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2007 Drake Software Manual

1. Keyword Description Form 8906 Form 8906 Distilled Spirits Credit Form 8907 Form 8907 Nonconventional Source Fuel Form 8908 Form 8908 Energy Efficient Home Credit Form 8909 Form 8909 Energy Efficient Appliance Credit Form 8910 Form 8910 Alternative Motor Vehicle Credit Form 8911 Form 8911 Alternative Fuel Vehicle Refueling Property Credit Form 8912 Form 8912 Clean Renewable Energy Bond Credit and Gulf Bond Credit Form 8913 Form 8913 Credit for Federal Excise Tax Paid Form 8914 Form 8914 Additional Exemption for Housing Displaced Katrina Individuals Form 8915 Form 8915 Qualified Hurricane Retirement Plan Distributions and Repayments Form 8916 Form 8916 Reconciliation of Schedule M 3 Form 90 22 1 Form 90 22 1 Report of Foreign Bank and Financial Accounts Form 9465 Form 9465 Installment Agreement Request Form 966 Form 966 Corporate Dissolution or Liquidation Form 970 Form 970 LIFO Last in first out Application Form 982 Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness Form 996 Form 996 Corporate Dissolution or Liquidation Form W 2 1040 Wage and Tax Statement Form W 2G W2G gambling income Form W 4 Form W 4 Personal Allowances Worksheet From W 7 Form W 7 application for IRS individual taxpayer identification number Gift Tax Federal 709 Gift Tax Gift Tax Schedule A Federal 709 Gift Tax Schedule A Gift Tax Schedule B Federal
2. 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 Annual Report Arkansas S Corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Fiduciary OtherTax1 Franchise District of Partnership OtherTax1 Franchise eolanbia Individual OtherTax1 Franchise Fiduciary OtherTax1 Franchise Florida Individual OtherTax1 Stamp Fiduciary OtherTax1 Stamp Corporation OtherTax1 Stamp Drake Software Manual Copyrighted Material 284 Appendix 2007 DRAKE SOFTWARE State Package Tax Type Description Indiana Individual OtherTax1 County 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 Indiv
3. The Letter Editor is split into two parts the left pane listing keyword and conditional paragraph categories in an expandable tree format and the right pane displaying the selected letter template Other parts of the Letter Editor are described in the following sections Drake Software Manual Copyrighted Material 56 Installation amp Setup 2007 DRAKE SOFTWARE Toolbar Functions of the Letter Editor are accessed from the toolbar 9 H 2 le da 0g Open Save Print Edit Setup Preview Help Exit e Open View a list of packages view letter templates within a package Click a template name to open it e Save Save a letter template If there are issues with keywords and conditional paragraphs in the letter a Problem Saving Letter dialog box appears listing issues with the letter e Print Print the letter template as it appears in the editor e Edit Display a menu of editing options and corresponding hot keys e Setup Rename or restore the original letter template access Letterhead Setup e Preview View a letter for a specific return before finalizing edits to the template e Help Access Drake Help e Exit Close the Letter Editor Formatting Bar Use the functions on the formatting bar to format the text of the letter Rest your mouse pointer over a format button to view a description of that button To apply a format select the text for formatting and click the formatting button Font
4. EF Messages Federal PEN Tax Return Identifi To ad Print ca Package _ Code Description right click for full description Federal 5199 Schedule C E or F or Form 4835 has a loss and the at risk question Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ 0008b must Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ 0008b Federal 29 Tax Return Identification Page 1 EFIN of Originati ea Federal 29 Tax Return Identification Page 1 nator SEQ 0008b must EFIN of Originator SEQ 0008b must IPEN ANNAL ve n Return Notes and Fee Type and Amount Amount W Z WITHHOLDING IS HIGHER THAN MAX TAX RATE NON STANDARD W 2 KEYED NON STANDARD W 2 KEYED Current Program Calculation Complete SEE MESSAGE PAGE Description Press lt ENTER gt key or Click Here to Continue gt Total Tax Refund 15 370 EF Continue The calculation summary shows total income taxable income total tax refund amount balance due payment method and an eligibility indicator for electronic filing If the return is eligible a green check mark is displayed If a portion is ineligible a red X is displayed and a message appears in EF Messages Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Results 141 Drake 2007 Calculation Results 600 00 1020 DELA HALO TEST amp RUBY Summary
5. Tip Access the bank screen from General in data entry or type BANK BNK or the applicable bank code into the Selector field press ENTER Several transmissions occur when you transmit the tax return with bank information to Drake e Drake transmits the tax return to the IRS and the banks Drake Software Manual Copyrighted Material 172 Electro NOTE NOTE nic Filing and Banking 2007 DRAKE SOFTWARE The IRS sends an acknowledgement to Drake If the return has been accepted Drake transmits this information to the bank Your system picks up any new bank acknowledgements whenever you initiate a connection to Drake The bank sends an acknowledgement back to Drake If the bank approves a RAL it sends a Check Print Authorization acknowledgement This acknowledgement allows the check to be printed and is normally posted on the Wednesday of the following week if sent by noon Thursday If the bank declines a RAL it may flip the RAL to a non loan product If the bank approves the non loan product it sends a bank acceptance acknowledgement The bank may flip a RAL to a non loan product at its own discretion For example a bank may flip a RAL to a non loan product if there are no withholdings from earned income or if all earned income is from a Schedule C A RAL that is flipped to a Bonu by the bank is treated the same as a Bonu The bank also posts a Fees to ACH Automated Clearinghouse to inform
6. 1 Go to Tools gt File Maintenance gt Export Client EF Data Select to Export Client Data Files or Export EF Data Files e If exporting client data files the path for CLIENT export is displayed Change the default path if desired e Ifexporting EF data files the file and path names are displayed Change the default path if desired e To export to csv format click Export to CSV Comma Separated Values To include test returns click Include Test Returns Press ENTER or click OK Click Exit when export is complete Drake Software Manual Copyrighted Material 212 Tools 2007 DRAKE SOFTWARE PASSWORD PROTECT FILES The Password Protect tool allows you to protect your files from unauthorized access If a file has been locked it cannot be opened until unlocked with a password M PI RT ANT Write down the password and keep it in a secure location The file cannot be unlocked without it Drake software cannot retrieve a password for you Locking and Unlocking Select Tools gt File Maintenance gt Password Protect Files on the menu bar Type the SSN or EIN on the return Press TAB Enter an eight character password Press TAB Re enter the same eight character password Press ENTER Click OK Press Yes to continue Press Esc when finished NAM PY DN UNLOCK CLIENT FILES If a return has been set to lock upon e file acceptance the return can be viewed but not changed until the files have been unlocked U
7. N OTE Form 8582 amounts are calculated from passive activities amounts entered elsewhere Use this screen only if you must override Drake s calculations 2 Enter information into the appropriate fields 3 Press ESC to save and close Schedule E and Schedule K 1 Entry fields for Schedule E Supplemental Income and Loss and Schedule K 1 Share of Income Deductions Credits etc are located under the Income tab sar aa ot T ane As aty aD n ee m 4835 Farm Rental Income 6198 Amount Notat Risk 8582 Modified AGI Worksheet K1S Sub S K1 Parts of Schedule E under Income tab E2 Partnerships S Corps E3 Estates and Trusts E4 REMICs FAQ Frequently Asked Questions ee Oe Oe Schedules E and K 1 E Rent and Royalty Income K1 Partnership K1 KIF Fiduciary K1 Schedule E Page 1 of IRS Schedule E Part I Income or Loss From Rental Real Estate and Royalties is a direct entry screen in Drake To access it from the Income tab click Rent and Royalty Income or type E into the Selector field and press ENTER Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 105 Amounts for page 2 of IRS Schedule E Parts II through V calculate from the K 1s The corresponding screens E2 E3 and E4 primarily contain override fields data entered here overrides amounts that would otherwise flow from the K 1s IMPO RTANT Enter data in the E2 E3 and E4 screens only if you are transferring it fro
8. The 1040 amp Primary component is required and cannot be cleared N DTE Selecting components to download from the Download Manager ensures time is not wasted on unnecessary updates If you components appear in the Download Manager that you do not wish to download consider modifying your Update Profile at Setup gt Update Profile Drake Software Manual Copyrighted Material 206 Tools 2007 DRAKE SOFTWARE INSTALLING UPDATES If your Update Profile is set to download updates but not install them complete the following steps from Tools gt Install Updates 1 Click Install Updates Click Yes If No is selected the process stops If another computer on your office network is in the program during this process a message appears to reboot your system 3 Click Proceed to begin the updating 4 When files are updated click Exit COPYING UPDATES For computers without Internet access updates can be copied from updated computers with Internet access The following procedure outlines the steps required to copy updates PART 1 Complete the following steps from the computer that needs updates 1 Goto Tools gt Install Updates Insert or connect a media storage device such as a USB jump drive into the computer 3 Under the Updating computers without Internet access click to the first option MWy erates P2 i Updating computers without Internet access Choose this option to copy updates from another Step 1 Create
9. Update and Configure Data Q Choose the backup media type that best suits your needs Q Update your profile Complete Update Profile in Drake Q Update and back up Run the software update routine and make a backup copy of the software setup Take Advantage of Drake Resources Q Electronic Training Center ETC Train your office using Drake ETC See Drake ETC on page 186 Q Tutorials Use the 2007 tutorials computer based training located on the Help menu The Drake CD must be in the drive when accessing tutorials Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Checklist 69 Q Drake User Manual Use this manual as a resource for help and instructions for using the software and preparing individual returns m Practice Returns Use our practice returns to learn program navigation and data entry See Practice Returns and Test Returns on page 23 Drake Web site Add www support DrakeSoftware com to your Favorites list Drake KnowledgeBase Practice using the the KnowledgeBase at our Web site Drake Forum Sign up for the Drake Forum also at our Web site RIA Online Review the features offered with RIA online Ooooo Online EF Database Review and practice using the Online EF Database Prepare for Electronic Filing Q Complete settings Preparer Firm and EF electronic filing settings in Drake Q Send test transmissions to D
10. 00 eee ee 231 Report View Print Utility 232 Depreciation List 004 232 Fixed Asset Manager 232 Suite Products cccccscssssssssssssssssssssesenes DOD Document Manager 235 Drake Tax Planner 0 00 243 Client Write Up 0 008 250 AppendiX seoesssosecesosccessscosessosessosecesssesesssee 2O L Report Keywords 00 000 251 Letters Keywords 000 273 TINO oidsdscacsdsccasidccdscasedccuseddsecdascdeecededecescossdessessd Drake Software Manual 2007 DRAKE SOFTWARE Copyrighted Material 2007 DRAKE SOFTWARE Introduction 1 Introduction Welcome to the Drake Software Manual for Tax Year 2007 We are delighted that you have chosen Drake for your tax software needs for the 2007 tax year The Drake Team has been hard at work in 2007 to ensure that tax season at your firm is a successful one NEW FOR 2007 Each year Drake strives to offer the most efficient and comprehensive tax software in the industry while staying current with the latest in technology If you are a renewing Drake client you ll notice that the software has undergone numerous changes this year Some of those changes have been behind the scenes while other changes will be obvious to you Listed below are just a few of the improvements you will enjoy this year e Setup Wizard The 2007 Setup Wizard now guides
11. When prompted click Yes The 2007 letter is replaced with the 2006 letter NANAY Letterhead Setup Print letters and bills with your firm information and a logo The firm information can be printed alone with a selected bitmap graphic or with the default simple graphic Set the letterhead to print on client bills and client letters NEW FOR Letterhead Setup is now accessed through the Letter Editor Previously it was 70 07 accessed from the Letters gt Letterhead menu gee oom of eee iini V A ia le i A Setup Preview Help Exil l Letterhead Setup 2 Rename Letter knn i Restore Original Letter Ctrl R Update Prior Year Letter j FY EEEE P a d To enable the letterhead feature complete the following steps Drake Software Manual Go to Setup gt Letters From Letter Editor go to Setup gt Letterhead Setup Select from Letter Bill Indicators Choose to print the logo and firm information on the letter on the bill or on both Designate Coordinates In the right column number settings indicate the position of the firm information and logo Settings for the default simple graphic are as follows 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 of the bitmap or graphic in the Path Filename for Bitmap Logo text box or Browse to the bitmap location To print a personal logo the full path and fil
12. e Taxpayer or spouse owes money to the IRS The taxpayer can call 800 829 1040 for more information e F Taxpayer or spouse owes money to a branch of the federal government The taxpayer can call 800 304 3107 for more information e B Taxpayer or spouse owes money to both the IRS and a branch of the federal government Bank Codes indicate the bank through which the taxpayer requested a product and the status of the request e Bank Code Indicates the bank providing the product used e 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 e Check Information At the bottom of the screen is information pertaining to any checks approved or printed for the taxpayer Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 161 Bank Direct Deposit Info This window contains detailed information about any bank products e Bank Information Bank information fields are located on the left side of the window They include Bank Code Loan Status Bonu Indicator Decline Reason Application Date State Bonu whether requested IRS Debt Code Selected Loan Amount and Prior Debt Withheld e Direct Deposits Involving Bank Loans These fields are located on the right side of the window These direct deposits indicate what amounts have been paid to the bank and to the preparer Thi
