 7 5 Reports Available from the Online EF Database Category Description Returns Pending accepted and rejected federal and state returns extensions Bank Products Loan status original
306. instead 9465 Form 9465 Installment Agreement Request Form 9465 is e filable if the taxpayer uses direct debit to pay Otherwise this form must be paper filed If e filing a PIN is required indicate Form 9465 and enter prior year AGI on the PIN screen W7 Form W 7 Application for IRS Individual Tax This form is not e filable payer Identification Number ITIN 156 Tax Year 2008 Drake Software User s Manual Statements and Claims Requests Claims and Other Forms Additional screens for statement and claim forms are listed in Table 5 22 Table 5 22 Statement and Claim Forms Available from Other Tab in Drake Screen Form Notes EFPD Form 2120 Multiple Support Declaration This screen can also be accessed by typing 2120 Form 8332 Release of Claim to Exemption for or 8332 into the selector field and pressing ENTER Child of Divorced or Separated Parents 1310 Form 1310 Statement of Person Claiming If anything other than box C is selected in Part of Refund Due a Deceased Taxpayer the screen or if box 2a is selected in Part Il the return cannot be e filed 2848 Form 2848 Power of Attorney and Declaration This form is not e filable of Representative 8275 Form 8275 Disclosure Statement To print Form 8275 R select 8275 R at the top of Form 8275 R Regulation Disclosure Statement the screen 8379 Form 8379 Injured Spouse Allocation 8594 Form 8594 Asset Acquisition Statement Und
307. int the 8606 even if not needed To report the transfer of an amount from a traditional IRA to a Roth IRA enter the amount into the appropriate fields at the top of the ROTH screen Figure 5 23 Form 8606 Nondeductible IRA Contributions IRA Basis amp Nontaxable IRA Distributions Part Il Conversions from Traditional IRAs to ROTH IRAs 16 Amount of your traditional IRA converted to a ROtH AA Recharacterizations 17 VIRAiDas S HeforelcOnversl Once cccctccccscrreseereecercsccsssve a Ea aE E E Ea E AA E a ZrO a n a E aa a a a Figure 5 23 ROTH screen field for amount to be transferred to a Roth IRA This amount is carried to the appropriate line of Form 8606 IRA Penalty Computations Carrying 1099 R Data to Form 5329 102 IRA penalties are calculated using data entered on the 5329 screen Form 5329 Addi tional Taxes on Qualified Plans Including IRAs and Other Tax Favored Accounts It might not be necessary to enter data directly onto the 5329 screen If a distribution code of 1 Early premature distribution no known exception has been entered in Box 7 of the W2 screen you can force the distribution amount from a 1099 R to flow Tax Year 2008 Drake Software User s Manual Supplemental Income to Form 5329 To do so go to the desired 1099 screen and select the applicable box under Special Treatments for this Distribution Figure 5 24 Special Treatments for this Distribution M 1099 R for d
308. ion from a Schedule E that has already been calculated and completed by hand The E screens contain new activity type drop lists to select whether an NEW FOR activity is passive or non passive If option D not a passive activity is 2008 selected and EIC is involved the program prints NPA on the appropri ate line of Schedule E For more on selecting activity types see Activ ity Types on page 105 Tax Year 2008 103 Supplemental Income Kind of Property Property Usage Drake Software User s Manual Enter the kind of property you rented such as brick duplex at the top of screen E List each dwelling for the Schedule E on a separate screen Item 2 of screen E contains three boxes for indicating how much of a property was used for personal purposes 2 J Property was used for personal purposes atleast 10 or 14 days If box 2 is checked enter personal Ifbox2 is checked this is your main home or second home Figure 5 26 Item 2 of screen E Select Property was used for personal purposes at least 10 or 14 days if the property was used for personal purposes during the current year for more than either 14 days or 10 of the total days it was rented to others at a fair market rate whichever is greater Indicate the personal use percentage in the text box If you select box 2 and the property was the main home or a second home click the next check box also Do not enter personal residence expenses on Sc
309. ion or amortization schedules for the following ation forms Schedules e Schedule A e Schedule F e Form 8829 e Schedule C e Form 2106 e Form 4835 e Schedule E Depreciation data is also used for the Auto Expense Worksheets for Schedule C Schedule E Schedule F and Form 4835 To create an auto worksheet see Auto Expenses on page 146 To associate a depreciable asset with another screen in Drake see Associating One Screen with Another on page 62 Ji Press CTRL W or double click inside the Depreciation field of a IP supporting schedule s screen such as Schedule E to access the associated 4562 screen Entering Depreciable Assets Screen code 4562 Use the 4562 screen accessible from the Income tab to enter depreciation data Enter each asset on a separate 4562 screen To open a new screen press PAGE DOWN To ensure the accuracy of future calculations it is important to complete each 4562 screen correctly the first year an asset is entered N Grid data entry can be used for the 4562 screen Press F3 to switch UTE from grid data entry to full screen mode For more on grid data entry see Grid Data Entry on page 58 Tax Year 2008 141 Depreciation Required Fields Business Use Listed Property Type Prior Depreciation NOTE NOTE Drake Software User s Manual Required fields on the 4562 screen are described in Table 5 17 Table 5 17 Required Fields on 4562 screen Field Description
310. iption Call List for All Preparers Lists the call lists for all preparers New Client List Lists new clients entered for a selected preparer Preparer Appointments Lists the appointments for a selected preparer Preparer Call List Lists the call list of a selected preparer 5 Click View The Report Viewer displays the generated report For more informa tion see Report Viewer on page 12 The New Client List report does not pull data from other areas of NOTE Drake It pulls data only from the Scheduler itself To designate a client as a new client select New from the Client Type drop list in the middle of the Appointment Detail dialog box E filing Preparation For details regarding preseason tasks for e filing see Chapter 7 E filing 82 Tax Year 2008 5 Return Preparation This chapter focuses on how to prepare a Form 1040 U S Individual Income Tax Return using Drake Software It describes procedures for entering data for and pro ducing a Form 1040 and the supplemental forms schedules and other documents that might be part of a tax return This chapter assumes a basic understanding of data entry in Drake If you are not familiar with Drake data entry please read Chapter 3 Basics before attempting to prepare a tax return in Drake The amounts on a Form 1040 return consist of a combination of directly entered data and program calculated data based on the numbers entered by the preparer Screens 1 through 5 o
311. is generated and only if applicable for a return Client Previously called the Letter Editor the Client Communications Editor gives you a Communica place to read edit re write print and save the letters contained in the program You tions Editor can also add your company letterhead and logo to the letters The right pane of the Client Communications Editor displays the letter template The left pane displays paragraphs and keywords by category Figure 2 20 click to expand a category or click to contract it Hover your pointer over a keyword to view its description Keywords gt Client Information Federal Return Paragraphs SE Federal Amended Paragraphs Federal Amended Bal Due Paragraph Expanded Federal Amended Refund Paragraph category view Federal Amended Return Paragraph Federal Amended Zero Due Paragraph Federal Estimate Paragraphs Federal Extension Paragraphs Federal Return Results Federal Amended Results Federal Estimates a J FedstabE xtepsior Resul fo Conditional paragraphs Figure 2 20 Category tree left pane of Client Communications Editor While the result letters are designed with keywords inserted to handle most situations additional keywords are available if you want to further customize the letter Available Table 2 14 lists all available letter templates New templates are indicated by an aster Letters isk All letters can be modified usi
312. is report is pulled from the EF database Cash Receipts Client Payments Report lists amounts entered on the BILL screen in data entry Completed Returns Report lists SSN EINs and client names of returns with a Complete status The program pulls the date completed from the TRAC screen which is automatically set when you select a status of Complete To manually set the completion date log in as Admin and enter a Date Complete on the TRAC screen Problem Returns Old Returns Report lists returns that have taken longer than a specified number of days to complete Problem Returns Missing Files For this report the CSM scans client files for File Deleted and File Not Found statuses Many reports rely on data entry for accuracy To take full advantage of the CSM s reporting features you must use the data entry screens mentioned in Table 9 2 See Chapter 12 Reports for information on using reports in Drake Generating a CSM Report To generate a report from the CSM 9 1 Select Reports Select a report from the drop list in the CSM Reports dialog box Depending on your selection you could be prompted to enter dates select preparers or provide other information to narrow the scope of the report 3 Click Report The report data is displayed in the Report Viewer Print the report export the report into another program or customize the report dis play For information on usi
313. isability Ifso reported as wages on the 1040 compute 10 penal Exclude from income reported on Form 4972 Exclude from income reported on Form 8606 Exclude from income rolled over into another qualified plan Figure 5 24 Select box to carry 1099 R data to Form 5329 Exception On the 5329 screen exception numbers 01 and 06 Part I line 2 apply only to distri Numbers butions from qualified employee plans not to those from IRAs annuities or modi fied endowment contracts To view full descriptions of each exception number place the cursor in the Exception number field and press F1 Supplemental Income Entry fields for Schedule E Supplemental Income and Loss are located in the Sched ules E and K1 section of the Income tab Schedules E and K 1 K1 Partnership K 1 an Parts of Schedule E K1S Sub S K 1 2 Partnerships S Corps Ea Estates and Trusts E4 REMICs under Income tab Figure 5 25 Screens for entering Schedule E data Schedule E Screen code E Use screen E accessible from the Income tab to complete Page 1 of Schedule E Part I Income or Loss From Rental Real Estate and Royalties Page 2 of Schedule E Parts II through V is calculated from K 1 schedules The corresponding screens in Drake E2 E3 and E4 primarily contain override fields data entered here overrides amounts that would otherwise flow from the K 1 Enter data on one of these screens only if you are transferring the informat
314. ities 0 i old Other current assets 0 Loans to shareholders 0 L line 7 cold Mortgage and real estate loans 0 ine 8 cold orm 0 h ne 8 cold other investments so Buildings and other depreciable assets 0 L line 10a col c Form 1120 Sch L line 10a col c optional PMPOLUIIBIE d danraciatiO Naa nainn ian aai a ges PEE TS F TOON gg 120 Schl lined Oh oneal SO Figure 14 11 SCH2 screen required for do not carry items To complete an SCH2 detail screen in data entry 1 Open the SCH2 screen for the return 2 Select the line number from the SCH2 drop list 3 Enter the applicable item descriptions and beginning and end of year totals To enter details for additional lines of the Schedule L press PAGE DOWN and repeat steps 2 and 3 Data is saved automatically upon entry When the return is produced the Schedule L of the return reflects both the amounts imported from the trial balance worksheet and the totals of the amounts entered on the SCH2 screen Depreciation On a corporate 1120 tax return total depreciation consists of COGS depreciation which is reported on Schedule A and any remaining depreciation which is reported on page of the return S corporation 1120S and partnership 1065 returns can have up to four components of total depreciation e COGS e Real estate rental e Rental other than real estate e Any remaining depreciation For trial balance purposes enter depreciation amounts directly i
315. ive fields for miscellaneous codes You can now cre 70 0 B ate drop lists for a miscellaneous code fields see Customized Drop Lists on page 31 Notes about the Return Screen code Use the NOTE screen to ensure that specific reminders in the forms of notes and EF NOTE messages appear for specific returns By default all notes from the NOTE screen are printed on the NOTES page generated with the return Entering a To include a note with a return go to the NOTE screen and enter all relevant informa Note tion in the fields provided The screen includes fields for names dates and any screen or form to which the note refers Figure 5 65 Notes Date Date ScreenForm Note taken by completed Completed by SS a M A Note Lii nn dein iT ee y N a la hanni a m Bp adi IN k Figure 5 65 NOTE screen fields 160 Tax Year 2008 Drake Software User s Manual Special Features in Data Entry Delaying E filing The maximum number of characters for the Note field is 120 Up to four notes can be entered on a single NOTE screen For additional screens press PAGE DOWN NOTE In the Date Completed field enter the date that the note should be discontinued In Drake the presence of an EF message red MESSAGE page prevents a return from being e filed A return cannot be e filed until all EF messages are eliminated The NOTE screen can be used to delay the e filing of a prepared return even if it is otherwis
316. k Import gt Trial Balance Import from the menu toolbar The preliminary Trial Balance Import dialog box is opened 3 Click Next 4 Enter or select the trial balance file to be imported Use the Browse feature if nec essary By default each trial balance file is an Excel xls file showing the client name and ending in TB for trial balance as shown in the example in Figure 14 9 See Naming Convention on page 301 1 Import File Name FADRAKEOS TB TREE FIXA UPPER INCTB XLS Figure 14 9 Selected file to import 5 Select the Trial Balance Import Options See Additional Import Options fol lowing this procedure 6 Click Next and wait for the import to be completed 7 Click Finish The program returns to the Data Entry Menu for the open return Note that all selected data from the trial balance worksheet has been imported into the return This can be seen both in the data entry screens and on the generated return Additional Import Options By default the program imports the following additional information when importing the trial balance data Buildings amp other depreciable assets Accumulated depreciation Goodwill amp other intangible assets Land Rental real estate information Accumulated amortization Other rental property information Special Conditions Some trial balance items cannot be entered into the trial balance worksheet and must be typed directly into Drake data entry Other items sh
317. k Printing Drake Software User s Manual Resetting Check Stock Occasionally you might need to reset the check stock Follow the process outlined in Printing Checks on page 211 When you get to the Check Print Options dialog box click Setup Checks to access the feature for resetting check stock Lost Stolen Checks If you do not physically possess a check that needs to be reissued for example if a check is lost missing or stolen follow your bank s procedures for a lost or stolen check Do not reprint the check Ifa RAL check is lost or stolen go to Tools gt Blank Forms and print the lost check affidavit LOST_CK PG This document must be completed signed by both the tax payer and the ERO and faxed to Drake Software at 828 349 5745 Troubleshooting Check Printing Listed below are some of the more common issues that preparers encounter when printing checks Please read the following information before contacting Drake Soft ware Support Checks Won t Print There are many reasons that a check may not print Before contacting Drake Support please review the following questions to ensure that the necessary conditions for print ing checks have been met e Is the correct printer selected Go to Setup gt Printing gt Printer Setup then look in the Checks section of the General Setup tab e Are you using the same computer from which the return was transmitted e Have you received the bank acceptance acknow
318. l 1 Click New to open a blank message 2 Click Attach to open the Email Attachments window Figure 10 12 237 Interactive Support Drake Software User s Manual Drake 2008 Email Attachments Client Data File s Attachment s SSN EIN Search Browse Search Document Manager File s SSN EIN Browse Drake Software Program File s Browse All other File s Browse Done Figure 10 12 E mail Attachments window 3 Attach the necessary files to the e mail All attached files appear in the Attach ment s pane to the right e To attach a client file enter the SSN EIN and press ENTER or click Search Alternately click Browse in the Client Data File s box locate the file in the appropriate DT folder and double click it to attach it Ji If you need to send only one client file open the file in data entry IP and click the E mail button When the e mail program is opened the client file is attached automatically e To attach a file from the DDM enter the SSN EIN and press ENTER Alter nately click Browse in the Document Manager File s box locate the file in the appropriate DT folder and double click it to attach it e To attach a Drake program file click Browse for Drake Software Program File s The Attach File window is opened to your Drake08 folder Locate the file and double click it to attach it e To attach a file other than the types described above click Browse for All other File s
319. l three of the following conditions e Does not use a tax return preparer to prepare Article 9 A general business corpo ration and S corporation tax returns e Uses tax preparation software that has been approved by New York State for e filing business corporation and S corporation tax returns e Has broadband Internet access While there is no penalty for failing to e file a mandated tax document there is a 50 per tax document penalty for failing to electronically pay the balance due on the man dated tax document New for 2009 The new mandate requires tax return preparers who meet certain requirements to e file authorized tax document beginning on or after January 1 2009 The mandate also requires electronic payment of the balance due on any authorized tax document Tax Year 2008 Drake Software User s Manual Appendix E State E filing Mandates Oklahoma Rhode Island South Carolina Utah Virginia Tax Year 2008 Preparers must e file all general business and NYS S corporation Article 9 A returns and extensions beginning on January 1 2009 and electronically pay the balance due if they both e Prepared more than 100 original Article 9 A documents in calendar year 2008 including tax documents for prior periods e Use tax software to prepare one or more Article 9 A tax documents in 2009 A 50 penalty applies to each document that preparers fail to e file unless the tax payer opted out of e filing or the
320. lanner c Print Planner Options GOTo Client Setup Close Planner A Client Setup Drake Software Tax Planner TEST O MAPLE 400 00 1005 Contact Information Taxpayer SSN 400 00 1005 Taxpayer name TEST O MAPLE Taxpayer date of birth 4 15 1988 Taxpayer blind Spouse name Spouse date of birth pouse blind Street address 7842 WEEPING WILLOW LN City state zip AUDUBON NJ 08106 7842 Daytime phone 201 555 1111 Mar Figure 13 11 Tax Planner window Some cells are read only and cannot be changed others can be edited Unshaded white cells are active and can be edited Tax Year 2008 293 Tax Planner Drake Software User s Manual The Client Setup tab Figure 13 11 has cells for taxpayer demographic data and planning preferences The other tabs correspond to sections of the 1040 The Sum mary tab displays a summary of the information in the other tabs NOTE Summary tab cells do not accept direct entry If you click Sum mary tab cell the jumps to the cell of the corresponding tab GoTo Schedule C Certain tabs are hidden by default For example the Schedule C tab is not initially vis ible but appears when the Schedule C cell is double clicked from the Income tab Hid den worksheets can also be accessed from the Go To list on the toolbar To move through the tabs click Next or Back on each screen click a tab at the bottom lt lt Back Next gt gt of the
321. lation process for the first and for subsequent CD shipments Table 2 1 CD Installation First CD Shipment Insert the 2008 Drake CD into the drive Wait for the Drake 2008 Software Pro grams window to be opened Subsequent CDs Insert the 2008 Drake CD into the drive Wait for the Drake 2008 Software Installation window to be opened Click Install Drake 2008 Tax Software Click Install Drake 2008 Tax Software Accept the Drake Software 2008 License Agreement Click Next Accept the Drake Software 2008 License Agreement Click Next Select Install 2008 Drake Tax Soft ware States are not available on initial shipment Click Next Optional Select Install State Tax Pro grams Click Next Select a drive or select New to install to a new location Optional Select Install test returns if you are going to test e fil ing capabilities Click Next Select a drive or select New to install to a new location Click Next Tax Year 2008 Drake Software User s Manual Installation Table 2 1 CD Installation Step First CD Shipment Subsequent CDs 6 Click Next State programs are not Enter the serial number from your soft available with the initial shipment ware packing slip Click Next 7 Enter the serial number from your soft Select an installation drive from the list ware packing slip Click Next of available drives Click Next 8 Click Install then wait for the Installa Select state
322. lds e When a Per Item entry is not applicable for a form the field is unavailable e IfPer Item pricing is allowed the price entered here will apply to all instances of the selected form that are printed for a return 6 Click Update then click Save Repeat these steps for each form or set pricing for only the most common forms You can price the less common forms from within the individual returns that use them NOTE For more on formatting the client bill see Billing Options on page 28 To set minimum and maximum fees to be charged for a return 1 From the Home window go to Setup gt Pricing 2 Select a package from the Form Categories All forms for that package are dis played in the grid below 3 Scroll down to Forms 0255 and 0256 the minimum and maximum fee settings A Double click a row and enter the fee Repeat for the other form if desired 5 Click Update then click Save Tip If incorrect charges are generated on bills check the minimum and maximum fees to see if the settings are affecting the totals 33 Software Setup Drake Software User s Manual Macros Setup A macro is a combination of keys that allow you to accomplish data entry tasks faster You can edit existing macros or create new ones to meet your office s needs Also called shortcut keys macros are already available in the program for example CTRL V is a macro that opens View mode You can also use macros for data that i
323. le gt Logout Preparer to log out without closing the program To log out completely click Exit then click Yes The Home Window The Home window Figure 3 2 is the main screen of the Drake program The menu bar and toolbar allow you to accomplish tasks in the program The status bar provides system information The Recent Files section lists the last nine returns opened The Appointments section shows the preparer s schedule The Message Center lists any e mail messages that need to be downloaded updates that need to be installed or acknowledgments that need to be processed Menu bar 4 Drake 2008 Tax Software File EF Tools Reports Last YearData Setup Help Qp Colo Six SB 0 x Toolbar Open New Calculate Print view Support Help Research CSM Scheduler Exit Recently Recent Files Key Print View opened returns TESTS CREDIT amp ALLEN 1 Lad 106ES 2 bel PACK FOR YOU INCORPORAT 3 E A Aeon FOURTH ALABAMA amp SPOUS 4 a HAMMER TEST 5 a HAMMER TEST amp MARY 6 Lad TEST RETURN PYND amp PYS 7 LJ HAWAII PARTNERSHIP 8 Ld JACK A BEANSTALK 3 la Appointments Open Scheduler E S 0 a Se Appointments pending Hint 6 Sales Tax Deduction is automatically computed and used if Hints and applicable reminders ase ene LAURIE To override the table amount key that on the A or the STAX screen SB E mail to download Updates to install Copyri
324. le D Figure 13 13 Worksheet totals are highlighted in blue e Tax Planner Worksheets To access an additional tab or worksheet for a form or line double click the shaded cell Making Each numerical column in the Tax Planner has an Adjustment column to the right of Adjustments it Use this column to enter dollar amounts or percentages by which to adjust the amounts Default is dollar amount to use a percentage enter the number with a per cent symbol See Figure 13 14 To decrease an amount enter a negative number or percentage by entering a minus sign in front of the amount for example 5 or 5 in the Adjustment column Income Items 2007 Adjustment 2009 Adjustment 2010 Adjustment 2011 Wages 60 000 1200 61 200 K 50 J 30 600 Nontaxable combat pay Taxable interest Nontaxable interest Dividends Qualified dividends Figure 13 14 Adjustments To apply an adjustment to all future years or cases right click the cell with the adjust ment and select Carry Adjustment Across Running To access reports click Reports from the Tax Planner toolbar and select to print a Reports Detailed or Summary Report Standard charts and graphics are also available Printing a To print Tax Planner data Tax Planner 1 Click Print Planner 2 Inthe Print Selector select your printing options e Sheet Selection Sheets pertain to specific tabs in the Tax Planner e Report Selection Sele
325. lection explanations are visible as ELECTION pages in the View Print mode directory tree For more on unformatted schedules see Unformatted Schedules on page 161 Special Returns This section explains how to complete the following return types in Drake Form 1040X Amended U S Individual Income Tax Return e Extension Applications Form 4868 Application for Automatic Extension of Time To File U S Indi vidual Income Tax Return Form 2350 Application for Extension of Time To File U S Income Tax Return For U S Citizens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment e Form 1040NR U S Nonresident Alien Income Tax Return e Form 709 United States Gift and Generation Skipping Transfer Tax Return NOTE Amended returns cannot be e filed An electronic signature is required for all other returns and applications for extensions See Signing the Return on page 139 for more on electronic signatures Amended Returns Screen code X Tax Year 2008 To create an amended return in Drake 1 Open the return to be amended 2 From the Other tab click 1040X Amended Return 3 To have the program fill the 1040X screen with data from the original return click Yes To leave the fields blank click No 4 Enter all applicable data in the 1040X screen The 1040X screen contains fields for the following types of information 153 Special Returns Drake Software User s Manual
326. ledgment for this taxpayer e Has the correct SSN been entered if reprinting e Have you entered the range of checks you received from your RAL bank Text Won t Line Up 214 If the text is not lining up correctly on the check you may need to modify the adjust ment settings for the printer To adjust these settings 1 From the Home window go to Setup gt Printing gt Printer Setup 2 Select the F8 Edit Printer Settings tab 3 Select the printer being used to print the checks Once a printer is selected all other fields are activated 4 Enter a number in the Check Adjustment Vertical field Each whole number represents a fourth of a line Enter a positive number 1 to move the check down a fourth of a line text will show up higher on the check Enter a negative number 1 to move the check up a fourth of a line text will show up lower Remember to click Update before closing the Edit Printer Settings window Tax Year 2008 Drake Software User s Manual Cancellations Tracking amp Post Season Procedures If the text is printing too far to the left or right the printer itself may need adjusting Consult the user manual for your printer Program Won t Allow Reprinting If trying to reprint a check that was printed before the current date you will get a Reprint Not Allowed message like the one shown in Figure 8 7 Reprint Not Allowed Too Late The Check on this record was originally printed o
327. lete click Exit New in 2008 Drake supports using a single SSN for two return types when a taxpayer requires a Form 1040 U S Individual Income Tax Return and one of the two return types listed below e Form 706 U S Estate and Generation Skipping Transfer Tax Return e Form 706 A U S Additional Estate Tax Return An SSN must already be associated with a return in the software before it can be assigned to a second return type To assign an SSN to multiple returns 1 From the Home window select Tools gt File Maintenance gt Change File Type Tax Year 2008 Drake Software User s Manual File Maintenance 2 Inthe Convert Client Data File Type dialog box enter the SSN to be assigned to a new return type 3 Click OK The available return types are displayed In the example in Figure 11 9 the selected return is a 1040 so that option is disabled Note that the 706 and 706 A options are in the right hand column Enter SSN EIN to convert 400001 oil Convert this file E Travia 100A Fiduciary 1041 Estate 708 Corporate 1120 Partnership 1065 Heir 7064 Sub S Corp 1120S Tax Exempt 990 400001001 File Type is Individual 1040 Select the type of return to convert to Help Exit Figure 11 9 Available return types are displayed 4 Click an option to select it then click OK 5 When asked if you want to keep the original return in addition to the new return click Yes 6 Click OK The
328. lient Wiie Up 2i4eicos dhe enka tup E REEERE EECA EATERS EEEIEE ETARE TEREA 297 Business Packages New Features c ssceeeceeeeeeeeeeeeeeeeeeeeeeeeeeeeees 299 Trial Balance MNO yi ae aaa ate a hada Kn ewes wee he he eee ee eda a Res eee esd 299 Binary Attachments ose Gene dogs ha eae eed padded da eae yee peed eed eee wees 309 Appendix A Preseason ChechkliSt ccccccceseeeeeeeeeeeeeeeeeeeeeseaeeeeeeeeeees A 1 Appendix B E filing OVervieW ccceceeeeeeeeeeeeeeeeeeeeeeeeeeeeaaeeeeeeeeees B 1 Appendix C KeyWords iussisse aa C 1 Appendix D Acronyms and Abbreviations ccccccsssseeeeeseeeeeeeeeeeeees D 1 Appendix E State E filing Mandates 0 ccccceeeseeeeeeeeeeeeeeeeeeeeeeees E 1 Appendix F Trial Balance IMport ccccceesseeeeeeeeeeeseeeeeesseeeneeeeseeneees F 1 vi Tax Year 2008 1 Introduction Welcome to the Drake Software Manual for Tax Year 2008 The Drake Team has been hard at work in 2008 to help ensure that tax season at your firm is a successful one This electronic manual has been developed for Drake clients to provide clear easy to find instructions and guidelines for using the software Use this manual in conjunction with other Drake resources such as the online and on screen help features tutorials training and phone support Be sure to take advantage of our expanded index and the Adobe PDF search feature both of which will help you locate information mor
329. ling be on paper The threshold is reduced to 100 returns for tax years beginning on or after January 1 2005 The pre parer must continue using electronic means to file returns in all subsequent years unless the preparer completed no more than 25 original individual income tax returns during the previous calendar year IIT Tax practitioners who prepare 200 or more personal income tax returns are required to e file all eligible forms that are supported by their software Software developers producing software for professional tax preparers will need to support e Tax Year 2008 Drake Software User s Manual Appendix E State E filing Mandates Minnesota New Jersey New Mexico Tax Year 2008 file for all Michigan income tax forms that are included in the tax preparation software package SBT Treasury mandates electronic filing of SBT returns Software developers have been advised they must support e file for all SBT forms included in their tax prepara tion software Therefore all eligible SBT returns prepared using software must be e filed MBT The e file mandate for Single Business Tax is being continued for software developers supporting MBT effective January 1 2010 for the 2009 tax year Soft ware developers producing MBT preparation software will need to support e file for all eligible MBT forms that are included in their tax preparation software Therefore all eligible SBT returns prepared using software must be e fil
330. ly F on he Mee a P erate E O N a Figure C 4 Keywords from letter template To view available letter keywords select Setup gt Letters from the Home window and select any template to view The tree view of the Client Communications Editor lists the keyword categories Click to view specific keywords within a category In the example in Figure C 5 the Preparer Firm and Revenue category has been expanded Client Information Miscellaneous Prep Firm and Revenue Firm E mail Address Firm Name Paid Preparer Fax Paid Preparer Name Paid Preparer Phone Figure C 5 Prep Firm and Revenue keywords To view a keyword description place the mouse pointer over the selected keyword A brief keyword description appears as shown in Figure C 6 Client Information Miscellaneous Prep Firm and Revenue Firm E mail Address Firm Name Paid Preparer Fax ad ne Name wee Paid Preparer Phone Phone number of paid preparer FP tert nth enetnne Girne agile D ry Figure C 6 Place mouse pointer over a selected keyword to see the description Instructions for adding and editing report columns are provided in Introduction to Letters in Drake on page 35 C 2 Tax Year 2008 Drake Software User s Manual Appendix C Keywords OtherTax Keywords in Letters The result letters in the Client Communications Editor include keywords for Other Tax Types for state and city ret