13. 1 LAS40E G 1 WK _cTC4 1 LA540 1 WK_8812 Select a form then use the plus and minus keys on your keyboard to increase or decrease the number of copies of the selected form to print Maximum number is 9 minimum is 0 zero To enter or exit Classic Print click Classic Mode in the toolbar If you continue to use Classic Print mode the number selected for each form is saved and used as applicable for all subsequent returns printed N OTE To make Classic Print mode the default go to Setup gt Printing gt Printer Setup from the Home window Select F7 Options and check Classic print mode Printing a PDF To print a return as a PDF select PDF995 from Printer in Print Selection Your system must have a PDF995 installed before it is available as a print selection see PDF Printer Setup on page 65 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 149 Electronic Filing and Banking Each preparer is responsible for using due diligence in exercising proper judgment MPI RTANT and following rules and regulations for filing returns electronically Verify all information on a return before electronically filing Once returns are sent the transmission cannot be stopped Drake streamlines the electronic filing and bank product application processes on both the federal and state levels This chapter provides an overview of electronic filing introduces the banks and ban
14. 130 Form 4952 Investment Interest Expense Deduction 121 Form 4970 Accumulation Distribution of Trusts 126 Form 5329 Additional Taxes on Qualified Plans 119 Form 56 Fiduciary Relationship 136 Form 5695 Residential Energy Credits 122 Form 5884 Work Opportunity Credit 122 Form 6198 At Risk Limitations 102 104 Form 6251 Alternative Minimum Tax 126 Form 6252 Installment Sale Income 115 Form 6478 Credit for Alcohol Used as Fuel 122 Form 6765 Credit for Increasing Research Activities 122 Form 6781 Gains amp Losses Section 1256 115 Form 709 Gift Tax 127 Form 8082 Inconsistent Treatment or Adjustment Request 122 Form 8271 Tax Shelters 127 Form 8275 Disclosure Statement 136 Form 8283 Noncash Charitable Contribution 121 Form 8332 Release of Claim to Exemption 129 136 Form 8379 Injured Spouse Allocation 136 Form 8396 Mortgage Interest Credit 122 Form 8453 Transmittal for e file Return 89 Form 8582 Passive Activity Loss Limitations 102 104 Form 8582 CR Passive Activity Credit Limitations 122 Form 8586 Low Income Housing Credit 122 Form 8606 Nondeductible IRAs 94 119 Form 8609 Low Income Housing Credit 122 Form 8611 Recapture of Low Income Housing Credit 127 Form 8633 IRS e file Application 149 Form 8633 IRS e file Application 150 Form 8801 Credit for Prior Year Minimum Tax 122 Form 8812 Additional Child Tax Credit 123 Form 8814 Child
15. 2 Click Activate AutoUpdates 3 Select a download time from the Hour and Minute lists 4 Select to Auto install updates or Manually install updates If you choose Auto install updates the updates are installed after being downloaded If you choose Manually install updates you must install all updates manually from Tools gt Install Updates before the updates can take effect 5 Click Save Drake Software Manual Copyrighted Material 46 Installation amp Setup 2007 DRAKE SOFTWARE OPTIONAL PROGRAM SETTINGS The following program settings are not required for proper program operation Review each setting to determine which may be required for your office setup NOTE Most optional settings can be updated from the prior year See Updating Settings on page 71 Setup screens covered in the following sections include the following e Options Set individual program preferences e Pricing Establish pricing to generate client bills e Macros Create your own software shortcut keys e Letters Review and edit client letters e Colors Adjust the program s color display e Printing Edit printer DDM and PDF settings Options Setup The software is shipped with the most common preferences set as the defaults To change the defaults take the following steps 1 From the Home window go to Setup gt Options 2 Click the tabs to navigate and view all options See following sections for m
16. 87 Return Preparation This chapter describes the features and procedures in Drake for preparing an income tax return While its focus is the individual 1040 return the functionality for business and entity returns is the same From the Data Entry Menu select the screens to enter data The data entered flows to federal income tax form state income tax forms and related attachments and worksheets Access the Data Entry Menu when a return is created or opened Displayed on the screen are the taxpayer name and SSN the data entry toolbar the menu tabs the menu items and the Selector field Taxpayer Name and SSN Drake 2007 Data Entry 123213123 SAMPLE HUGH amp GWEN xe J 3 amp a Split Doc Mar Tax Planner CSM Email Exit Name and Address A Itemized Deductions Schedule Dependents 3 STAX Sales Tax Worksheet Income 2106 Employee Business Expense Adjustments Payments Electronic Filing and Banking Estimated Taxes CHAS Chase RAL or Bonu Child Care Credit DD Direct Deposit Form 8888 Earned Income Credit Checklist PMT Electronic Funds Withdrawal Menu Items PIN 8879 8878 e file signature Screens Wages 2 EF EF Options Override Gambling Income 1099 R Retirement NOTE Notes aboutthe return 1099 DIV Dividend Income PRNT Print Options 1099 INT Interest Income 1099 G Gov t Payments 1099 MISC Miscellaneous Income RRB 1099 R Railroad Retirement 1099 SSA Social Security Foreign Employer Compensation Freq
17. Firm EFIN Firm entered on screen 1 in data entry Pulls from the Firm file First Year TRAC screen direct Admin entry Drake Software Manual Copyrighted Material 180 Client Status Manager 2007 DRAKE SOFTWARE Keyword Data location ID Number Client s SSN or EIN from screen 1 Index Record number in the CSM database Last Change The date of the last change in the CSM Misc Code 1 4 Miscellaneous codes from screen 1 Payment Flag Indicated how the bill is to be paid bank client or a combination Phone Number Screen 1 Preparer Screen 1 Receipt Screen 1 in direct entry Refund Calculated data from return individual and business returns St AckCode 1 6 EF gt EF Database St AckDate 1 6 EF gt EF Database St BalDue 1 6 Calculated data from state return up to six states St Refund 1 6 Calculated data from state return up to six states St TranDate 1 6 EF gt EF Database Started TRAC screen State 1 6 States that are present on the return up to six Status Status selected from the CSM button on the data entry toolbar Total Bill Bottom line of the calculated bill Tran Date TRAC screen Type Return Type selected upon creating a new client file NAVIGATING THE CSM Listed below are common tasks for navigating the CSM e View large tables Use scroll bars and arrow keys as needed to
18. For CSM data to be transferred to MOM the software must be configured to send CSM data to Drake during the electronic filing process Each level 1 and level 2 office in a multi office environment must complete the following steps 1 Go to Setup gt Options 2 Select EF 3 Check the box to Transmit return data to Drake for multi office web reports 4 Click OK Any changes made in CSM are transmitted to MOM during filing To access click MOM from the Online EF Database View data using the available filters To run a report select an option from each filter and click Run Report All of the data columns available in CSM are displayed Scroll down or across the report screen to view all the available data If the report contains more than a specified number of rows default 25 it is paginated Page numbers appear in the upper and bottom left corners The number of rows displayed per page can be changed via Rows Per Page e To print the report click the printer icon Only the data on the screen is printed e To sort data click a column header Sorting is in ascending and descending order based on the column selected If there are electronic filing details available for a particular return click the record s ID number SSN or EIN Reports can be downloaded in CSV format suitable for Excel and Access by clicking the Excel CSV icon All data for the given report criteria are saved not just the data shown on the current page
19. OPENING THE SCHEDULER For preparers that access the Scheduler in Preparer mode click Scheduler from the Drake Home window For Front Office logins the Scheduler opens when the employee logs in to Drake Drake 2007 Appointment Scheduler eo 472 amp BOD New Appt Search Appts Print Current Calendar Date 14 15 16 21 22 23 28 29 30 4 5 6 8 9 Z Today 9 25 2007 Drake Software Manual Copyrighted Material 78 Preseason Preparation 2007 DRAKE SOFTWARE Toolbar The Scheduler toolbar contains the following buttons e New Appointment Opens the Appointment Detail dialog box Enter new appointments or edit existing appointments here e Search Appts Opens the Scheduler Search to search scheduled appointments e Print Open the current schedule grid view in a Report Viewer window e Reports Opens Preparer Reports Use this screen to generate reports based on scheduled appointments e Export Export the current schedule view into an Excel spreadsheet e Setup Access Scheduler View Setup where view and time options are set e Help Opens the Help System e Exit Closes the Scheduler Calendars Expanded for 2007 calendars display up to three months in the left column e To view future months click the right arrow To move past months click the left arrow e The current month displays at the top of each calendar The current date displays with a red circle The se
20. or C EZ see page E 3 Report farm rental income or loss from Form 4835 on 1 List the type and location of each rental real estate property 2 For each rental re A listed on line 1 Saka aa i a use it during the 4g purposes for mor B PEENE SE EAEN EE EEEE e 14 days or e 10 of the to c fair rental valu Pe i or Ge See page E 3 i Propertles ncome A i B T Na alll arn ie hls anci en ee Pe ap ar je naaa i Multi form Codes For other forms and schedules the number entered into the Multi form code field refers to the instance of a schedule or form See Depreciable Assets on page 106 If depreciation amounts are to flow to Schedule E however a multi form code number should reflect an actual rental property rather than the instance of a Schedule E When the return is calculated a FED_DEPR sheet is generated for each Schedule E property The return can still be filed electronically because the Schedule E properties up to three per schedule flow to the same Form 4562 e Depreciable Assets In most cases depreciable assets should be entered only in the 4562 screen If using the other 4562 screens for multiple rental properties you must manually apportion the depreciation to each property When entering depreciation use the additional 4562 screens 6 7 and 8 under Income only if you have a completed IRS Form 4562 in front of you if the depreciation data cannot be uploaded du
21. web file several extensions electronically Drake does not track whether the extensions are accepted or rejected but the information on each extension is available on the state s Web site in Preparer Report Sample Report View When you select a report from Report Manager a Sample Report is displayed with a description if available of the selected report and a sample of the print layout including the title and all columns This display is reflects changes as report details are updated Portrait and Landscape Report View To the right of the Sample Report is a description of the report layout Portrait Landscape or Potentially too wide Layout is determined by the number of report columns Potentially too wide means some data may be cut off in printing even if Landscape is used because too many are columns selected The report is still suitable for viewing in the Report Viewer using scroll bars Report Buttons e Help Click to access the Help System e New Report Click to create a new report from scratch e Edit Report Edit a report s settings and save as a new report Edited predefined reports are saved in My Reports e Delete Report Delete a report Only reports listed under My Reports can be deleted e View Report View a saved report or use the most current data to view a new report Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 225 Right Click Menus Right click
22. 166 delaying 132 EF Database 158 error codes 151 in data entry 100 messages 141 146 notes 155 online EF Database 162 override options 101 156 procedures 149 queue 153 154 record of transmissions 154 reject codes 160 selecting returns to file 152 setup options 50 signatures 101 states 167 suppressing returns 50 89 testing 150 transmission 150 155 Transmit Receive 154 transmitting a return 153 troubleshooting 153 Electronic Filing Identification Number see EFIN electronic funds withdrawal direct debit 101 Electronic Refund Check see bank products Drake Software Manual 2007 DRAKE SOFTWARE Electronic Return Originator see ERO Electronic Training Center see Drake ETC Email address books 197 attaching files 196 broadcast emails 199 checking for new messages 195 features 195 messages 196 employee tips 123 employer credits 123 empowerment zone credit 123 energy efficient appliance credit 123 energy efficient home credit 123 envelopes 217 equal sign for overrides 15 ERO application 149 setup 37 estimated tax adjustments 124 exemptions 90 existing forms list 13 expenses and mileage 117 auto 103 117 moving 118 exporting K 1 data 105 extensions Alabama 224 filing for 130 gift tax 128 FAQs 99 farm related income 103 Federal State Facts 193 fees bank 37 calculated 141 display during calculation 47 electronic filing 37 overrides 47 90 pricing
23. 4562 ST Prior Depr State Prior Depreciation on Form 4562 4562 ST Sec 179 State Section 179 Expense Deduction on Form 4562 Drake Software Manual AGI Adjusted gross income Alimony Received Total amount of alimony received on return Alt Min Tax Alternative minimum tax amount 1040 only Applied Overpayment Applied to next year s taxes Balance Due Amount of tax due Copyrighted Material 264 Appendix 2007 DRAKE SOFTWARE Keyword Description Child Tax Credit Additional Total amount of additional child tax credit Dividends Ordinary Total Displays the total ordinary dividends on a return This includes the qualified dividend amount Estimated Tax Paid Prior Year Total of estimated tax payments in prior year Estimated Tax Payment 1 First estimated tax payment for next year Estimated Tax Payment 2 Second estimated tax payment for next year Estimated Tax Payment 3 Third estimated tax payment for next year Estimated Tax Payment 4 Fourth estimated tax payment for next year Estimated Tax Payments Total of estimated tax payments made throughout the year Exemptions Number of total exemptions Form 1040 Type Type of 1040 return 2 for 1040 3 for 1040A or 4 for 1040EZ Interest and Dividends Total amount of interest and dividends IRA Deductions Total amount from IRA and pensions IRA Pensions ltemized Standar
24. At the prompt click Yes to fill lines 1 24 with data from the original 1040 Click No to leave blank Complete these steps before changing any other screens Correct all other screens to reflect changes to the original return Do not use the X screen for the changes themselves Attach a copy of the original return to the printed 1040X before submitting an M PI RTANT amended return to the IRS The original 1040 cannot be retrieved in Drake once the return has been amended Drake Software Manual Copyrighted Material 136 Return Preparation 2007 DRAKE SOFTWARE Accessing Additional Forms The following additional federal form fields can be accessed and completed from Other or by typing the screen code into the Selector field and pressing ENTER Form 56 Notice Concerning Fiduciary Relationship Form 970 Application to Use LIFO Inventory Method Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness Form 1045 Application for Tentative Refund Page 1 screen 1045 Form 1045 Application for Tentative Refund Page 2 screen NOL Form 1098 Mortgage Interest Statement Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer Form 2120 Multiple Support Declaration Form 2555 Foreign Earned Income Form 2848 Power of Attorney and Declaration of Representative Form 4506 Request for Copy of Tax Return Form 4852 Substitute for Form W 2 or Form 1099 R Form 8275 Disclosure Statement Form 8332 Release of
25. Click column headers to sort by columns Like other windows in Drake the DDM has a menu bar and toolbar If a hot 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 launches a different function Depending on your level in the DDM different buttons are accessible For example from the cabinet level you can add only drawers and cabinets so only these buttons are available From folder level the following speed buttons are available Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE oi eaa 2 bb New Folder New File Open Scan Import Copy Rename Email Delete Suite Products 239 a R g Drag Link File Help Exit New Folder Create a new folder e New File New Open a new text Word or Excel file e Open Open the selected document e Scan Scan a document into the DDM e Import Import a document from another location e Copy Export a document to another location e Rename Rename the selected document e Email E mail the selected document e Delete Delete the selected document e Drag Disable the drag and drop feature e Link File New Link to a file outside the DDM e Help Open the Help system e Exit Close the DDM Searching the DDM File Structure To find a cabin
26. Credits Single Business 1K cites pe aiaia sas tothe tS EE IN I I EAR AIAN an on err diets DA natn mat To access a city form click the link or type the corresponding screen code into the Selector field and press ENTER Ohio city codes are listed in the City of field of the Ohio Generic Municipality Form or GEN screen Special abbreviated codes are given to cities whose names exceed nine characters Drake Software Manual Copyrighted Material 138 Return Preparation 2007 DRAKE SOFTWARE Part Year Return Additional steps must be taken if a taxpayer is a part year resident of a state To file a taxpayer as a part year resident select PY in the Resident State field of the Demographics screen screen 1 of the federal return Tip When working in state screens have the part year residency dates on hand since many state screens require them M Bi RTANT Code each screen with the state with which it is associated to ensure that income deductions and calculations are applied to the correct state Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Results 139 Return Results Before a return can be viewed printed or filed the results must be calculated A return can be changed and calculated repeatedly before it is finally submitted This chapter covers the basics of calculating viewing and printing return results in Drake CALCULATING A RETURN Return calculations are shown in the Calculate
27. Drake Software Manual Date the return was marked as completed Copyrighted Material 262 Appendix 2007 DRAKE SOFTWARE Keyword Description Date Last Calc Date 1040 return was last calculated from the TRAC screen Date Promised Date promised from TRAC screen Date Started Date the return was started from the TRAC screen Date Updated Date the return was updated from last year Misc Code 1 Miscellaneous Code 1 Misc Code 2 Miscellaneous Code 2 Misc Code 3 Miscellaneous Code 3 Misc Code 4 Miscellaneous Code 4 Misc Code 4 Miscellaneous Code 4 Opened Number of times that return has been opened in data entry mode Percentage Gives the percentage for the immediately preceding column Receipt Number Receipt Number entered on Demographics screen Accounts Receivable Bal Due BILL Net amount from the BILL form Balance due amount on the BILL form Bill Adj Amount 1 First adjustment amount on the BILL Screen Bill Adj Amount 2 Second adjustment amount on the BILL screen Bill Adj Amount 3 Third adjustment amount on the BILL screen Bill Adj Description 1 First adjustment description on the BILL Screen Bill Adj Description 2 Second adjustment description on the BILL Screen Bill Adj Description 3 Third adjustment description on the BILL Screen Bill Discount Percentage Discount entry on the Bill Screen Bill Inc
28. For more on the Drake Tax Planner see page 243 To launch the 2007 program double click the Drake 2007 icon on your desktop The Drake 2007 Tax Software window is displayed amp Drake 2007 Tax Software Preparer Login Preparer ID Password Login E Copyright 1985 2007 Drake Software Licensed Not Sold All Rights Reserved Updated Drive F 05 Windows XP 09 12 2007 N UTE For installation instructions see Tax Software Installation on page 28 Drake Software Manual Copyrighted Material 6 Basics 2007 DRAKE SOFTWARE LOGGING IN AND OUT To log in from the Drake 2007 Tax Software window enter a Preparer ID and a Password then click Login The Home window appears with successful login If logging in for the first time after installation see Logging in as Admin on page 32 N OTE Preparer logins are created during Preparer Setup see Preparer Setup on page 38 It is not necessary to enter a password if one was not designated in Preparer Setup To log out of the program click Exit or go to File gt Exit in the Home window To log out as a preparer without exiting the program go to File gt Logout Preparer GENERAL NAVIGATION Use the mouse or keyboard to navigate within the software Use shortcut keys to speed navigation Choose the option that is most comfortable for you Mouse e Left button Move the pointer over an item and click the left mouse button to select that item When
29. GO Zone 111 grid data entry 12 group sales 110 Gulf Opportunity Zone see GO Zone heads down data entry 21 health coverage tax credit 123 health savings accounts HSA 119 Help System 193 help see Drake Support Home window 7 home business use of 109 hot keys see Quick Reference Guide household employment taxes 126 Hurricane Katrina 122 imperfect returns 50 156 income church 116 120 farm 103 interest and dividend 93 non taxable 91 passive 105 screen in data entry 91 self employed Schedule C 102 splitting between joint taxpayers 91 taxable scholarships 93 unearned 91 index files repairing 208 Indian employment credit 123 inheritance 112 injured spouse allocation 136 Copyrighted Material 2007 DRAKE SOFTWARE innocent spouse 136 installing tax software 28 installment agreement request 136 installment sales 110 interest income 93 investment credit 122 investment interest expense deductions 121 IRAL Instant RAL see bank products IRAs adjustments to 118 deductible 94 nondeductible 94 119 Roth 119 IRS debt indicator codes 160 publications 119 120 149 Submission Processing Center 155 itemized deductions 99 K 1 schedules 105 Katrina Hurricane 122 keyboard 6 keyword 57 kiddie tax 127 KnowledgeBase 191 land assets 107 LETTER page 146 letterhead setup 61 letters after season 215 bringing forward from 2006 60 conditional paragraphs
30. Installation amp Setup 2007 DRAKE SOFTWARE Pay Per Return Setup Pay Per Return PPR is available for offices that prepare a small number of returns Pay Per Return setup is necessary only for those who use a PPR version When a return is created it counts as one PPR Do not create unnecessary returns N OTE in the software Use Drake test returns for practicing data entry An SSN verification on the New Return screen helps reduce errors When opening a prior year return you are prompted to pay for the return or open the return in read only mode Entries cannot be made when in read only mode Other PPR restrictions include the following SSNs or EINs entered on screen 1 cannot be edited The Tools gt File Maintenance gt Change SSNs on File feature is unavailable in the PPR package A return entered in the Quick Estimator counts as one PPR To activate PPR go to Setup gt Pay Per Return The Pay Per Return window lists the following For this EFIN Total Returns Purchased Returns purchased for the EFIN Purchase additional returns from this window Total Returns Activated Returns activated for the EFIN Returns must be activated before they can be used e Total Returns Remaining Returns purchased but not activated for the EFIN For this computer Total Returns Activated Total Returns Used and Total Returns Remaining please confirm Activating PPR Returns Activate returns from Activatio
31. Once the report is saved open Excel or Access to access the saved report Drake Software Manual Copyrighted Material 166 Electronic Filing and Banking 2007 DRAKE SOFTWARE COPYING EF RETURN DATA Firms with multiple computers but no network may have to copy data from computer to computer using a disk USB flash drive or other memory data storage device MPI RTANT Copying EF return 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 data storage device take the following steps 1 From the Home window select EF gt Copy EF Returns to Disk to open the EF Return Selector Check the boxes of the returns to copy Click Select All or Unselect All as needed to check or clear multiple boxes Click column headers to sort returns in ascending order by column provided Click header a second time to sort in descending order Click Continue Select the output drive from Select Drive then click Copy Files Click OK after files are copied COPYING FROM A STORAGE DEVICE To copy EF information from a data storage device to a computer take the following steps 1 From the Home window select EF gt Copy EF Returns from Disk to open the Copy EF Return from Disk dialog box Select the drive from which file are to be copied Click Copy Files then click OK to copy each file Click Exit Drake Software Manual Copy
32. Paragraph Inserts applicable paragraph if direct debit is NOT selected for e filed city return City No Direct Debit Paper Paragraph Inserts applicable paragraph if direct debit is NOT selected for paper filed city return City No Direct Deposit Paragraph Inserts applicable paragraph if direct deposit is NOT selected for city return City OtherTax Balance Due Balance due from city return being prepared other tax type City OtherTax Balance Due Paragraph Inserts paragraph for balance due on city return other tax type City OtherTax Due Date Due date of city return other tax type City OtherTax MAIL TO Address City MAIL TO Address other tax type City OtherTax Refund Refund from city return being prepared other tax type City OtherTax Refund Paragraph City OtherTax Return Paragraph Inserts paragraph for refund from city return other tax type Inserts paragraph for city return other tax type City OtherTax Tax Description City OtherTax Zero Due Paragraph Tax description from city return being prepared other tax type Inserts paragraph for zero due on city return other tax type City Return Paragraph Inserts paragraph for city return City Taxpayer Bank Taxpayer s bank for city direct deposit or direct debit City Taxpayer Bank Account Number Taxpayer s bank account number for city direct deposit or direct debit City Taxpayer Bank Account Type Taxp
33. Residential Energy Credits Form 5884 Form 5884 Work Opportunity Credit Form 6198 Form 6198 Computation of Deductible Loss Form 6251 Form 6251 Alternative Minimum Tax screen Form 6252 Form 6252 Installment Sales Form 6478 Form 6478 Credit for Alcohol Used as a Fuel Form 6765 Form 6765 Credit for Increasing Research Activities Form 6781 Form 6781 Section 1256 Contracts and Straddles Form 8027 Form 8027 Employers Annual Information Return of Tip Income amp Allocated Tips Form 8050 Form 8050 Direct Deposit or Direct Debit of Tax Form 8082 Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Form 8264 Form 8264 Application for Registration of a Tax Shelter Form 8271 Form 8271 Tax Shelter Reporting Form 8275 Form 8275 Disclosure Statement Form 8283 Form 8283 Noncash Charitable Contributions Form 8379 Form 8379 Injured Spouse Claim and Allocation Form 8396 Form 8396 Mortgage Interest Credit Form 8582 Form 8582 Passive Activity Loss Limitations Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 259 Keyword Description Form 8582 CR Form 8582 CR Passive Activity Credit Limitations Form 8586 Form 8586 Low Income Housing Credit Form 8594 Form 8594 Asset Acquisition Statement Form 8606 Form 8606 Nondeducti
34. ST OtherTax2 4th Qtr Estimate Amt Due State estimate payment 4th quarter after overpayment applied other tax type 2 ST OtherTax2 4th Qtr Overpayment Applied State overpayment applied 4th quarter other tax type 2 ST OtherTax2 4th Qtr Total Est Amt 4th Qtr state estimate amount overpayment applied and amount due other tax type 2 State Amended Balance Due Balance due from state amended return being prepared State Amended Balance Due Paragraph Inserts paragraph for balance due on amended state return State Amended Refund Refund from amended state return being prepared State Amended Refund Paragraph Inserts paragraph for refund from amended state return State Amended Return Paragraph Inserts paragraph for amended state return State Amended Tax Description Tax description from amended state return being prepared State Amended Zero Due Paragraph Inserts paragraph for zero due on amended state return State Bank Product Type of bank product s selected for state refund State Direct Debit Date State Direct Debit Paragraph Date state balance due will be directly withdrawn from taxpayer account Inserts applicable paragraph if state direct debit is selected State Direct Deposit Paragraph State Extension Paragraph Inserts applicable paragraph if state direct deposit is selected Inserts paragraph for extension application for state return Dra
35. Selecting Preparers Schedules to View View multiple preparers schedules on Preparer Calendars To select preparers to display on the schedule grid complete the following steps 1 Open the Scheduler from the Home window 2 Click Setup to open the Scheduler View Setup dialog box 3 Select preparers from the left box Click gt to add a preparer or click gt gt to add all These preparers are visible in the right column Click lt to remove a preparer from a column 4 Click Save Preparers are displayed on the Preparer Calendars Setting Default Times Preparer schedules and appointment durations are set in 15 minute increments To select a specific increment complete the following steps 1 Open the Scheduler from the Home window 2 Click Setup to open the Scheduler View Setup dialog box 3 Select a default appointment and or scheduler time under Time Options 4 Click Save N OTE Changing the default schedule appointment times and durations changes them globally That is they are changed for all preparers in the firm SCHEDULING APPOINTMENTS Once preparer schedules are created and selected for view appointments may be scheduled in Appointment Detail To access Appointment Detail click New Appt from the Scheduler toolbar or double click a time slot on the schedule grid Drake Software Manual Copyrighted Material 80 Preseason Preparation 2007 DRAKE SOFTWARE Drake 2007 Appointment Detail a
36. go to Setup gt Options Calculation and View Print and check or clear Pause option for calculation To view or print a return from data entry mode click View or Print on the toolbar or press CTRL V or CTRL P Results are first displayed in Calculation Results Click Continue to proceed to view or print mode as selected Drake Software Manual Copyrighted Material 144 Return Results 2007 DRAKE SOFTWARE WORKING IN VIEW AND PRINT MODES View mode and print mode have two main sections each the cascade of forms and the toolbar as shown in view mode the following figure Drake 2007 View Mode SAMPLE HUGH F amp GWEN 123213123 se JOO WD ineo DE F9 Prop Color Cfg DDM F1 Help view Exit Cascade of Forms Cascade of Forms All forms worksheets and associated Drake generated documents for a return are shown in the cascade of forms Cascades are generally organized as follows e Left most cascades Forms notes and messages for federal return e Middle cascades Forms notes messages and associated worksheets for state returns e Right most cascades Worksheets filing instructions letter and billing statement See the previous figure for an example of how pages are typically ordered in the cascade N OTE Page order depends on factors such as the number of forms in a return or the number of state returns Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Results 145 Viewing an