331. m 8879 The generated return uses both the taxpayer s PIN and the ERO s Practitioner PIN Signature A PIN signature date is required at the top of the PIN screen If no date is entered an Date FF message is generated and the return cannot be e filed Obtaining Ideally the client signs Form 8879 in your office If the client is not available to sign Client PIN you can e mail Form 8879 as a PDF file to the client and have the client sign the form Signatures and return it to you The taxpayer can select his or her own PIN any five digit number except 00000 On the PIN screen have the client enter these numbers in the appropriate text box then indicate either Taxpayer keyed or Spouse keyed If the client is not available and you enter the PIN signatures leave the check boxes blank The taxpayer can elect to use the PIN generated by the software NOTE To turn off the option to generate PINs go to Setup gt Options gt EF tab and clear the check mark from Auto generate taxpayer s PIN 1040 Only option Tax Year 2008 139 Depreciation Drake Software User s Manual Direct Debit If there will be a direct debit from the client s bank account to make a tax payment Consent selecting Direct Debit Consent indicates that the taxpayer authorizes funds to be electronically withdrawn from his or her account PIN Signatures for Forms Other than the 1040 By default Form 8879 is printed with Form 1040 If an electronic signature form is
332. m Categories Your selection determines which forms are displayed in the grid below Double click a form in the list The default information for that form fills the text boxes above In the boxes under each set name enter the number of copies of the form to be printed with each set For example to include three Schedule Cs with the Client set enter 3 under Client Enter the number of copies per set below Valid Copy amounts are 0 9 Form Name Schedule C EF Signature Est Ext Client Preparer Federal a fo fo B F Moo Update Figure 2 22 Example Three copies of Schedule C for client Click Save then click OK Repeat this procedure for other forms as needed Making Sets changes on the fly modifies settings globally not just on a per return basis If you change your Sets settings on the fly you change those settings for all future set printing To change or add print settings on the fly without entering Printer Setup complete the following steps while in Enhanced View Print mode 1 2 3 Click a form in the directory tree to select it Click the Setup button from the toolbar then click Form Properties from the menu In the Number of Copies section edit settings and click Save Settings are applied universally Pricing can also be changed using this option NOTE If using Basic View access this feature by right clicking a form in Basic View and selecting Properties Use this option to indic
333. m the Home window select Reports gt Fixed Asset Manager The Fixed Asset Manager dialog box has the drop lists for report types reporting options and sorting options Figure 12 11 Drake 2008 Fixed Asset Manager Fixed Asset Manager Choose to run a report edit a macro or cancel e Federal Full Schedule Help Edit Macros Cancel Figure 12 11 Fixed Asset Manager dialog box 2 Select a report type See Table 12 4 3 Select a tracking format Options are described in Table 12 5 Table 12 5 Fixed Asset Manager Format Options Format Description of Printed Report Federal Tracks federal depreciation methods State Tracks state depreciation methods Alternative Tracks alternative depreciation methods Book Tracks depreciation using book methods 4 Select a sorting option from the drop list on the right Choose to print a Full Schedule to sort By Department or to sort by Form Schedule 5 Click Run Report 278 Tax Year 2008 Drake Software User s Manual Client Status Manager CSM Reports 6 Inthe Asset Manager Client Selection dialog box create a report for one or more specific clients or create a filtered report based on all clients e One or more clients Enter SSN EIN in the blank field and click Add Cli ent Repeat for all desired clients then click Next e Filtered report Click Next to open the Asset Manager Filter Selection dialog box Select a filter or sort option then
334. m your packing slip and click Submit 3 Complete all applicable fields To have CPE credit for completing an ETC tax course select Yes from the CPE drop list 4 Click Save Information To create a student account log in to ETC See Logging In following click the Administration link and click Add New Student After completing all applicable fields click Save Information Logging In To log in to ETC enter your Login Name and Password on the ETC home page and click Log In item 2 in Figure 10 3 The ETC Welcome page has a sidebar listing the available resources described in Table 10 3 228 Tax Year 2008 Drake Software User s Manual Online Support Table 10 3 Drake ETC Resources Resource Description Tax Courses Interactive tax courses explore IRS tax law and terminology and how it applies to Drake data entry CPE credits are available Tutorials Step by step instructional slide shows that teach the basics of Drake Software Practice Returns Hands on data entry and e file training Videos Available for tax year 2008 videos include a software tutorial and a demonstration of the latest innovations in Drake Report Card Track student s progress in the tutorials and in the tax courses includ ing dates of completion quiz results and CPE credits earned Administration Available only when logged in with an Admin account this section allows you to create student accounts and view student re
335. mail Your default e mail program is opened with the Email document added as an attachment D Select a file in the DDM document list then click Delete Click Yes to confirm Q the deletion Enable drag and drop navigation which allows files to be dragged and a dropped from one location on the computer into the DDM You can also drag Drag and drop files within the DDM Use your mouse to drag the selected file to the new location Tax Planner The Drake Tax Planner help you assist your clients with planning for financial deci sions Clients can easily see how such events as the birth of a child a marriage or a Tax Planer few job will affect their short and long term finances and tax liability The Tax Planner is installed when you install Drake Because each worksheet in the Tax Planner contains typical Excel worksheet functions your computer must have Microsoft Excel 2000 or later installed New in Tax Year 2008 New in 2008 the Tax Planner includes fields for estimated payments and first time homebuyer information Estimated Payment Vouchers On the Tax Planner Summary tab the program projects the amounts of estimated payment vouchers for future years assuming even quarterly payments First time Homebuyer Information The Tax Planner can now project how taxpayers will benefit from the First Time Homebuyer Credit which was imple mented in tax year 2008 On the Tax Planner Payments tab yo
336. ments in e filing 186 check printing 214 215 e file transmissions 184 return selection for e filing 184 2008 Drake Software TS TSJ field 62 tutorials 230 U unemployment compensation 107 unformatted schedules SCH screen 161 unlocking client files 253 UNVER EF message 60 update profile setup 22 23 updates automated 23 copying 244 installing 243 updating CSM 221 from the prior year 67 71 NOTE screens from year to year 161 V verification fields see flags verifying SSNs 25 W 2 amounts 25 87 Veriscom ABC voice files 197 videos 231 viewing see also printing bank decline reasons 193 206 blank forms 246 CSM filters 221 deleted records 223 earned revenue from add on fees 14 EF reports 195 in enhanced view print mode 168 171 letter keywords Appendix C loan status codes 193 206 processed acknowledgments 181 report keywords Appendix C reports 275 sample letters 40 scheduled appointments 80 tax returns 168 Vista Windows operating system 8 300 W W 2 import 89 Windows operating system default printers 42 enabling standard keystrokes 25 print driver GDI 43 using system colors 41 Tax Year 2008 Drake Software User s Manual worksheets AUTO 146 carryover 26 detail Ctrl W 64 65 for Schedule D import 97 next year depreciation listing 47 optional on return 26 sale of home HOME screen 99 sales tax 163 Z ZIP code auto fill 24 database 62 Tax Year 2008
337. message 1145 is generated when the return is calculated 1145 Form 851 has required attachments that must be attached in PDF format Supporting statements are required for each corporation included in the consolidated return and cannot be a Form 1120 The statement must include 1 Items of gross income and deductions 2 A computation of taxable income 3 Balance sheets as of the beginning and end of the tax year aaen haa Ae regonciliasion of income psf books with incom DERurEtTULA ron Figure 14 17 EF message page As shown in Figure 14 17 the EF message states that attachments are required You would then need to obtain or complete the statements scan them into the computer save them as a PDF document and attach them to the return 312 Tax Year 2008 Drake Software User s Manual Appendix A Preseason Checklist Appendix A Preseason Checklist Preseason planning can reduce or eliminate many problems for tax preparers Take time now to prepare for the months ahead and ensure that your office is ready before the first client arrives The needs of each office vary in the months before tax season but your preparations might include the actions listed here Several of the items below refer to Drake Support which you can find at Support DrakeSoftware com Contact the IRS L Apply for Electronic Filer s Identification Number EFIN All new EROs must complete and submit Form 8633 Application to Participate
338. mi Color Red City town or post office state and ZIP code If you have a F N afitt E o h in pijam E E EN N a Figure 6 11 Customizable colors in Enhanced View Print mode To change colors in Enhanced mode select Setup gt Form Colors In the View Mode Color Selection dialog box click a color After selecting a basic or custom color from the color palette click OK To revert to the Drake default colors click Reset in the View Mode Color Selection dialog box Basic Mode Because Basic Mode uses the multi color cascade of forms it offers more opportunity for color configuration In addition to changing the form background and text data colors you can customize the following items in Basic mode View Mode View mode only Print Mode Print mode only EF message page Notes page To change the colors shown in the cascade of forms in Basic View Print modes 4 Go to Basic View or Basic Print mode of a return Select Setup gt Color Configuration The View Print Mode Color Configura tion dialog box displays the default colors for Basic View Print Click a color box and select a new color from the Color palette You can also click Define Custom Colors to create any desired color Click OK The corresponding color box is re colored To restore the default color palette click Restore Colors in the View Print Mode Color Configuration dialog box NOTE If the form background or text data colors are changed in on
339. mmends that you run an initial transmis sion test to become familiar with the e filing process and ensure that your system is working properly Open a test return and calculate it before testing transmission To test system transmission Shortcut CTRL S 1 From the Home window select EF gt Select Returns for EF 2 From the EF Return Selector select the EF eligible test returns to transmit M p 0 RTANT Select only the returns in the 400 00 and 500 00 series provided in the software All other returns are processed as actual live tax returns and can result in a charge of filing fraudulent returns 180 Tax Year 2008 Drake Software User s Manual E filing a Return Click Continue The Report Viewer displays the selected returns Click Exit to close the Report Viewer Shortcut CTRL T From the Home window select EF gt Transmit Receive Click Send Receive in the Transmit Receive dialog box that is opened oe oe When the process is complete go back to the Home window and select EF gt Process Acks to view acknowledgments An IRS acknowledgment of T indicates successful test transmission Transmission unsuccessful Go to Setup gt ERO and add or cor NOTE rect your ERO information if necessary and re transmit If trans mission is still unsuccessful make sure your Internet connection is working properly E filing a Return The e filing process can be said to consist of up to five main steps starting
340. mounts displayed on the vouchers you must enter the amounts Amounts manually in the Estimate Amt fields of the ES screen shown in Figure 5 41 NOTE Use the ETA screen to enter estimate adjustments rather than overrides Estimated Tax Adjustments Screen code ETA Use the Estimated Tax Adjustment screen if the taxpayer expects a significant change in income the following year NEW FOR The ETA screen and the Recomputed Estimated Tax Worksheet 2008 WK_ES have been revised in 2008 to feature expanded capabilities and a more user friendly layout Tax Year 2008 127 Estimated Taxes Drake Software User s Manual Applying 2008 Overpayment to 2009 Drake provides several ways to indicate that a taxpayer wants to apply part of a 2008 overpayment to the 2009 estimate Figure 5 41 You can use the ES screen to enter the total overpayment to apply to all estimates item 1 in Figure 5 41 or you can enter the total overpayment amount directly on screen 5 item 2 The program applies the overpayment according to the overpayment OP code selected item 3 see OP Codes following To override the OP code selection enter amounts to be applied into the Overpayment fields for each voucher item 4 ES Screen Estimated Taxes DUE in 2009 Federal ES Code z OP Code z payment Voucher 1 Voucher 2 Voucher 3 Voucher 4 Screen 5 Maad eee atte A oe AASTOAg SNT 5 OST 69 Other payments 5 77 Overpayment to be
341. mpt organization 990 packages Tax Year 2008 F 1 Trial Balance Import General Process Prepare to use Trial Balance Import Enable Excel macros Disable Auto Balance Force Schedule L Delete unnecessary detail worksheets Populate Trial Balance Template Import gt Trial Balance Import direct entry data cells with 0 applicable detail worksheets totals for depreciation Schedule L rentals 1120S amp 1065 only Compare M 1 line 1 Schedule M 1 line 1 Did data import correctly NO l Make corrections in TB worksheet Populate Data Entry Enter any trial balance data that cannot be imported via Trial Balance Import Screen SCH2 for Schedule L items Screen 4562 for individual assets depreciation YES Adjust amounts elsewhere in data entry Does trial balance match YES 1120 NO 1120S amp 1065 Were rental totals entered in trial balance YES y Go to data entry an enter individual rentals on 8825 or RENT screens as applicable Delete imported 8825 and RENT screens return YES YES Is an M 1 adjustment ecessary NO Make M 1 adjustment Process complete 2008 Drake Software Index Symbols adjustment fields 61 override fields 61 A ABC voice f
342. n By IRS regulations only the first 15 letters of an item description are transmitted during e filing The Description field in Drake supports 32 char acters By default the first 15 characters are displayed in black text on the screen any additional characters are displayed in red e Date Acquired Ifa single date does not apply type VARIOUS for multiple dates or INHERIT for an inheritance If VARIOUS the program treats the item as a long term gain Tax Year 2008 Drake Software User s Manual Sales of Assets e Date Sold Ifa single date does not apply type BANKRUPT or WORTHLESS as applicable NOTE If Date Sold is bankrupt the return must be paper filed Various and worthless entered as a date are acceptable for e filing e Sales Price Enter the sale amount If only the gain amount is available enter the gain amount and leave Cost or Basis blank e Cost or Basis Enter the cost or basis If only the loss amount is available enter the loss amount and leave Sales Price blank e S L From the dates entered Drake determines if an item is long term or short term If no specific dates select S or L to force short term or long term e Misc Press F1 to access codes Check with states for codes that are required for state purposes only Screen D2 Screen D2 has fields for short term gains losses from other sources long term gains Carryovers amp losses from other sources loss carryovers
343. n ment and copy cut and paste To add a keyword or conditional paragraph to the letter place your cursor where you want the new item to go then locate and double click a keyword or paragraph from the left pane To delete a keyword or conditional paragraph select it in the letter template and press DELETE Tax Year 2008 Drake Software User s Manual CTRL X deletes a selected item Setting Up Letterhead You can also set up letterhead for bills Changing Letter Margins Tax Year 2008 3 Click Save NOTE Software Setup The Client Communications Editor does not allow you to save any letter in which text within angle brackets in other words the names of keywords or conditional paragraphs has been changed Arrange to have your firm s information and logo generated on client bills and letters To set up your letterhead 1 2 3 5 In the Client Communications Editor go to Setup gt Letterhead and Margins Select options from the Letter Bill Indicators section Designate Coordinates In the right column number settings indicate the position of the firm information and logo Settings for the default graphic are e Left most column for logo 8 e Top most row for logo 3 e Left most column for firm info 25 e Top most row for firm Info 4 Enter the path to the graphic in the Path Filename for Bitmap Logo text box or use the Browse button The full path and filename are r
344. n 11 05 2009 IF you have the check listed in YOUR possession you may reprint the check by clicking Ok and then pressing F5 Check Number 00503300 Check Date 11 05 2009 Check Amount 925 00 Figure 8 7 Reprint Not Allowed If this happens click OK then press F5 on the keyboard You will be asked if you have the prior check in hand A prior check must be physically in your office in order for you to reprint a check If you have the check select Yes If the check has already cleared there will be a date in the Clear Date field You can not reprint this check Contact Drake Software Support for additional assistance Misfeeds and Paper Jams Ifa check is damaged and rendered unusable during printing or if you accidentally print a check on something other than the check stock such as a blank sheet of paper write VOID on the face of the original check and reprint the check using the proce dure in Reprinting Checks on page 212 Guarantee that the original check issued will not be cashed If the check is still usable you can reload and reprint it When you get to the Check Print Options dialog box make sure the check number displayed matches the number on the next check to be printed If it doesn t you can use the Setup Checks feature to reset the number Use a voided check return list available as VOID_CK PG in Tools NOTE gt Blank Forms to track all RAL Bonu checks voided in the office Retain a copy
345. n a return is calculated and DTE the screen has been completed go to Setup gt Options gt EF tab and select Print Bank Application When Keyed on Return Check Stock Obtain additional check stock from your bank All check stock must be verified and secured upon receipt Read and retain all information included with the checks Using Bank Screens in Data Entry Each of Drake s four banking partners has its own screen While the bank screens have certain fields in common each bank screen is unique Become familiar with the screen for the bank you are using Use the available help resources to ensure that all required information is entered for each taxpayer with bank products Described here are the fields that are found on all bank screens in Drake N You can view any bank screen at any time Just type the bank code DTE SB Santa Barbara CHAS Chase RB Republic Bank and RCB River City Bank into the selector field and press ENTER Select Product In the top left corner of each bank screen are the bank product selections Click a product box to select it If adding a state bank product select the state Verify ID The ID Verification section contains override fields for information entered on screen 1 Demographics This section is required and must be verified by the preparer NOTE If the taxpayer s address differs from screen 1 or if the screen 1 address is a P O Box enter a physical address on the bank screen
346. n entering tax Transmit e file Receive ack of Print copies of tax information return in Drake return accepted return return for client l l l l l New Client In Progress EF Pending EF Accepted Printed Status Status Status Status Status Figure 9 1 Some statuses are set automatically as the return is processed Tax Year 2008 217 About Client Statuses Drake Software User s Manual Predefined Statuses Table 9 1 displays the predefined statuses in the CSM Note that some are set automat ically while others must be set manually Table 9 1 Predefined Statuses in the CSM Set Automatically Set Manually New Client EF Accepted Complete Under Review In Progress Printed Under Extension Signed EF Pending On Hold Delivered Set statuses manually as appropriate Note that the program never automatically assigns a return a status of Complete Custom Statuses Define up to ten custom statuses to suit your office s needs Custom statuses must be set and changed manually To ensure consistency in CSM reports and office workflow create custom statuses before tax season begins To define a custom status PA 1 From the Drake Home window click CSM to open the CSM 2 Click Customize 3 Click Status Settings and select a status placeholder to rename 4 Click Edit Customize Drake 2008 Customize Display Status Settings The Status Setti
347. n of Check Print records Allows program to notify you before it transmits the Check Print records E mail 9325 Notice to Taxpayer automatic from Drake Processing Center Have Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically automatically e mailed to taxpayer when return is accepted E mail address must be present on screen 1 ERO SSN Indicator Choose a preparer number Paid Preparer or None Override the choice in data entry Check for email during EF transmit receive The program checks for e mail received every time you transmit returns or pick up acks Combine EF steps Select Transmit Post Acks Select this option to combine all steps of e filing Click OK or press ESC on selected returns to e file pick up any new acknowledgements and process the acknowledgements in one step Tax Year 2008 Software Setup Option Transmit return data to Drake for multi office Web reports Drake Software User s Manual Table 2 11 Setup Options EF Description Selecting this option sends CSM data to the MOM during the EF process State EF Choose to suppress e filing of all state returns or select states to suppress while other state returns remain eligible Admin To access the Administrative Options tab the user must have administrative rights Options Options under the Administrative Options tab are described in Table 2 12 Table 2 12 S
348. n piggyback go to the EF screen and select a state from the Select state for piggyback e file drop list Any other eligible state returns will be sent directly to the applicable state To suppress one state or city return while e filing others select the states or cities you want to e file from the Select other states cities to e file drop lists In the example in Figure 7 7 the Georgia return is piggybacked with the federal return and the Missis sippi and Louisiana returns are filed separately No other state returns are e filed for this taxpayer even if they are eligible STATE E FILE OVERRIDE Choose the states cities you want to e file Note If you do not make a selection below all eligible states will be e filed Select state for piggyback e file GA T Select other states cities to e file i l ra J J 4 Lal Lal v l i i M Do NOT send any states Figure 7 7 State E file Override options Additional Options The Additional Options section of the EF tab allows you to e Specify that a return should not be eligible for a bank product e Elect to submit an imperfect return See Imperfect Returns on page 188 190 Tax Year 2008 Drake Software User s Manual EF Database E filing Returns with Ineligible Forms A return can be e filed even if it contains certain forms that are ineligible for e file The IRS requires that Form 8453 U S Individual Income Tax Transmittal for an I
349. n screen 4 Employee Business Expenses Screen code 2106 Use the 2106 screen accessible from the General tab to enter data for Form 2106 Employee Business Expenses NOTE The 2106 screen expense flows to Job Expenses and Certain Mis cellaneous Deductions on Schedule A and not directly to Form 1040 Meals and Entertainment Department of Transportation DOT workers are allowed to claim 75 of the costs of meals as a business expense rather than the standard 50 To calculate the allowed amount properly enter the total expense in the Meals entertainment field of the 2106 screen and enter the amount attributable to DOT hours of service rules for meals in the DOT meals subject to 75 limit field See Figure 5 28 uu sements NO Lincluded in Box 1 OF SA WN 2 nfs gant Figure 5 28 On the 2106 screen use both the Meals entertainment and DOT meals subject to 75 limit fields as appropriate Multiple 2106 Forms If 2106 screens are entered for both the taxpayer and the spouse the taxpayer s 2106 screen must be entered first because the taxpayer is listed first on the return or the return will receive a reject code after it is transmitted 110 Tax Year 2008 Drake Software User s Manual Health Savings Account HSA Deduction Clergy Expenses If the taxpayer is a member of the clergy select a P from the F code drop list at the top of the 2106 screen Form 2106 Employee Business Expenses TS z F Z ST v City Sele
350. n the 4562 screen under Amortization Information To allow the extra 5 000 deduction in the first year of amortization select Elect additional first year 5 000 deduction State specific Information All States Complete the applicable State Asset Type ITC Code and State basis if different fields ensuring that all state rules and guidelines are followed Note that State basis if different is an override field The default basis is the Cost Basis from the top of the 4562 screen FL and PA State specific fields for FL and PA returns are located on the 4562 screen e Occurrence of Schedule field Choose the occurrence of the state form or sched ule to which the asset relates the default is 1 For PA entries this field applies only when the asset is sold e Schedule Form Data Flow list Select the state form or schedule to which the asset data should flow For PA entries this field applies only when the asset is sold e Removal Method field FL only Press F1 to view valid entries If left blank and a 2008 Date sold is entered the program uses the default 02 FL Sold The state specific fields described above are new in 2008 144 Tax Year 2008 Drake Software User s Manual Depreciation Placed in Service Overrides The 4562 screen has the following placed in service override fields Force convention MQ mid quarter or HY half year If MQ is selected the program calculates which quarter to use
351. named filter is added to the Available Filters and can be edited Viewing a Report from the Report Manager Tax Year 2008 To view a report from the Report Manager 1 2 3 Locate and select the report in the report tree Click View Report If a Basic Search Conditions box appears make any desired changes and click Continue If a previously saved version of the report is detected you are prompted to do one of the following e Click Yes to create the report again using the most current data e Click No to open the previously saved report If you clicked Yes a Basic Search Condition box might appear Make any desired changes and click Continue Wait for the program to search the records for data matching the report criteria 275 Report Viewer Drake Software User s Manual The report is displayed in the Report Viewer Report Viewer All reports in Drake are accessible through the Report Viewer To view a saved report 1 From the Home window select Reports gt Report Viewer 2 Select a report in the Report Viewer window Tip Click column headers to sort the list in ascending or descending order 3 Click View to display the report on the screen From this point you can print the report export it or change the font You can also scroll through multiple page reports by using the arrow keys at the top of the viewer To perform a task click the applicable icon Figure 12 10 lt wA O Q 1 Print Expor
352. narrower results or Match Any Condition for broader results as applicable 8 Click Save N To edit a search condition select the condition and click Edit Con UTE dition Make changes and click OK To delete a search condition select the condition and click Delete When prompted click Yes 274 Tax Year 2008 Drake Software User s Manual Filter Manager Available Filters List The Available Filters list in the Filter Manager Figure 12 6 on page 270 can be modified as needed You can create new filters edit existing ones or rename filters Creating a Filter Modifying a Filter Renaming a Filter To create a new filter in the Filter Manager aPhYON Click New Filter Enter a unique filter name Click OK Modify the search conditions as needed See Search Conditions on page 272 Click OK The new filter is added to the Available Filters and can be edited as needed To create a filter in the Filter Manager using an existing filter as a template PSP ee Select a filter to use as a template Click Copy Filter Enter a unique name for the new filter Click OK Modify the search conditions as needed See Search Conditions on page 272 Click OK The new filter is added to the Available Filters and can be edited To rename a filter in the Filter Manager 2 3 4 Select a filter to use as a template Click Rename Filter Enter a new name for the filter Click OK The re
353. nd DIV screens to report interest and dividend income from foreign accounts and trusts As applicable this data flows to Form 1116 Foreign Tax Credit Tax Year 2008 91 Passive and Investment Income 1099 DIV etc Drake Software User s Manual The following Form 1116 features and capabilities have been added to the INT and DIV screens in 2008 e A section for Form 1116 Foreign Tax Credit e Ability to link information from an INT or DIV screen to an 1116 screen e Ability to suppress Form 1116 if it is not required for the return Foreign Tax Both the INT and DIV screens now include a section for Form 1116 FTC informa Credit Data tion Figure 5 13 shows this section as it appears on the DIV screen Form 1116 FTC Information Gee TForeignitaxipald a cccsecce reset ete inet ee careers meet Suneote cre eee oe J 1116 NOT required E FOBION COUNTE e e A A E E Type of income z Date paid or accrued M Accrued FIC aAa _ Figure 5 13 Form 1116 section of DIV screen Information entered here does not need to be re entered on the 1116 screen In fact if amounts are entered on both screens the program combines the two amounts and prints the total on the return If data is entered in this section of the DIV or INT screen Form 1116 is generated automatically Bint Foreign dividends can now be reported in the program as either an amount or a percentage of the total of ordinary dividends Linking Data Because the
354. nd Export icons respectively to print a report or export it in CSV format suitable for Microsoft Excel and Microsoft Access To save a set of report criteria for future use 1 Click a category button to select a report category Figure 7 11 2 Enter the report criteria 3 Type a report name in the Save Report As field 4 Click Save In the future when you want to view reports that meet those criteria select the report name and click Load When you are ready to delete a saved report select the Options tab and click Man aged Saved Reports Reports are displayed in columns on the Report Administra tion page Select a report and click Delete Sort reports by clicking column headers Using the Database for Multiple EFINs Tax Year 2008 If your company has multiple EFINs you can provide different levels of access to the online EF database for different EFINs This is done using hierarchy levels The three levels of the reporting hierarchy are shown in Table 7 6 Table 7 6 Online EF Database Hierarchy Levels for companies with multiple EFINs Description Master Master EFINs can view all data for the Master EFIN and any Level and Level 2 EFINs configured below it This is the default level 195 Online EF Database Drake Software User s Manual Table 7 6 Online EF Database Hierarchy Levels for companies with multiple EFINs Level Description 1 Level 1 EFINs can view data for Level 1 EFINs pl
355. nd click OK You are asked if you want to import the return data Click Yes The return is opened to the General tab of the Data Entry Menu When you open the 8615 screen you will see that the parent information has been automatically entered into all of the applicable fields as shown in the Figure 5 37 example Drake 2008 Data Entry 245622235 CARTER Richard _Soreen Help Form 8615 Tax Computation for Certain Children with Investment Income Parent s First Name Last Name Parent s SSN Estim WILLIAM CARTER 4400 00 6665 EEE E I E ee en ER A A A A A E A zi B Parent s taxable income a CEREALS a cece ccc Sh eect eer at nem cae em ler ere ete 6646 D Parent s tax computed using either Schedule Dord aaa eeaeee eanne Aeneae an Aaaa eara aaa AA ArAnA ARARA Anana E Parant Form ABEZE 4O sasinan tanane r Parent s net capital gain Parent s qualified dividends Figure 5 37 Parent information has been imported into dependent s 8615 screen Estimated Taxes This section focuses on entering the following information into Drake Estimated taxes paid in 2008 Estimated payments for 2009 Estimated Tax Adjustments Applying 2008 overpayments to 2009 Underpayment of estimated tax Estimated Taxes Paid in 2008 Drake offers several ways to enter estimated tax amounts that were applied from the 2007 tax return and paid in 2008 The preferred method is to enter quarterly and total Tax Year 2008 125
356. ndicate whether the taxpayer could be eligible for relief What s New in Drake for 2008 Each year Drake strives to offer the most efficient and comprehensive tax software in the industry while staying current with the latest technology Many of our 2008 changes have been behind the scenes but others such as the Enhanced View Print feature will immediately be obvious Listed below are just a few of the enhance ments you might enjoy this year Enhanced View Print Mode A new Enhanced View Print mode allows viewing and printing from the same win dow making it easier to see how a printed return will look Among the new features e Anew tree view viewer pane and a row of tabs for viewing the specific cate gory of documents you need e Options to set up form properties color and printing order e Ability to archive returns Basic View Print mode featuring the cascade of forms that Drake customers are accustomed to is still available in the program for preparers who wish to use it For details on how to use Enhanced View Print mode see Chapter 6 Return Results 2 Tax Year 2008 Drake Software User s Manual What s New in Drake for 2008 Scheduler Letters The Drake Scheduler now allows you to create and manage appointments internal meetings and planning sessions that have multiple preparers in attendance Other new Scheduler features include e Ability to create overlapping appointments e ZIP