37. s Interest amp Dividends 127 Form 8815 Interest Exclusion Bonds after 1989 136 Copyrighted Material x Index Form 8820 Orphan Drug Credit 123 Form 8822 Change of Address 136 Form 8824 Like Kind Exchanges 115 Form 8826 Disabled Access Credit 123 Form 8828 Recapture Federal Mortgage Subsidy 136 Form 8829 Business Use of Home 106 117 Form 8834 Qualified Electric Vehicle Credit 123 Form 8835 Electricity Coal Credit 123 Form 8839 Qualified Adoption Expenses 123 Form 8844 Empowerment Zone Credit 123 Form 8845 Indian Employment Credit 123 Form 8846 Employee Tips Credit 123 Form 8847 Community Development Corp Credit 123 Form 8853 Archer MSAs amp LTC Insurance 119 Form 8857 Innocent Spouse Relief 136 Form 8859 DC First Time Homebuyer Credit 123 Form 8860 Qualified Zone Academy Bond Credit 123 Form 8861 Welfare to Work Credit 123 Form 8862 EIC After Disallowance 136 Form 8863 Education Credits 120 Form 8864 Biodiesel amp Renewable Diesel Fuels 123 Form 8866 Interest for Property Depreciated 136 Form 8867 EIC Checklist 123 Form 8873 Extraterritorial Income Exclusion 118 Form 8874 New Markets Credit 123 Form 8878 IRS e file Signature Authorization extensions 101 Form 8879 IRS e File Signature Authorization 101 Form 8879 IRS e file Signature Authorization 89 Form 8880 Retirement Savings Contributions 123 Form 8881 Small Employer Pension Plan S
38. you can also override certain setup options including Firm and Preparer The entries on this screen are used for many other forms To enter a client s demographic information use the following procedure 1 Under the General tab click Name and Address or type 1 into the Selector field and press ENTER The Demographics screen displays sections for Taxpayer Information Spouse Information screen disabled if not married filing jointly Return Options 2210 Options and Miscellaneous 2 Complete all applicable fields To move quickly from one field to another press TAB To clear all populated fields in a screen press CTRL D To exit a screen without saving the data entered press SHIFT ESC To undo recent changes in a screen press CTRL U 3 Press ESC to save the information and close Screen 1 Taxpayer and Spouse Information The Demographics screen includes fields and check boxes for entering taxpayer and spouse information Following are some items to keep in mind while entering Demographics data e Name Names are limited to 35 characters for filing electronically If a name exceeds 35 characters use the initial for the first name Also do not use suffixes such as Jr Sr etc e Filing Status Select a Filing Status Save time by typing the status code into the field For example type 3 for Married Filing Separate MFS Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Prep
39. 4 Open PATCHLIST TXT If update files are needed they are copied to the media storage device If no updates are needed you are prompted to click OK 5 Remove the media storage device from the computer AAN EA OO n ye oat EA i aa Y PART 3 Complete the following from the computer that needs updates 1 Insert or connect the media storage device to the computer 2 Click the first option under Updating computers without Internet access A E a pet E tet Se E E me Updating computers without Internetaccess Choose this option to copy updates from another Step 1 Create Update List d computer to this one A portable data drive floppy Se ann a disk USB drive etc must be in the computer a GetUpdates From Drive Choose this option if you are reading a portable data drive brought from a computer that needs updates oe agrees aiiin 1p eG nel hat a gnannenin teh MoM ee Oe ane Click to select Step 2 Get Updates From Drive Browse to PATCHLIST TXT file Click OK to download update files Under Download amp Install Program Updates click Install Updates to begin installing the updates An bw DOWNLOAD FONTS Special software based fonts or Softfonts are required to print tax forms Most laser printers do not come with these fonts installed They must be downloaded to the printer s memory each time the printer is turned on Drake Software has included downloadable software fonts in t
40. 57 59 custom paragraphs 50 131 defaults and overrides 60 editing 59 envelopes 217 estimate 215 formatting 56 greeting 131 keyword list 273 keywords 57 59 mailing labels 215 override options 131 personalizing 131 postcards 217 preseason 74 215 previewing 60 privacy policy 49 restoring 60 Drake Software Manual Index xi schedule 215 setup 55 text of 57 updating from 2006 133 LIFO 136 like kind exchanges 110 115 limitations at risk 104 passive activity credit 122 passive activity loss 102 104 limitations at risk 102 list of preparers 41 live payroll see Client Write Up logging in as admin 29 during setup 32 for first time 6 29 logging out 6 losses nonrecaptured 115 lost checks 173 low income housing credit 122 lump sum distributions 126 macros Fixed Asset Manager 234 setup 54 using 20 MACRS tables 110 magnify fields 15 mailing labels 215 medical savings accounts MSA 119 menu bar Home window 7 MESSAGES page 146 151 messages see electronic filing MFJ to MFS split 17 mileage 117 ministerial income allocation 120 miscellaneous codes 90 MOM see Multi Office Manager mortgage interest credit 122 mortgage interest statement 136 mortgage recapture 136 mouse 6 moving expenses 118 MSG page see MESSAGES page 146 multi form code 106 Multi Office Manager MOM 162 165 multiple support declaration 136 N nesting see conditional p
41. 8a Interestinco To begin enter desired field number and press enter g 8b Tax exempt interest NO Schedule B required Ta e H 9 Dividend income NO Schedule B required Taxable refunds State taxes Local taxes Alimony received 15a IRA distributions received NO 1099 received 15b Taxable portion of IRA distributions above 16a Pension distributions received NO 1099 received 16b Taxable portion of pensions above N 19 Unemployment compensation EONI a a To work in heads down mode take the following steps 1 Press CTRL N while in a data entry screen 2 In the Heads Down box type the field number and press ENTER 3 Enter a field amount or description and press ENTER The data is placed in the proper field and the system returns you to the field number box Drake 2007 Data Entry Heads Down Mode 4 Press ESC to return to the Data Entry Menu Press CTRL N at any time to toggle between heads down and data entry modes For field specific help press F1 or SHIFT Drake Software Manual Copyrighted Material 22 Basics 2007 DRAKE SOFTWARE Right Click Menus To access several useful functions in data entry right click the screen to view a right click menu or right click within a field DATA ENTRY RESOURCES Drake Software offers several resources in data entry for obtaining help quickly Field Help F1 Field help provides specifics about each field in dat
42. A Accepted D Declined R Rejected Loan Status History Non Return Status of the loan narrative history of all bank acks received Indicates the record is for a non return loan product Original Type Drake Software Manual Original bank product type R RAL C RAC BONU Copyrighted Material 2007 DRAKE SOFTWARE Appendix 269 Partial loan Partial loan amount Prep Fee Amount of preparer fee Prior Check Number 1 If check 1 was printed again this is the prior check number Prior Check Number 2 If check 2 was printed again this is the prior check number Prior Check Number 3 Prior Check Number 4 If check 3 was printed again this is the prior check number If check 4 was printed again this is the prior check number Prior Check Number 5 If check 5 was printed again this is the prior check number Prior Check Number 6 If check 6 was printed again this is the prior check number Prior Check Number 7 If check 7 was printed again this is the prior check number Prior Check Number 8 If check 8 was printed again this is the prior check number RAL Indicates a return with a RAL RAL Prep Fee Refund anticipation loan fee as entered on the Firm setup screen RAL Prep Fee State RAL Signed Date State refund anticipation loan fee as entered on the Firm setup screen Date the refund anticipation loan application was signed Service Bureau
43. CID Numb Type Ystatus NY Last Change Changed B Started 400007701 BLACKBURN RONALD amp MARY Updated From 2006 08 27 2007 JPLESS 400007 Updated From 2006 08 27 2007 JPLESS 400007 MBER Updated From 2006 08 27 2007 JPLESS 400007 Poe morero SHARON Updated From 2006 08 27 2007 JPLESS 400007708 TRAVELLER TEST Updated From 2006 08 27 2007 JPLESS 400007709 LAMB JOHN amp MARY Updated From 2006 08 27 2007 JPLESS 400007711 LUCKY TESS Updated From 2006 08 27 2007 JPLESS 400007712 CEAESAR TEST amp CLEO Updated From 2006 08 27 2007 JPLESS 400007716 HOAGIE TEST amp TUNA Updated From 2006 08 27 2007 JPLESS 400007718 OLYMPICS TEST Updated From 2006 08 27 2007 JPLESS 400007725 TONTO TEST amp SILVER Updated From 2006 400007727 LIVINGWATERS TEST amp ISABEL Updated From 2006 8 2 400007773 RETIRED JOE amp SUE n Progress A 07 11 2007 400007773 RETIRED JOE amp SUE 4 07 11 2007 400007777 REYNOLDS CATHERINE Updated From 2006 400007999 TIMS TEST S CORP Updated From 2006 D YPLESS 400008001 JONES SAMANATHA Updated From 2006 bs JPLESS 400008002 JAMES BILL Updated From 2006 08 27 2007 JPLESS 400008003 HAMPTON JOHN Updated From 2006 08 27 2007 JPLESS 400008004 SANDERS CLYDE Updated From 2006 08 27 2007 JPLESS 400008005 HALL SARAH Updated From 2006 08 27 2007 JPLESS 400008006 TOWNSEND WATSON Updated From 2006 08 27 2007 JPLESS 400008007 BOSTON JONATHAN Updated From 2006 08 27 2007 JP
44. Click Install to launch Drake Tax Software installation If a previous version of Drake is detected on your system the Update Admin N OTE Preparer and Setup window may launch during these steps You do not need to update now Click Skip to continue with program installation The DDM and Tax Planner are installed automatically at this time An icon is displayed for each program once installation is complete Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 29 INITIAL LOGIN To open Drake double click the Drake Software icon on your desktop or if you have just finished installing the software click Start from the Installation Complete window N OTE If you opened Drake using the Start button from the Installation Complete window you do not need to enter a password The Drake 2007 Tax Software window displays the Preparer Login box in the bottom left corner No eS ee O Preparer Login i Preparer ID To log in for the first time type Apmrn in the Preparer ID field and enter the serial number located on the software packing slip as the initial password Click Login to open the program Drake recommends using the Admin login when setting up the program NOTE The Setup Wizard opens automatically the first time you run Drake For information on the Setup Wizard see Setup Wizard on page 33 RUNNING DRAKE ON A NETWORK This section reviews the specifications options and
45. Custom Colors to make your own color then click OK 3 Continue with steps 1 and 2 until all the desired color changes are made 4 Click OK to save your selections M Pi RTANT Make sure the background color and the text color contrast or the text will disappear Restoring Program Color Settings To restore the original color settings go to Setup gt Colors Click Restore Click OK Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 63 Printing Setup Edit printer DDM and PDF settings from the Printing Setup menu Printer Setup When Drake is installed the default printer in Windows is designated as the default printer in Drake You do not need to add and set up a printer even if you add another printer in Windows All printers installed in Windows are accessible from Drake Printer settings carry forward automatically each year NOTE If a printer is no longer installed in Windows it still appears in Drake To remove the printer go to Setup gt Printing gt Printer Setup and click Reset This removes all printers and re adds all the available printers automatically Editing Printer Settings To edit printer settings go to Setup gt Printing gt Printer Setup The Printer Setup window opens Make any necessary adjustments on any of the tabs Click OK to save the settings NOTE To print in the Duplex mode go to Setup gt Printing gt Printer Setup F5 General Setup ta
46. DRAKE SOFTWARE Return Preparation 137 Both screen and field help are available within state return screens NOTE NOTE Entering State and City Data on Federal Forms Some federal forms such as Form 2106 Employee Business Expenses require entry of a state or city code that may or may not be for the taxpayer s state of residence Drake calculates federal state and city income as required and carries any applicable data to the respective state and city forms If a ST or City field is blank the program uses the state or city of residence as the default If state or city taxes do not apply ST and City fields are disabled Accessing State Tax Forms State tax forms are accessible from the States tab of the Data Entry Menu To access a state s menu click the state name or type the state s two letter code into the Selector field and press ENTER State menus have varying numbers of tabs and selections depending on each state s tax laws and requirements Most states have at minimum a General tab which includes the individual income tax return a Credits tab and an Other tab As in the federal screens access a form by clicking the form name or by typing the form code into the Selector field and pressing ENTER Accessing City Tax Forms If a state supports a city tax return then its data entry menu includes a Cities tab Drake 2007 Data Entry 123213123 SAMPLE Hl E aia Calculate View Print Split General
47. Details Taxable Income __TotalTax Refund Balance Due Payment Method Eligible For EF Federal 80 268 30 974 3 759 15 370 0 Receive Check x Return is ineligible for e filing EF messages display EF Messages Double click on any highlighted item in the lisyelow to fix the problem Federal 5199 Schedule C E or F or Form 4835 has a loss and the at risk question Federal 29 Tax Retum Identification Page 1 EFIN of Originator SEQ 0008b must n a omaha tel aie Return dentlicaton Pager BilN of Oscigeton GAC SOREN ken tem a T Anaad T fi EF Messages The EF Messages section lists electronic 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 e Accessing full messages Some messages do not fit in the Description row To view a full message right click the row and select View Full Text Of EF Message e Accessing message links If an EF message is blue you can double click it to open the screen that contains the error generating the message If applicable your field that requires adjustment is activated N OTE If you double click an EF message in black text a window containing the full EF message is displayed Only blue text messages link to screens within the return EF messages appear in the MESSAGES page in view mode For more on viewing these pages see Working in
48. EF Database Bank Deposits EF gt EF Database Bank Deposits Pending Amount of prep fees that are expected to be deposited from a bank product from EF gt EF Database Bill Adjustment Amounts 1 3 BILL screen Bill Adjustment Descriptions 1 3 BILL screen Bill Date Bill date from the BILL screen Bill Decrease BILL screen Bill Increase BILL screen Bill Prior Amount Due BILL screen Bill Payment Amount 1 3 BILL screen Bill Payment Date 1 3 BILL screen Bill Payment Description 1 3 BILL screen Bill Sales Tax BILL screen Cash Receipts Total payments received from the client and bank deposits Change Change has been made to this CSM record not yet uploaded to MOM Changed By Login name of person that last changed the return Check Ready EF gt EF Database Client Name Primary taxpayer s name from screen 1 Client Payments BILL screen Client Payment Date BILL screen Client Payments Pending BILL screen Completed Date when Complete is chosen as return status from the CSM button on the data entry toolbar May be edited on the TRAC screen Days The number of days since the first time entries were saved in data entry DCN DCN from 8453 or 8879 ERO EFIN ERO entered on screen 1 in data entry Extension Indicated an extension was filed from the TRAC screen Filing Status Screen 1 Firm Firm entered on screen 1 in data entry