357. ndscape to produce it horizontally Pause option for calculation Choose the circumstances under which the Calculation Results win dow appears allowing a review of calculation results before proceed ing to View Print mode Number of days to store print files Select to store print files from 1 to 9 days or to have them removed after being selected for e filing If a return is needed after the print file is removed recalculate the return to recreate the print file Print sort options for Interest Dividends Choose how items entered on the INT and DIV screens are sorted when printed on Schedule B alphabetically numerically or not at all Form amp Options under the Form amp Schedule Options tab are described in Table 2 7 Schedule Options Table 2 7 Setup Options Form amp Schedule Option Description Print Schedule A only when required Produce Schedule A only when taxpayer qualifies to itemize Print Schedule B only when required Produce Schedule B only when taxpayer has enough interest income to require filing Schedule B Print form 4562 only when required Produce Form 4562 Depreciation and Amortization only when the tax return requires it Print form 6251 only when required Produce Form 6251 Alternative Minimum Tax only when the tax return requires it Next year depreciation schedule This option produces a depreciation schedule for next year in addition to the depreci
358. nes tie tats AERO a AN nn ethene As E a E E AA a anes Figure 5 2 Information goes to Exemptions section of Form 1040 To open a new screen 2 press PAGE DOWN Start a new screen 2 for each dependent to be listed on a return Figure 5 2 shows the default screen 2 in Drake Grid data entry can NOTE also be used for entering dependent information To switch to grid data entry mode press F3 to return to the screen view as shown in Figure 5 2 press F3 again To have grid data entry as the screen default go to Setup gt Options gt Data Entry tab and select Dependent screen for grid data entry Information is saved automatically when you exit a screen Note that the number of dependents entered is shown under the General tab of the Data Entry Menu General income Adjustments 1 Name and Address 3 Income 4 Adjustments 5 Payments Figure 5 3 Number of dependent screens that contain data Screen 2 contains fields for other dependent related data such as for education credits and the Earned Income Tax Credit EIC For education credits see Education Expenses on page 115 For Child Tax Credit see Child and Dependent Care Expenses Credit on page 118 For EIC and related due diligence requirements see Earned Income Credit EIC on page 130 Entering Dependent Last Names By default the taxpayer s last name is used for all dependents Complete the Last Name field on screen 2 only if the depen
359. nformatted Schedules on page 161 A statement number is indicated in the spouse s signature box of the printed return Depreciation Form 4562 Depreciation and Amortization is used to claim deductions for deprecia tion and amortization to elect to expense certain property under section 179 and to indicate automobile and other listed property use for business investment purposes 140 Tax Year 2008 Drake Software User s Manual Depreciation Where the Information Flows Data entered on the 4562 screen flows to the applicable sections of Form 4562 The information is also used to calculate data for other related forms and schedules Form 4562 Because the data entered into the 4562 screen flows to Form 4562 you should need to use screens 6 7 8 and 9 4562 Parts 1 through 5c only if entering a pre prepared return with no supporting documentation ia nie k Denreciation Deli Information entered in the 4562 Part 1 Depreciation Detail 4562 Parts 2 and 3 screen flows to the other 4562 Parts 4 5a and 6 parts of the 4562 4562 Parts 5b and Sc GO GO Zone Depreciation Elections 10 Additional Depreciation Elections OT ee l Afiti ma ahdas St se e R Figure 5 50 Use the Depreciation Detail 4562 screen for Form 4562 Data also flows as applicable from the 4562 screen to Form 4797 Sales of Business Assets and Form 3468 Investment Tax Credit Depreci Screen 4562 is used to create depreciat
360. ng the Client Communications Editor Table 2 14 Letter Templates Available in 2008 Letter Template Description Result Letter Provides return results for the filed return s gives info on bank products esti mates due dates mailing instructions etc as applicable Result Template Contains the same keywords and paragraph tags as the Result Letter but no pre written letter template is provided Tax Year 2008 37 Software Setup Drake Software User s Manual Table 2 14 Letter Templates Available in 2008 Letter Template Extension Letter Description Explains that an application for extension has been filed Amended Letter Similar to the result letter but for an amended return Estimate Payment Reminder Provides details for making an estimate payment individual 1040 package only Scheduled Appt Reminder Informs prior year clients of this year s appointment date and gives instructions for preparing for the appointment individual 1040 package only Referral Coupon Offers client a discount for referring another client individual 1040 package only Pre season Letter Reminder that tax season is coming up all applicable packages Post season Letter Customized Supplemental Letter Engagement Letter Letter thanking clients for their business available for all applicable packages Fully customizable template that can be used to create a customer survey
361. ng the Report Viewer see Report Viewer on page 276 222 Tax Year 2008 Drake Software User s Manual Exporting CSM Data Exporting CSM Data a To export CSM data into Notepad or CSV format suitable for Microsoft Excel and y Microsoft Access click Export in the CSM toolbar A worksheet of the data is Export opened automatically Admin only Features The following CSM features are available only to the Admin login and to preparers who have been given administrative rights Deleting a Record Deleting a record removes it from the CSM display Although the record still exists in the software it is no longer visible in the CSM default view To delete a record right click the record and select Delete Record To view a deleted record click Filters gt Display Deleted Records Restoring Data When restoring data the CSM scans a client file calculates the return searches the EF database and updates the data To restore data from the CSM right click a record and select Restore CSM Data This Client Click OK Removing Duplicates To remove a duplicate entry in the CSM right click a record and select Remove Duplicate Entries Entire Database Tax Year 2008 223 Admin only Features Drake Software User s Manual This page intentionally left blank 224 Tax Year 2008 1 0 Resources and Support Drake Software offers a wide range of support resources In addition to our unparal leled telephone support Drake h
362. nge SSNs on File 2 Inthe Current SSN EIN on file box enter the ID number without spaces dashes or additional characters that is currently in the system In the New SSN EIN for file box enter the new ID number Click OK Click Exit Repair the index files See Repair Index Files on page 239 PS NOTE PPR clients If you change a SSN or EIN you will be charged for another return Tax Year 2008 251 File Maintenance Drake Software User s Manual Exporting Data from Drake The exporting tool allows you to transfer client data in Drake and the EF database files to either a text file or a CSV spreadsheet format file You can then import that infor mation into other programs such as Microsoft Word Excel or Access To export data files 1 From the Home window go to Tools gt File Maintenance gt Export Client EF Data The Export Client EF Data box provides several choices Figure 11 8 Drake 2008 Export Client EF Data This will export all EF or Client data to a Text CSV file The text or csv file can be opened using word processor database and or spreadsheet software Click OK to export data or Exit to leave this screen without exporting files C Export Client Data Files Export EF Data Files Export to CS Comma Separated Values I Include Test Returns Path File name for record layout F Drake08 export EFLAYOUT TXT Path File name for export data F DrakeOS export EF_DBF TXT Hel
363. ngs tab allows the user to modify the Status Descriptions that are available in Data Entry and the Client Status Manager To change a Status Description select the Status from the list and click Edit Column Layout Status Settings Status Descriptions 1 Under Extension 2 On Hold s 3 Under Review Edit 4 Signed 5 Delivered Reset 6 lt Lustom Status 6 7 8 9 1 Select status to customize lt Custom Status 7 gt lt Custom Status 8 gt lt Custom Status 9 gt 0 lt Custom Status 10 gt Drake 2008 Status Description Enter the Status description in the space below Click OK to continue Awaiting Payment OK Cancel Enter new status description Figure 9 2 Creating custom statuses 218 Tax Year 2008 Drake Software User s Manual Setting Statuses 5 Enter a status description in the Status Description text box 6 Click OK To restore all original statuses click Reset Setting Statuses Set return statuses at any time during the return preparation cycle A status can be set from within the CSM or from data entry For consistent and valid CSM status reports set statuses for each stage of a return You can ensure that the CSM Status column is always correct Tip From the Drake Home window go to Setup gt Options Under the Calculation amp View Print tab select Auto calculate tax return when exiting data entry Setting a Status from the CSM
364. ns In addition certain interest and dividend figures can be entered as amounts or percentages See Pas sive and Investment Income 1099 DIV etc on page 90 W 2 Verification To ensure accuracy of data entry your firm can require that data entry operators enter the wages and federal taxes withheld amounts two times each on the W2 screen See W 2 on page 87 8615 Export Parent information can be imported into a child s Form 8615 Kiddie Tax See Exporting Data for Kiddie Tax on page 124 W 2 Import For employees of selected companies W 2 data can be imported directly into the taxpayer s W2 screen in Drake See W 2 on page 87 Tracking Prior Year Bank Data The TRAC screen now includes a section for tracking prior year bank product information See Tracking Prior Year Information on page 216 Heartland Disaster Tax Relief Act of 2008 The Heartland Disaster Tax Relief Act of 2008 applies to certain counties in the Mid west that were affected by the severe storms tornadoes and floods that occurred in 2008 The software has been updated according to the alterations in the tax law for these counties Listed below are some of the changes to the software Screen 8914 corresponding to IRS Form 8914 Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals has been added to the 1040 package Screen 8930 corresponding to IRS Form 8930 Qualified Disa
365. ns in Drake Screen Code Type of K 1 K1 also K1P K 1 for partnership income K1F K 1 for fiduciary income K1S K 1 for S corporation income Enter information directly into any of these three forms in Drake or export K 1 infor mation from a pass through entity into an individual return Activity New in 2008 the E K1 and 4835 screens feature an Activity Type drop list for des Types _ ignating an activity as passive or non passive A selection from this list controls what income data if any goes to Form 8582 Passive Activity Loss Limitations Available activity types are described in Table 5 3 Table 5 3 Activity Type Selections for E K1 and 4835 screens Activity Type A Active Rental Real Estate Description Activity is a rental real estate activity with active participa tion Calculation flows to the Rental Real Estate Activities With Active Participation section in Part of Form 8582 and to WKS 1 B Other Passive Activity Activity is a passive activity but is not a rental real estate activity Calculation flows to the All Other Passive Activities section in Part of Form 8582 and to WKS 3 C Real Estate Professional Activity is that of a real estate professional and does not flow to Form 8582 D Not a Passive Activity not an option for 4835 Activity is not a passive activity Because it is non passive the calculations from this screen do not flow to Form 8582
366. nt The Report Viewer displays the report on the screen Click Print to open the Print Drake Report dialog box Change any print options necessary then click Print again Click Exit Click Exit again to close the Firm Setup window Electronic Return Originators ERO must complete ERO Setup in order to e file returns use the Drake e mail program download software updates access the online e filing database and access RIA online tax research To set up your firm as an ERO in Drake 2U08 Tax Year 2008 From the Drake Home window go to Setup gt ERO Enter General Information for the ERO Yellow text boxes indicate required information for e filing A customer account number is now required in Setup gt ERO This number is provided on your packing slip 15 Software Setup Drake Software User s Manual 3 Choose a connection setting Default setting is Always use my existing internet connection this setting works for most computers Contact Drake Support if you have trouble connecting to Drake 4 Ifapplicable select Advanced Options Transfer my files using Default is HTTPS Most computers transmit using this protocol My machine uses a firewall FTP users only Most machines using trans fer protocols of Regular FTP or WinSock FTP require that the My machine uses a firewall use Passive FTP to define port range box be selected This option uses a defined port range to transfer files 5 If yo
367. ntly Asked Questions from the Data Entry Menu or by typing FAQ in the selector field and pressing ENTER FAQ screen content varies by state and package Searchable Help AA All windows in Drake except the data entry screens have a clickable Help icon or Help button for accessing the Drake Help System a searchable encyclopedia of Drake Software arranged in books and in an index The Help System answers many of the most commonly asked questions about the software Help When you click a Help button the Help System is opened for the window or screen you are in For example if you are in pricing setup Setup gt Pricing and click Help you are shown the Help information for pricing setup To print a topic click the Print icon in the toolbar N If you encounter an error accessing the Help System run DTE F Drake08 Help FixHelp exe on each workstation Replace F with your server drive letter Access Help System items by using the Contents Index and Search tabs Index Search Contents Clodex Search Contents Index Type in the keyword to find Type in the keyword to find g Contacts amp Mailing Addres organized organizers Contacting Drake Sup Fe 7 A p IRS amp Social Security Deae S __kist Tonics Banking Other Expenses Descriptior Select Topic to display File Other State EF i Overpayment Blank Forms ne Apply Opening Return IOygyide Field Ingjpates l Organizers Pre
368. nto the DISC screen in Drake accessible from the General tab If the required fields on the DISC screen are completed the Consent to Disclosure of Tax Return Information will be generated with the return 202 Tax Year 2008 Drake Software User s Manual About Bank Products Consent to Disclosure Service Bureaus Franchisors Screen code CONS The Consent to Disclosure of Tax Return Information to service bureaus and fran chisors is required for a returns not just bank product returns prepared by firms that are part of a service bureau or franchise The form is similar to the disclosure form for banks described previously and must be signed before the return is e filed e Paper Forms Access the form in PDF or Word from the PDF 7216 folder on the Drake CD Enter the firm and service bureau franchisor names in Word or PDF or print the documents and enter the names manually The taxpayer and spouse if applicable must sign and date the form prior to e filing Next go to the CONS screen accessible from the Other tab and select the first box in the Paper Consent section at the bottom of the screen See Figure 8 2 Karne of omit taxpayer river he shere by hirapan Date en Paper Consent of Disclosure to service bureau or franchisor l Consent to Disclosure of Tax Return Information to service bureau or franchisor has been signed by the taxpayer and joint taxpayer if applicable I Consentto Disclosure of Tax
369. nto the appropriate fields on the trial balance worksheet Note that for 1120S and 1065 trial balances rental expense detail worksheets are required for 8825 and RENT depreciation Enter 8825 and RENT depreciation amounts in the detail work NOTE sheets for importing purposes but be aware that the 8825 and RENT screens in the program will need to be edited if 4562 detail screens see Figure 14 12 are used When the trial balance is imported the COGS depreciation expense amount flows directly to the appropriate line of Schedule A on the return and the rental depreciation expense amounts flow directly to the appropriate lines of the 8825 and RENT screens Tax Year 2008 307 Trial Balance Import Drake Software User s Manual as applicable Because the remaining depreciation can comprise any number of assets the amount entered on the trial balance does not flow to the return To ensure that each component of the total remaining depreciation is calculated into the return each asset must be entered on the applicable depreciation screens in data entry Figure 14 12 Depreciable Assets 4562 GO 10 Depreciation Detail Items 4562 Part1 4562 Parts 2 and 3 4562 Parts 4 5b and 6 4562 Parts 5a and 5c GO Zone Depreciation Elections Additional Depreciation Elections Figure 14 12 Enter depreciable asset data on a 4562 detail screen or enter the total depreciation on the override screens Figure is from 1120S data ent
370. ntry opens the DDM to the client s tax year folder e When tax returns are printed using PDF995 they are automatically saved to the correct DDM folder e Files saved in a client s folder can be attached through the Drake e mail program or sent as a PDF attachment to a return 1120 1120S 1065 and 990 packages only see Binary Attachments on page 309 Doc Mar To implement the Drake document file structure 1 From the Home window go to Setup gt Printing gt Document Manager to set the Document Manager Location If the default location is incorrect click Search then click Yes to choose the appropriate location 2 Select Allow Drake to set up Document Manager client folders recom mended 3 Click Save then click OK N If the Drake file structure is introduced into an existing system the DTE Drake structure is added to the existing system The Drake structure does not overwrite it DDM DDM administrators logged in as Admin can establish change and remove pass Security at words required to open the DDM The capability to password protect DDM startup is Startup new in 2008 To establish a password for opening the DDM 1 From the Home window go to Setup gt Printing gt Document Manager 2 Enter a password in the top text box Passwords are case sensitive 3 Re enter the password in the bottom text box to confirm it Figure 13 2 Drake 2008 Drake Document Manager Integration Options B x Drake D
371. o the overpayment 0 Applies the overpayment to the 2009 estimate but does not print any vouchers 4 Applies the overpayment to all four vouchers equally Underpayment of Estimated Tax By default the software calculates the estimated tax penalty but it does not generate Form 2210 unless there is an underpayment and the form is required This default set ting can be disabled for all returns in Setup Options or it can be changed for a single return in the 2210 Options section of screen 1 2210 Options FERN ECU EL arereraraa crean 2007 Fed tax 2007 State tax Figure 5 42 2210 Options section of screen 1 2210 Codes To print or suppress Form 2210 or Form 2210F as applicable for a return select one of the following from the 2210 Code drop list Table 5 13 2210 Codes in Drake 2210 Code Program Action blank Uses the default setting in Setup gt Options Form amp Schedule Options tab X Calculates the estimated penalty produces Form 2210 if necessary Because this is the default setting you need to select X only if the default setting has been glo bally disabled in Setup gt Options P Calculates the estimated penalty produces Form 2210 even if not required F Calculates the estimated penalty produces Form 2210F if necessary Because this is the default setting you need to select F only if the default setting has been globally disabled in Setup gt Options G Calculates
372. ocument Manager Integration Options 1 Set the location for the Drake Document Manager 2 Determine if you want Drake to set up the Document Manager client folders for you Document Manager Location C DrakeDDM Search IV Allow Drake to set up Document Manager client folders recommended Add Password for DDM Startup ADMIN ONLY g Confirm Password omeo Figure 13 2 Adding a password to DDM 4 Click Save With a password in place users must enter the password in order to open the DDM Tax Year 2008 283 Document Manager Configuring the DDM Drake Software User s Manual To change a password repeat the steps described previously In the Add and Confirm text boxes see Figure 13 2 enter the new password and click Save To remove a password go to Setup gt Printing gt Document Manager as described previously Delete the passwords from the Add and Confirm text boxes see Figure 13 2 then click Save To delete select a password and press DELETE NOTE For information on password protecting individual files in the DDM see File Security on page 291 To set configurations for the DDM 1 Open the DDM See Figure 13 1 2 Choose Setup gt Options Options are listed in Table 13 1 Table 13 1 DDM Setup Options Option Description Document Manager Data To store data in a location other than the DDM enter the Path data path here or click Browse to map to a new location Use
373. ode Lookup on page 193 e IRS Debt and Bank Codes The IRS debt indicator and bank codes are located below the reject codes An IRS Debt Code indicates some sort of debt to the federal government IRS debt codes are listed in Table 7 4 Table 7 4 IRS Debt Codes Code Description l Taxpayer or spouse owes money to the IRS The taxpayer can call 800 829 1040 for more information F FMS Debt Taxpayer or spouse owes money to a branch of the federal govern ment owes money on student loans or child support or has a state obligation The taxpayer can call 800 304 3107 for more information B Taxpayer or spouse has both an IRS debt and an FMS debt N None A Bank Code indicates the bank through which the taxpayer requested a product and displays the status of the request The Bonu Loan Status indicates the status of the loan request Codes vary by bank For more information refer to the guide provided by your bank The Check Information grid displays information pertaining to any checks approved or printed for the taxpayer The F2 Bank Direct Deposit tab contains detailed data about any bank products e Bank information is located on the left side of the window e Direct deposit information involving bank loans is located on the right side of the window This information includes amounts paid to the bank amounts paid to the preparer and the dates of the payments Tax Year 2008 Dr
374. of 2008 SS benefits Omar MEG ETE onina Figure 5 27 Screen 3 fields for Social Security benefit amounts These figures are combined with any Social Security benefit amounts from the SSA screen calculated and displayed on the Social security benefits line of Form 1040 RRB 1099R Screen code RRB The RRB screen reflects the federal RRB 1099R form Benefits from Form RRB 1099 should be entered on screen 3 in the Net railroad Social Security equivalent Tier 1 benefits received field See Figure 5 27 Other Income To report taxable income that is not reported elsewhere Schedule C Schedule F 1099 MISC etc in the return you can use the Other income fields on screen 3 Several screens are available in Drake for entering other types of income as described in the following sections Taxable Distributions 1099 Q Ifthe amount on Form 1099 Q Payments From Qualified Education Programs exceeds the amount of education expenses compute the taxable amount of the distri butions and enter it on screen 5329 Part II line 5 and on screen 3 line 21 108 Tax Year 2008 Drake Software User s Manual Other Income Medical amp Enter distributions from Medical Savings Accounts MSAs on the 8853 screen Form Health 8853 Archer MSAs and Long Term Care Insurance Contracts Enter distributions Savings from Health Savings Accounts HSAs on the 8889 screen Form 8889 Health Sav Accounts ings Accounts HSAs
375. of the four categories of letters e Letter for e filed return with balance due e Letter for paper filed return with balance due e Letter for e filed return with refund e Letter for paper filed return with refund To replace a current year template with a prior year letter 1 From the Client Communications Editor click Open and select the letter to replace Go to Setup gt Update Prior Year Letter and click OK Select the drive of the Drake program that contains the prior year letter Select a prior year letter Click Continue When prompted click Yes Pe PS Tax Year 2008 Drake Software User s Manual Software Setup Be sure to read through the replacement letter to ensure that the information is current NEW FOR Letters from your 2007 program can also be updated from Last Year 7008 Data gt Update Settings See Updating Settings on page 70 Color Setup Use the Color Setup feature to tailor Drake screens to meet your firm s preferences If you used Drake last year consider customizing colors to make your Tip 2008 program look different from your 2007 program If you need to open the 2007 program during tax season customized colors will help you avoid entering data into the old program by accident Program To customize program colors Colors 1 From the Drake Home window go to Setup gt Colors 2 Under Program Colors choose Use Windows System Colors or Use Custom Created Colors e Windows Syst
376. oftware must be configured to send Data to MOM CSM data to Drake during the e filing process Each Level 1 and Level 2 EFIN office in a multi office environment must complete the following steps 1 From the Home window go to Setup gt Options gt EF tab 2 Under Session Options select Transmit return data to Drake for multi office web reports 3 Click OK Any changes made in CSM will be transmitted to MOM during e file transmissions Running a To run a MOM report MOM Report 1 Inthe online EF database toolbar click MOM to view report criteria filters Figure 7 12 Return Status All v Return Type All i x Preparer f E B EFIN ALe v Figure 7 12 Multi Office Manager MOM filters 2 Select an option from each filter and click Run Report The report displays all of the data columns available in the CSM Scroll down or across the report screen to view all the available data If a report contains more than a specified number of rows the default is 25 it is pag inated Page numbers appear in the upper and bottom left corners The number of rows displayed per page can be changed via the Rows Per Page drop list above the report amp To print the report click the printer icon Only the data on the screen is printed ZF e To sort data based on the column selected click a column header e To view e filing details for a particular return click the record s ID number e To export the report into an Excel
377. ogram that uses that filter If you need to modify a filter for a specific report we recommend making a custom filter or copying a filter and giving it a unique name then editing it to your specifications To customize a filter to assign to a report 1 After making changes in the Step 1 window Figure 12 2 on page 268 click Next to open the Report Editor Step 2 window Figure 12 3 on page 269 2 Selecta filter from the Filter Selection drop list Note that a Filter Description is automatically displayed when a filter is selected Figure 12 5 Filter Selection Select a Report Filter Edit Filters Clients with Schedule C Filter Description Return Type is 1040 Schedule C is present Figure 12 5 Filter that includes all 1040 returns with a Schedule C 3 Click Edit Filters The Filter Manager window is opened Figure 12 6 The fil ter you selected is highlighted Drake 2008 Filter Manager Filter Manager The Filter Manager allows you to customize the behavior of Report Filters in the Tax Software Each Filter is defined by several Basic Search Conditions and up to 10 additional Conditions The software uses this information to narrow down or filter the resulting list of clients Select a Filter from list on the left Edit the selected Filter s properties on the right Click Save to Save the changes Available Filters All Individual 1040 Clients All Partnership 1065 Clients All S Corpo
378. ollar Checks Anticipated Actual a e tessa seartea rsesiene RAESTE EEE Federal Refund Deposit NJA Fees Actual Bank e wn nero resent ree Tene Account Setup ae settee eee arr cea BOIVICG HUNG AM E a Figure 8 8 Prior year bank product fields on TRAC screen Information must be entered manually the first year these fields are used Post Season Procedures Required post season procedures vary from bank to bank Refer to your bank s operat ing procedure to determine the proper method of storing or returning taxpayer bank applications and the proper handling of excess check stock If your office is closing for any extended period between April and October notify Drake so the bank can print any late checks 216 Tax Year 2008 Client Status Manager The Client Status Manager CSM is a tool for tracking workflow within an office It displays various types of data including client ID number and client name return type preparer name client status and the starting and completion dates for each return The CSM can be used for searching viewing organizing and printing data About Client Statuses The CSM categorizes clients by status A client status is the stage of a return in the return preparation cycle The CSM s predefined client statuses can be set automati cally as the return progresses through the cycle see Figure 9 1 or manually as appro priate You can also define new statuses Enter new client s Begi
379. ollars For information on adding unformatted statements in Drake see Unformatted Schedules on page 161 Form 1116 AMT Worksheet To force the Form 1116 AMT worksheet to be printed with all returns that include forms 1116 and 6251 go to Setup gt Options gt Form amp Schedule Options Select Print Form 1116 Alt Min Tax Worksheet Child Tax Credit See IRS rules for Child Tax Credit CTC eligibility Some children could qualify for Form 8901 Information on Qualifying Children Who Are Not Dependents Form 8901 Ifthe child qualifies for Form 8901 as in the case of a taxpayer who cannot claim the child as an exemption but by divorce decree can claim the child tax credit that year 1 Enter the child s information as directed on screen 2 2 Inthe Additional Information section of screen 2 select the Not a dependent and the Qualifies for Form 8901 boxes The program will now generate Form 8901 with the return Tax Year 2008 121 Retirement Savings Contributions Credit Drake Software User s Manual Retirement Savings Contributions Credit Screen code 8880 Use the 8880 screen accessible from the Credits tab for Form 8880 Credit for Qual ified Retirement Savings Contributions Other Credits Table 5 9 lists all credit forms not mentioned previously for which Drake provides screens If no screen is available most forms can be found at Tools gt Blank Forms Table 5 9 Other Credits Calculated in Drake Scr
380. om the Home window click Last Year Data and select either Organizers or Proformas 2 Do one of the following tasks e Enter the client s SSN or EIN and press Add Client Repeat for additional cli ents then click Next and wait for the program to scan the client files e Click Next then select filtering and sorting options as desired Click Next again Modify filtering criteria as desired from the Basic Search Conditions dialog box then click Continue and wait for the program to scan the client files 3 When the Options dialog box is opened Figure 4 10 select the desired options Drake 2008 Individual 1040 Organizer Options Proforma Organizer Options Please select the desired options from the list below You will be allowed to select specific forms for printing after the Proformas Organizers have been prepared Click Process 1040 to continue Additonal Proforma Organizer Options Print Organizer even if printed before Just those returns that were calculated in 2007 O Print Sch always O Print INT always O Print Div always O Include Sch D Blank Form O Include Form 4684 Blank Form Select All Unselect All Help Test Print Process 1040 Cancel Figure 4 10 Options dialog box includes Process button circled 73 Scheduler Drake Software User s Manual 4 Click the Process button Figure 4 10 to open the Batch Printing dialog box Figure 4 11 Drake Software 2008 Batch Printing Organizer
381. omebuyer Credit 2 133 Form 5695 Residential Energy Credits 120 Form 5884 Work Opportunity Credit 122 Form 5884 A Credits for Affected Midwestern Disaster Area Employers 4 122 Form 6251 Alternative Minimum Tax Individual 26 118 Form 6252 Installment Sale Income 98 146 Form 6478 Credit for Alcohol Used as Fuel 122 Tax Year 2008 Index Form 6765 Credit for Increasing Research Activities 122 Form 8275 Disclosure Statement 157 Form 8275 R Regulation Disclosure Statement 157 Form 8283 Noncash Charitable Contributions 117 118 Form 8332 Release of Claim to Exemption for Child of Divorced or Separated Parents 157 Form 8379 Injured Spouse Allocation 157 Form 8396 Mortgage Interest Credit 122 Form 8453 U S Individual Income Tax Transmittal for an IRS e file Return 191 Form 8582 CR Passive Activity Credit Limitations 122 Form 8586 Low Income Housing Credit 122 Form 8594 Asset Acquisition Statement Under Section 1060 157 Form 8609 Low Income Housing Credit Allocation and Certification 122 Form 8611 Recapture of Low Income Housing Credit 124 Form 8615 Kiddie Tax 124 Form 8633 IRS e file Application 180 Form 8801 Credit for Prior Year Minimum Tax Individ uals Estates and Trusts 122 133 Form 8812 Additional Child Tax Credit 133 Form 8814 Parents Election to Report Child s Income 124 Form 8815 Exclusion of Interest from Series EE and I U S Savings Bonds
382. on the 4562 screen Parking fees Force expenses Property Tax Prior Year s Mileage Business Press F1 or Right Click for Help Figure 5 53 AUTO screen re designed in 2008 New features shown above are as follows 1 For menu and a multi form code MFC box to indicate which form and which instance of a form the screen should be associated with 2 Separate fields for business mileage to allow for changes in 2008 mileage rates 3 Expense fields for interest and property tax 4 Prior Year s Mileage fields for keeping a running total of business mileage This allows the system to compute total business use percentage when the auto is sold Note also that there is no longer an option to have the system figure the mileage rate This is now done automatically Applying Auto Expenses to a Form AUTO screens can be applied to Schedule C Schedule E Schedule F and Form 4835 Use a separate AUTO screen for each vehicle The WK_AUTO worksheet is gener ated for each AUTO screen created Tax Year 2008 147 Auto Expenses Drake Software User s Manual To apply an AUTO screen to a specific form select the form type from the For menu Use the multi form code MFC box as necessary see Associating One Screen with Another on page 62 for more on using the For and Multi form code boxes in Drake Business Mileage Rates The business mileage rate for miles driven between January 1 and June 30 2008 is
383. on to open a worksheet in a new tab Figure 14 7 shows an example of the Other Income worksheet Statement Required Other Income Form 1120 page 1 line 10 Amount of credit for tax on fuels Form 4136 INC line 1 2 Interest income on receivables INC line 2 Ordinary income from partnerships Partnership Income Detail 4 Recoveries of bad debts deducted in earlier years INC line 4 5 Section 481 adjustments INC line 5 5 State tax refund cash basis INC line 6 7 Taxable income from insurance proceeds ine Other Total other income 1 gt MG Corp TB Other Income lt il gt Figure 14 7 Trial balance worksheet for Other Income To return to the previous worksheet click the TB tab labeled 1 in Figure 14 7 or click the Return button above the worksheet tabs labeled 2 in Figure 14 7 Note Tax Year 2008 303 Trial Balance Import Drake Software User s Manual that a detail tab the Other Income tab in Figure 14 7 might include one or more detail worksheets labeled 3 in Figure 14 7 N Do not create detail worksheets in data entry if the trial balance UTE worksheet does not provide an equivalent detail worksheet Other wise the trial balance will not import correctly Totals Totals are displayed at the bottom of each worksheet If credit and debit columns are out of balance the worksheet highlights the out of balance amount Figure 14 8 fw if r r giar ho ne ae IP
384. on you provided to us during the preparation of your 2008 tax return to determine whether to present you with the opportunity to apply for these products and services Name of taxpayer must be entered by the taxpayer Date HUGH F SAMPLE 02 18 2009 Name of joint taxpayer must be entered by the taxpayer Date GWEN D SAMPLE 02 18 2009 Figure 8 1 Names and the date as entered by clients on the USE screen If the required fields on the USE screen are completed the Consent to Use of Tax Return Information will be generated with the return Consentto The Consent to Disclosure of Tax Return Information for banks contains bank specific Disclosure information and explains the IRS Regulation 7216 requirement to the taxpayer It must Banks be signed before the return is e filed e Paper Forms Paper forms can be accessed by several means The software generates the disclosure form as part of the return The wording of the form reflects the bank your firm has selected in the program This form can be signed with other signature documents prior to e filing Go to the PDF 7216 folder on the Drake CD and open either the PDF or Word version of the form Be sure to print the correct form for your firm s selected bank Enter your firm s name at the top of the form then print Screen code e Electronic Signatures To obtain electronic consent you must have the taxpayer DISC and spouse if MFJ enter their names and the date o
385. organizational file structure for storing electronic docu ments such as PDF copies of tax returns scanned Form 8879s and scanned copies of driver s licenses NOTE Before storing items in the DDM determine the type of file structure you want to use the structure can be difficult to rearrange once it is in place and contains files Think of the DDM file structure as a virtual filing cabinet with drawers in the cabinet and folders in the drawers with Level 1 as the cabinet Level 2 as the drawer and Level 3 as the folder Folders can also have subfolders The documents themselves reside in the folders and subfolders 281 Document Manager Drake Software User s Manual Setting up the DDM Review the following information before beginning work in the DDM Technical The DDM takes up very little disk space but you might need more space to store your Require office files The storage drive for an average sized office needs approximately 1GB of ments space for each year Most new computers have at least a 20GB hard drive if you own anew computer storage should not be an issue Be aware that while long file names can be used this naming convention might not function properly on older systems that limit file names to eight or fewer characters PDF995 Even if you already have PDF software on your computer install the PDF995 folder Program from your Drake CD to take full advantage of all the DDM integration features For details
386. orm Code See Associating One Screen with Another on page 62 for more on using the For and Multi Form Code features Passive and Investment Income 1099 DIV etc This section covers interest and dividend income from both domestic and foreign sources To enter rental income data in Drake see Supplemental Income on page 103 To enter foreign earned income see Foreign Earned Income on page 109 Interest and Dividends The INT and DIV screens in Drake reflect the 1099 INT and 1099 DIV forms respectively Data from the INT and DIV screens is carried primarily to Schedule B Interest and Dividends and when applicable to Form 1116 Foreign Tax Credit NEW FOR The INT and DIV screens now include sections for Form 1116 Foreign 2008 Tax Credit Also in 2008 the INT screen has been redesigned to better reflect the layout of Form 1099 INT Income Less than 1 500 In most cases no Schedule B is required if the taxpayer s interest and dividend income does not exceed 1 500 Amounts can then be entered on the appropriate lines of the Income screen screen 3 See Figure 5 9 Other income reported on line 7 NOT W 2 WwWagesSi Interest income NO Schedule B required Tax exempt interest NO Schedule B required Dividend income NO Schedule Bregua d ren areare naear aaea a aaea Taxable refunds PS CR O WOT O S O R adramaad Ap aama O Gea Figure 5 9 Interest and dividend fields on sc
387. ould be entered into the work sheet for balance purposes but are not carried to data entry these must be entered sep arately and the calculated results compared to the trial balance worksheet Details for Preparers Most trial balance items go directly to the location indicated in the program and on the return For example the amounts shown in Figure 14 10 go to Schedule L line 1 col umn d in the program and are shown on page 5 line 1 column d of the 1065 return Tax Year 2008 305 Trial Balance Import Drake Software User s Manual teit___ _era_f_imeons_ _nareads__ 420 050 ee L line 1 cold 1065 page 5 line 1 cold L line 2a col c 1065 page 5 line 2a col c s Set Aten eR eee I EE ale ee V a Figure 14 10 Indication of where an amount will go in Drake and on the return Not all figures can be imported directly however and some amounts are optional Drake has provided an Other Information column in the trial balance worksheet to indicate special conditions and additional information regarding certain rows Table 14 2 describes the most common notes in this column Table 14 2 Other Information Column Notes Note Description not included in totals The amount is required for importing purposes only but is not included in the totals shown on the trial balance does not carry Information cannot be imported and must be entered on the appropriate screen in Drake Screen is specified in column
388. oyment Tax Schedule SE Schedule SE is required if net earnings from self employment exceed 400 For church employees 108 28 If these conditions are not met the program does not produce Schedule SE with the return To force Schedule SE to be printed select the appropriate box on the SE screen Data from Schedules C and F along with any self employment income from partner ships flows to Schedule SE of the return All other self employment income should be entered directly on the SE screen Short or Depending upon the employment terms the taxpayer must complete a short Schedule Long SE S page 1 or long Schedule SE page 2 Schedule SE Drake determines the form required and processes it accordingly To force the long form select a Force Schedule SE box in the bottom section of the SE screen Force Schedule SE page 2 instead Of Page ere e E E E a Feo OU Fae ineno aaa ee eee eee ee E E Figure 5 30 Override SE printing for taxpayer left box or spouse right box 112 Tax Year 2008 Drake Software User s Manual Self Employment Adjustments Church Church income should be coded on the W 2 W2 screen as C or P Any income Income entered in the Wages of church employee field of the SE screen will be added to the W 2 amount For more information on entering data for clergy see Clergy Expenses on page 111 and Ministerial Income Allocation on page 116 SE Health Insurance Deduction Enter insurance deduc
389. p Figure 11 8 Export Client EF Data dialog box 2 Select to either Export Client Data Files or Export EF Data Files e Ifyou chose Export Client Data Files the path for client export is displayed Change the default path as needed e Ifyou chose Export EF Data Files the file and path names are displayed Change the default path as needed 3 optional Click Export to CSV Comma Separated Values to export the data to CSV spreadsheet format 4 optional Click Include Test Returns to include Drake test returns in the export 5 Click OK 6 Click Exit when export is complete Password Protecting Client Files The Password Protect tool protects files from unauthorized access A protected file cannot be opened in data entry until unlocked with a password M p 0 RT NT Drake cannot recover a password assigned to a file If passwords are forgotten all the data in the client file is permanently lost Write down the password and keep it in a secure location To password protect a file 252 Tax Year 2008 Drake Software User s Manual File Maintenance 1 From the Home window select Tools gt File Maintenance gt Password Protect Files Enter the SSN or EIN of the client file to password protect Enter an eight character password in the Enter the Password field Passwords are case sensitive and can consist of any combination of letters and numbers oN Re enter the password in the next field to confirm it
390. pare to Offer Bank Products L Complete the Drake bank application at the Drake Support site L Choose a bank Review bank information then complete the application or contract Tax Year 2008 A 1 Appendix A Preseason Checklist Drake Software User s Manual E E E Order check stock Test print check After installing the software set check ranges and test print a check Set bank fees and complete Firm Setup in the software Review Equipment Staff Needs E m Ovo O Ooo vo E Educate yourself to tax law changes Do online research visit and study the IRS Web site and state tax departments sites Learn new phaseout limits Be prepared to explain to your clients why they no longer receive benefits they ve received in the past Review or learn EIC rules Prepare for EIC due diligence interviews Review staffing needs Set staff software security levels Train your staff Make sure everyone understands his or her duties and is familiar with the soft ware Train your staff through Drake ETC Upgrade computers as needed Ensure that your computers comply with system requirements Test printers and modems to be used with Drake Software Check phone cords and connections to be used during tax season Check scanner Review Drake recommended scanners If necessary purchase a scanner to use with the Drake Document Manager Purchase office supplies such as folders envelopes paper and tone
391. parer Setup Proformas Mrr i i Figure 10 9 Contents Index and Search tabs Contents Arranged in a Table of Contents style the Contents tab first image in Figure 10 9 lists all available Help topics Topics are organized into books which contain the Help files for a specific topic To open a book and use the list of topics included in the 234 Tax Year 2008 Drake Software User s Manual Software Support Index Search book double click the book The list expands to show the topics contained in that book To see the Help screen for a topic click the topic As shown in the second image in Figure 10 9 the Index tab allows you to access the Help index by keyword As you type a keyword into the search field the matching index term is displayed in the lower box To see the Help screen for a matching term double click the topic or select the topic and Display You can also use the UP ARROW and DOWN ARROW on your keyboard to move from term to term As shown in the third image in Figure 10 9 the Search tab allows you to search the Help topics by keyword Enter a search term and click List Topics or press ENTER From the topics displayed double click a topic to view or single click it and press ENTER You can also use the UP ARROW and DOWN ARROW on your keyboard to move from topic to topic Data Entry Help Field Level Help Screen Help Tax Year 2008 Two types of help are available in data entry field le
392. port cards 8 When a course unit tutorial practice return or video has been viewed a green check mark see Figure 10 4 example replaces the red X next to the completed item Tax Courses Fach tax course consists of units that must be completed in order For a list of avail able courses and units in ETC click Tax Courses The Tax Courses page is opened displaying the units of the Basic Tax Course Figure 10 4 System Requirements Tax Year 2008 Tax Year vi Course Basic Tax Course b Basic Tax Course Introduction Launch Course W Unit1 Filing Status Launch Course v Unit2 Dependents Launch Course Unit3 Exemptions and Standard Deductions Launch Course 8 A S L A NE nent T N a TNN Figure 10 4 Modules of Basic Tax Course are displayed To view units for a different tax year or course select an option from the Tax Year and Course drop lists N Click System Requirements on the Tax Courses page to ensure DTE that your system supports the tax course programs Make sure your speaker volume is turned on in order to hear the audio To launch a module 1 Click Launch Course for the selected module See Figure 10 4 The unit is opened in a browser window Tax Year 2008 229 Online Support Drake Software User s Manual 2 Use the navigation buttons in the top right corner to move through the course Use the sound buttons at the bottom of the screen to stop pause or re play audio 3 When
393. port via e mail phone and fax E mail Program E mail Setup 236 E mail addresses for Drake Support are listed in Table 10 4 on page 240 You can also use the Drake e mail program described here to e mail Drake Support personnel The Drake e mail program allows you to send and receive e mail messages using your 1040 com e mail address Use the Drake e mail program to send e mail questions directly to Drake Support or to send e mail your clients If desired you can use your Drake e mail as your everyday e mail program Access your Drake e mail from the Home window by selecting Help gt E Mail Use the Setup menu to select your method for sending and receiving e mail Two methods are available the default method which is compatible with most Internet Service Providers and the alternate method which is chosen if the default method does not work Tax Year 2008 Drake Software User s Manual Interactive Support Checking Mail To check your Drake e mail select File gt Check Mail or press CTRL M You can also check the status of your mailbox by clicking File gt Check Mailbox Status or pressing CTRL S NOTE E mail messages are downloaded only once per EFIN If multiple computers are using the same EFIN consider designating one per son to download Drake e mail and forward it accordingly Downloaded messages appear in your In box To open a message in a new window double click it Your mailbox also includes an Out
394. ppears in the Sample Report box To remove a keyword from the Selected Report Columns field click it then click Unselect Click Unselect All to clear the field 7 Click Save or proceed to Assigning Filters following if you want to assign fil ters to the report The program stores the modified report under My Reports N New reports overwrite existing reports of identical output names in UTE the Report View Print Utility To have multiple versions of one report you must rename the newer output file Tip Place the mouse pointer over an Available Columns keyword to display a tooltip description of the item Assigning Filters Filtering allows you to limit what information is included in the report by screening out unwanted data and including only the remaining information With the many fil ters available and the ability to create your own filters and add conditions to each fil ter the output options for your report are almost endless Choose a filter from one of Drake s many pre defined filter choices You can edit an existing filter to meet other selected criteria Existing To assign a filter to a report Filters 1 From the Report Editor Step 1 window see Figure 12 2 on page 268 click Next The Report Editor Step 2 window is opened Figure 12 3 Like the Step 1 window it has a Sample Report window in the lower section not shown in Figure 12 3 see Figure 12 2 Drake 2008 Report Editor Step 2 Filte
395. pplicable package in the Result Letter section of the dialog box Customized The default greeting for all letters is set in Letters Setup To override the greeting for a Greeting return go to the LTR screen and enter a new greeting in the Personalized letter greeting text box To begin the greeting with the word Dear enter it along with the NOTES name in the Personalized letter greeting field To have all letters for a package type to begin with Dear or another greeting of your choice make the change in the template in Setup gt Letters Adding a To add accustom paragraph to an individual letter write the paragraph in the Custom Custom Paragraph text box of the LTR screen By default the paragraph is printed at the bot Paragraph tom of the letter To have a custom paragraph appear somewhere else within the letter 1 Go to Setup gt Letters 2 Click Open and select the package and letter that is to be generated for the client 3 Place the cursor on the line where you want the custom paragraph to appear Tax Year 2008 51 Making Changes on the Fly Drake Software User s Manual E filing or Paper filing Printing Additional Letters 4 Click the plus sign next to Miscellaneous in the tree directory left column of window 5 Double click the lt Paragraph from LTR screen gt keyword The keyword appears in the letter template 6 Click Save When the return is generated the letter displays the cus
396. preparer has other reasonable cause for failure to comply The taxpayer is subject to a 50 per tax document penalty for failing to electronically pay the balance due Any tax return preparer who prepared more than 50 Oklahoma income tax returns for the prior year must file all Oklahoma income tax returns prepared for the current tax year electronically This does not apply to a return upon which the taxpayer has indi cated they did not want the return filed by electronically Any software developer or provider marketing tax return preparation software must use 2 D bar coding technology in the printed version of the completed tax form or support electronic filing Legislation signed into law on July 1 2008 indicates Rhode Island requires profes sional tax preparers who did more than 100 Rhode Island returns last season to file their clients individual both resident and non resident state income tax returns elec tronically for Tax Year 2008 Beginning in TY2007 South Carolina mandated all preparers filing 100 or more returns of any package Individual S corp Partnership etc to submit them electron ically The mandate is separate for each package For example Preparers e filing 100 Individual returns are not required to e file 1120s or 1065s unless their number of 1120s or 1065s exceeds 99 Note While the bill s initial effective date was for the 2007 tax year South Carolina legislators adopted a concurrent resolution th
397. preparers entered into the program PA 1 2 3 4 Search 1 2 18 From the Drake Home window go to Setup gt Preparer s Click Search Tax Year 2008 Drake Software User s Manual Software Setup 3 Enter preparer information in the Find Preparer Record box As you type the software locates and highlights the record 4 Click Close Click Exit to close Preparer Setup Pay Per Return Setup PPR Clients Only The Pay Per Return version of Drake Software comes with fifteen PPRs These returns must be activated before you can use them To activate PPRs 1 From the Drake Home window go to Setup gt Pay Per Return The Pay Per Return dialog box shows the PPRs available for your firm s EFIN and for the computer items 1 and 2 in Figure 2 6 Ordering and Activating PPR Returns The Pay Per Return option allows a limited number of tax returns to be printed Once a tax return has been printed it may be re printed as many times as needed without charge Once all PPRs have been used this screen may be used to purchase additional returns For This EFIN DS4113 or this Computer Total Returns Purchased Total Returns Activated 0 Total Returns Activated Total Returns Used 0 Total Returns Remaining Total Returns Remaining 0 Random Code 8c7a 0f1b 1e10 m ctivation Step 1 Enter the Number of Returns to Activate on this Computer Step 2 Retrieve Online Approval Code from Drake Get Code
398. r Install and Set up Software A 2 E E E O O O O Review system requirements for software installation Install the 2008 Drake Software CD Customize program settings Complete required and optional program settings Check the packing slip to verify the EFIN and enter new password and account number Setup gt ERO Keep packing slip which contains your serial number and account number in a safe place Perform database updates Update the EIN Database from the prior year Perform configuration updates Update configurations for firm information macros etc from the prior year Establish billing amounts Setting your billable amounts now saves time later Install PDF995 Tax Year 2008 Drake Software User s Manual Appendix A Preseason Checklist Help Clients Prepare for Tax Season L Prepare proformas or organizers for prior year clients Reports organizers proformas and returns can be stored and e mailed as PDF files L Prepare preseason letters and coupons to send with organizers L Begin preseason scheduling Get a jump start on tax season Schedule clients who are eager to file early Ul Order mailers from Nelco if necessary Update and Configure Data LJ Choose the backup media type that best suits your needs E Update your profile Complete Update Profile in Drake L Update and back up Run the software update routine and make a backup copy of the software setup T
399. r Shortcut Press CTRL Q to open Quick Estimator 264 Drake Software User s Manual To use the Quick Estimator From the Home window select File gt Quick Estimator Enter or select a return SSN If an existing return is selected the Quick Estimator will not override previous entries Enter all applicable information for the return Press F1 in an individual field for help on that field Press ESC to save the data exit the screen and view the return or click the X in the upper right corner of the screen Depending upon your setup options you might be able to click CTRL C to calculate or CTRL V to calculate and view Please note the following points when using the Quick Estimator Because the total of interest dividends and other income are entered in one field Int div other income the RAL Bonus and preparer fees might not be accu rately reflected on the bill The income could be overestimated or underestimated The Quick Estimator produces only one return if Married Filing Separately A separate return must be generated for the other spouse Because the names of dependents are not entered in the Quick Estimator the indi vidual names are not shown on the return The appropriate credit amounts will be indicated if all applicable fields are completed in the Quick Estimator The potential RAL and Bonus amounts can be calculated by selecting the RAL and Bonus fields An Override RAL amount entry overrides the select
400. r s parent s return in Drake 2 Click View or Print to open View Print mode If the Calculation Results window is opened due to the pause option selected in Setup gt Options click Continue 3 From the View Print toolbar click the 8615 Export button The Export 8615 dialog lists dependent names SSNs export statuses for the return Figure 5 36 Drake 2008 Export 8615 8615 Export Utility This screen gives a list of children that are eligible to be exported Highlight the children and click the EXPORT button to continue First Name Last Name SSN Status CO JANE CARTER 440000001 Exported C PETER CARTER 410001001 Not Exported i e aa T a O ee E on os a Figure 5 36 Dependents entered on return 124 Tax Year 2008 Drake Software User s Manual Estimated Taxes 4 5 6 Put check marks in the applicable boxes If a row is selected the parent s data is exported to that dependent s tax return in Drake Click Export Click OK Click Exit to close the Export 8615 dialog box The parent information is now ready to be imported into the dependent s return Importing After the 8615 data has been exported from the parent return you will be prompted to Parent import the data the next time you open or when you create the dependent return Information To import parent data into a dependent return 1 2 3 From the Home window click Open New Enter or select the dependent s SSN a
401. r s general daily schedule in out times ZIP code autofill Activate the ZIP code autofill feature which auto matically enters a client s city and state informa tion once the ZIP code has been entered Private appointment Mark all future appointments as private Private appointment details are not visible to other pre parers or to Admin You can also select this option on the fly when setting up an individual preparer s appointment Customer name autofill Establish how client names are displayed in the calendar view Calendars Preparers in View Select which preparer schedules are visible by default Calendar view start time Select the time to be displayed when the calen dar is opened Default calendar at login Select which calendar type will be displayed at login This choice not available to Admin Calendars in my view Select which calendars will be in your default view This choice not available to Admin Colors Select screen colors for the calendar The Scheduler allows you to view at a glance the planned daily schedules of selected preparers including the times they are scheduled to be in the office To establish a preparer s daily schedule in the Scheduler 1 Click Setup 77 Scheduler Drake Software User s Manual Calendar Settings Calendar Colors 78 2 Under the General tab select a preparer from the Open Setup S
402. r The program also now figures the mileage rate auto matically See Auto Expenses on page 146 e Activity Types Certain activities can now manually be designated as passive or non passive for the tax year This feature allows the program to calculate former passive activities See Activity Types on page 105 e Multiple Returns 1 SSN A single SSN can now be used for two return types when a taxpayer requires Form 1040 and either Form 706 or Form 706 A See Estate and Qualified Heir Returns on page 254 Estimated Tax Adjustments The Estimated Tax Adjustment ETA screen used for recomputing federal 1040 estimates for the following year has been revised to feature expanded capabilities and a more user friendly layout See Special Features in Data Entry on page 159 What s New in Drake for 2008 Drake Software User s Manual Tax year Comparisons The Tax Return Comparison COMP screen used for comparing a taxpayer s current tax return with data from the two prior tax years has been revised to feature expanded capabilities and a more user friendly layout See Special Features in Data Entry on page 159 Interest Dividends Foreign Tax Credit Drake s INT and DIV screens reflect the 1099 INT and 1099 DIV forms respectively and now include fields for Schedule B Part HI Foreign Accounts and Trusts The 1116 screen Foreign Tax Credit can now be associated with INT and DIV scree
403. r account such as an IRA MSA etc e The account is in the taxpayer s name Multiple accounts are not allowed if filing Form 8279 Injured Spouse Allocation M p l RTANT From the IRS instructions for Form 8888 You the taxpayer cannot request a deposit of your refund to an account that is not in your name such as your tax preparer s own account Multiple By default the program directs the federal refund to the first account entered on the Accounts DD screen If depositing funds into multiple accounts completing the Federal selec tion field to indicate whether the first account entered should be used for the federal refund Figure 5 45 The default selection is Yes Account 1 Deposit selection Federal selection 7 Name of financial institution ii No FIRST BANK OF ANYTOUN Le Repeat Account Information Figure 5 45 Select No if federal refund is not to go to the account listed To indicate that a refund should be distributed into multiple accounts enter the por tions for each account in the appropriate Federal deposit amount fields on the DD screen Figure 5 46 An amount entered here overrides the calculated refund amount Figure 5 46 An amount entered in the Federal deposit amount field overrides the calculated refund amount NOTE Because not all states support multi account direct deposit the State deposit amount field Figure 5 46 is inactive by default Tax Year 2008
404. r 20 2007 must file all original Maine tax returns for sales use or service provider tax electronic data submission Employers with 75 or more employees in 2008 that are subject to Maine income tax withholding must elec tronically file all original Maine tax returns of quarterly and annual reconciliation for Maine income tax withholding for 2008 Maine mandate Rule 102 requires that for 2008 any person with a combined tax liabil ity to the state of 100 000 or more for all tax types must remit all Maine tax payments electronically using the ACH credit or ACH debit method Paid preparers must under certain conditions electronically file all Corporate S Corp and Partnership returns and corporate extensions Additionally the state of Massachusetts requires personal income tax extensions with zero payment or with payments of 5 000 or more to be filed and paid if applicable electronically Note Effective February 16 2004 software generated forms that are printed and mailed to the Department of Revenue must contain a 2 D barcode or the return will be sent back to the taxpayer unprocessed For tax years beginning on or after January 1 2004 income tax return preparers who completed 200 or more original Massachusetts Forms 1 and 1 NR PY including those e filed during the previous calendar year are required to use electronic means to file all personal income tax returns unless the tax payer specifically directs on the paper form that fi
405. r Drake windows the DDM has a menu bar and a toolbar If a shortcut key exists for a menu item it is listed to the right of the menu item You can also access toolbar selections from the menu bar To view a description of a toolbar button hold the mouse pointer over it Each toolbar button activates a different function Different levels access different buttons For example from the Cabinet level you can add only drawers and cabinets so only these buttons are available from the Folder level you can add folders create files import files scan copy rename delete drag send e mail and link to other files Searching To find a cabinet drawer or folder in the DDM enter part of the name in the Find text box and click Find The file location is highlighted in the tree Figure 13 6 CLIENTS 391 F a n D E aaua roa l B AAA TrusteesFid U She _ AAAA Storage 888888E RO ne Ta a ties tlia ds fi Figure 13 6 Click Find to locate files that match a search term To find the next instance of the search term click Find again Repeat as needed until you find the file you re looking for 286 Tax Year 2008 Drake Software User s Manual Document Manager Building A File Structure DDM Cabinets DDM Drawers DDM Folders Tax Year 2008 If you are building your own file structure map it out on paper before creating it in the DDM Additional cabinets drawers and folders can be added
406. r by Completed Returns status EF Not Sent EF Pending EF Accepted EF Rejected Missing Files All Return Types All Business Returns Individual 1040 Filter by Corporate 1120 4 return type Sub 5 11205 Partnership 1065 Fiduciary 1041 Estate Tax 706 Tax Exempt 990 Hide or Hide Inactive Returns display gt Hide Completed Returns returns Display Deleted Records Figure 9 4 CSM filter list 3 Select filters You can select one filter from each of the first three lists and any or all of the filters in the bottom list A selected filter is indicated by a check mark Tax Year 2008 221 CSM Reports Drake Software User s Manual The CSM displays the files that fall within the selected filters NOTE In the Status column a red File Not Found message indicates a deleted return Deleted files stay in the CSM for tracking purposes CSM Reports Seven predefined status and financial reports are available in the CSM Reports are displayed in the Report Viewer Data can be exported from the Report Viewer Table 9 2 CSM reports Report Title CSM Data Description Report is based solely on the data in the CSM current view Cash Receipts Report lists cash amounts from bank deposits resulting from RAL Bonu etc and client payments from the BILL screen in data entry Cash Receipts Bank Deposits Report lists cash amounts received from bank deposits only The data in th
407. r on a workstation and needs to be done only once To set up directories and paths 1 From the Drake Home window select Setup gt Directories Paths 2 Select 2 Software installed only on Server Setup Directories and Paths Select the appropriate configuration for your office setup below It is not recommended that these settings are changed during the season 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 i f i E Network Options 3 Software installed on server and workstations secondary network setup nat lig Tli a aie on Indicate seger drivelater foggbarngciant fiss lam asm ale Figure 2 3 Select network option 2 3 Click OK The server only system is now in place Using the instructions in Installation on page 8 install Drake onto each workstation One workstation should be designated as the server Each workstation must have access to the server computer s NOTE drive through a single drive letter A network technician can map each workstation to the server using the same drive letter All computers on the network must share the drive on which Drake is installed Map to the drive not to the Drake08 folder 11 Running Drake on a Network Drake Software User s Manual