49. EF message error 151 form 11 loan status 161 miscellaneous 90 multi form 106 111 Ohio city 137 Drake Software Manual 2007DRAKESOFTWARE reject 160 161 school 16 search 16 color setup 62 147 combat pay and EIC 123 combining amounts within a field 19 community development credits 123 property 122 conditional paragraphs 57 correspondence see letters coupons for clients 49 cover letters see letters creating a return 8 credits child care 95 forms 122 Hope 91 in data entry 94 122 Lifetime Learning 91 credits see also specific tax forms 122 crop insurance 103 121 CSM see Client Status Manager data entry calculator 19 cities 137 colors 63 customizing 51 field codes 17 fields 12 form codes 11 grid 12 heads down 21 letter case 47 macros 20 maximize screen 47 menu 9 87 mode 9 RIA form line finder 23 selector field 11 87 setup options 47 states 137 databases EIN 16 ZIP code 15 DCNs duplicate 36 staggering 36 DDM see Drake Document Manager debt indicator codes 160 Declaration Control Numbers see DCNs deductions domestic production activities 122 investment interest expense 121 Copyrighted Material 2007 DRAKE SOFTWARE itemized 99 printing Schedule A 100 self employment 93 120 standard 100 tuition and fees 91 120 dependents adding 90 classification 91 editing and deleting see existing forms list education and credits 91 EIC 90 l
50. Fee Paragraph RAL Summary Information Inserts paragraph for RAL preparation fee RAL summary information Receipt Number Referral Coupon Amount Receipt number from Federal Screen 1 Referral fee for individual referral coupon Referral Coupon Footer Paragraph Inserts paragraph for referral coupon footer Referral Coupon Heading Paragraph Inserts paragraph for referral coupon header Referral Coupon Message Paragraph Inserts paragraph for referral coupon message Shareholder Address Address of shareholder Shareholder Name Name of shareholder Spouse Tax ID Spouse s SSN or ITIN ST IncomeTax Balance Due ST IncomeTax Balance Due Paragraph Balance due from state income tax return being prepared Inserts paragraph for balance due on state income tax return ST IncomeTax Due Date Due date state income tax ST IncomeTax E Filing Paragraph Inserts applicable paragraph if e filing is selected for state income tax return ST IncomeTax Estimate Amt for ES Letter Amount of state income tax estimate due for the selected quarter s ST IncomeTax Estimate Detail by Quarter State income tax estimate detail by quarter ST IncomeTax Estimate MAIL TO Address State income tax estimate MAIL TO address ST IncomeTax Estimate Paragraph Inserts paragraph for estimate on state income tax return ST IncomeTax Estimate Payment Due Date ST IncomeTax MAIL TO Addre
51. Interest SFM Seller financed mortgage indicator Interest St Muni Amount of interest income from resident state municipal interest Interest St Other Amount of interest income from other not resident state municipal interest Interest Withholding Amount of federal tax withholding from interest income Interest Income Interest Income not including US government interest IRA Deductions Total IRA Deductions for this return Jury Pay Spouse Jury pay for spouse Jury Pay Taxpayer Jury pay for primary taxpayer Katrina Field is Y if the return is marked as a Katrina victim KEOGH Benefit plan TP Taxpayer s contribution to defined benefit plan KEOGH Benefit Plan SP Spouse s contribution to defined benefit plan Drake Software Manual Copyrighted Material 254 Appendix 2007 DRAKE SOFTWARE Keyword Description KEOGH Contribution Plan SP Spouse s contribution to defined contribution plan KEOGH Contribution Plan TP Taxpayer s contribution to defined contribution plan Keystrokes Number of keystrokes used in Data Entry Non conventional Fuel Amount of credit from a non conventional source Form 8907 Phone Number Phone number of taxpayer Reforestation spouse Forestation or reforestation expenses for spouse Reforestation taxpayer Forestation or reforestation expenses for primary taxpayer Resident City City in which the taxpayer resides Resident State State in which the
52. Itemized Deductions on page 99 If supplemental employer provided unemployment compensation from a prior year was repaid enter the repaid amount on screen 4 Adjustments See Adjustments Screen 4 for information on entering other types of adjustments If current year unemployment was repaid enter the amount in Portion of above unemployment repaid in 2007 Adjustments Screen 4 Screen 4 Adjustments covers the Adjusted Gross Income AGT section lines 23 27 of Form 1040 See also 1040 Adjustments Tab on page 116 Take the following steps to enter a client s adjustments information 1 3 Under the General tab click Adjustments or type 4 into the Selector field and press ENTER The Form 1040 Adjustments screen opens Enter information into the appropriate fields Note that taxpayer income goes into the left column while spouse income goes into the right Press ESC to save and close the Form 1040 Adjustments screen Listed below are important points to remember when entering adjustments information SEP and SIMPLE Contributions Amounts carry to line 28 of Form 1040 Self employed Health Insurance Deduction Enter deduction allowed not total premium paid This amount overrides calculations from Schedule C or Schedule F as applicable To have the software calculate the deduction worksheet leave blank and enter the total insurance premium paid onto the C or F screen as applicable Deduction amou
53. M Setup Letterhead Customize your letterhead to appear on bills and letters to taxpayers Client Statuses Customize statuses to track your clients using Client Status Manager Setup Options Select from numerous options to fit your tax preparation needs M Setup Pricing Set prices for your tax preparation business DDM Customize the Drake Document Manager location and folder settings Edit Letters Customize the letters to meet your business needs Setup Printers Configure Drake Software s printing options to best suit your needs e o e You are not required to complete these screens through the Setup Wizard To exit N ITE the wizard at any time click Exit Return to the wizard later by going to Help gt Setup Wizard or access each setup screen individually from the Setup menu For example to edit letterheads go to Setup gt Letters and then from the Letter Editor toolbar select Setup gt Letterhead Setup Drake Software Manual Copyrighted Material 34 Installation amp Setup 2007 DRAKE SOFTWARE The following setup screens are available for launching e Required Setup Setup Firm s Setup ERO s Setup Preparer s e Recommended Setup Setup Letterhead Client Statuses Setup Options Setup Pricing DDM Edit Letters Setup Printers While the recommended settings are not required several of them are crucial for MPD RTANT proper program functioning For example if you plan to use DDM the Document Mana
54. NI NG i Drake Support Changing this drive letter during tax season causes a considerable number of problems in file storage and EF processing Selecting a Drive Letter for State Programs Enter the appropriate drive letter for installing and updating state programs To determine this letter consider the following e If this field is set to None state programs install and update to the same location where the program is installed e to install and update states to a specific drive enter the drive letter Drake Software Manual Copyrighted Material 44 Installation amp Setup 2007 DRAKE SOFTWARE NOTE NOTE You can also choose not to install state programs and instead run the state programs directly from the Drake CD Select the drive letter of the CD drive if you choose to run state programs from a CD If running states from a CD states do not update during Tools gt Install Updates To receive state updates wait for the updated state program to ship on CD Setting Data Paths The data path settings are determined by the chosen configuration You should not need to change the path settings after selecting the desired configuration Use the Admin Override option only when data path overrides are necessary This option is accessible only to users logged in as Admin To override a default path in Directories and Paths Setup check Admin Override then make the necessary path adjustments Click OK to save your changes ji
55. Name Courier New v FontSize 10 B Z U oap e Font Name Change the selected portion of the letter to another font e Font Size Change the selected portion of the letter to another font size e Bold Format the selected portion of the letter to bold text e Underline Underline the selected portion of the letter e Italics Format the selected portion of the letter to italic text e Text Alignment Align the selected portion of the letter to the alignments chosen left center or right e Undo or Redo Undo or redo the last action taken in the editor e Copy or Cut Copy or cut out the selected portion of text e Paste Paste the last cut or copied text to a selected location in the letter N OTE Right click a letter to access a menu of formatting editing and toolbar functions Use Find to search for keywords or text in the letter Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 57 Parts of a Letter A letter in the Letter Editor contains three categories of letter elements text keywords conditional paragraphs and Drake Software Manual lt Taxpayer Name and Address gt lt Greeting Title and Last Name gt lt Federal Electronic Filing Paragraph gt E osed is a sn ax ate orm 040 ge Indi idua ne ome Return prepared from information you provided Your return will be electronically filed with the IRS once we receive your
56. Number SSN Login Preparer Name ADM Admin ADMINISTRATOR 222656565 Christine Reynolds 2 555656565 pat Pat Karn 3 998989898 katie Katie Hughes 4 191919191 esutton Edward Sutton General Information r Return Signature Options n SS f JE aoe O C E tae te an dae ee ae When editing or creating a new preparer the toolbar functions change to the following e Save Save the preparer s settings e Security Designate preparer security settings or give a preparer a Front Office designation for use of the Scheduler See Setting up Preparer Security on page 41 for details e Schedule Create a schedule for a preparer see Creating Preparer Schedules on page 41 e Help Open the Help System e Edit Exit Preparer Setup Drake 2007 Preparer Setup ws S BF Save Security Schedule Help Exit Number SSN Login Preparer Name ADM Admin ADMINISTRATOR 1 222656565 chris Christine Reynolds 2 555656565 pat Pat Karn 3 998989898 katie Katie Hughes Soo 191919191 esutton Edward Sutton tie Al pints cll Bip a a dpe snem dips T T aia Setting Up a New Preparer Complete the following steps to set up a new preparer Yellow fields are required 1 From the Home window go to Setup gt Preparer s 2 Click Add The bottom half of the screen becomes active Drake Software Manual Copyrighted Material 40 Installation amp Setup 2007 DRAKE SOFTWARE 3 Enter General Information Field d
57. OTE computer with the same EFIN Mail downloads only once per EFIN Offices with multiple computers with the same EFIN should have one person be responsible for downloading and forwarding e mail Drake Software Manual Copyrighted Material 196 Resources and Support 2007 DRAKE SOFTWARE Messages Downloaded messages appear in your In box Double click a message to open it The other boxes listed in the left pane are e Out Messages appear here once they have been sent e Drafts If you try to close a message before sending it you are prompted to save a draft to be completed later Click Yes or No to indicate if you want to save a draft 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 Compose To compose a new mail message click New Enter a To address a Subject line and a message in the text box at the bottom Mail cannot be sent without a subject and a message To send the message click Send Tip If you have trouble sending mail check your e mail options From within the E mail program go to Setup gt Options Choose the appropriate method and click Save e Reply Select a message and click Reply or with the message open click Reply The original message is included in the reply message e Forward Select a message and click Forward or click Forward in an open message e Delete Select a mess
58. Only Re ne a ee OT ee Te Oe eee Once you have logged into Drake the system 1 checks for new acks 2 transmits files to Drake 3 retrieves acks of the transmitted files 4 checks for Drake e mail and 5 logs out of Drake Transmission is complete The system only checks for email if it is designated to do so in Setup gt Options EF tab All returns transmitted through Drake are forwarded to the correct IRS Submission Processing Center 6 Click Exit to close Transmit Receive STEP 4 PROCESS ACKNOWLEDGMENTS When Drake receives a transmission from an ERO it immediately sends a one letter acknowledgement or ack to the ERO indicate a successful transmission When the IRS Submission Processing Center receives the return as forwarded by Drake the IRS sends an ack to Drake which Drake forwards to the ERO Banks and state city taxing authorities also send acks which Drake forwards to the ERO Drake Software Manual Copyrighted Material 156 Electronic Filing and Banking 2007 DRAKE SOFTWARE The next step is to process all acknowledgements received by Drake the IRS state city taxing authorities and banks From the Home window select EF gt Process Acks to open Process Acknowledgements The information in Process Acknowledgements is copied to the EF Database for NOTE later access See Using the EF Database on page 158 If there are no new acknowledgements to process upon logging in to Drake you are ask
59. Open a Return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 209 To repair index files complete the following steps SO Boe os Go to Tools gt Repair Index Files or press CTRL R Select to Repair All or to repair the EF Index EIN Index CSM Index or Name Index Click Continue to begin the repairing process If name index was selected select a Name Index Option Click OK Once repair maintenance is completed click Exit to return to the main menu N UTE Repairing the name index takes approximately one minute per every 2 000 clients FILE MAINTENANCE Use file maintenance tools to perform data file management tasks including backing up and restoring files importing exporting changing or deleting files copying and moving data and configuration files to other computers or for use as backups and locking and unlocking computers to control access File maintenance tools are located on the Tools gt File Maintenance submenu BACKING UP AND RESTORING FILES Use Backup and Restore to prevent losing 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 or to a single machine to create a master file MED RTANT Backup and store files at an off site location N DTE For assistance with using a CD RW refer to y