408. r who file more than 100 combined Individual and Partnership original returns in the previous calendar year and who use tax preparation software are required to e file returns A 50 return penalty is applied to practitioners who fail to file electronically unless their client opted out or they can establish reasonable cause New for 2009 The income tax mandate for tax return preparers now includes Partner ship returns and Partnership extensions in addition to income tax returns and exten sions for tax years beginning on or after January 1 2008 Preparers must e file all individual income tax and partnership returns and extensions beginning on January 1 2009 if they were subject to the mandate in a prior year or if they meet both of the following conditions e Prepared more than 100 combined original Individual or Partnership returns for tax year 2007 in calendar year 2008 e Use tax software to prepare one or more New York State Individual and or Part nership returns for tax year 2008 in calendar year 2009 A 50 penalty applies to each return or extension that the preparer fail to e file unless the taxpayer opts out of e filing or the preparer has other reasonable cause for failure to comply New for 2009 A corporation must e file all general business and NYS S corporation Article 9 A returns and extensions beginning on January 1 2009 and electronically pay the balance due on those tax documents if the corporation meets al
409. racion de la Contribucion Federal Sobre el Tr Kansas 1040PR PG3 Planilla para la Declaracion de la Contribucion Federal Sobre el Tr Kentucky 1040PR PG4 Planilla para la Declaracion de la Contribucion Federal Sobre el Tr Louisiana 1040SS PG U S Self Employment Tax Return Massachusetts 1040SS PG2 U S Self Employment Tax Return Maryland 1040SS PG3 U S Self Employment Tax Retum Maine 10405S PG4 U S Self Employment Tax Return Michigan 1040 PG Individual Payment Voucher Detroil ipanaa marrer ran Flint j Highland Park Mi Help Find View Print Exit Figure 11 4 Blank Forms window Click a form category in the left pane Click a tab to select a tax package from the right pane default tab is Individual Scroll through the form list to locate a form Forms are listed in numerical then alphabetical order Select a form and click View or Print IRS Revenue Procedure 96 48 requires that a copy of the Paper work Reduction Act Notice be distributed on federal tax forms When providing a blank copy of a federal form to a client you must include a copy of the notice To access it go to Tools gt Blank Forms and select Federal Under the Individual tab select PAPERWRK PG Repair Index Files Tax Year 2008 An index file is a comprehensive list of data on the client files in Drake Keep these lists up to date by repairing your index files regularly as part of your general file main tenance routine Table 11 1 list
410. raph gt Enclosed is your lt Current Tax Year gt Form 1040 U S Individual Income Tax Return prepared from the information provided Your return will be electronically filed with the IRS once we receive your signed Form 8879 IRS e file Signature Authorization lt Federal Balance Due Paragraph gt Figure 2 17 A letter consists of keywords text and conditional paragraphs Keywords appear as red text within angle brackets A keyword is a description of the type of text that will be generated and added to the letter For example the keyword Current Date is at the top each letter When a letter is printed with a return the Cur rent Date keyword is replaced with the current date Text in black text is displayed exactly as it will be printed in the output of the letter Conditional paragraphs like keywords contain angle brackets Each conditional paragraph actually consists of a starting tag keyword the conditional text and an ending tag Both the starting and ending tags end with the word Paragraph The enclosed conditional text is printed only if a particular situation applies in that let ter For example the conditional paragraph below is generated only if the taxpayer who has a balance due is paper filing and has selected not to pay by direct debit Text is generated only if this condition applies Include your payment and Form 1040 V with your return For faster processing and to prevent errors m
411. rate 11205 Clients All Tax Exempt 990 Clients Clients Completed this week Clients Completed Today Clients not E Filed Clients Updated but not Calculated Clients with Amendments Clients with Balance Due Clients with Dependents Clients with EIC Clients with Estimates Clients with Extensions Clients with Form W2 Clients with Misc Codes Clients with Refund Clients with Schedule A Clients with Schedule B 4 Basic Search Conditions for the Selected Filter A New biter Return Type is 1040 Copy Filter Rename Filter Edit Additonal Search Conditions for the Selected Filter Schedule C is present Add Condition Edit Condition Delete Match All Conditions C Match Any Condition ae a ee Se ee ee Ce eee ET ene es atm Figure 12 6 Filter Manager window Tax Year 2008 Drake Software User s Manual Setting Up a Report 4 Click Copy Filter Name the filter and click OK The new filter is highlighted 5 Modify the Basic Search Conditions and the Additional Search Conditions for your filter as appropriate there is a limit of ten Additional Search Conditions per filter See Search Conditions on page 272 6 Click Save The program returns to the Report Editor Step 2 window 7 Click Save again to save the report To close the Report Manager click Exit Selecting Additional Report Options Sort Summary Order Data Calculations Prior Year Data Output File Name A
412. rately 86 education credits for 115 EIC information for 130 kiddie tax 124 125 state related data 86 tuition and fees deductions for 115 depreciation see also depreciation schedules see also section 179 expensing elections 146 GO Zone 146 in data entry 140 146 of farm assets 107 of home 144 151 of sold assets 145 of traded assets 100 2008 Drake Software reports and lists 276 279 stopping depreciation on an asset 145 trial balance business returns only 307 depreciation schedules for 2009 26 generated in Drake 141 layout portrait or landscape 26 detail Ctrl W worksheets 64 65 direct debit consent Form 8879 140 from multiple accounts 137 of balance due 136 137 of estimates 137 direct deposit of bank products 192 206 of refunds 134 136 to multiple accounts 135 directories and paths 20 22 disabling grid data entry 59 disaster payments farm 106 recovery 2 dividends and interest 90 93 document control numbers see DCNs Document Manager 281 292 dollar rounding 28 domestic production activities deduction 116 downloading ABC Voice Files 197 automated updates 23 conversion software 233 Drake tax software 233 e mail messages 237 fonts 246 prior year state programs 233 program updates 243 publications 233 W 2 information 89 drag drop ordering 175 Drake Document Manager see Document Manager Drake Software CD installation process 8 contact information 240 online forums
413. reen 3 The Income screen amounts are calculated directly into the appropriate lines of Form 1040 Any interest or dividend income entered on the INT or DIV screens is com bined with the screen 3 amounts when the return is calculated Do not duplicate entries unnecessarily Schedule B Interest and Ordinary Dividends 90 Schedule B is required if the taxable interest or the ordinary dividends on the return exceed 1 500 Use the INT and DIV screens to report interest and dividend income that exceeds this amount Interest and dividend amounts are generated on Schedule B and calculated into the appropriate lines of Form 1040 Tax Year 2008 Drake Software User s Manual Passive and Investment Income 1099 DIV etc Reporting New in 2008 certain portions of ordinary dividends domestic dividends not taxable Portions Of bya state and ordinary dividends that are U S Government dividends can be Dividends expressed as either amounts or percentages Amount Percent Percent of lines 1 and 2 that are nominee dividends and capital gains Dividends included in Box 1a that are NOT taxable on the state oe or Dividends included in Box 1a that are US Government dividends eee or i DANO Lineilude the Us Government divgdendprartion on the MET SaKable ODIStat gy MRA t cme aitontn nadie anit Figure 5 10 Enter portions of ordinary line 1a dividends as amounts or as percentages of the total Schedule B Some taxpayers with bank or other
414. return if the entity does not meet the filing requirement If this is the case you need to override the default in order to have the amounts shown on Schedule L To force the Schedule L amounts to be printed go to the PRNT screen and select the Force Schedule L box Items to Print ie Force Schedule E l Print Form 4562 l Print nextyear depreciation listing S Figure 14 2 Force Schedule L box for 1120 package NOTE Wording of this option varies by return package The example above is of the Force Schedule L box for an 1120 return Check for Detail Worksheets The trial balance import allows only those detail worksheets required by the IRS Check updated returns for detail CTRL W worksheets that are not required For example the IRS does not require a detail worksheet for the Gross receipts field on screen 3 if a return has a detail worksheet for that field the trial balance will not import correctly into the return Detail worksheets are indicated by red shading as shown in Figure 14 3 Tax Year 2008 Drake Software User s Manual Trial Balance Import Income and Deductions Income ABTGFOSS GCE ITS OSES irre E ne ne C UBD Retums and alOwWantaS reee eeaeee aeee ceea aee tee Aeae Et eee Kee E Eee a E SEEE En AAE EEE AAE AE LAEE EE EE EEEE Bi ntorest intom Gs teccccsccssccsceezecsosectesssssrccosessrceaucscesssnsecacssstons essovearessausrecosseerosaperesmsisiescoumveassasoratiootsrerreorsenrivoss l k a
415. returns could be e filed with incorrect information Adding a_ To add a firm in Firm Setup Firm 1 From the Drake Home window go to Setup gt Firm s 2 Click Add to activate the bottom half of the Firm Setup window Add 3 Enter your firm s general and banking information Shaded fields must be com pleted for e filing e General Information Enter all applicable contact information IMPORTANT A DCN Serial Number is assigned to each tax return based on the firm s EFIN and DCN If two returns have the same DCN the IRS will reject one of the returns To avoid duplications the DCNs are automatically advanced for each return calculated Offices that use multiple computers that are not networked must stagger the DCNs to avoid duplication For instructions on staggering DCNs see Staggering DCNs on page 187 Stagger DCNs before creating 2008 returns Non Paid Prep If the firm is not a paid preparer enter a non paid code here Acceptable codes are VI VITA VT VITA T TE TCE X IP IRS PREPARED AND IR IRS REVIEWED e Banking Information Select a bank and enter applicable fee information Fees are charged in addition to the fees set by the bank and are included in the client bill For more on individual bank selections see Chapter 8 Banking Select Do not allow EF Fee override on the Bank screen to prevent users from adjusting a firm s e filing fee for a selected return Tran
416. ring of Reports Select a Filter to use for this Report The Filter allows to the user to limit the information that is included in the Report If you need to edit an existing filter or create a new one click Edit Filters below Select any additonal options to apply to the Report and click Save r Filter Selection Select a Report Filter fan Clients x Edit Filters Filter Description Return Type is Any Dep of Another TP is not lt Blank gt Taxpayer Age is not over 65 r Additional Report Options Sort Summarize Report by this field Taxpayer Last Name A Summarize the Report Data 5 Use Data from 2007 Report output file name Amended ey ee ee ee ee ae ee Figure 12 3 Report Editor Step 2 window top half Tax Year 2008 269 Setting Up a Report Customized Filters 270 Drake Software User s Manual 2 Select a filter a pre defined filter or a custom filter from the Filter Selection drop list Note that a Filter Description is automatically displayed when a filter is selected Figure 12 4 Filter Selection Select a Report Filter Edit Filters Clients with Schedule C Filter Description Return Type is 1040 Schedule C is present Figure 12 4 Filter that includes all 1040 returns with a Schedule C 3 Click Save Use a pre defined filter as a template for creating a customized filter Be aware that changing a pre defined filter affects every report in the pr
417. rmation Select Bank Santa Barbara Bank amp Trust Republic Bank amp Trust Company River City Bank Figure 8 3 Bank selection drop list in Setup gt Firm s Tax Year 2008 207 Preparing to Offer Bank Products Drake Software User s Manual 208 3 Under Banking Information Figure 8 3 select a bank and enter additional information as necessary Options are described in Table 8 3 Table 8 3 Options under Banking Information in Setup gt Firm s Item in Setup Description Document RAL etc Prep Fee Fee to charge clients for preparing bank documents Chase Republic RCB Electronic Filing Fee all banks Fee to charge clients for e filing their returns Do not allow EF Fee override Prevents preparers from changing the e filing fees on Bank screen check box Chase Republic RCB Transmission Software Fee Add Allows you to charge an extra fee of up to 30 in addi On all banks tion to the 2 Drake transmission fee This add on fee deducted from the taxpayer s refund is held for you ina separate bank account After tax season the balance of this account is distributed directly back to you ERO chooses to Opt out of For those who choose not to offer the Super RAL The SuperRAL RCB only highest loan amount allowed for a regular RAL is 6 000 while a Super RAL s limit is 10 000 This option pre vents Super RALs from being available in the program have contacted the bank and For fi
418. rmation is disclosed to What s New in Drake for 2008 Drake Software User s Manual a third party such as a bank service bureau or franchisor These forms are available in paper format on your Drake CD and in electronic format on the USE DISC and CONS screens Documents can be signed and dated manually or electronically whichever you or your clients prefer See Chapter 8 Banking for important details and procedures on how to use the tax software to comply with this new regulation First time Homebuyers The Housing and Economic Recovery Act of 2008 gives first time homebuyers a temporary refundable tax credit equal to 10 of the purchase price of the home up to 7 500 Screen 5405 in Drake is available for completing and submitting Form 5405 First Time Homebuyer Credit See First Time Homebuyer Credit on page 133 Reporting Foreign Accounts Screen 9022 for Form TD 90 22 1 Report of For eign Bank and Financial Accounts has been redesigned in 2008 per IRS revisions See Report of Foreign Accounts on page 158 Recovery Rebate Credit The new RRC screen in Drake is used for entering data regarding the Recovery Rebate Credit of 2008 See Recovery Rebate Credit on page 134 Disaster Recovery Tax relief is available to many taxpayers in the Midwest who by the 2008 storms flooding and tornadoes These changes are reflected in the soft ware Applicable screens now include check boxes to i
419. rms or preparers who have been approved to offer have been approved for the with RALs even when the taxpayer s refund minus the holding bypass option RCB only amount of EIC is less than 0 4 Click Save M H RT ANT Check with your bank for limitations on bank product and e filing fees before setting up a new firm Once an amount is set and a bank application has been created the amount should never be changed The banks closely monitor the amounts charged for application fees Once a bank is selected and saved you can access it from data entry In the Electronic Filing and Banking section of the General tab click the bank s name Electronic Filing and Banki USE Consentto Use of Tax Return Information DISC Consentto Disclosure of Tax Return Information DD Direct Deposit Form 8888 PMT Electronic Funds Withdrawal PIN 8879 8878 e file Signature EF EF Options Override Figure 8 4 Electronic Filing and Banking section of General tab in data entry Alternately you can type BANK BNK or the bank code into the selector field and press ENTER Tax Year 2008 Drake Software User s Manual Using Bank Screens in Data Entry Taxpayer Application Complete an application agreement for every taxpayer applying for a bank product see Taxpayer Requirements on page 203 Some banks require original applications to be mailed on a weekly basis Consult your bank N To have a bank application printed whe
420. rned income 109 employers 87 interest and dividends 91 mailing address 84 tax credit 120 121 Form 56 Notice Concerning Fiduciary Relationship 140 157 189 Form 706 U S Estate and Generation Skipping Transfer Tax Return 254 Form 706 A U S Additional Estate Tax Return 254 Form 709 U S Gift and Generation Skipping Transfer Tax Return 155 Form 90 22 1 Report of Foreign Bank and Financial Ac counts 2 158 Form 940 see Client Write Up Form 944 see Client Write Up Form 944SS see Client Write Up Form 970 Application to Use LIFO Inventory Method 156 Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 157 Form 1040 U S Individual Income Tax Return 83 163 Form 1040NR U S Nonresident Alien Income Tax Re turn 155 Form 1040X Amended U S Individual Income Tax Re turn 153 Form 1045 Application for Tentative Refund 152 156 Form 1098 Mortgage Interest Statement 117 Form 1098 C Contribution of Motor Vehicles Boats amp Airplanes 118 Form 1098 T Tuition Payments Statement 116 Tax Year 2008 2008 Drake Software Form 1099 C Cancellation of Debt 109 Form 1099 DIV Dividends and Distributions 90 93 Form 1099 H Health Coverage Tax Credit 111 Form 1099 INT Interest Income 90 93 Form 1099 MISC Miscellaneous Income 90 Form 1099 OID Original Issue Discount 91 Form 1099 PATR Taxable Distributions Received from Cooperatives 107 Form 1099 Q Payments From Qualified Edu
421. rom Prior Periods ATT Attached Statement ELEC Election Options for 709 Figure 5 62 Menu for Form 709 Gift Tax From the menu shown under the 709 General tab click an item to open it or type its code into the selector field and press ENTER Pricing for To set up pricing for Form 709 go to the Home window and select Setup gt Pricing Form 709 By default the pricing list is of individual 1040 package forms From the State City drop list select GF Gift Tax 709 to display a list of the gift tax forms Double click a form name to adjust the pricing Attached If Form 709 requires an attachment for example if an election option requires the Statements amounts in question to be identified use the ATT screen on the 709 menu 709 Election The ELEC screen Election Options for 709 provides a series of check boxes for Options electing certain optional ways of treating some income and exclusion amounts Extension Ifa six month extension is being requested for a 1040 and a 709 return no separate Request for extension request is required Form 4868 covers extension requests for both returns Form 709 For more information see Extensions on page 154 Tax Year 2008 155 Requests Claims and Other Forms Drake Software User s Manual If an extension is needed for Form 709 only then Form 8892 Application for Auto matic Extension of Time To File Form 709 and or Payment of Gift Generation Skip ping Transfer Tax must be
422. rom being prepared program prepares either Form 1040 or 1040A instead 1040A and EZ Prevents Forms 1040A and 1040EZ from being prepared program pre pares Form 1040 instead State short form Forces state return to be printed on the state long form WK_PAL new in 2008 Prevents Passive Activity Deduction Worksheet from being prepared This worksheet shows how much if any the taxpayer is taking in passive activ ity loss deductions this year and how much is being carried over WK_6251B new in 2008 Suppresses Exemption Worksheet for Form 6251 Alternative Minimum Tax WK179LMT new in 2008 Prevents section 179 Business Income Limit Worksheet from being pre pared This worksheet shows the amount if any of section 179 deductions this year and how much is being carried over Proforma organizer Prevents proforma organizer from being generated for next year See Organizers and Proformas on page 71 N The option to print or suppress the 1040A and 1040EZ for all UTE returns if applicable is set at Setup gt Options gt Form amp Sched ule Options tab Forcing Table 2 17 lists PRNT screen items that can be forced or printed even if the pro Items to Be gram calculations and established defaults would otherwise not print them Generated Table 2 17 Items That Can Be Forced from the PRNT Screen Item Schedule A Description Itemized Deductions Schedul
423. rryovers on Form 1045 following NOL Carryovers on Form 1045 Screen code NOL Form 1045 Application for Tentative Refund includes Schedule A NOL and Sched ule B NOL Carryover Use the NOL screen accessible from the Other tab to enter amounts for these schedules into Drake Note that the Schedule A fields are override fields Entries override NOTES system calculations for Schedule A To calculate only page 2 of Form 1045 select Calculate 1045 page 2 ONLY at the top of the NOL screen 152 Tax Year 2008 Drake Software User s Manual Election Options NOL Carry forward Only Figuring AMT NOL To indicate that the taxpayer elects to carry a NOL forward and not back go to the NOL screen and select Election to carry forward ONLY When the return is gener ated it includes an EF_NOTE stating that the taxpayer is electing under Section 172 b 3 to relinquish the entire carryback period Use the NOL screen to enter data for figuring Alternative Minimum Tax NOL When the return is generated the AMT NOL worksheet shows the current year AMT NOL Election Options The ELEC screen has check boxes to indicate elections from the IRS code If any boxes on this screen are marked a note listing the elections is generated with the return To attach an additional statement detailing an election go to the SCH screen and select E Election Explanation for the type of schedule Both the list of elections and any designated e
424. rs in data entry 41 in view print mode basic and enhanced 174 comparing current to prior year 27 network options 10 two versions of a return 159 configuring colors in basic mode 174 data path settings 22 DDM 284 directories and paths 20 hierarchies in the online EF database 195 Consent to Use and Disclosure of Tax Return Information IRS Reg 7216 1 16 201 203 contact lists 197 conversions 233 copying DDM files 291 EF data 199 updates 244 coversheets 27 CPE credits 230 creating see also opening amended returns 153 appointment reports 82 archived returns 176 CSM reports 222 EF reports 194 ETC accounts 228 filters 275 key combinations 34 macros 34 miscellaneous codes 30 31 preparer schedules 77 reports 267 returns 55 update profiles 22 credits see also individual credit and form names child and dependent care 118 child tax 121 Tax Year 2008 Index education 115 elderly disabled 120 foreign tax 120 home energy 120 retirement savings contributions 122 crop income for Form 1041 107 insurance 118 CSM see Client Status Manager Ctrl W detail worksheets 64 65 cursor size 25 custom paragraphs 28 51 customer account numbers 5 customized supplemental letter 27 customizing colors 41 174 CSM display 220 data entry menu 30 drop lists 31 fields on BILL screen 30 flagged fields 30 greetings in letters 51 letters 37 miscellaneous code fields 30 report filters 270 security settings 17 D
425. rt or right click it and choose Delete Report from the right click menu N Alabama return preparers Because forms AL 4868 and AL PSE UTE are obsolete as of 2008 Drake no longer provides an Alabama Extension Bulk Web File Report under Other Report Options Sample Report Window Before generating a report you can preview the report title and column headers to see how the report will fit on a printed page The report preview is displayed in the Sam ple Report window at the bottom of the Report Manager Also included is a brief description if available of the selected report See Figure 12 1 To preview a report 1 From the Home window select Reports gt Report Manager 2 Click to expand any category Categories have a or to their left reports do not 3 Select single click a report to preview The report title and column headings are displayed This display reflects changes as report details are updated The Sample Report box also indicates a report layout of Portrait Landscape or Potentially too wide A layout of Potentially too wide means that some data could be 266 Tax Year 2008 Drake Software User s Manual Setting Up a Report cut off in the printed report due to the number of columns Regardless of width the report can still be viewed in the Report Viewer using scroll bars Setting Up a Report When planning reports for your office consider beginning with a pre defined report that alre
426. rth Carolina Information on individual state requirements are available at Support DrakeSoft ware com For more Drake resources see Chapter 10 Resources and Support 200 Tax Year 2008 8 Banking This year Drake is working in conjunction with four banks to provide taxpayers access to bank product options e Chase e Santa Barbara Bank amp Trust SBBT e Republic Bank amp Trust RB River City Bank RCB NEW FOR River City Bank is a new Drake banking partner in 2008 Also new in 2008 70 0 B the TRAC screen in Drake allows tracking of prior year bank products See Return Tracking on page 163 About Bank Products This chapter covers requirements for you and your customers processes for setting up your software for offering bank products and data entry for bank products It also explains what bank products are and provides valuable information yov ll want to review in addition to the brochures provided by your bank Tax Preparer Requirements NEW FOR If tax return information will be disclosed to parties outside of the tax 2008 preparer s firm IRS Regulation 7216 requires that you obtain clients signed consents for the use and disclosure of their tax information IRS Reg 7216 provides guidance to tax preparers regarding the use and disclosure of their clients tax information to parties outside of the tax preparer s firm The Consent to Use of Tax Information must be signed and dated by the taxpay
427. ry menu Entering the remainder of the depreciation on the trial balance NOTE worksheet helps ensure that the balance sheet balances and pro vides a way to check that the amount on line 1 of Schedule M 1 is correct Compare the calculated line 1 at the bottom of the trial bal ance to the equivalent line on Schedule M 1 of the calculated return If the depreciation amounts match but the line 1 amounts differ an M 1 adjustment could be required Rental Expenses The following information applies only for partnerships and S corporations with mul tiple rental properties The partnership and S corporation trial balances include lines for rental income and expenses Both rental expense items require a trial balance detail worksheet Account Title Cash Trade and accounts receivable Allowance for bad debts Aan inns Ah oS oe eS ae t Torna Peon pt So ep heey rt yt Gross real estate rental income Total real estate rental expenses Gross other rental income Total other rental expenses Gross royalties p captal gains we N ee a aN vewn cren import Reportedon L line 1 cold Form 1120S Sch L line 1 cold Form 1120S Sch L line 2a col c Form 1120S Sch L line 2a col c naa tak ati E re L line 2a col c 0 L line 2b col c Se oF Sener OS Ream pT on nna to ney lie dee OT or 8825 line 2 Real Estate Rental Exp Form 8825
428. s Tax Year Unverified field Fields flagged as UNVER must be verified before e file is possible Excel files ZIP Code Zone Improvement Plan Five digit postal code following addresses to make mail delivery quicker Tax Year 2008 Drake Software User s Manual Appendix E State E filing Mandates Appendix E State E filing Mandates Alabama California Connecticut Florida Indiana Kansas Louisiana Tax Year 2008 State e filing mandates for tax year 2008 as collected from state tax authority publi cations are provided below If an income tax return preparer prepares 50 or more acceptable original individual income tax returns using tax preparation software in calendar year 2006 then for that calendar year and for each subsequent calendar year thereafter all acceptable individ ual income tax returns prepared by that income tax preparer must be filed using elec tronic technology California law requires tax preparers who prepare more than 100 individual state income tax returns annually and prepare one or more using tax preparation software to e file all individual income tax returns A 50 per return penalty may be assessed for each return filed on paper that should have been e file Conn Agencies Regs Section 12 690 1 requires return preparers who prepared 50 or more 2007 Connecticut income tax returns to file all 2008 Connecticut personal income tax returns electronically using the Federal State Electronic F
429. s checking Drake Calculations Screen code CHK Comparing Tax Returns In Drake you can compare data between two versions of the same tax return You can also produce a tax return comparison worksheet that shows data for a client s returns for the current year and the two prior years The Checking Information screen allows you to cross check Drake calculations with amounts from a previously prepared return Any discrepancies between the Drake return and the previously prepared return are shown via an EF message To compare a Drake return with a previously prepared return 1 Open the return to be compared and go to the CHK screen 2 Enter the information from the previously prepared return regarding income taxes credits deductions banking etc 3 Exit the CHK screen and calculate the return 4 In View Print mode view the EF MESSAGES page As displayed in Figure 5 64 an EF message shows where discrepancies occurred ELECTRONIC FILING MESSAGES MUST be corrected before electronic filing is allowed Name s TEST O MAPLE Your social security number 400 00 1005 5152 Info on CHK screen WAGES did not match the return 5162 Info on CHK screen TAX did not match the return P E eae ee ee Se ee Figure 5 64 EF message showing that CHK screen amounts do not match those in Drake NOTE If pre prepared data entry was used this screen already contains data The Tax Return Comparison screen i
430. s gt Envelopes Select filtering and sorting options from the Envelopes Filter Selection box If you need a more complex filter click Edit Filters See Filter Manager on page 262 Click Next Modify the Basic Search Conditions as needed then click Continue For more on Basic Search Conditions see Search Conditions on page 272 In the Envelopes dialog box update the envelope formatting as needed Click Help for more on individual fields Click Finish 259 Amortization Drake Software User s Manual 8 Set printer options in the Print dialog box as needed then click Print NOTE Not all printers are capable of printing envelopes Verify that your Postcards printer has this capability before using the Print Envelopes function in the program Always test print an envelope before printing an entire selection To print addresses on postcards 7 8 Amortization 260 Ensure that the postcards are loaded properly into the printer From the Home window go to Tools gt Letters gt Postcards Select filtering and sorting options from the Postcard Filter Selection box If a more complex filter is needed click Edit Filters See Filter Manager on page 272 Click Next Modify the Basic Search Conditions as needed then click Continue For more on basic search conditions see Search Conditions on page 272 From the Postcards dialog box update the postcard formatting as ne
431. s Proforma Proformas Organizers Forms may be toggled on off for printing purposes Simply choose the appropriate tab scroll through the list of forms and check uncheck the appropriate forms Click Detail to enable disable specific proformas organizers and to review their contents 1040 Organizer 1040 Proforma 1120 Proforma 11205 Proforma 1065 Proforma 1041 Proforma Name Description COVER Envelope Slip Sheet LETTER Pre Season Letter PRIVACY Privacy Policy Letter IREFERRAL a Aeterral Coupon a tender pe ae eae ey wn Figure 4 11 Select forms to print from the Batch Printing dialog box 5 Select the individual forms to print then click Print 6 Click Print again If printing proformas for multiple return types additional Proforma Options dialog boxes appear Select additional options and click Process 1040 1120 1120S 1065 etc to proceed In the Options dialog box you can click Test Print to test print a N TES proforma or organizer In the Batch Printing dialog box you can click Detail to preview the documents to be printed Preseason letters can also be printed in batches apart from profor mas and organizers For more on printing batch letters see Let ters on page 257 Scheduler am The Drake Scheduler has been redesigned for 2008 The new capabilities are ay described in Table 4 1 Scheduler Table 4 1 Scheduler New Features in 2008 New Feature Description Group Me
432. s a carryover of the credit from the previous year enter the amounts in the appropriate fields and then create a statement listing the circumstances and amounts Use statement number 47 For more information on adding an unformatted statement in Drake see Unformatted Schedules on page 161 Tax Year 2008 119 Elderly Disabled Credit Drake Software User s Manual Elderly Disabled Credit Screen code R Use the R screen accessible from the Credits tab for Schedule R Credit for the Eld erly or the Disabled NOTE If the credit does not show up in the calculated return make sure the taxpayer s AGI is not too high to qualify for the credit Home Energy Credits Screen code 5695 Use the 5695 screen accessible from the Credits tab for Form 5695 Residential Energy Credits Foreign Tax Credit If the amount of the foreign tax credit FTC is less than 300 or 600 if married fil ing jointly and no Form 1116 is needed you can enter this amount directly into the Foreign Tax Credit field on screen 5 See Figure 5 35 Form 1040 Credits Other Taxes Payments Taxes CaptaliCorstrercthons Farnell eR Sit Sssccicacscsccsscssvovscsevscsscyesscesscsccucesetceivasssvucasstavscssessevassasets cores crasecezrovcvoststedaesvver RTT eT SET TE SRT a E ae Credits ges i ee eee ee mee ee Oe eee ETS Figure 5 35 Use screen 5 to enter FTC if totals are less than 300 for single or 600 for MFJ For greater amounts us
433. s auto on the 4562 screen Force expenses TO Figure 5 56 New expenses added to AUTO screen 148 Tax Year 2008 Drake Software User s Manual Auto Expenses Tax Year 2008 If the standard mileage is taken the business use portions of the property tax and interest are figured into the standard mileage deduction while the personal use por tion of the property tax is transferred to Schedule A line 7 An example is shown in Figure 5 57 where business use percentage is 68 61 Total Expenses 0 6 ee ee eee ee ee ee ee ee ee ee eee nee 11 r 142 Standard Mileage Rate Calculation Total Business miles driven January 1 to June 30 10 000 X 505 eee eee 5 050 Total Business Miles driven July 1 to December 34 585 er rsesrseren Interest esesosososososooo 61 Personal Property Tax ee eee eee eres E 261 seas Total Standard Mile Rate deduction How it is reported Depreciation deduction 6 2 6 eee ee eee eee ee we ee eee we eee wee eens Figure 5 57 1 Business use portions of interest and property tax are figured into total standard mileage rate deduction 2 personal use portion of property tax flows to Schedule A If expenses are taken the business use and personal use portions are figured as explained previously but the total expenses rather than the standard deduction are used for the auto expense The amount of personal property tax carri
434. s based on a different starting number For example if you chose to stagger by 2 000 with the first computer starting at 01000 the second computer would start at 03000 the third at 05000 and so on In this case each computer can process 2 000 returns before duplicating a DCN M p l RTANT Be careful if changing DCNs after tax season begins and returns have already been transmitted If DCN staggering is done improperly returns might be processed with duplicate DCNs causing e filing rejections Changing a When a return receives an IRS rejection because the same DCN was assigned to more DCN than one taxpayer the DCN must be changed before you can re transmit the return Tax Year 2008 187 EF Override Options in Data Entry Drake Software User s Manual Imperfect Returns To change the DCN of a tax return 1 Open the return in Drake 2 Press CTRL M and wait while the program assigns a new DCN 3 Go to View mode 4 View Form 8879 to verify that the DCN has been changed gt Keep this form for your records See instructions _ 777777 066658 AMELIA CARTER tue Declaration Control 4 Number DCN Tax Return Information Tax Year Endin lole Dollar Dollar 1 Adjusted gross income Form 1040 line 38 Form 10404 line 22 Form 1040EZ lineg e s 2 Total tax Form 1040 line 63 Form 10404 line 37 Form 1040EZ line 10 eee ee ee eee d S it WN Ga camancitee schmitt hiner She owas oep
435. s for a taxpayer calculate the total for each of the 8903 items and enter the combined totals onto the 8903 screen Other Adjustments Other adjustment related screens in Drake are listed in Table 5 7 These screens are all available from the Adjustments tab Table 5 7 Other Adjustment Screens Available from Adjustments Tab Screen Form or Worksheet Notes CLGY Ministerial Income Allocation See Ministerial Income Allocation following 8082 Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request MFS Community Property Allocation Use for MFS in a community property state 8873 Form 8873 Extraterritorial Income Exclusion Ministerial Income Allocation Use the CLGY screen for those with housing allowance in the form of a parsonage or rental or a parsonage allowance from the church generally reported on the W 2 box 14 The CLGY screen allows the following to be calculated e Percentage of tax free income to be applied to Schedule C expenses marked with business code 813000 e Percentage of tax free income to be applied to Form 2106 expenses marked with a P pastor in the F federal box e Appropriate self employment income to flow to the Schedule SE Rental Ifthe church provides a rental or parsonage allowance but no parsonage enter the Parsonage Parsonage or Rental Allowance and the Actual Expenses for parsonage If a sepa Allowance rate Utility allowance is provided enter th
436. s opened Figure 12 2 Tax Year 2008 267 Setting Up a Report Drake Software User s Manual Drake 2008 Report Editor Step 1 a x Formatting of Reports Select the category of data and then the data itself When a keyword is highlighted its description will appear below Select that keyword by double clicking or using the select button Once the keywords are selected they can be dragged to create the desired order of columns Below this list is a sample of the the report and the print format Enter a title and description limit pm O 70 characters for your new report Select Title and Description Report Title 1040 Returns Accepted Report Description Returns transmitted but not acknowledged m Select Report Columns Choose keywords to add columns to your report Categories Available Columns Selected Report Columns fal Categories hl Accepted Ack Code Ack Code State Ack Date Ack Date State Add On Fee lt Unselect All Address 1 Address 2 AGI Average xi Transmission Date Ack Code Ack Date Bank Code Extension Only Extension Selecta category Column keywords m Sample Report Portrait 1040 Returns Accepted Transmission Date Ack Code Ack Date Bank Code Exten Taxpayer ID Taxpayer Name Figure 12 2 Report Editor Step 1 window for formatting reports 5 Revise the R
437. s returns that are planned for transmission Because transmittal can be interrupted or a return denied this list is not suitable as a record of transmitted files 5 Click Exit The program immediately logs in to Drake Software and performs the following tasks e Checks for new acks e Transmits files to Drake e Retrieves acks of the transmitted files e Checks for Drake e mail if this option is selected see note following e Logs out of Drake Transmission notes appear in the Communications box of the Transmit Receive window as transmission progresses When transmission is complete all returns trans mitted through Drake are forwarded to the correct IRS Processing Center 6 Click Exit to close the Transmit Receive box NOTE To have the system check for Drake e mail during transmission go to Setup gt Options gt EF tab and select Check for email during EF transmit receive To check for acknowledgments without transmitting any files to Drake go to EF gt Transmit Receive and click Acks Only The program checks for federal and state acknowledgments bank product acknowledgments and check authorizations Once the acknowledgments are received click Exit See Step 4 Process Acknowl edgments following for more information on acknowledgments Step 4 Process Acknowledgments Ack Processing Tax Year 2008 When Drake receives your transmission it immediately sends you a one letter acknowledgment or ack W
438. s specific instances that could require index file repair Table 11 1 Situations that Might Require Repairing of Index Files What To Situation Repair Files were restored using Tools gt File Maintenance gt Restore Name Index A client record was deleted through Tools gt File Maintenance gt Delete Name Index Client Files The EF gt Search EF Database function does not seem to work properly EF Index 247 File Maintenance Shortcut Press CTRL R fo open the Repair Index Files window Drake Software User s Manual Table 11 1 Situations that Might Require Repairing of Index Files What To Situation Repair Records were added to the EIN database EIN Index The Client Status Manager CSM index was updated CSM Index To repair index files 1 2 3 4 5 From the Home window go to Tools gt Repair Index Files In the Repair Index Files window select the index files to repair To select all click Repair All Click Continue Click OK If Name Index was selected you will need to select a Name Index Option before clicking OK When the file repair is completed click Exit to return to the Home menu NOTE Repairing the name index takes about a minute for every 2 000 clients File Maintenance The File Maintenance menu provides access to the following functions NEW FOR 2U08 Backing up and restoring files Importing exporting changing or deleting f
439. s to install from the States tion Complete window to be displayed on CD listing Click Next Installation could take several minutes 9 Click Install then wait for the Installa tion Complete window to be displayed Installation could take several minutes Initial Login If a previous version of Drake is detected on your system the Update Admin Pre parer and Setup Information window is displayed during these steps You do not need to update now Click Skip to continue with program installation If a drive letter is not displayed the software has determined that there is not enough space on the drive To open and log in to Drake for the first time APON Preparer Login Double click the Drake Software icon on your desktop In the Preparer ID field type Admin Field is not case sensitive In the Password field type your serial number located on your packing slip Click Login Preparer ID lt Type Admin Password lt Enter serial number for initial login Click Login Figure 2 1 Logging in as Admin The Setup Wizard opens automatically the first time you log in to Drake Setup Wizard Designed to guide you through the software setup screens the Setup Wizard appears each time the program is opened until all required setup items are completed A green check mark see Figure 2 2 indicates that a setup item is complete Tax Year 2008 9 Running Drake on a Network Drake Software U
440. s used for comparing a current year tax return with data from the two prior tax years The screen itself has parallel columns of data entry fields one column for 2006 and one for 2007 Tax Year 2008 159 Special Features in Data Entry Drake Software User s Manual Screen code If a return was updated from the prior year the COMP screen already contains data If COMP not the screen must be completed manually for an accurate comparison When a return is generated the COMPARE worksheet displays the data comparisons NEW FOR The COMP screen has several new fields and a more user friendly lay 7 0 B out New fields must be completed manually for the two prior years in order to get a complete and accurate comparison Miscellaneous Codes The Miscellaneous Codes fields on screen 1 are for use in tracking returns and creat ing customized reports For example you might decide to use Misc Code 1 to track the different ways that clients learned of your service For each return you might enter Ad Flyer Referral etc whichever is applicable into the Code 1 field Later when designing a report of all clients in the Report Manager you would select Misc Code 1 as one of the columns The report displays the information from the Misc Code 1 field on screen 1 for each client and you would be able to see at a glance which clients were referred which responded to an advertisement or flyer etc NEW FOR Screen 1 now has f
441. s used often by your office For example if many of your local clients use Small Town Bank you can arrange for the program to enter Small Town Bank every time you press a shortcut key combination Using To insert macro data place the cursor in the field and press the applicable shortcut key Macros macro combination To view available macros press CTRL SHIFT M from within a field The Data Entry Macros window is opened To insert macro data from the list in the Data Entry Macros window select a macro from the list and click Execute or double click the row The Data Entry Macros window is closed automatically Creating To set up your own macros in Drake New Macros To access a list macros in data entry press CTRL SHIFT M Symbol 1 From the Drake Home window go to Setup gt Macros The Setup Macros dialog box shows the shortcut keys and their associated tasks of 2 Edit the Data column for a macro listed All tasks listed can be edited Symbols for non character shortcuts are listed in Table 2 13 3 Click OK Table 2 13 Macro Symbols Action Move cursor back one field If the lt symbol is inserted in front of selected data in a macro the pro gram moves the cursor back one field from the active field before inserting the data If inserted after the data the program inserts the data in the active field then moves the cursor back a field Move cursor forward one field If the gt symbol is inser
442. se Taxpayer T TEST MAPLE 400001005 Download Progress Figure 5 8 Name and SSN appear in W 2 Download dialog box 3 Enter the client s PIN supplied by the employer N In some cases you can contact the employer and get the format for DTE the PINs for instance if the company uses the last four digits of the employee s SSN but a preparer cannot get the PIN itself 4 Click Download then click Yes to continue The Progress bar tracks the progress of the download process 5 When the W2 Download Complete message is displayed click OK The W2 screen for the taxpayer will now contain the downloaded information M p I RTANT Purchase W 2 downloads in sets of 15 25 per set Each instance of a downloaded W 2 counts as one against your total even if the same W 2 is downloaded twice If however the client has W 2s from multiple employers and all W 2s are downloaded in the same session it counts as only one download If the W 2s are downloaded in separate sessions each session counts as one against your total Tax Year 2008 89 Passive and Investment Income 1099 DIV etc Drake Software User s Manual 1099 MISC Screen code 99M Use the 99M screen to enter data from Form 1099 MISC To associate the 1099 MISC information with a specific line or form within the return make a selection from the For drop list at the top of the 99M screen If associating it with one of multi ple forms enter a Multi F
443. se Allowed in prior years see Figure 5 51 field will be updated based on system calculations If the taxpayer expenses assets using section 179 the program produces a WK_1179L worksheet Section 179 Business Income Limit with the return Investment Credit Codes If an investment credit code is required select the code from the Investment credit code drop list on the 4562 screen Tax Year 2008 143 Depreciation Drake Software User s Manual Asset amp Department Numbers The Asset number and Department number fields on the 4562 screen are for track ing purposes in the Fixed Asset Manager see Fixed Asset Manager on page 277 and can be used in reports Land Cost The Land cost field on the 4562 screen is for the cost basis of the land The amount entered here should not be included in the cost basis of the asset For example if the purchase price including the land was 100 000 and the cost of the land was 10 000 you would enter 10 000 in the Land cost field and 90 000 in the asset Cost Basis field at the top of the screen Depreciating Home Used for Business If a 4562 screen is to be associated with a Form 8829 Business Use of Home select 8829 from the For drop list at the top of the screen If the home was the taxpayer s main home select Main home for Form 8829 in the Other Information section on the left side of the 4562 screen Amortization Enter amortization codes in the Amortization Code field o
444. se amounts in the appropriate fields 15a IRA distributions received NO 1099 received cc eccceceeeceeseeeccneseesonneees 15b Taxable portion of IRA distributions AbOVE cccucscensnsnnnennnnnnnnenenannnnneettle A 16a Pension distributions received NO 1099 received cece ccc ceeesessesseeessesteseeseeenees E 16b Taxable portion of pensions AHOVE ccc ccc ccc csccssescesesesseeuesecscasesesssensaeessenesesseeneaees i 1 Figure 5 21 Adjustment fields for IRA and pension distributions screen 3 These amounts are calculated with the corresponding amounts from the 1099 and 8606 screens and carried to the IRA distributions and Pensions and annuities lines of Form 1040 Do not duplicate entries made on the 1099 or 8606 screens NOTE If a 1099 R was not received for a pension annuity or IRA distribution the return cannot be e filed To file a substitute 1099 R Form 4852 refer to Substitute W2 or 1099 R on page 89 Ifa 1099 R distribution should be excluded from income because it was rolled over into another qualified plan indicate this using the Exclude from income drop list on the 1099 screen under the Special Treatments for this Distribution heading Exclude from income rolled over into another qualified plan X Rolled over into another plan Rolled over into the same type of account le Figure 5 22 Selections for rolled over 1099 R distribution Select S if the di
445. season Preparation iscsivccccicacesssessnsactacervansocssunssieseveccnertenmiisncteceerereens 67 Priore eat Updates ii sive 64d rert pitri Cou hoe tE EErEE ETER EEEE EEA RRR ARR EES 67 Organizers and Proformas sas ot se danho oat neunana nner e rrera 71 Sched let rsrsr RAR RLS AGRA ka paa a E E EA AE ER A EE a Ei 74 E filing Pre parauony ocseredre reiri eg ake PRES ee EKES SEEE PE AEDE E e Ea 82 Return Preparation cassis satsn scant vss xnnan esccceannesndaaaaacobeamanncaabbeiencsaecieaastees 83 Taxpay r Demecrapnics ivacscdelevasce soe ta ek eevee hoes bee EE eete heii eee ets 83 EXCMPUONS 600 cee Eis addenda kee RACHA RARER LA RATES Ree RELA REA ER RERS 85 Personal Service Income W 2 1099 MISC 0 0 cc ccc cee eee eee eees 87 Passive and Investment Income 1099 DIV etc 2 0 0 eee ne 90 Taxable REMUS 2325 44 varew kha gs Col edy katana eee elas Hows Chea hes E A EEE 93 POM cy 5 acc cas ade aa este a be cent gag a ecg a eo tate ge eget bee E aE 93 Self Employment Income Schedule C 0 0 0 0 0c cece eee 93 Sales OF ASSES ue stehu d ae iE ae goa E Ia ee S EE ae ie ie eee oie ea kee aE E S 96 Retirement Income 1099 R ete dan ananuna nananana anea 101 Supplemental Income cai incuba eek ed ed ie E REN a EE ka e eN 103 Fam INCOME ook a cst eek rekien saa e R a a ea e Ra rA Chea a 106 Unemployment Compensation s s s ssassn seenen rarene eree 107 Social Security and Railroad Benefits nnana ccc eens 108 Tax Year
446. sed and viewed from the DDM Creating an Archive To create an archive of an open return 1 From View Print mode select Archive gt Archive Client Return or select J Archive gt Archive Manager and click the Archive icon in the Archive Man ase ager toolbar 2 Inthe Archive Client Return dialog box enter a description of the archived file Figure 6 13 and click OK Archive Client Return Please enter a description for the archived file The description is used in the Document Manager and in the Archive Manager to help identify specific archives Enter a description for the archived file Ex Original Return before Amending Amended Return prior to review Figure 6 13 Archive Client Return dialog box 3 After the program has created the archive click OK again The program adds the archived return to the Archive Manager list 176 Tax Year 2008 Drake Software User s Manual Archive Manager I6 OW Restore Archive Delete Print Help Exit Archive Description Original Return Before Amending User Name NROGERS 10 28 2008 08 34 14 AM 10 28 2008 08 49 18 AM ia aar r E E O N T EE E N Figure 6 14 Archive list The DDM and Archive Manager use your description to help iden NOTE tify specific archives The program creates an archive file name beginning with Archive followed by the date time stamp Exam ple Archive 20081015153145 indicates October 15 2008 20081
447. ser s Manual Drake 2008 Setup Wizard Welcome to the Drake Software Setup Wizard The setup wizard will quide you through entering basic information The first section is required for basic return preparation and electronic filing The second section is recommended to enhance your tax preparation business V Do not show Setup Wizard at program startup Required Completed M Setup Firm s Enter information about your company n aati Dan arano gl Ee pfarmation required for glaciare fing an Figure 2 2 Setup Wizard Setup complete You are not required to use the Setup Wizard To keep the Wizard from opening at program startup click Do not show Setup Wizard at startup See Figure 2 2 Click Help gt Setup Wizard to return to the Setup Wizard at any time Click Exit to close it Running Drake on a Network Your network s designated server should meet the following minimum specifications e Windows 98 or later for a peer to peer network e 500 MHz processor e A minimum of 64 MB RAM 128 MB is recommended As computers are added to the network RAM and processing speed of the server and the workstations should be upgraded to improve performance N Your office s network must be properly configured for Drake to run UTE correctly Drake cannot provide technical support for the network itself Consult an IT professional for network setup and support Network Options Two network options are available a S
448. set complete the Date sold field on the 4562 screen 2 Complete a 4797 screen for the asset indicating with a Y that the sale is also reported on Form 6252 a Complete a 6252 screen for the asset 4 View the return Note that two 4797 forms are generated making the return ineli gible for e filing e Ifrecapture is necessary the two 4797 forms cannot be avoided The return must be paper filed e Ifthere is no recapture you can delete the 4797 screen for the asset and recal culate the return Look at line 31 of Form 4797 for the recapture amount if any Basis of Primary Residence Screen code HOME 98 Prior to tax year 2008 the HOME screen in Drake was used for tracking the gain or loss on the sale of a home in the year of sale for reporting on Schedule D or Form 4797 This screen has been revised in 2008 to be used for the following purposes e Reporting the sale of a primary residence e Entering data to determine the taxpayer s basis in the primary residence Tax Year 2008 Drake Software User s Manual Sales of Assets e Entering data to calculate the tax implications of the transaction e Allowing the program to reduce the maximum exclusion if the taxpayer is eligible for part but not all of the gain exclusion e Applying the appropriate treatment for the gain loss on the transaction e Indicating whether a surviving spouse is taking the MFJ currently 500 000 exclusion for gain on the sale
449. sh in front of the description NOTES eeu If you press CTRL W or double click in a Depreciation field the program will open the associated 4562 Depreciation screen with the For and Multi Form Code boxes completed See Associating One Screen with Another on page 62 You can now take screen captures of screens in data entry and send them to the clip board to a printer or to a file To capture a data entry screen 1 2 Right click any open screen not from within a field or text box Select Screen Shot The program offers three choices for screen captures e To File Save the screen as a bitmap bmp file to a location you select e To Printer Open the Print dialog box and print an image of the screen e To Clipboard Copy an image of the screen to your clipboard in order to paste it into another program such as Microsoft Word Save print or copy the image as directed according to your selection A calculator feature is available in every numeric field in data entry To access it press F10 from within a field Once results are calculated press F1 to insert those results into the field When the calculator is active the NUM LOCK status is activated NUM LOCK is disabled when the calculator is closed Macros are shortcuts that enable you to enter frequently used data entry items with minimal keystrokes This convenient feature is described in detail in the Macros Setup section of Chapter 2
450. smission Software Fee Add On Add up to 30 as an additional fee to the 2 Drake transmission fee This add on fee is deducted from the taxpayer s refund and held in a separate bank account At the end of the season the balance is distributed directly back to the preparer 4 Click Save The program assigns a number for each firm entered in Firm Setup NOTE 14 To view a report of the revenue you ve earned from the add on fees for e filing log in to Support DrakeSoftware com and select My Account gt Add on Fees Report Tax Year 2008 Software Setup Drake Software User s Manual Editing Firm Information Shortcut Double click a firm s row to edit firm data Deleting a Firm amp Delete Printing a List of Firms sy 1 ee 2 3 4 ERO Setup 1 2 NEW FOR To edit a firm s information 1 2 3 4 From the Drake Home window go to Setup gt Firm s Select the firm to edit then click Edit Firm to activate the bottom half of the Firm Setup window Edit the firm information See Adding a Firm on page 14 Click Save Click Exit to close the Firm Setup window To delete a firm from Firm Setup PPM From the Drake Home window go to Setup gt Firm s Select the firm to delete Click Delete Click Yes Click Exit to close the Firm Setup window To print a list of firms entered in the program From the Drake Home window go to Setup gt Firm s Click Pri
451. ss 109 Form W 4 Employee s Withholding Allowance Certifi cate 157 Form W 7 Application for IRS Individual Taxpayer Iden tification Number ITIN 156 forms blank 246 order in printing 175 properties 173 forms based data entry 263 forums 232 xiv 2008 Drake Software frequently asked questions see FAQs front office mode in Scheduler 75 G gains capital 96 GO Zone 146 grid data entry activating globally 25 disabling 59 using 58 group sales 145 H heads down data entry about 72 macro for 34 toggling to basic data entry 73 health insurance self employed 113 health savings accounts HSAs 109 Heartland Disaster Tax Relief Act see Midwestern Disas ter Areas hierarchies online EF database 196 home residence conversion to business use 99 credit for first time buyers 133 depreciation of 151 energy credits 120 months in 86 office 150 property usage of 104 sale of 98 using the HOME screen 98 Home window in Drake 54 Hope credit 115 Housing and Economic Recovery Act 2 133 imperfect returns 29 188 importing see also exporting e mail address books 239 files into the DDM 288 Kiddie Tax data 124 QuickBooks data 255 Schedule D data 96 trial balance 299 309 W 2 data 89 index file repair 247 inheritance 96 installing DDM 281 Tax Year 2008 2008 Drake Software Drake tax software 7 12 updates 243 interest and dividends 90 93 IRA adjustments 115 contributions 102
452. sses to be used when creating Ohio city returns To view and edit Ohio city tax details 1 2 3 4 From the Home window go to Tools gt City Tax Rates Select a city from the list The city s details automatically fill the text boxes which you can edit as needed Click Update to save any changes Click OK NOTE This tool is for use with Ohio cities only Verify Ohio city tax rates and addresses before preparing Ohio returns Forms Based Data Entry Formerly known as pre prepared the forms based data entry tool allows you to enter a previously prepared return into the tax software To enter a pre prepared return in Drake complete the following steps 1 2 3 4 5 Go to File gt Forms Based Data Entry Enter or select the desired return Click a form from the Forms Based Data Entry screen type the form in the Make A Selection field or press the corresponding F1 F8 keys Fill in the fields with return data and press ESC to save the form Continue to enter form data until complete To view or print the return click either View or Print from the toolbar Quick Estimator Use the Quick Estimator to quickly calculate results for an individual 1040 return IM p I RTANT Do not e file or mail the return generated in the Quick Estimator Tax Year 2008 to the IRS or an amended return will be required PPR clients A return created in the Quick Estimator counts as one PPR 263 Quick Estimato
453. starttime color j Single appointment color E Multiple appointment color Figure 4 14 Colors section under Calendar tab in Scheduler Setup Click a color to open the Color dialog box for that color Select a new color Click OK Before exiting Scheduler Setup ensure that Use custom created colors is selected DNA To reset the Scheduler to use the default colors click Use application default colors Tax Year 2008 Drake Software User s Manual Scheduler Scheduling Appointments A preparer s information must be entered in Setup gt Preparer s before appoint ments can be scheduled in the Scheduler for that preparer N Preparer schedules and appointments are carried forward each DTE year Go to Last Year Data gt Update Settings 2007 to 2008 and select Preparer Schedules To schedule an appointment for a preparer 1 From the Home window select Tools gt Scheduler or click the Scheduler icon 2 Click New Appt or double click an appointment time in the schedule grid The Appointment Detail dialog box is displayed If you accessed Appointment Detail by double clicking a time in the schedule grid the Appointment Detail is opened to that date and time Figure 4 15 New Appt Drake 2008 Appointment Detail a O Q y B Find Next Appt Save Delete Lookup Data Entry Help Date 2 18 2009 Time 99 30 AM 7 Duration 15 SSN EIN 400001005 Client Type Retuming 7 Appointment Type Individual Name C
454. ster Recovery Assistance Retirement Plan Distributions and Repayments has been added to the 1040 package Fields for Form 5884 A Credits for Affected Midwestern Disaster Area Employ ers have been added to screen 5884 in all applicable packages Where applicable checkboxes have been added to specific screens to indicate that the Midwestern disaster area tax provisions apply For example screen 8863 Education Credits has checkboxes to indicate that the taxpayer and or spouse attended an eligible institution Enhancements to Other Packages Drake s other packages particularly the tax exempt organization 990 package have undergone some significant enhancements in 2008 Keep an eye out for our Business Entities manual which will be published on the Drake Support Web site in early 2009 Tax Exempt Organization 990 Package Streamlined packages in conjunction with newly designed IRS forms make it easier to complete Forms 990 990 EZ 990 T Tax Year 2008 Drake Software User s Manual Contacting Drake Support and 990 PF Screens are less entry intensive with information carried to as many other areas as possible The 990 updates are more concise in 2008 and the field spe cific helps have been revised for accuracy and thoroughness 1120 1120S and 1065 Packages Drake s corporate 1120 S corp 1120S and partnership 1065 packages now include a trial balance importing feature These packages along with the 99
455. stomize the CSM display Shortcut Press CTRL D to open the Customize Display dialog box 2 Click OK to save your changes TIP 220 Drake 2008 Customize Display Column Layout 1 Click Customize In the Column Layout tab of the Customize Display dialog box Available Columns are listed in the left pane and Columns in Current View are listed in the right The Column Layout tab allows the user to define the columns that appear in the Client Status Manager display To add a column select the item in the left hand list and click Select Column order can be changed by dragging an item up or down in the list Column Layout f Status Settings Available Columns Filing Status Extension Bill Adjustment Description 1 Bill Adjustment Amount 1 Bill Adjustment Description 2 Bill Adjustment Amount 2 Bill Adjustment Description 3 Bill Adjustment Amount 3 Bill Payment Description 1 Bill Payment Date 1 Bill Payment Amount 1 Bill Payment Description 2 Bill Payment Date 2 Select gt Select All gt gt lt Remove lt lt Remove All Reset Columns in Current View Client Name Type Preparer Status Started Completed Last Change Changed By Refund BalDue Total Bill Bank Deposits Client Payments Figure 9 3 Column Layout tab To add a column select an item in the left pane and click Select to move it to the right pane To add all items click Select All To remove a column select an i
456. stribution was rolled over into the same type of account Select X if it was rolled over into another plan If S is selected the word ROLLOVER is dis played on Pensions and annuities line of Form 1040 101 Retirement Income 1099 R etc Drake Software User s Manual 501 c 18 Contributions Enter contributions to a 501 c 18 pension plan on screen 4 but do not include amounts that have been assigned Code H elective deferrals to a section 501 c 18 D tax exempt organization plan in box 12 of the W 2 Those amounts are carried automatically from the W2 screen to Form 1040 IRA Contributions Converting to a Roth IRA For traditional IRA contributions use the 8606 screen which addresses Part I of IRS Form 8606 Nondeductible IRAs For Roth IRA contributions use the ROTH screen which addresses Parts II and III of Form 8606 Nondeductible IRAs Deductible IRA contributions are calculated from the 8606 screen and displayed on the IRA deduction line of Form 1040 If an amount is entered into the Deductible IRA field on screen 4 it is combined with the amount from the 8606 screen If the taxpayer is covered by a pension plan use the 8606 screen instead of screen 4 If the program determines that the contribution amount exceeds the maximum allowed it generates a warning NOTES page with the return NOTE If Form 8606 is not required but you want to generate it anyway go to the 8606 screen and select Pr
457. t First Previous Next Last Font by Page 1 of 3 Exit Print report Change font Number of Scroll from page to page in ee eae Export report to Excel a multiple page report ropan CSV or Notepad Exit Report Viewer Figure 12 10 Report Viewer Options NOTE Reports exported to CSV are saved in Drake08 Reports Select a different location by browsing from the Save CSV file window Depreciation List The Depreciation List report displays depreciation information for selected clients There are two methods for creating depreciation lists in Drake by manually entering client SSN EINs to be listed or by filtering the client database for clients that meet specified criteria To create a depreciation list for one or more clients 1 From the Home window select Reports gt Depreciation List The Depreciation List Client Selection dialog box is displayed 2 Choose one of the following methods a Create a manual list Enter the SSN EIN and click Add Client Repeat this step for additional clients until all the desired clients are entered then click Next 276 Tax Year 2008 Drake Software User s Man ual Fixed Asset Manager b Filter the client database Click Next to open the Basic Search Condi tions dialog box Edit settings as desired see Search Conditions on page 272 then click Continue 3 Choose to Print the depreciation list or to Export to File Print Send the list to the prin
458. t Yes or No for the desired letter types In the Figure 2 26 example the user has selected not to have the engagement letter printed for the client Overriding EF Setup 52 The EF screen in data entry allows you to suppress federal and state e filing on a per return basis The program default in Setup gt Options gt EF tab is that all eligible forms will be e filed For more information on the EF screen see EF Override Options in Data Entry on page 188 Tax Year 2008 3 Basics To open the 2008 program double click the Drake 2008 icon on your desktop The a login window displays system and drive information the current date and the Pre wae parer Login box Figure 3 1 M Drake 2008 Tax Software Drake S O F T_W_A_R_E TAX YEAR 2008 Preparer Login Preparer ID l Password l Updated Drive Windows xP 11 03 2008 A Copyright 1977 2008 Drake Software Licensed Not Sold All Rights Reserved Figure 3 1 Drake login window Tax Year 2008 53 Logging In and Out Drake Software User s Manual Logging In and Out Enter a Preparer ID and Password if one has been designated and click Login to open the Drake Home window See Figure 3 2 on page 54 N If logging in for the first time after installation enter ADMIN this item DTE is not case sensitive for Preparer ID For Password enter the serial number from your packing slip Log out from the Home window Click Fi