60. Options in the Report Manager Reports gt Report Manager FIXED ASSET MANAGER Use the Fixed Asset Manager to run reports based on client assets Customize reports by content style and type of depreciation Run single reports or use macros to create a set of reports Run reports on one or more clients Start by going to Reports gt Fixed Asset Manager Then to create a Fixed Asset Manager report complete the following steps Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 233 1 Select a report type from the first list Choose from eight report types yi PF Y b Depreciation Schedules List asset number description date in service method and recovery period percentage basis prior depreciation salvage value current year Section 179 expense and current depreciation This report is sorted by the asset number and department number separated by a decimal Example of an asset number 122 01 Listings List asset number description date in service federal method and recovery period listed automobile and business percentage cost federal basis current year Section 179 expense federal prior year depreciation federal depreciation state depreciation AMT depreciation book depreciation tax schedule code and date disposed This report is sorted in the same way as Depreciation Schedules Section 179 Assets List items that expensed during the current year List includes asset number de
61. Overpayment code fields of the Demographics N OTE screen Screen 1 overrides entries made in the ES Code and OP Code fields respectively of the ES screen If estimated tax payments were not made in four equal payments or on the usual payment dates in 2007 enter the payments on the ES screen rather than on the Payments screen Entries on the 2210 screen override entries on the ES screen Child and Dependent Care Expenses 2441 Screen 2441 Child Care Credit covers Form 2441 Child and Dependent Care Expenses To qualify for the Child Care Credit both parents must have earned income be N OTE full time students or be disabled Entered dependent care information on screen 2 Dependents Enter provider information on screen 2441 For more on tax credits see 1040 Credits Tab on page 122 Take the following steps to enter a client s payment information 1 Under the General tab click Child Care Credit or type 2 441 into the Selector field and press ENTER 2 Enter data into the appropriate fields N DTE Asterisked items on this screen refer to dependent information 3 Press ESC to save and close W 2s 1099s and Foreign Employer Compensation Enter W 2 1099 and Foreign Employer Compensation FEC data from the General tab W 2s The W2 and W2G screens cover respectively federal forms W 2 Wage and Tax Statement and W 2G Certain Gambling Winnings Once you complete either of these in Drake press PAGE DO
62. Practice Returns Hands on data entry and electronic filing training Report Card Tracks progress Administration Available only when logged in with an admin account this tab allows you to create student accounts and view student report cards Tax Courses Click the Tax Courses tab from the toolbar A list of available tax courses display For a tax course to run properly your system must meet the following requirements Browser Internet Explorer 5 5 SP1 or later Firefox 1 0 or later Netscape Navigator 7 1 or later Internet Connection Dial up or high speed DSL Cable Recommended Media Player Windows Media Player or Real Media Player Each course consists of several modules designed to be completed in order e To begin a module click Launch The course opens in a browser window e Use the navigation buttons to navigate the course e Sound loads automatically with each page Click the appropriate sound buttons at the bottom of the page to stop pause or play sound e Click Exit to complete a module Each course displays with a red X until completed Once a course is completed a green check mark appears and the next course is available for viewing e Completed modules may be viewed again at any time e Once all course modules are completed click Launch to begin the test Submit test score upon completion of the test Currently ETC offers a basic 1040 tax course an intermediate tax course on advanced
63. QO QA Find Next Appt Save Delete Lookup Preparer s Date 11 21 2007 7 Time 1200 AM 7 Duration 30 SSN EIN 400001001 Client Type Returning Y Appointment Type Individual v Name JOE SMITH Street ADDR City ITY s zip foso Phone Day 123 657 9533 Evening 650 562 3566 Cell 263 144 6565 Email JSCHMOE GMAILLCOM MV Add Reminder I Private Appointment Comments The toolbar contains the following speed buttons e Find New Appointment Opens the Find Next Appointment dialog box which allows you to find the next available appointment by preparer e Save Saves the appointment e Delete Deletes the appointment e Lookup Open the Schedule Lookup Client List dialog box that allows you to search current year and prior year client files for a specific client by last name and then import the client s information in to the Appointment Detail fields e Drake Opens an existing return or creates a new return in Drake for the client e Help Opens the Help System e Exit Closes Appointment Detail Creating a New Appointment To schedule an appointment complete the following steps 1 Click New Appt from the toolbar or double click a time slot on the schedule grid to open Appointment Detail 2 Complete the fields When entering appointments enter a SSN EIN of a client already in data entry and N OTE the Name Address Phone Client Type and Appointment Type fields are au
64. Refund Transfer or Bonu are options for taxpayers who do not have bank accounts to receive refunds electronically or are denied a RAL With a non loan product the taxpayer can pay for preparation fees without up front costs MPI RTANT The taxpayer must understand that a Refund Transfer Bonuf is not a loan The check reflects the actual refund with bank and preparer fees deducted 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 pays the money to the taxpayer METHODS OF BANK PRODUCT DISTRIBUTION Bank product may be distributed by direct deposit cashier s check or other methods Fees are charged for each method Notify your client that the following fees may be subtracted from the refund amount Tax preparation fees Electronic filing fees RAL Bonu preparation fees A 2 Drake processing fee included on all bank products Bonu Deposit Account fee included on all Bonu checks Bank RAL Fee included on all RALs Additional transmission software add on fee The following paragraphs provide a brief overview of the acceptable methods for distributing bank products to taxpayers Check bank publications for further details Direct Deposit Most bank products include a direct deposit option If a taxpayer has a checking or savings account funds may be deposited i
65. SOFTWARE ST OtherTax2 Tax Description Tax description from state return being prepared other tax type 2 ST OtherTax2 Tax Rate Tax rate from state return being prepared tax type 2 ST OtherTax2 Total Estimate ST OtherTax2 Zero Due Paragraph Total state estimate amount other tax type 2 Inserts paragraph for zero due on state return other tax type 2 ST OtherTax2 1st Qtr Estimate Amt Due State estimate payment 1st quarter after overpayment applied other tax type 2 ST OtherTax2 1st Qtr Overpayment Applied State overpayment applied 1st quarter other tax type 2 ST OtherTax2 1st Qtr Total Est Amt 1st Qtr state estimate amount overpayment applied and amount due other tax type 2 ST OtherTax2 2nd Qtr Estimate Amt Due State estimate payment 2nd quarter after overpayment applied other tax type 2 ST OtherTax2 2nd Qtr Overpayment Applied ST OtherTax2 2nd Qtr Total Est Amt State overpayment applied 2nd quarter other tax type 2 2nd Qtr state estimate amount overpayment applied and amount due other tax type 2 ST OtherTax2 3rd Qtr Estimate Amt Due State estimate payment 3rd quarter after overpayment applied other tax type 2 ST OtherTax2 3rd Qtr Overpayment Applied State overpayment applied 3rd quarter other tax type 2 ST OtherTax2 3rd Qtr Total Est Amt 3rd Qtr state estimate amount overpayment applied and amount due other tax type 2
66. Selector field and press ENTER 2 Enter information into each field accordingly 3 Press ESC to save and close Electronic Filing and Banking in Data Entry The Electronic Filing and Banking section of the General tab provides access to bank information electronic transfer and signature information and the capability to override electronic filing options selected in Setup Firm Bank Three banks offer the following refund anticipation loans RAL and instant RALs IRAL for Tax Year 2007 e Chase Bank RAL Bonu First Advance e Santa Barbara Bank amp Trust RT Refund Transfer RAL Advance RAL e Republic Bank RAL ERC Electronic Refund Check NowRAL The General tab displays the bank selected in Setup gt Firms for your firm Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 101 NOTE NOTE Electronic Filing and Banking CHAS Chase RAL or Bonug DD Direct Deposit Form 8888 PMT Electronic Funds Withdrawal PIN 8879 8878 e file signature EF EF Options Override To the left of the bank name is the code for accessing the bank information from the Selector field Bank codes are CHAS Chase SB Santa Barbara and RB Republic Click a bank to open the bank information page or type the bank code into the Selector field and press ENTER If no bank has been selected in Setup gt Firm s the code column displays BANK When you click BANK you are prompted to set up a fir
67. Setup Each preparer must be entered in Preparer Setup Each time a new preparer is added a preparer number is assigned A preparer number entered on screen 1 in data entry ensures the associated preparer s information from Preparer Setup carries to letters and returns Data entry operators can also be entered in Preparer Setup The data entry number on returns on screen 1 in data entry can be used for tracking purposes New for 2007 a Front Office preparer may be created for use of the Scheduler see Creating a Front Office Login on page 77 for details New for 2007 Preparer Setup has been redesigned for 2007 Preparer Setup Toolbars New for 2007 Various functions are accessed from Preparer Setup toolbar e Edit Preparer Click to edit information for the selected preparer Once in edit mode the toolbar displays functions specific to the selected preparer e Add Enable the preparer information fields so that a new preparer may be added e Delete Delete the selected preparer e Remove Rights Remove all rights from all preparers excluding Admin e Search Search for a preparer in the list e Print Print a preparer list e Help Open the Help System e Edit Exit Preparer Setup Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 39 Drake 2007 Preparer Setup S amp amp amp Edit Preparer Add Delete Remove Rights Search
68. Software Manual Copyrighted Material 168 Electronic Filing and Banking 2007 DRAKE SOFTWARE SERVICE BUREAU REQUIREMENTS If your firm collects tax returns for electronic filing from outside companies or individuals it may be considered a service bureau Service bureaus may be required to provide additional information when applying for bank products Your firm is not a service bureau if it issues W 2s to employees who are under direct control and collect returns at the other locations A preparer or firm may be considered a service bureau if e A preparer accepts returns from other businesses that the preparer does not own e A preparer issues 1099s for contract labor at other locations e A preparer contracts with another tax preparer to provide electronic filing and RALs e A preparer issues W 2s to a non employee who performs functions as a preparer Service Bureau information can be added during the online bank application process TYPES OF BANK PRODUCTS Bank product loans include Refund Anticipation Loans RAL and Instant Refund Anticipation Loans IRAL It is important that your client understand that IRAL and RAL checks are loan checks and not the taxpayer s actual refund Communicate the cost of the loan the APR and any other disclosures Show your client the RAL_Info page and explain all costs checks deposits and the timing of payments Check identification to verify the client s identity before offering bank product
69. Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 199 Broadcast E mail Drake sends broadcast e mail notifications to all clients at their 1040 com accounts to pass along news tax law changes IRS alerts Service Center announcements etc SOFTWARE MANUAL The Drake Software Manual supplies detailed instruction on setting up and using the software The printed manual you receive with your software is being continuously enhanced with addenda pages addenda instructions and a printable PDF of the manual including all updates Addenda pages are on Drake s Support site Training Tools gt Manuals gt Drake Software DRAKE SUPPORT CONTACT INFORMATION Department E mail Address Accounting Accounting DrakeSoftware com Electronic Filing EF DrakeSoftware com Support Support DrakeSoftware com 828 524 8020 Conversions Support Support DrakeSoftware com 828 349 5546 Client Write Up Support Client wu DrakeSoftware com 828 349 5547 To reach any department call 828 524 8020 or fax 828 349 5718 Drake Software Manual Copyrighted Material 200 Resources and Support 2007 DRAKE SOFTWARE STATE SUPPORT CONTACT INFORMATION For state specific support questions call 828 524 8020 State and State Support E mail Address State and State Support E mail Address Alabama alstat
70. Update List D computer to this one A portable data drive floppy disk USB drive etc must be in the computer Seu eo enn Choose this option if you are reading a portable data drive brought from a computer that needs updates aprendes ege pe Aam e aen Pe ate eo Sine ace aid eee ne ee a Teee Aai a a Me 2 PN pAn f Help Exit 4 Click Step 1 Create Update List In Select a location to copy file to browse to the location of the media storage device 5 Click Save 6 When prompted click OK Click OK again 7 Remove the storage media device from the computer The file PATCHLIST TXT is now stored listing the updates installed on this computer PART 2 Complete the following steps from the computer designated to supply the updates 1 Insert or connect the media storage device into the computer the device used in part 1 2 Click the second option under Updating computers without internet access Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 207 OE Ee ee oe EN ee A et Updating computers without nernet 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 Choose this option if you are reading a portable data drive brought from a computer that needs updates Read Update List __ Help Exit 3 Click Read Update List then browse to PATCHLIST TXT
71. a report from the tree to view the following menu of items e View Report View a selected report Click Yes to re create the report using the most current data e Edit Report Open the Report Editor for the selected report e Add to My Reports Add the selected report to My Reports e Add a New Report Open Specify Report Type Report Editor the first step in creating a report CREATING A REPORT PROCEDURE 1 New reports are saved in My Reports They can be re created or edited and saved as other reports To create a new report complete the following steps 1 2 3 4 From the Report Manager click New Report Select a report type and click OK to open the Report Editor e Electronic Filing amp Banking reports are based on EF Database data e Tax Return Data reports are based on return data entry and calculation data Drake 2007 Report Editor 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 t x Enter a title and elect Title and Description description for Report Title 1040s your new report Report Description Info on Firm s Individual Filers Select Report Columns Choose columns for your rep