459. t a tab Table 2 5 through Table 2 12 describe the options available on each tab in Setup gt Options Options under the Data Entry tab are described in Table 2 5 Table 2 5 Setup Options Data Entry Option Description Maximize data entry screens where Increase the size of the Drake screen to fill your monitor Effective at all possible for easier viewing monitor resolutions Size data entry screens to show most Decrease the size of long Drake screens so they fit on your monitor Effec fields without scrolling tive only when monitor resolution is set to 1024 x 768 or smaller Disable sizing of data entry screens Keep preparer from resizing screens Effective usually for monitor resolu tion set to 800 x 600 or smaller Tab to zip code field skip city state Press the TAB key while entering address info on the Demographics and use zip code database screen to bypass the City and State fields and go directly to the ZIP field Show notes reminders to preparer Show all notes and reminders from the NOTE and PAD screens every time when opening a return you open a client file that contains notes or reminders Display formatting in SSN EIN Date Display dates phone numbers SSNs EINs and ZIP codes with appropri Phone and Zip code fields ate hyphens for easier reading 24 Tax Year 2008 Drake Software User s Manual Software Setup Table 2 5 Setup Options Data Entry Option Description
460. t an asset is in the GO Zone property and as applicable if taking the 50 bonus depreciation If most depreciable assets are GO Zone properties but some do not NOTE qualify you can indicate that all qualify but you must select the Does NOT qualify box in the GO Zone portion of the 4562 screen for the non qualifying assets Other Depr Use screen 10 Additional Depreciation Elections to elect out of 50 bonus depreci Elections ation for some or all of the assets that were placed in service in 2008 Auto Expenses Screen code The Auto Expense Worksheet AUTO screen accessible from the Adjustments tab AUTO is used for calculating automobile expenses related to certain types of income NEW FOR The AUTO screen and WK_AUTO worksheet have been redesigned in 2008 2008 New features of the AUTO screen are highlighted in Figure 5 53 146 Tax Year 2008 Drake Software User s Manual Auto Expenses Drake 2008 Data Entry 400001008 LUCKY TEST Auto Expense worksheet Description Date placed in service 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 Current Year Mileage Business Before 07 01 After 06 30 orce Mileage Expenses Insurance Apply r o Licenses Bus use Note DO NOT key La eee aces Batista E the business use i percentage for r this auto
461. t year 2008 repaid Screen 3 Field Portion of above unemployment repaid in 2008 Note that the Unemployment compensation received field on screen 3 is an adjust ment field Any amount entered in this field is added to the amounts from the 99G screen and carried to the Unemployment compensation line of Form 1040 Do not duplicate the 99G entries on screen 3 Tax Year 2008 107 Social Security and Railroad Benefits Drake Software User s Manual Social Security and Railroad Benefits Use the SSA and RRB screens to enter information from the 1099 SSA and RRB 1099R forms respectively Screen 3 includes fields for related data if no 1099 is used SSA 1099 Screen code SSA Use the SSA screen to enter SSA 1099 data If the SSA 1099 was not distributed use screen 3 to enter the following Social Security benefit amounts shown in Figure 5 27 e Social Security benefits that apply for the current year e Lump sum benefits from prior years total received and taxable portion e Railroad Tier 1 benefits for the current year Lump sum benefits earlier years TOTAL received cccccccssecsseessecsseessecessecsseesessessneens Lump sum benefits earlier years TAXABLE portion ccc eccccsccsessesessesseseeseeseseeees ot Fp AV Meiko AP ONS aban reveren a IT ened att A ET ae ee pe ee ee ee Net railroad Social Security equivalent Tier 1 benefits received for 2008 00 Note Program will figure taxable portion
462. ta entered on the W2 screen must match the client s W 2 form The following fields can be completed automatically by the program e Names and Addresses The employer information could be filled in automati cally if the EIN is in your Drake database The employee information is not required unless it is different from that provided on screen 1 e Wages and Withholding When wages are entered in box 1 of the W2 screen boxes 3 6 are filled automatically These amounts should match those on the W 2 If the Social Security or Medicare withholding is incorrect and must be verified use the Verification of W 2 screen accessible from the Other tab for documentation If after contacting or attempting to contact the employer you sus pect fraud immediately contact Drake the RAL bank if appropriate NOTES and the nearest IRS Criminal Investigation office Call the tax fraud hotline at 800 829 0433 If a W 2 has incorrect Social Security or Medicare withholdings a RAL is not allowed until the W 2 is verified with the employer New in 2008 optional verification fields can help ensure that wage and federal with holding amounts are correct These fields require that the user re enter wages and fed eral withholding amounts at the bottom of the W2 screen Wages and Federal Withholding Verification To ensure the accuracy of the Wages tips and Federal tax wih amounts re enter the amounts from boxes 1 and 2 of the client s VV 2
463. tal income taxable income total tax refund amount balance due payment method and e filing eligibility If the return is eligible for e filing a green check mark is displayed If a portion of the return is ineligible for e filing a red X is displayed and a message appears in EF Messages Figure 6 3 Summary Details 62 529 2 521 Check or CC 14 556 0 Receive Check Wisconsin 15 963 California a Return is ineligible for e filing EF messages are displayed EF Messages Pouble click on any highlighted item in the list belovytto fix the problem Parage Code Description right click for fullipeription ooo Federal 5704 The amount of the economic stimulus payment received by the taxpayer Federal 5244 Direct Deposit info was duplicated incorrectly in data entry MEON ROTA nee T a RNIN E Ne i EN S EN aa N O Figure 6 3 Return in this example is ineligible for e filing The EF Messages section lists e filing message codes and descriptions by package EF messages pinpoint the reason a return is ineligible for e filing Identified issues must be corrected for a return to be eligible for e filing e Accessing full messages Some messages do not fit in the Description row To view a full message right click a row and select View Full Text Of EF Message e Accessing message links If an EF message is blue double clicking it opens the data entry screen that contains the error If applicable the field that ca
464. te The Administration page is available only for users logged in as Admin To access this ETC page click Administration Displayed are a student drop list buttons for adding and searching student records and a list of student records Figure 10 7 231 Online Support Logging Out Drake Software User s Manual Active Students CED Search a iasnama Funt Nome onr Name Pound Tadmin eenepthetiee err orra N Report Card fins o Edit Report Card i karrerea Se esdoorn Yes Edit Report Card Sigg lt atie Erer ethene No Edit RPE AL a T T a TTE MUO A Dan Me MMB ae aye plane Liliton te Figure 10 7 Admin page displays list for student information The following tasks can be performed from the Administration page in ETC e Selecting Active Students Inactive Students or All Students to view lists e Adding a new student See Creating an ETC Account on page 228 e Searching for a student record Enter a student name and click Search e Viewing a student s Report Card Click Report Card next to a student name e Clicking Edit to view and edit a student s information Click Save to save it To log out of Drake ETC click Log Out You are returned to the ETC login page Federal State Facts Information about federal and state reject codes exclusions instructions and e filing is accessible from the Federal State Facts page From the Drake Support site select Resources gt Federal State
465. te codes Figure 5 4 as needed Select a state from the State drop list to specify which state should receive the dependent data Enter a State code disabled adopted etc as applicable To view all state codes place the cursor in the State codes field and press F1 Double click a displayed code to select it NEW FOR The State drop list on screen 2 helps ensure that dependent credit information flows to the correct state return This information is neces 2008 sary in some situations for example if the parents of the dependent are married filing separately and are residents of different states Additional Dependent Information It could be necessary to override or further clarify dependent information entered on screen 2 Some examples are if a child is over 18 and disabled is not a U S citizen or resident alien or qualifies for Form 8901 Use the Additional Information section of screen 2 to include this additional information 86 Tax Year 2008 Drake Software User s Manual Personal Service Income W 2 1099 MISC Personal Service Income W 2 1099 MISC W 2 Screen code W2 Accuracy of W 2 Data Screen code VER W 2 Verification Foreign Employers Tax Year 2008 Use the W2 and 99M screens both accessible from the General tab to enter personal service income data from a taxpayer s W 2 and 1099 MISC forms respectively The W2 screen is designed to reflect the IRS Form W 2 Wage and Tax Statement Da
466. te the report from the Report Viewer Click Yes or No as applicable Filter Manager The Filter Manager is used primarily in reports but is also used in other Drake func tions such as the Letters found at Tools gt Letters and the Fixed Asset Manager See Fixed Asset Manager on page 277 Access the Filter Manager from a Filter Selection box which is opened when you might need to narrow a selection of records To access the Filter Manager from a Filter Selection box click Edit Filters See Customized Filters on page 270 Search Conditions Use the Filter Manager to set up search conditions There are two levels of search con ditions Basic Search Conditions and Additional Search Conditions 272 Tax Year 2008 Drake Software User s Manual Filter Manager Basic Search Conditions for the Selected Filter Return Type is Any Edit Additonal Search Conditions for the Selected Filter Schedule C is present Add Condition Edit Condition Delete nii Match All Conditions C Match Any Condition Figure 12 7 Basic and Additional Search Conditions boxes Basic Search Basic search conditions refer to the most common filtering criteria Return Type s Conditions Return Result Activity and Preparer and Firm Additional Search Conditions Tax Year 2008 Table 12 3 Basic Search Conditions Categories Category Description Return Type s Return types to include in the report To include
467. ted in front of the selected data in a macro the program jumps ahead one field from the active field before inserting the data If inserted after the selected data the program inserts the data first then moves the cursor forward a field Escape If the symbol is inserted after the selected data in a macro the program inserts the selected data then saves the data and exits the screen D Insert date If D is part of a macro the program enters the current date into the active field Launch heads down data entry mode If the symbol is inserted after the selected data in a macro the program enters the data then activates heads down data entry To have heads down closed from the macro add a second symbol See Heads Down Data Entry on page 66 Bypass the Existing Forms List when performing the task set by a macro Enter an asterisk only once in any macro and place it at the beginning of the macro When you open a screen that has multiple records an Existing Forms List is displayed and you have the choice of selecting an existing record or creating a new one To bypass the New Record option and open the first record listed enter the symbol in front of the macro For example C opens the first Schedule C record To open the second record enter a 2 inside brackets 2 thus the macro C 2 opens the second C screen C 3 opens the third etc 34 Tax Year 2008 Drake Software User s M
468. tely after the checks are printed go to EF gt Transmit Receive and click Send Receive to transmit the check register to Drake When the bank receives the check register it deposits preparer fees so the taxpayer can cash the printed check M p RT ANT The check register must be transmitted to Drake before you can receive fees from the bank Drake recommends running EF gt Transmit Receive after printing large batches of checks Reprinting Checks To reprint a check 1 From the Home window select EF gt Print Checks e Ifno new checks are ready for printing you are prompted to reprint checks Click Yes to open the Reprint Checks dialog box Figure 8 6 e Ifnew checks are ready the Select Checks dialog box opens Click Exit then click Yes to open the Reprint Checks dialog box Figure 8 6 212 Tax Year 2008 Drake Software User s Manual Processing the Loan Check Drake 2008 Reprint Checks Reprint Checks This utility allows you to reprint a check that has been damaged or printed incorrectly Enter the client s SSN in the space provided and click Print Note You should not attempt to reprint a check that was lost or stolen Instead follow the procedures listed by the Bank for reissuing a lost or stolen check Enter the Client s SSN and click Print Name s Taxpayer SSN Decline Reason Spouse SSN App Sign Date Bank Code State BONU Requested BONU Loan Status Loan Amount BONU RAC Indicator Prior Debt Wi
469. tem in the right pane and click Remove to move it to the left pane To remove all items click Remove All To change the column order drag items up or down the list in the right pane To reset columns to original view click Reset Other ways to customize the display click a column header to sort in ascending or descending order adjust column widths by drag ging the edge of a column to the desired width and double click a column header s right border to quickly size to fit Tax Year 2008 Drake Software User s Manual Searching Updating and Filtering Searching Updating and Filtering Searching the CSM To find a return in the CSM click Search or press CTRL F to open the Find Client iF Record dialog box As you type the SSN EIN or client name the CSM searches for Seien and highlights the matching record Click Close to exit the Find Client Record dialog box Updating the CSM To incorporate the latest return updates when the CSM is open either click the 4 Refresh button or press F5 on your keyboard Refresh Filtering Data in the CSM v Filters allow you to control which records are shown in the CSM To select filters a Filters 1 From the Home window click CSM Shortcut Press 2 Click Filters The filter list is divided into four sections as shown in Figure 9 4 CTRL L to view the filter list RT i v reparers Fier by gt Current Pre preparer parer All Status Types Work In Progress Filte
470. ter When the Print dialog box is opened click Print Export to File Depreciation lists exported to file are stored in Drake08 Reports as CSV files Click OK Fixed Asset Manager Use the Fixed Asset Manager to run reports based on client assets Eight report types shown in Table 12 4 are available Table 12 4 Fixed Asset Manager Report Types Report Type Report Description Items on Report Depreciation Schedules Depreciation list sorted by asset number assigned asset number and department number separated by a decimal example of asset number 122 01 Asset Number Description Date Acquired Date Sold Gross Sales Price Depreciation Current Cost or Other Basis Loss Gain Listings Depreciation list sorted by asset number assigned asset number and department number separated by a decimal example of asset number 122 01 Asset Number Date Placed in Service Method amp Recovery Period Business Per centage Cost Federal Basis Current Year Sec 179 Prior Year Depreciation State Depreciation Amt Depreciation Book Depreciation Tax Schedule Code Date Disposed Section 179 Assets Asset list of items expensed during the current year Asset Number Department Number Asset Description and Date Placed in Service Cost Section 179 Expense Amount Prior Year Carryover and the Current Year Sec 179 deduction Dispositions Asset list of items disposed of within the curr
471. ter to another or to restore lost files To restore Drake files 1 From the Home window select Tools gt File Maintenance gt Restore 2 Click Location to restore files from and browse to the desired location Once you have made a selection the Select folder to restore from drop list displays all Tax Year 2008 249 File Maintenance Drake Software User s Manual of the subdirectories created during backup Folder directories are displayed in month day year format example January 28 2009 Choose to Restore All Files in Folder or Restore Select Files in Folder Click Restore This button is not activated until a restore location is entered Rw 5 Click Exit when restoration is complete If you do not have Windows XP and want to back up your data on CD you must use your CD burner software not the Drake NOTES Backup tool to perform the backup For assistance with using a CD RW refer to your CD writer soft ware user manual New in 2008 Automated Backup Use the new automated backup feature to have the program automatically back up cli ent setup and system files at a specified time each day Two types of backups are available a full backup backs up all selected files and an incremental backup backs up only those files that have changed since the last backup To activate automatic backup 1 From the Home window select Tools gt File Maintenance gt Backup 2 Click Automatic at the bottom of the Ba
472. the account Section 3 For Part HI only This section must be completed only if Owned Jointly IID was selected See Figure 5 63 Section 4 For Part IV V only This section must be completed only if item IV or V was selected See Figure 5 63 The program prints only those pages of the form that are applicable For example if Owned Jointly III is selected only pages and 3 of the form are printed since page 2 covers only accounts that are owned separately selection II in Figure 5 63 and page 3 covers only jointly owned accounts Page contains taxpayer data Section 4 applies to either signature but no financial interest IV or NOTE consolidated report V If IV is selected Figure 5 63 and a First name is entered on line 36 the nine digit Account owner ID number from line 35 will be printed as an SSN If if V is selected or if IV is selected and line 36 is blank the Account owner ID number will be printed as an EIN Tax Year 2008 Drake Software User s Manual Special Features in Data Entry Special Features in Data Entry Drake data entry includes various special features to help tax preparers compare and review information more effectively include all needed details on a return and track a return s progress Most screens described in this section are accessible from the Other tab or by typing the screen code into the selector field and pressing ENTER Comparing Data Cros
473. the arrow next to the Print icon to see print options tke 4 optional Select any printing options shown in the Print dialog box 5 Click Print again Setting Up View Print Options Set up options for form properties colors and printing order You can also access other utilities within Drake using the Setup feature NEW FOR Although the print view setup feature is new in 2008 it incorporates 200 B several features that have been part of the program in prior years Setting Form Properties The Form Properties setup function is not new to Drake it was previously available as the F9 Prop button in Basic mode To access this feature in Enhanced mode click the document whose property setup you want to view then select Setup gt Form Properties Setting Form Colors Colors can be customized in both Basic and Enhanced modes Tax Year 2008 173 Setting Up View Print Options Drake Software User s Manual Enhanced The Form Color Background Color and Text Data Color can each be changed in Mode Enhanced View Print mode Drake default colors for these three items as shown in Figure 6 11 are black white and red respectively Form Department of the Treasury Internal Revenue Service i Form Color 1040A U S Individual Income Tax Return lt Black Label Your first name and initial Last name Background See page 15 Color White MAPI Use the IRS label Otherwise lie Text Data please print or type E z
474. the box for This is a workstation then choose a drive for sharing client files In Figure 2 8 the user has selected the F drive e Click OK 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 5 c a Network Options r N wClient link installed on workstations 3 Software installed on server and workstations secondary network setup r 3b This is a workstation V Indicate server drive letter for sharing client fies gt To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below Figure 2 8 Example of selected shared drive 3 To share all Drake files Setup EF configurations letters and acknowledgments e In the Paths section at the bottom of the Directories and Paths Setup win dow select Admin Override See Figure 2 9 e Choose a Shared Drive Letter In Figure 2 9 the user has chosen to share all the files on the F drive ae ainiin ae T ORTOP TTEN TENE ee wretaene pu Paths Drive Letter for State Programs w Paths determined by configuration selected above Path for 2008 Data DRAKEOSDTSS Path for 2007 Data DRAKEO7ADTS Path for Print File ADRAKEOSP Shared drive letter for all other shared f
475. the computer 2 From the Home window go to Tools gt Install Updates 3 Under Updating computers without Internet access click the first option to copy updates from another computer to this one then click OK to close the warn ing box Buttons for Step 1 and Step 2 appear ee ee se A OPR a O et TNE meets pe arn petai e a sie pint aus i i i Updating computers without Internet access Choose this option to copy updates from another Step 1 Create Update List computer to this one A portable data drive floppy disk USB drive etc must be in the computer Step 2 Get Updates From Drive Choose this option if you are reading a portable data drive brought from a computer that needs updates Help Update Profile Figure 11 2 Option 1 steps 1 and 2 244 Tax Year 2008 Drake Software User s Manual Install Updates Loading the Updates Copying the Updates Tax Year 2008 So Click Create Update List Step 1 Browse to the location of the media storage device and click Save When prompted click OK Click OK again Remove the storage device from the computer The file PATCHLIST TXT which lists the updates currently installed on the computer is now saved on the media storage device To load the updates complete these steps from the computer designated to supply the updates 1 Connect the media storage device to the computer 2 From the Home window select Tools gt Install Updates 3 Un
476. the tax Preparer returns To add a new preparer in Drake 1 From the Drake Home window go to Setup gt Preparer s 2 Click Add to activate the bottom half of the Preparer Setup window 3 Enter General Information Yellow text boxes indicate required information i The following fields are required for e filing e Preparer Name To apply for a e Social Security Number If the preparer has a Preparer Tax Identification PTIN complete Number PTIN the PTIN replaces the SSN on the 1040 Form W7 P and send to the IRS 16 Tax Year 2008 Drake Software User s Manual Software Setup Setting up Preparer Security Edit Preparer 8 Security Tax Year 2008 gt A 8 9 Enter Login Information A login name is required for e filing Use of a pass word is optional If applicable enter the Preparer LTP Number for Oregon Tax Preparers Indicate Return Signature Options e PIN Signature Enter the preparer s five digit PIN Signature e Use PIN for 8879 PIN Signature Select to activate the 8879 PIN signature Alternative Electronic Signature Select to automatically fill in any field requiring electronic signature with the preparer s PIN Enter Power of Attorney information necessary for Form 2848 Power of Attor ney and Declaration of Representative Preparer Designation Select the designation under which the preparer has authorization to practice before the IRS CAF Number
477. thheld Check Information _ Status_ Amount Number PrinNo__ Print Date _ Clear Date Help Test Get Next Check Exit Figure 8 6 Reprint Checks dialog box 2 Type an SSN and press TAB or click ENTER The Reprint Checks dialog box dis plays any previous taxpayer and check information see Figure 8 6 3 Click Print The program automatically voids the old check number Check Register To access a detailed register of issued refund deposits 1 From the Home window select EF gt Check Register 2 Select the Starting Date Ending Date and EFIN Firm Name 3 Click Continue The Report Viewer displays the check number date amount EFIN sequence number client ID and client name for all checks within the parameters 4 optional Print or export the register as needed See Report Viewer on page 276 for more on using these features in the Report Viewer 5 Click Exit to close the Report Viewer Available from Tools gt Blank Forms a printed check register REGISTER PG allows accurate record keeping of all RAL checks both voided and issued in the office Complete the check register as each check is written and ensure that this infor mation is available at all times and is not available from any other source Drake rec ommends that your office keep this check register in a three ring binder along with the computer generated check registers described previously Tax Year 2008 213 Troubleshooting Chec
478. this scan device By default the DDM chooses a scanner To choose a differ ent scanner select it from the list Turn off scanner interface Activate or disable the DDM s default scanner interface You might need to view the scanner interface window when mak ing ascan especially if options not available in the DDM such as scanner resolution or color are required Build index when DDM starts The DDM index used for searching the DDM occasionally needs to be rebuilt to ensure proper functionality Enter a check mark to have the system rebuild the index each time the DDM starts Edit Reset list of Common Edit or reset names assigned to commonly scanned docu Documents ment types See Setting Up Common Documents follow ing NOTE Rebuilding the index each time the DDM starts does not interfere Setting Up Common Documents 284 with DDM operation If you choose not to rebuild the index automat ically rebuild the index by going to File gt Rebuild Search Index Prior to 2008 each time a document was scanned into the DDM it was necessary to save the scanned version by typing a file description into the program It was impor tant to establish a naming convention particularly if your office was scanning the same types of documents such as driver license and Social Security cards for multi ple clients A new Common Documents feature is available to help your office save time while maintaining
479. tion 72 p Recharacterized to another type of IRA by a trustee to trustee transfer or with the same trustee Excess contributions plus earnings excess deferrals taxable Qualified distribution from a ROTH IRA use Code Q if you know gt Copy Print OK Figure 5 32 View Help press F1 in box 7 for Distribution Code Tax Year 2008 Drake Software User s Manual Alimony Paid Alimony Paid Enter details about alimony paid in the Alimony fields on screen 4 IRA Adjustments To enter IRA adjustments see Retirement Income 1099 R etc on page 101 Student Loan Interest Deduction Enter student loan interest deduction amounts Form 1098 E Student Loan Interest Statement into the Student loan interest deduction field on screen 4 Education Expenses Screen codes Entry fields for Form 8863 Education Credits and Form 8917 Tuition and Fees 8917 8863 Deduction are located on the same screen which can be accessed from either the Adjustments tab for the 8917 or the Credits tab for the 8863 NEW FOR In cases where education credits are to be filed with one state and 200 B tuition and fees deductions with another select the applicable states from the ST drop lists in each section of the 8863 8917 screen Tuition and Fees Deduction Use the 8917 screen to enter tuition and fees deductions for the taxpayer or spouse Use the Education Expense Information section of screen 2 to enter tuition and fees deductions
480. tion field and either double click or press CTRL W For more on entering depreciation in Drake see Depreciation on page 140 Business Mileage The standard business mileage deduction rate changed as of June 31 2008 Enter busi ness mileage driven before July 1 in the text box on line 44a Business miles before July 1 on screen C under Part IV Vehicle Information Enter business mileage driven after June 30 in the text box on line 44a Business miles after June 30 Part IV Vehicle Information J Force the Mileage Rate 43 Date placed in service 44a Business miles before July 1 Business miles after June 30 Figure 5 17 Enter business mileage on line 44a Loss on Schedule C If Schedule C shows a loss and all investment is not at risk the program produces Form 6198 At Risk Limitations If part of a loss may be disallowed enter the required data on the 6198 screen If the taxpayer does not materially participate the loss could be limited by Form 8582 Passive Activity Loss Limitations this is com puted automatically E filing Schedules C and C EZ Only one Schedule C EZ can be filed per taxpayer Up to eight Schedule C forms can be filed per taxpayer If necessary to allow e filing keep the short form EZ from being generated by selecting the Suppress Schedule C EZ box on screen C Tax Year 2008 95 Sales of Assets Drake Software User s Manual Sales of Assets Screens for entering gains losses and
481. tional p n in i205 P ppett a E AN E E L E als oOo mo a tial pestan E a 7 7 ve Figure 4 1 Ensure that Path for 2007 Data field is correct If the correct path is not displayed select Admin Override to activate the field make the necessary changes and click OK Tax Year 2008 67 Prior Year Updates Drake Software User s Manual Updating Client Files Save time by updating prior year returns in the 2008 program By default the follow ing information from a return is brought forward from the prior year program names addresses filing statuses installment sales business names ages occupations dependent names depreciation ID numbers You have the option of manually selecting other data to bring forward M p 0 RTANT To ensure that files are updated according to your clients needs update returns individually as you meet with your clients through out tax season Drake does not recommend updating all returns in a package at the same time Update To update an individual return Returns Individually 1 Open the return in Drake 2008 An Individual Update Options dialog box lists all options for updating Figure 4 2 Drake 2008 Individual 1040 Update Options Update Options First PLEASE read manual section on UPDATING before continuing Second BACKUP your 2007 data files just in case In addition to the standard update information you may update the following Additional Updat
482. tions for a self employed taxpayer in one of three places e Screen C or screen F Family Health Coverage field e SEHI screen line 1 An entry here overrides system calculations from screen C or F an entry might be needed on line 4 to effect correct system calculations e Screen 4 Self employed health insurance deduction field An entry here over rides system calculations from the screens mentioned above Be aware that the SEHI and screen 4 fields are overrides Do not duplicate entries SEHID The top half of the SEHI screen incorporates the Self Employed Health Insurance Worksheet Deduction Worksheet WK_SEHID in Drake from the 1040 instructions If entering an override on screen 4 type the deduction allowed not the total premium paid To have the software calculate the WK_SEHID leave the screen 4 field blank and enter the total insurance premium paid on the C or F screen as applicable N Self employed health insurance deduction information is entered on UTE the same screen as self employed pension SEP information This screen can be accessed using either the SEHI or SEP screen code Self Employment Pensions Screen code SEP SEP screen data flows to the WK_ SEP worksheet for Self Employed Rate Deduction N To have the program calculate the maximum SEP contribution UTE enter the plan contribution rate as a decimal on the SEP screen For more on SEP contributions refer to IRS Pub 560 Adjustments to SEP SIMPLE and Quali
483. to a computer 1 From the Home window select EF gt Copy EF Returns from Disk 2 Inthe Copy EF Return from Disk dialog box select the drive to copy files from 3 Click Copy Files then click OK to copy each file Click Exit to close Tax Year 2008 199 About State Filing Drake Software User s Manual About State Filing Most states accept e filed returns and some require it or have regulations that deter mine at what point a tax professional can or must begin e filing Mandates don t apply to taxpayers e filing their own returns Some states with mandates have their own application process for EROs and tax preparers who offer bank products These processes and the rules and regulations pertaining to e filing vary from state to state The FAQ screen in data entry includes links to state e filing information Figure 7 14 Drake 2008 Data Entry 400001015 CAESAR TEST NC Frequently Asked Questions 2 Select Topic of Interest V Native American Cherokee Income B Whereiwhen to mail checkireturn W NC 529 College Savings Deductions C Where is NC8453 D NCRA is now obsolete North Carolina Form Instructions Drake Software Website E Contacts ALDOR Web site address North Carolina Dept of Revenue F Electronic Filing G State EF Reject codes H Information on Part Year Non Residents vl Military kasoy el gt ow ee ee sa a ee P ee N a Figure 7 14 Three sources for EF information from the FAQ screen for No
484. tom paragraph as directed Ifa return has an EF message when calculated the return is considered ineligible for e file and the program generates a result letter for a paper filed return If the return is considered eligible for e file a letter for an e filed return is generated You can over ride these defaults for the federal and state tax returns and extension applications To override the defaults go to the LTR screen and select EF or Paper for the selected returns See Figure 2 26 To indicate one or more state returns select state abbrevia tions from the drop lists provided In the Figure 2 26 example the resulting letter will be worded as if both the federal and Arizona returns are going to be e filed Override Options Result Letter Paragraph Override Extension Letter Paragraph Override Setup Options Override Federal Federal M EF Paper m Paper Customized Supplemental Letter Az oy V EF I Paper F M EF I Paper pa Paper x EF I Paper N gt Engagement Letter tee M Paper zl EF M Paper Privacy Policy pa T EF Paper zl EF Paper Zi EF Paper hd EF Paper Figure 2 26 Select EF to force a letter to be printed as ifthe return is eligible for e file From Setup gt Options gt Optional Documents tab you can select to have the cus tomized supplemental letter engagement letter and privacy policy letter printed with all returns To override the established defaults go to the LTR screen and selec
485. ts that can be printed see Printing Printer Sets on page 172 Software Setup Table 2 15 Printing Setup Field Description Tray Default is Main Paper Source Change the default if you have a multiple tray printer and will not be printing from the main tray Duplex Directs printer to print duplex Only forms that are approved for duplex will be printed as duplex front and back in order of appearance Duplex All Directs printer to duplex print all forms approved or not Not available for sets to be mailed to the IRS or a state Staple If the printer supports stapling after each print job select this option to turn stapling on Print Set Indicates which sets should be available for printing after a return is calculated Watermark Text Adds watermark text to client and preparer sets The text in the Watermark Text entry box is printed on every set To pre vent a watermark from printing clear this box F7 Options used to set up advanced printing options not related to a specific printer PCL Soft Font Option Many printers require soft fonts to be downloaded to the printer before the tax forms can be printed Select the desired downloading option Letterhead Source Tray Print letters from a tray other than the one used for tax forms Classic Print Mode For preparers who prefer Basic View See Enhanced View Print Mode on page 168 Drake s Classic Print
486. ttom of the SCH screen Return Tracking Screen code TRAC Use the Return Tracking TRAC screen to track the data shown in Figure 5 25 Table 5 25 TRAC Screen Information Type of Information Description Fee and Payments Amounts are updated from prior year Return preparation from first meeting to cli Used in timed billing optional feature ent pickup to date complete Current year bank product data Number and amount of check are com pleted automatically preparer must enter the date the check is picked up Prior year bank product data New in 2008 Dates and amounts are retained from prior year Software stats for the return ADMIN ONLY These fields are completed automatically EF transmission data ADMIN ONLY These fields are completed automatically Bank codes ADMIN ONLY These fields are completed automatically Note that some TRAC screen fields are autofilled with data from elsewhere while other fields require direct entries Note also that some fields are Admin only and are not visible unless the user is logged in as Admin or is a preparer with Admin rights Administrators should not provide the Admin password to employees unless they are approved to access these fields NOTE Some data from the TRAC screen can be incorporated into Report Manager and Client Status Manager CSM reports Sales Tax Worksheet Screen code STAX Tax Year 2008 The software uses data entered into the St
487. turn Direct Deposit Debt Indicator A field on an ACK that indicates whether a debt offset of a taxpayer s refund will occur Dividends screen in Drake Drake Document Manager Appendix D Acronyms amp Abbreviations doc DTP EA E ack EF EFIN EFT EFTPS EFW EIC EITC EIN ERC ERD ERO ES ETA ETA ETC ETD ETIN D 2 Drake Software User s Manual Word files Drake Tax Planner files Enrolled Agent IRS acknowledgement for an imperfect return Electronic Filing Electronic Filer s Identification Number Electronic Funds Transfer The process through which Direct Deposit refunds are transmitted from the government to the taxpayer s account at a financial institution Electronic Federal Tax Payment System A free service from the U S Treasury through which federal taxes may be paid via the Internet by phone or through a ser vice provider Electronic Funds Withdrawal A payment method which allows taxpayers to authorize the U S Treasury to electronically withdrawal funds from their checking or savings accounts Earned Income Credit Earned Income Tax Credit A refundable individual income tax credit for certain persons who work Employer Identification Number Electronic Refund Check bank product Electronic Refund Deposit bank product Electronic Return Originator An authorized IRS e file provider that originates the electronic submission of returns to the IRS Estimate
488. u can view or enter the following first time homebuyer information for a selected year Home purchase price Taxpayer s share of purchase price if someone other than the spouse held interest in it Credit amount Recapture amount To access these fields see Working in the Tax Planner on page 295 Opening the Tax Planner To open the Tax Planner 292 Tax Year 2008 Drake Software User s Manual Tax Planner e From the desktop double click the Tax Planner icon A blank planner is opened Begin entering information or click Open Planner to open an existing planner From data entry click the Tax Planner icon The program calculates the return opens the Tax Planner and imports the client s current year information You can edit this information once it is in the Tax Planner Clicking New Planner opens a blank planner NOTES See Working in the Tax Planner on page 295 for instructions on steps to take once you ve opened the Tax Planner Tax Planner Window Across the top of the Tax Planner is a spreadsheet menu bar item 1 in Figure 13 11 and just below it is the Tax Planner toolbar item 2 in Figure 13 11 Tabs represent ing setup and specific portions of the 1040 return are located across the bottom of the screen item 3 in Figure 13 11 In the center of the window is the taxpayer data Type a question for help f X i Open Planner Save Planner gt X Delete P
489. ubsidy 8866 Form 8866 Interest Computation Under the Look Back Method 9022 Form 90 22 1 Report of Foreign Accounts The IRS redesigned this form in 2008 See Report of Foreign Accounts following for details and how the 9022 screen has been revised Report of Prior to 2008 Form 90 22 1 Report of Foreign Accounts was a two page form In Foreign 2008 the IRS revised this form it is now five pages Drake has revised and re orga Accounts nized the 9022 screen to reflect these changes The screen is now divided into four 158 sections Section 1 Filer Information Complete this section once for each filer report ing a foreign account Use a separate 9022 screen for each account If necessary select either T Taxpayer or S Spouse at the top of the screen to indicate which filer should report the account default is T Once a filer s information has been entered on a 9022 screen this section can be left blank in subsequent 9022 screens for that filer Section 2 For Parts II HI IV V This section must be filled out for each 9022 screen used Choose one of the boxes at the top of this section to indicate the nature of the account Options are shown in Figure 5 63 For Pan l Owned Separately Il F Owned Jointly ll Signature but no financial interest V M Consolidated report v Er TE ARS OLED N Minn staan all Bion ne a eee eS Figure 5 63 Select one box to indicate the nature of
490. uch as the Miscellaneous Code 2 field to customize or select a field and click Edit The Edit Entries dialog box opens the Add Entry fields Figure 2 15 Tax Year 2008 Enter a Code 8 or fewer characters and Description 25 or fewer characters in 31 Software Setup 32 5 Click Add Drake Software User s Manual Selected Entry m m Sere ee Add Entry Code BUSREF Description Business Referral Figure 2 15 Enter code and description in the Add Entry fields 6 Repeat the previous two steps for additional drop list items When added items are displayed in the Entry List on the left side of the dialog box Figure 2 16 Entry List Edit Remove Move Up Move Down Sort Ascending Sort Descending Ly oe i Allinson de Mr ee ee ee sre BUSREF Business Referral WOMREF Word of Mouth Referral Figure 2 16 Entry list of Edit Entries dialog box 7 Click Save Changes to close Edit Entries Click Exit to return to the Administrative Options tab The drop list is now available in data entry The Edit Entries dialog box also offers the following options e Changing the order of a listed item Use the Move Up Move Down Sort Ascending and Sort Descending buttons to change the order of items in the drop list See Figure 2 16 e Removing a listed item Select an item and click Remove See Figure 2 16 e Editing a listed item Double click an item The Selecte
491. ult The result letter is the standard letter that is printed with a return It tells the client that Result Letter the return has been prepared from the information provided states the amount of the refund or balance due and provides instructions for mailing the return if paper fil ing The program uses Result Letter 1 as the default To change the default letter for a return go to the LTR screen and select a new letter from the Letter drop list at the top of the screen In addition to other result letter templates you can have the program generate a Spanish result letter Figure 2 25 an extension letter or an amended return letter instead of the program default letter LTR Custom Paragraph for the Letter Letter v This selection overrides any entry in setup _ l Individual Result Letter 01 Default Personalizg gt Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template 10 Individual Result Spanish 11 Individual Extension MS 12 Individual Amended on OE a a T R P eee arami me nent a OE e a E co Figure 2 25 Selecting the Spanish letter as the default letter for a return LTR screen N To change the default letter for a returns go to Setup gt Options gt DTE Optional Documents tab and select a letter template from the a
492. unctions of the tax software this new feature requires Microsoft Excel version 2000 or later In addition take these actions to ensure the trial balance import works properly 299 Trial Balance Import Drake Software User s Manual Enable Macros The trial balance import function uses macros in Microsoft Excel Check your Excel settings to ensure that macros are activated and that macro security is set to medium To do so go to Tools gt Options in Excel and select the Security tab Click Macro Security and select Medium then click OK In Microsoft Vista click the Office button in the upper left and select NOTE Excel Options at the bottom of the window Next select Trust 300 Center from the list at left and click Trust Center Settings Select Macro Settings then choose Disable all macros with notifica tion Click OK Disable Auto Balance When auto balance is disabled the program is pre vented from automatically adjusting the year end retained earnings or capital amounts thus allowing you to see any discrepancies in the balance sheet To dis able auto balance go to the PRNT screen and select Turn off auto balance Other Print Options vi Prepare a Form 7004 extension Screens 1 and 4 must be complete for an extension Figure 14 1 Disable auto balance in Other Print Options section of PRNT screen Force Schedule L By default the program does not display the balance sheet amounts on the
493. up Single SSN or EIN 9 Digits All File Types Setup Files Pricing Setup Information Files F System Files CSM EF Database IRS Bank and Scheduler Files I Client Files 1040 1120 1120S 1065 1041 706 990 Ee Automatic Backup Exit Figure 11 5 Backup window 4 Select the file or file types to back up by entering the SSN or EIN or by checking All File Types Setup Files System Files or Client Files 5 If you marked a box click Advanced The Advanced Backup dialog box lists all files of the selected type Filter or sort files as needed using the date and type fil ters on the right side of the Advanced Backup window N The files listed on Advanced Backup contain only the file types DTE selected For example if the Client Files group is not selected no client files 1040 1120 1120S 1065 1041 or 990 are displayed 6 Click Backup Files are backed up to a folder at the root of the selected drive or subdirectory The folder name always starts with DS and is followed by the eight digit date a hyphen and the number of the backup for the day For example the second backup file of January 28 2009 would be titled DS01282009 02 See New in 2008 Automated Backup on page 250 for information on using the automatic backup feature Restore Use the Restore tool to copy data files from a media storage device to a computer Use this feature along with the Backup tool to transfer files from one compu
494. ur changes 4 Click the File gt Exit 5 Click OK Whenever a user scans a document into the DDM he or she has the option of selecting one of the descriptions entered See Scanning a File on page 288 N To reset the common document names listing to the default names DTE provided in the program click Reset in the Document Manager Setup Options dialog box The DDM Window The DDM consists of the file structure tree on the left side a list of files in the selected folder on the right and a menu bar and toolbar at the top Tax Year 2008 285 Document Manager Drake Software User s Manual EJ Drake Document Manager SO SssaeasARARDAYVOD lew Folder New File Open Scan Import Copy Cut Paste Rename Email Delete Drag Link File Help Exit Enter search text i Document Name p Last Modified Description aga amp Consentto Use of Tax Return Information docFile 11 17 2008 18 16 33 Consentto Use signed Final a g B a c 1 R toolbar a g F d G GAINES JANELLE 400 Tax Figure 13 5 DDM Filing cabinets are organized in standard tree format Click to expand a portion of the tree click to collapse it Or with a folder selected press or keys on the numbers pad of your keyboard Navigating Select a folder to view a list of its files The DDM displays document names types dates modified and descriptions Click column headers to sort by columns Like othe
495. ur firm is a service bureau complete the Service Bureau Information fields See Service Bureau Requirements on page 204 6 Disclosure or Use of Tax Information If applicable enter the name of the ser vice bureau franchisor to which tax information must be disclosed in order to apply for loan products This field is new for 2008 and facilitates compliance with IRS Regulation 7216 see Taxpayer Requirements on page 203 7 Click OK Click Help in the Electronic Filing Setup window for more on ERO options New to e filing this year Before transmitting live returns your firm NOTE must apply to the IRS for an Electronic Filer s Identification Num ber EFIN If you have not yet received an EFIN Drake assigns a temporary EFIN that you can use to test e filing and access Drake Internet tools and resources For more information about applying for an EFIN see Obtaining an EFIN on page 180 Preparer Setup Preparer Setup fields must be completed before preparing and e filing returns All pre parers must be entered in Preparer Setup Data entry operators can also be entered Each time a name is added to Preparer Setup a number is assigned to that name Ji Include data entry operators in Preparer Setup to 1 track data IP entry information and 2 easily set up Front Office preparers in the Scheduler See Scheduler on page 74 Adding a Information entered here determines what preparer information appears on
496. ure in Setup gt Options gt Data Entry tab If the taxpayer has a foreign mailing address or telephone number enter that information on the MISC screen in Drake Indicating a Deceased Taxpayer 84 If the primary taxpayer is deceased 1 Enter the date of death in the taxpayer s Date of Death field on screen 1 2 Type the surviving spouse s name in the In care of field on screen 1 If tax infor mation should go to someone else enter that person s name If there is a name in the In care of field all correspondence generated by the program letters bills etc will be addressed to that person Tax Year 2008 Drake Software User s Manual Exemptions Exemptions Screen code 2 Use screen 2 Dependents accessible from the General tab to complete the Exemptions section of Form 1040 Enter the dependent s required data name SSN etc at the top of screen 2 In Figure 5 2 note that the dependent s calculated age is displayed once the birth date is entered Drake 2008 Data Entry 400001002 LAMB JOHN amp MARY Screen Help PI Eq Dependent Information Use lt F3 gt to switch to grid mode Dependent Last Name Months Date of First Name if different Suffix SSN Relationship in Home Birth ELLA 400 00 1001 DAUGHTER sa d 11 01 2005 Child Care Expense Information sA Qualifying childcare expenses incurred and paid in 2008 aeons by as of 12 31 2008 Nagata lh mentite aman Mile AAP TE T te
497. urns as shown in the example in Figure C 7 Other Tax Types generally refer to tax types other than income tax franchise tax compos ite tax city income tax etc that are required by certain states and cities Vert ae namb or 7 Ppr ame teye aie State Return Results State Amended Results State Estimates State Other Tax Paragraphs ST OtherT ax1 Balance Due Paragraph ST OtherT ax1 E Filing Paragraph ST OtherT ax1 Paper Filing Paragraph ST OtherT axl Refund Paragraph ST OtherT ax2 Balance Due Paragraph ST OtherT ax2 E Filing Paragraph ST OtherT ax2 Paper Filing Paragraph ST OtherT ax2 Refund Paragraph ST OtherT ax2 Zero Due Paragraph State Other Tax Estimate Paragraphs State Other Tax Results State Other Tax Estimates City Return Paragraphs BA yy ae oe den a Figure C 7 Examples of OtherTax paragraph keywords Table C 1 lists the Other Tax types indicated by specific letter keywords for state and city returns in the Drake tax packages Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description Alabama S corporation OtherTax1 Composite OtherTax2 Privilege Tax and Annual Report Partnership OtherTax1 Composite OtherTax2 Privilege Tax and Annual Report Individual OtherTax2 Privilege Tax and Annual Report Fiduciary OtherTax2 Privilege Tax and Annual Report Corporation OtherTax2 Privilege Tax and
498. us and the SSN Verification and Document Manager configurations Return Type Fiduciary 1041 P C Tax Exempt 990 S Comp 1120S C Estate 706 Partnership 1065 r Name Entry For Document Manager First Name MI Last Name Help OK Cancel Figure 3 4 New Return box 6 Click OK to open data entry screen 1 for the new return You might be required to verify the ID number for a new return Ver NOTES ification is required for all Pay Per Return PPR clients The Name Entry section is opened only if the DDM is integrated with the software See Document Manager on page 281 Opening a Return Recently accessed returns can be selected from the Recent Files list in the Home window 56 To open a return in Drake 1 From the Home window click Open New Drake 2008 Open Create a New Return Enter the SSN EIN or the LAST NAME for the return you want to open create If a NAME is entered then the closest match will be displayed and the corresponding SSN EIN will be entered in the SSN EIN field automatically Sorting by PACKAGE i 1 ailable by selecting the PACKAGE TYPE on the right of this screen 400001015 CAESAR TEST amp CLEO 400001015 PHROZINTOWES TEST 400001010 LUCKY TEST 400001008 BEHAVIOR TEST 400001007 BARRELL TEST 400001006 MAPLE TEST 400001005 BLOWNAPART TEST amp FRED 400001004 ERTIA TEST 400001003 LAMB JOHN amp MARY 400001002 All Clients 1040
499. us any Level 2 EFINs 2 Level 2 EFINs can view only Level 2 EFIN data Building a To build an EF database reporting hierarchy Hierarchy Log in to the online EF database using the Master EFIN 2 Click Options 3 Click Configure EFIN Reporting Hierarchy to view the grid for the EFIN hier archy The top level EFIN is shown in the top row 4 Click add in the top row 5 Enter the EFIN a description optional and the Drake BBS password 6 Click Add A Level 1 EFIN has now been added To add a Level 2 EFIN click add in a Level 1 row and repeat Step 5 and Step 6 above Tip For best results map out the hierarchy on paper before starting Be sure to have all of your EFINs and Drake passwords available To remove an EFIN from the hierarchy click Remove in the row of the EFIN to be removed Be aware that if you remove a Level 1 EFIN that has Level 2 EFINs below it the Level 2 EFINs are also removed Setting Security Levels 196 Security settings allow you to password protect reports in the online EF database Because security is managed at the office level a security setting at one level does not apply to its sub levels therefore for offices using an EFIN hierarchy security must be set at each level To define security settings for an EFIN level 1 Log in to the online EF database using the Master EFIN 2 Click Options 3 Click Configure Report Security 4 Enter an e mail address and password and click
500. used the EF message adjustment is activated NOTE If you double click an EF message in black text a window with the full EF message is displayed Only blue text messages link to screens within the return EF messages appear as red MESSAGES in View Print mode For more information on viewing and eliminating EF messages see E filing a Return on page 181 The Return Notes section see Figure 6 2 displays informational notes about the return Return notes provide details about the return but they do not require that changes be made and they do not prevent e filing Return notes appear as NOTES in View Print mode The Fee Type and Amount columns see Figure 6 2 list the preparer e filing and bank fee amounts charged To have the fee type and amount displayed here the option must be selected from Setup gt Options gt Calculation amp View Print Fee breakdowns appear on the BILL page in View Print mode Calculation Details Tax Year 2008 The Details tab displays return amounts in an easy to read format Figure 6 4 167 Viewing and Printing a Return Drake Software User s Manual Summary Details Federal SL Wr NM EET Spare 4S ee desere eo eyes a eucleie a cre aye 1400 a e PEE E 12 2 EEAS 21000 MD a saas a a a a are aE EA E EE ie 22400 na EEEE EES ee 648 1 AERE EREA EEEE EEEE EE ET 0 Lai eee TEETE TE EEE EEEE 0 Dora n Se 1343 Connecticut Adjusted Gross Income 22400 Incom
501. vel help and screen help Field level help provides information about a selected field in data entry To access field help place your cursor in the field and press F1 on your keyboard Alternately you can press SHIFT or select View Help from the right click menu The help for the selected field is displayed as shown in the example in Figure 10 10 Drake Software Data Entry Help Date of Birth Direct Entry Enter the date of birth DOB in MMDDYYYY format An age may be entered if the exact DOB is unknown however for electronic filing and bank product purposes a full DOB is required e gate ay tata SBA one BOM nei ent tcl OT Figure 10 10 Example of field level help Note that each field level help window indicates whether the field is a direct entry adjustment or override field To close a field level help window click the X in the top right comer or press ESC Screen help provides information about an open screen in data entry To access screen help press CTRL ALT or click the Screen Help button at the top right corner of the screen Figure 10 11 In most cases a window similar to the field level help window Figure 10 10 displays the screen help Screen Help DER S a 1 Wages tips 2 Federal tax wih d 27000 o 2 3 Soc Sec wages 4 Soc Sec wih 27000 1674 5 Medicare wages 6 Medicare tax wih ewe e aA genoa ESA rannta n Figure 10 11 Screen Help button for W2 screen 235 Interactive Support RIA
502. viations Appendix D Acronyms amp Abbreviations cA ack ack ACH ACRS AGI AMT ATIN B ack CAF CSM COGS CWU py ack DAN DCN DD DI DIV DDM Tax Year 2008 This appendix lists and defines many of the acronyms and abbreviations you may encounter when using Drake tax software Accepted transmission Acknowledgement A report generated by the IRS and by Drake to a transmitter that indicates receipt of transmissions Automated Clearing House A system that administers electronic funds transfers EFTs among participating financial institutions Accelerated Cost Recovery System Adjusted Gross Income Alternative Minimum Tax Adoption Taxpayer Identification Number A tax processing number issued by the IRS as a temporary taxpayer identification number for a child in the domestic adoption process who is not yet eligible for a Social Security Number SSN Bad transmission Centralized Authorization File number issued to a preparer by the IRS Client Status Manager a tool for tracking workflow within a preparer s office Cost of Goods Sold Client Write Up Duplicate of previously filed return Rejected Depositor Account Number The financial institution account to which a Direct Deposit refund is to be routed Declaration Control Number A unique 14 digit number assigned by the ERO or in the case of online filing by the transmitter to each electronically filed tax re
503. wal Direct Debit 0 000 136 Third Part Designee s lt ia ccadnnedacawh yn Ca Coie i ghe Rent Reba EREEREER EEE 138 Signing the Re 65 60 8065 hod oie ieee oe bees Cae dee de EE ees E eas 139 Depreciation eam in acento Geen gang ou ee ae ee Bre ge eee eae wi oe Oe eae 140 AMO EXPENSES iacxtets beeiatadaeat bod taned e anae tee teense eet heathens 146 TICINO tn coms eek ene eek ee at ae sab ae ha ehh ek oh ea pa eae ees 150 Met Operating LOSSES eer iscsdaceas 6 ie eee EE EEEE ds dened di Pandas EURES wade oA 151 El ction OPTIONS s sa boa thin otetdeuchewsi dent oaatnad treat a eN a aapa i deus 153 Special REMAS ore anes reidans Ee eeaeee p aE Ra a a ea ea e a ds 153 Requests Claims and Other Forms i424 Hen padea va eske eee dawe end Re Setenn Fees 156 Special Features in Data Entry 40eseend ee atee tee eae ee ne ee Saree ad ee ese eras 159 iv Tax Year 2008 Drake Software User s Manual Table of Contents Ret rn RESUS eee nr nee en Preyer este aaa oer errr ey meyer rt 165 Calculating a Reni 2440 3240cdacasebivetdeaitadad ERA PEE NEETER EE EEES E 165 Calculation Results v0 an sdrereren go kerded ae e a ee E E a E e a EE E 166 Viewing and Printing a Return 2 2 eee e eee nee 168 Setting Up View Print Options a6 4 eid o ose dented aes sudeusedandoe weds eased eedaud 173 Archive Ma ag t sieri coven pate pa raw ek ok eR aee OR okie Er EERI SEE kad coe ees 176 BENG E E E A E A E E 179 Preparing t E File sire oia
504. window or select Go to from the toolbar and select a tab Each tab includes a Notes box see Figure 13 11 for recording any comments To clear a Notes box select the box then select Clear Contents from the right click menu Preferences and Options Set planner preferences before you begin working in the Tax Planner Planner options are available for exporting data selecting case options and changing the source direc tories and paths used with the Drake program Planner Multi year planning provides planning for up to seven years Multi case planning pro Preferences vides current year planning with up to seven user defined scenarios The Tax Planner allows you to save two planners one multi year and one multi case for each client To choose a planning preference 1 Open the Tax Planner for a client By default the planner opens to the Client Setup tab and displays client contact information 2 Click the cell to the right of the Planning preferences cell located near the bot tom of the Contact Information box then click the arrow that appears 3 Select a planning preference 4 Click Save Planner Ji To save multiple planners for a client save each planner using a IP slightly different name For example Click Save Planner gt Save As then save one planner as Smith1 another as Smith2 etc Planner The following options are available from the Tax Planner Options button Options a Send to DDM Send to DDM S
505. with return calculation and ending with the processing of loan checks for bank products M p RTANT The Consent to Disclosure of Tax Return Information is required for clients applying for bank products See Tax Preparer Require ments on page 201 Step 1 Calculate the Return Calculate the return to determine if it is ready to be e filed See Calculating a Return on page 165 for instructions on calculating returns in Drake Drake generates an EF status document and if necessary EF message pages shown in the Figure 7 1 directory tree and described in the following list All Forms Sets ERS El Federal Figure 7 1 View mode EF related documents include EF messages and an EF status page e EFSTATUS The FF status page shows transmission options piggyback state returns to be transmitted with the federal return and any additional state returns to be transmitted It also states whether any federal EF messages were generated Tax Year 2008 181 E filing a Return Drake Software User s Manual e MESSAGES EF messages are generated only if issues within the return cause it to be ineligible for e filing Issues include error codes descriptions of the issues and identification of fields that must be verified NOTE Error codes above 5000 are Drake error codes All other codes are federal or state error codes Eliminating All EF message pages must be eliminated before a return can be eligible for e f
506. xpenses Credit Where to Enter Data Enter data on both the 2441 screen and on screen 2 for each dependent for whom expenses were incurred NOTE Form 2441 appears on the 1040 return On a 1040A see Schedule 2 in View Print mode This credit cannot be claimed on a 1040EZ No Income for Spouse To qualify for the child care credit both parents must have earned income be full time students or be disabled If a spouse does not have income but qualifies for the credit the spouse s earned income must be entered at the bottom of the 2441 screen in the Earned income for 2441 purposes ONLY field Ct Ainduntforteneer if anes 18 Amount of qualifying expe Figure 5 34 Earned income fields on 2441 screen An entry in these fields affects Form 2441 amounts only and must be at least as great as the child care expenses Employer Provided Dependent Care Benefits Dependent care benefits provided by the employer box 10 on the W2 screen adjusts the credit by the amount provided Any amounts above the allowed credit appears on the Wages salaries tips etc line of Form 1040 with the notation DCB Ineligible Filing Statuses A taxpayer with a filing status of 3 Married Filing Separately 6 Taxpayer did not live with spouse even one day of the year or 7 Taxpayer did not live with spouse the last six months of the year on screen 1 is not eligible for the child care credit Carryover from Previous Year If there i
507. xx 1 4 publication or form instruction that Form Instructions for 1120S makes attachments necessary Description Description of form or document to Title of house on Oak Street be attached Appraisal of Lot 1234 File name Distinctive easily recognizable file TitleHouseOakSt pdf name followed by pdf AppraisalLot1234 pdf 3 Exit the PDF Attachments window 310 Tax Year 2008 Drake Software User s Manual Binary Attachments Because you ve indicated that a PDF document is attached the program generates an EF message page regarding the attachment when the return is calculated Attaching Documents to the Return To attach a PDF file to a return 1 From the return click View If anything was entered in the PDF Attachments window see Adding PDF Documents in Drake previously there will be two PDF related items in the View Print window e Ared MESSAGES alert item 1 in Figure 14 15 e An Attach PDF button on the toolbar item 2 in Figure 14 15 9 B oO P Data Entry Print Setup Archive Refresh Basic View Attach PDF Select Forms to View Print Q Q Q 2 All Forms Sets EF Federal Worksheets Form 1120 Department of the Treasury Internal Revenue Service Figure 14 15 The red MESSAGES file and the Attach PDF button 2 Click the red MESSAGES file to view EF messages including information on how to attach the required documents to the return 3 Click t
508. y designee options are shown in Table 5 16 along with descriptions of how the options affect the Third Party Designee section on page 2 of Form 1040 Table 5 16 Setup Options for Third Party Designee Selection Third Party Designee Section of Form 1040 None Blank No box is marked This default can be overridden from the PREP screen see For a Single Return Override below Preparer 1 9 Designated preparer for preparer numbers see list in Preparer Setup Yes box is marked Return Preparer Preparer who prepared the return Yes box is marked ERO Preparer indicated at Setup gt Options gt EF tab as ERO SSN Indicator Yes box is marked If a preparer or ERO is selected a PIN must be entered for that preparer otherwise no preparer name shows up as the third party designee on Form 1040 For a Single Return Override Screen code Use the PREP screen to override the setup options for third party designee for a sin PREP gle return Enter the designee s name phone and PIN in the fields provided Third Party Designee Allow another person to discuss this return with IRS h PUSEMEIMNG e ees Phone PIN Lastname Figure 5 49 Third party designee fields on PREP screen For more on how to use the PREP screen to override preparer information see Over riding Other Preparer Information on page 48 138 Tax Year 2008 Drake Software
509. y each year If a printer is no longer installed in Windows it still appears in Drake To remove the printer from Drake go to Setup gt Printing gt Printer Setup and click Reset This action removes all printers and re adds all the available printers automatically Editing To edit settings for the printer used for printing tax returns Printer Settings 1 From the Drake Home window go to Setup gt Printing gt Printer Setup 2 Enter setup changes as needed Details on each tab are provided in Table 2 15 3 Click Save Table 2 15 Printing Setup Tab F5 General Setup displays the current default printer for Tax Forms Reports Labels and Checks Field Tray Description Default is Main Paper Source Change the default if you have a multiple tray printer and will not be printing from the main tray Copies Default number of copies to print not available for labels or checks Duplex Directs printer to print duplex Only forms that are approved for duplex will be printed as duplex front and back in order of appearance Staple If the printer supports stapling after each print job select this option to turn stapling on Show dialog box Causes the Print dialog box to be opened before each print job 42 Tax Year 2008 Drake Software User s Manual Tab F6 Sets Setup displays the current default printer and the differ ent types of se
510. you finish a unit click Exit to return to the Tax Courses page Completed units can be viewed again at any time Once all course units are completed click Launch Exam to begin the test Submit your score upon completion of the test N ETC offers basic tax courses on 1040 1120 and 1065 reporting UTE and an intermediate tax course on 1040 concepts In the future look for advanced courses for 1065 1120 and 1120S returns CPE Credits To earn CPE credits for taking a tax course in Drake ETC you must score 80 or higher on the course exam and submit a course evaluation After completing all units of a course click Launch Exam on the Tax Courses page for that course After passing the exam with a score of 80 or higher click Launch Evaluation Once you have completed and submitted the evaluation you will be able to print a CPE certificate N To re print a CPE certificate click Report Card in the Drake ETC DTE sidebar Scroll to the bottom of the Report Card window to the CPE Credits list and click Print for the desired certificate Tutorials Tutorials teach the basics of Drake Software through text sound and animation For a list of available tutorials in ETC click Tutorials The Tutorials and Quizzes page displays a connection speed options box and lists Drake tutorials Figure 10 5 Please choose your connection speed Low recommended for dial up users no audio Med recommended for dial up users with audio

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