72. along with all other information you provide appears on the return NOTES e Date Completed Enter the date to discontinue the note e Miscellaneous Notes Notes entered here carry forward to the next year Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 133 NOTE NOTE NEW FOR 2007 Preparer Notepad New for 2007 The Preparer Notepad screen in data entry offers a typing area for keeping notes or other pertinent return information To access the notepad from the General tab click Preparer Notepad or type PAD into the Selector field and press ENTER Type or paste text in the text box Right click the box to access the cut copy paste and delete features To save the Notepad press ESC To access the Preparer Notepad from anywhere in data entry press CTRL SHIFT N Entering Alternative Preparer Data Use PREP to indicate return specific preparer information if different from the default From Other click Preparer Information or type PREP into the Selector field and press ENTER e Pin for Preparer s Alternative Electronic Signature Enter PIN if a return is to be paper filed with the alternative PIN The alternative PIN must match the one created in Setup gt Preparers e Third Party Designee To indicate a preparer as a third party designee page 2 of Form 1040 select Y for Third Party Designee then enter the designee s first and last name phone number
73. appropiate siret dnie Tetter Tree nde SEISA bemenne An ath Dffive Letter for State Programs C Paths determined by configuration selected above i a M Path for 2007 Data F drakeO dt Y Path for 2006 Data FADRAKEOS DT A Path for Print File F drakeO7 pf 3 Shared drive letter for all other shared files EF Firm Pricing Letters etc optional z O Te E SE a Bi T are Update Profile Setup Before installing updates create an update profile to customize the update routine for your office Each time updates are installed only the components selected in Update Profile Setup are downloaded for updating in addition to program and individual tax package updates which are required The software is continually updated and enhanced to remain current with tax law and improve the program Make installing updates a daily priority during tax season For details on installing updates see Installing Updates on page 206 To create an update profile go to Setup gt Update Profile from the Home window and select the components to update The 1040 amp Primary Updates box is required and cannot be cleared Use the Select buttons to select states and cities Choose and set Activate AutoUpdates if desired see following section Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 45 Drake 2007 Update Profile Setup Update Profile Select the components to
74. causing electronic filing rejects Resolving Duplicate DCNs Error codes for duplicate DCNs can occur when the same DCN is transmitted more than once If you receive an IRS rejection code for duplicate DCNs check the EF Database EF gt Search EF Database to see if the return has been transmitted more than once If the return is accepted on one of the transmissions there is no need to re transmit MPI RTANT If you receive duplicate DCN rejects immediately go to Setup gt Firm and stagger the DCN numbers accordingly Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 37 When a return receives an IRS rejection because the same DCN was assigned to more than one taxpayer the DCN must be changed on the return before the return can be electronically filed again This can happen when more than one stand alone computer using the same EFIN are calculating tax returns without staggered DCNs see Staggering the Declaration Control Numbers DCNs on page 36 To change the DCN for a single return before re transmitting open the return and press CTRL M from the Data Entry Menu The DCN is updated If multiple returns have duplicate DCNs take these steps to change all returns at once 1 From the Home window select Setup gt Firm and click Edit Firm 2 Inthe EFIN field enter six nines 999999 and press ESC 3 From the Home window select File gt Calculate to calculate all returns with
75. code Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWEN Extension Forms v 4868 x 2350 Total tax liability for PEs R Federalincometaxy 4 Enter an A to print the firm information instead of the B Use a B if you want the taxpayer s name and address printed at 2007 estimated tax an d 2 pay A i p P Use a P if you want the taxpayer s name preparer s name and Other payments and credits Amount paid with extension dig suet E Dee Ret a ah Y calc OE T EEN a y N ITE Only one extension can be generated at a time If Form 4868 has already been filed for a return and you are now filing Form 2350 clear the 4868 box and select X in the 2350 box to generate the later extension Net Operating Loss Carryovers Enter Net Operating Loss carryforward carryback data in the LOSS screen to indicate the amount available for carryforward carryback the amount used prior to 2007 and the amount used in 2007 for each applicable year From Other click Carryover of NOL WKSheet or type LOSS into the Selector field and press ENTER Amounts entered carry forward each year when the return is updated Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 131 Custom Paragraph for Letters Use LTR to override letter options from Setup enter a custom paragraph on the client letter generated with the return or override electronic filing and paper filing options
76. codes 156 IRS 160 report of 156 state 160 acks see acknowledgements addenda 2 additional child tax credit 123 address change of 136 adjusted gross income AGI 93 adjustment fields changing default format 47 using 15 admin CSM features 183 login 29 32 override options 44 setup options 51 software installation 27 adoption credits 123 after the fact payroll see Client Write Up AGI 93 Alabama extensions 224 alcohol used as fuel 122 Alternative Minimum Tax 126 alternative motor vehicle credit 123 alternative preparer data 133 amended forms 135 amortization 109 218 AMT see Alternative Minimum Tax 126 application for tentative refund 136 applications bank product 149 170 EFIN 150 ERO 149 to file electronically 149 appointments see Scheduler Archer MSAs 119 asterisks fields marked by 95 at risk limitations 102 104 auto expense 103 117 Drake Software Manual Index v auto complete tool 20 automobiles electric credits 123 backup and restore 209 bank codes 160 bank product applications 149 170 bank products banks 167 cancellations 173 cashier s check 169 check processing 157 check register 158 checks 171 checks see checks debit cards 169 denials 170 direct deposit 101 161 169 electronic funds withdrawal direct debit 101 fees 169 forms in Drake 173 IRAL 168 lost checks 173 non loan 169 post season procedures 173 RAL 168 se
77. current base year Only changes for the applicable fields for the desired years or cases need to be made Amounts in the various planning fields are adjusted through any of the following methods NOTE ieai ipbo that Making entries in the Adjustment columns Making direct entries in the cells Copying or cutting and pasting from prior years Completing worksheets Data entry features are also available from a cell s right click menu Making Adjustments Enter a dollar amount or percentage in an Adjustment column The cells in the Adjustment columns are formatted to dollar amounts by default To change to percentages enter the number with a percent symbol The adjustment amount fills the same field in the projected years or cases 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 tote ET ae get pe tm net PE an neem peat ot a ea a a a m i pmmenith ard M Font Alignment Number Styles RA Drake Tax Planner TEST O MAPLE 400 00 1005 Base Year Multi Year Multi Year 2007 Adjustment 2008 Adjustment 2009 Adjustm Were you covered by a retirement plan YES L YES YES Enter traditional IRA contributions made or will be made by April 17 2007 for 2006 1200 E 1700 1700 Primanys IRA deduction 0 0 0 Spouse covered by a retirement plan nl ae Enter tradition alas casamutions made The a
78. detailed explanation of the screen and associated forms For details see Screen Help on page 22 Access the Frequently Asked Questions screen in all packages by typing FAQ in the Selector field in data entry For details see Frequently Asked Questions FAQ on page 99 The following options are available e Addenda Pages Print pages to insert into your manual e Addenda Instructions View instructions on addenda pages and how they work e Manual Print a version of the manual that includes all addenda pages E MAIL The E mail program enables you to send and receive e mail messages using your 1040 com e mail address Use E mail for the following e During tax season use it to receive Drake broadcast e mails containing important IRS and state updates and alerts and news and tips for using Drake software e Send e mail messages to Drake Support and easily attach client files e Send bulk e mail to your clients or other contacts e Create customized e mail messages using the custom query tool Send these personalized messages to multiple clients and save a lot of time e Use it as your everyday e mail program To access go to Help gt E Mail Check Mail To check mail click Send Receive or go to File gt Check Mail If you wish to check the status of your mailbox before checking for mail click File gt Check Mailbox Status Once mail is downloaded to a computer it cannot be downloaded by another N
79. duplicate DCNs 4 From the Home window select Setup gt Firm s In the EFIN field remove the nines and replace with the correct EFIN Press Esc wn 6 From the Home window select File gt Calculate to recalculate all returns with duplicate DCNs 7 From the Home window select File gt View to view the returns and verify the DCNs have been changed Once the DCNs have been changed the returns can be re transmitted Setting Bank and Electronic Filing Fees Bank selection and banking and electronic filing fees are selected in the Banking Information section of Firm Setup 1 From the Home window go to Setup gt Firm s 2 Select the firm and double click it or click Edit Firm 3 Under Banking Information select the bank from the Select Bank list N ITE In addition to selecting a bank from Firm Setup you must take several other steps before bank setup is complete and you can begin to offer bank products See Offering Bank Products to Clients on page 170 for details 4 Enter bank product and electronic filing fees in the appropriate fields The fees set are charged in addition to the fees set by the bank and are included in the client bill 5 Optional Check to enable Do not allow fee override on the Bank screen 6 Optional Enter an amount 0 18 in the Transmission Software Fee Add On field The dollar amount entered in this field accumulates during tax season Drake Software will send you a check for th
80. e Prior Year Tax and AGI If these amounts are entered on screen 1 the program defaults to the screen 1 amounts If the amounts are not entered on screen 1 complete the Prior year tax and Prior year AGI fields to determine underpayment penalty when the return is calculated Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWEN Form 2210 Penalty for Underpayment of Estimated Tax Actu if cl Requ o file due to Date Est Amt 1c J Waiver M Annualized Income Paid wextension ssssesscccss 1 a b c d 1st Quarter M Actually Withheld ondOuartere M Required Installment 3rd Quarter 4th Quarter M Use Form 2210F Date return filed Prior year tax Prior year AGI P 1g n B OF TN Pt E E a a S e TN aa oe ee ae i S e Form 2210 Setup Option The program can be set up so that Form 2210 is prepared as needed For more on setting up form and schedule options see Form amp Schedule Options Tab on page 48 Default is to prepare as needed e 2210 Overrides Demographics screen 1 contains the 2210 Code override field See 2210 Options on page 90 Drake Software Manual Copyrighted Material 126 Return Preparation 2007 DRAKE SOFTWARE Additional Taxes and Forms Additional taxes and forms accessible from Taxes are detailed in the following sections Household Employment Taxes Schedule H Use Schedule H Household Employment Taxes t
81. in the software All other returns are processed as actual live tax returns and can result in a charge of filing fraudulent returns To test transmission use the following procedure 1 From the Home window select EF gt Select Returns for EF 2 From the EF Selector select the EF eligible test returns to transmit and click Continue Tip To select all EF eligible returns click Select All Click a checkbox a second time to clear it or click Unselect All to clear all selections 3 From the Home window select EF gt Transmit Receive to open the Transmit Receive dialog box See Step 3 Transmit Return on page 153 for options within this box 4 Click Send Receive to transmit the test return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 151 5 From the Home window select EF gt Process Acks on the menu bar Print the IRS acknowledgements if desired N OTE Test transmissions receive an IRS acknowledgement of T to indicate successful transmission FILING A RETURN ELECTRONICALLY Electronic filing functionality is the same for both business entity and individual returns in Drake This section describes the electronic filing process in a series of five steps from calculating the return to processing the loan check for a bank product STEP 1 CALCULATE RETURN When a return is calculated Drake generates additional documents related to electronic filing
82. instructions for running Drake on a network SERVER SPECIFICATIONS 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 on the server and workstations should be updated to improve performance N ITE Your office s network must be properly configured in order for Drake to run correctly Drake cannot provide technical support for the network itself Please consult an IT professional for network setup and support Drake Software Manual Copyrighted Material 30 Installation amp Setup 2007 DRAKE SOFTWARE NETWORK OPTIONS Depending on your office s setup choose one of following two network options e Install Drake on a server and link workstations to the server using a network link NWClient This is the preferred network setup e Install Drake on all workstations and designate one workstation as the server All workstations use the designated server to share files Installing Drake on a Server Only The server only method is for firms with a robust network setup typically client server but can be peer to peer with sufficient RAM and processing speed that is capable of supporting a server only installation This preferred network setup offers the following conveniences e All files and databases are on t
83. law and much more To access the KB click the Support button from within the software or go to www Support DrakeSoftware com and log in To open the KB go to Resources gt Knowledge Base The KB consists of the following four tabs e Search Search for and view the latest articles entered in the KB or the Hot Topics articles that are receiving the most hits e Browse View the contents of the KB in a table of contents view Click a topic to view its subtopics or articles e FAQ View articles we believe to be most pertinent on the FAQ tab These change frequently so check back often e Glossary Contains a list of relevant tax and Drake software terms Drake Software Manual Copyrighted Material 192 Resources and Support 2007 DRAKE SOFTWARE Searching for Articles The KB has various options to aid in narrowing down a search for an article or a particular topic The Search for Articles section is located on the Search tab To search for a particular topic in the KB complete the following 1 Enter a keyword in the Search field 2 Choose a search option from Search Using The search options include e All Words Search for articles containing all words entered e Any Word Search for articles containing any of the words entered e Exact Phrase Search for articles containing the exact phrase entered e Boolean Search using the connector words and not and or with keywords e Natural Language Q
84. month day year format example September 28 2007 The Restore button is enabled when a restore location is entered Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 211 Select a Restoration Type Select Restore All Files in Folder or Restore Select Files in Folder Click Restore Click Exit when restoration is complete Se oe CHANGE SSNS ON FILE It is sometimes necessary to change the SSN or EIN on a client file For example a couple may divorce and the spouse becomes the primary taxpayer or a business may receive a new EIN Use the Change SSNs on File to change the SSN or EIN of a client file MPI RTANT It is not sufficient to change the SSN EIN in data entry you must use the Change SSNs on File tool for this purpose To change the SSN or EIN for the client data file complete the following procedure 1 Select Tools gt File Maintenance gt Change SSNs on File on the menu bar Enter the current SSN or EIN without spaces dashes or additional characters in the Current SSN EIN on file text box Enter the new SSN or EIN for the file Click OK or press ENTER Press ESC or click Exit when finished EXPORT CLIENT EF DATA Use exporting tools to export data from client files and EF Database files to either a text file or a csv file The exported information can then be imported into other programs such as Microsoft Word Excel or Access Use the following procedure to export data
85. of check 8 Check Amounts Total amount of all checks issued to the taxpayer Check Clear 1 blank check not yet available A Available P Printed Check Clear 2 blank check not yet available A Available P Printed Check Clear 3 blank check not yet available A Available P Printed Check Clear 4 blank check not yet available A Available P Printed Check Clear 5 blank Check Clear 6 blank check not yet available A Available P Printed Check Clear 7 S blank check not yet available A Available P Printed Check Clear 8 check not yet available A Available P Printed blank check not yet available A Available P Printed Check Clear Date 1 Date that check 1 cleared Check Clear Date 2 Date that check 2 cleared Check Clear Date 3 Date that check 3 cleared Check Clear Date 4 Date that check 4 cleared Check Clear Date 5 Date that check 5 cleared Check Clear Date 6 Date that check 6 cleared Check Clear Date 7 Date that check 7 cleared Check Clear Date 8 Date that check 8 cleared Check Flag 1 blank check not yet available A Available P Printed Check Flag 2 blank check not yet available A Available P Printed Check Flag 3 blank check not yet available A Available P Printed Check Flag 4 blank check not yet available A Available P Printed Drake Software
86. of the software complete with modifications to reflect the most recent tax law changes N ITE Create an Update Profile before installing updates See Update Profile Setup on page 44 for details You may also choose to automate the update process when creating an Update Profile Drake 2007 Update Manager Drake Update Manager Use this screen to obtain and install updates to your software State tax programs can be installed by using the Drake Tax Software CD ROM Download amp Install Program Updates Step 1 Check for available updates Check For Updates Step 2 Install downloaded updates Install Updates Updating computers without Internet access Choose this option to copy updates from another computer to this one A portable data drive floppy disk USB drive etc must be in the computer Choose this option if you are reading a portable data drive brought from a computer that needs updates Help DOWNLOADING UPDATES To download updates go to Tools gt Install Updates and complete the following steps 1 Click Check For Updates The system compares your files with available updates to determine what updates are required Updates are listed in the Download Manager which displays the total number of files and total download size and lists each component along with the number of updates per component and total size 2 Clear uncheck any components that you do not want to download 3 Click Get Updates
87. of years or cases to create in the planner Multi case provides current year planning with up to seven user defined scenarios You can have two planners one multi year and one multi case for each client If you need more than one multi year or multi case planner for a client save the second using a slightly different name For instance go to Save gt Save As and save the first as Smith1 and then Save gt Save As and name the second Smith 2 Selecting Tax Planner Options The following options are available from the Options button on the Tax Planner toolbar Send to DDM Tax Planner files can be saved to an existing DDM client folder From Options choose Send to DDM to print the planner to PDF and save to the appropriate folder See Document Manager on page 235 for DDM details Case Options From the Case Selector select the number of cases or years to view and print Click Set selection as default to set a number of years as a default setting Directories and Path Select a path for the Tax Planner to use current path is displayed Enter a New path if necessary Files are saved to the specified location Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 247 Tax Planner Data Entry After manually creating a tax planner or exporting tax return data from Drake you are ready to begin tax planning Upon exportation tax return data automatically fills the planner for the
88. on keywords and conditional paragraphs review Parts of a Letter on page 57 1 Open a letter 2 Click the desired location in the letter 3 Double click to add a keyword or conditional paragraph The keyword or paragraph are inserted after the cursor To remove a keyword or conditional paragraph highlight the keyword or paragraph and press DELETE or right click and select Delete Be sure to include the angle brackets lt gt when highlighting Renaming a Letter To rename a letter in the Letter Editor complete the following steps 1 Go to Setup gt Rename Letter or press CTRL N 2 Enter a new name for the letter in the Rename Letter dialog box 3 Click OK to save the new name The new name appears in the title bar Copyrighted Material 60 Installation amp Setup 2007 DRAKE SOFTWARE Restoring an Original Letter To restore a letter to its original default format open the letter in the Letter Editor and go to Setup gt Restore Original Letter or press CTRL R Choosing a Default Letter to Print with a Return By default package letter 1 prints with each return To change to a different default letter go to Setup gt Options Optional Documents tab and select a different letter from the appropriate package list To override the default or letter selected in Setup gt Options go to the LTR screen in return data entry and select a letter from the Letter list Adding a Custom Paragraph to a Lette
89. organizers or proformas Mail organizers in 9 x 11 mailing envelopes available through N OTE www DrakeSupplies com In the 2007 Drake Software Compatible Supplies brochure and on the Web site see item 80344 9 by 1112 ORGANIZER mailing envelope This envelope has IMPORTANT TAX INFORMATION ENCLOSED printed on the front Envelopes of this size are also available at most office supply stores For the proper size to print go to Setup gt Options gt Optional Documents and choose X Large under Taxpayer address Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 73 To print blank organizers or proformas go to Tools gt Blank Forms NEW FOR 70 07 Questionnaires and data sheets now include more information e Organizers Available for the Individual package organizers help clients prepare for the tax preparation appointment organizers display two columns one with the prior year data and one for entering current year data e Proformas Available for Individual and Business packages proformas display numbered fields corresponding to data entry screens proformas are particularly useful for preparers who interview their clients then have data entry operators enter many of the return details PRINTING AN ORGANIZER OR PROFORMA Take the following steps to print one or more organizers or proformas 1 From the Home window choose Last Year Data gt Organizers or Last Year Data gt Prof
90. rate unrecaptured 1250 gain Dividends Cap Gain Total capital gain distribution Dividends Ord Dividends Qual Ordinary Dividends Qualified Dividends Dividends Withholding Amount of federal income tax withheld from dividend distributions Dividends Investment Expense Investment Expenses related to dividend income Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 253 Keyword Description Due Date Return Due Date EIC Earned income credit amount Email Address Email Address for the Taxpayer Estimated Tax Paid Prior Year Total of estimated tax payments in prior year Estimated Tax Payment 1 First estimated tax payment for next year Estimated Tax Payment 2 Second estimated tax payment for next year Estimated Tax Payment 3 Third estimated tax payment for next year Estimated Tax Payment 4 Fourth estimated tax payment for next year Estimated Tax Payments Total of estimated tax payments made throughout the year Excess SS RRTA Excess social security and tier 1 RRTA tax withheld Executor Name of the Executor on an Estate Tax Return Executor First Name First Name of the Executor on an Estate Tax Return Executor Last Name Last Name of the Executor on an Estate Tax Return Filing Status Filing status of 1040 return Firm Name The name of the Fi
91. see Document Manager on page 235 F1 Help Access this manual electronically View From view mode view the selected page from the cascade of forms In print mode use the Print button to print the selected page s from the cascade of forms Sets print mode only Print return sets client preparer federal state Print returns as duplex and or stapled as your printer allows When printed client and preparer sets have CLIENT COPY and PREPARER COPY across each page Classic print mode only In classic print mode use the and keys on a selected form to print multiple copies of a form For further details on using classic print mode see the following section F2 All print mode only Offers several options for which forms to print All forms federal forms only state forms only or miscellaneous forms only Click Unselect All as needed See menu for corresponding alternative function F key commands Exit Exit the view or print mode cascade of forms and return to the Home window Drake Software Manual Copyrighted Material 148 Return Results Classic Print Mode 2007 DRAKE SOFTWARE In Classic Print mode a number is displayed next to each form label indicating the number of copies of each form to print The default is 1 1 6251 R 1 1040 1 EFSTATUS 1 DRK_INFO 1 LA MSG 1 BILL 1 LAINST 1 LETTER 1 LAWWK540 PG2 1 FILEINST 1 LAWK540 Wy 1 Wk_CARRY
92. selected quarter s other tax 2 ST OtherTax2 Estimate Detail by Quarter State estimate detail by quarter other tax type 2 ST OtherTax2 Estimate MAIL TO Address State estimate MAIL TO address other tax type 2 ST OtherTax2 Estimate Paragraph ST OtherTax2 Estimate Payment Due Date Inserts paragraph for estimate on state return other tax type 2 State estimate payment due date other tax 2 ST OtherTax2 MAIL TO Address State MAIL TO Address tax type 2 ST OtherTax2 Overpayment Overpayment from state return being prepared other tax type 2 ST OtherTax2 Overpayment Appl Paragraph Inserts paragraph for overpayment applied on state return other tax type 2 ST OtherTax2 Overpayment Applied Overpayment applied from state return other tax type 2 ST OtherTax2 Overpayment Paragraph Inserts paragraph for overpayment on state return other tax type 2 ST OtherTax2 Refund Refund from state return being prepared other tax type 2 ST OtherTax2 Refund Paragraph ST OtherTax2 Return Paragraph Inserts paragraph for refund from state return other tax type 2 Inserts paragraph for state return other tax type 2 ST OtherTax2 Tax ST OtherTax2 Tax Bracket Tax from state return being prepared other tax type 2 Tax bracket from state return being prepared other tax type 2 Drake Software Manual Copyrighted Material 282 Appendix 2007 DRAKE
93. setup 52 reports 182 setting 36 53 tracking 134 fiduciary relationship 136 field help 22 fields adjustment 15 adjustment changing default format 47 auto complete tool 20 combining amounts within 18 flags 13 magnify 15 override 15 Copyrighted Material 2007 DRAKE SOFTWARE override changing default format 47 search 16 verification 14 70 file maintenance 209 FILEINST page 146 files backing up 209 changing file type 213 changing SSN on file 211 deleting client files 213 deleting print files 212 exporting 211 locking 212 password protection 212 print 47 QuickBooks import 214 restoring 209 unlocking 212 filing instructions generating with return 49 filing status 88 Filter Manager see reports fingerprint cards 149 firm setup 35 First Advance see bank products first time homebuyer credit DC 123 first time login 6 Fixed Asset Manager 232 flagged fields 13 folder cover sheet 49 fonts see downloading fonts foreign accounts 131 136 contact information 131 earned income 136 employer compensation 99 employment 96 tax credit Form 1116 122 Form 1040 U S Individual Income Tax Return adjusted gross income AGI 93 adjustments 116 credits 94 122 entering data for 88 estimates 94 exemptions 90 filing status 88 label 88 nontaxable income 91 other payments 94 splitting a return 91 spouse information 88 taxes 94 taxpayer information 88 unearned inco
94. software M Bi RTANT If running on Windows Vista the administrator or a user with OS access must install the application To install the tax software complete the following steps 1 Close all open programs on your computer 2 Insert the 2007 Drake CD into the CD drive Autoinstall launches the Drake 2007 Software Installation Installation options include 2007 Drake Tax Software Drake Client Write Up and PDF 995 PDF Printer Click Drake 2007 Tax Software 4 Select which programs to install default choices are Install 2007 Drake Tax Software and Install State Tax Programs then click Next States are not available on the initial shipment 5 Select New to install to a new location then click Next N OTE Select Install test returns to install test returns For details on using test returns see Practice Returns and Test Returns on page 23 6 Enter the serial number from your software packing slip then click Next 7 Select an installation drive from the list of available drives then click Next N OTE If a drive letter does not display the software has determined that there is not enough space on the drive 8 Select states to install from the Select states on CD from the left side then click Next The selected states appear on the right side and update automatically unless removed from the list Skip this step if installing the initial shipment States are not available until the January release 9
95. tax return click the Schedule D Import button from the toolbar The Schedule D Import screen opens 2 Review the example spreadsheet format and verify that the Excel TAB or CSV file with the transaction data is correct Click Next to open the Schedule D Import Step 1 dialog box 3 Click the Browse button to locate the file containing the transactions Copyrighted Material 114 Return Preparation 2007 DRAKE SOFTWARE tren a Aasman Oe Site tin tan F DAA ni z OO atm gy 7 r 1 Import File Name EESE E SE e S j 2 RMN ght nn lt p gen lint AON ae neg samen L gp allt petite r E AMEN cee pee ae pees After locating the file click Open The transactions display in the Schedule D Import Step 2 dialog box 4 Choose a line to start the import from the Start import at drop list For example if the Item 1 row in the transaction list is column header information choose to being import at item 2 Click Next Starting Row Select the first row where the data actually begins 1 Import File Name C Users timm Documents SchDImport slsx 2 Start import at fi z r Schedule D Transaction Information 1735 Records ltem TSJ FE State Cit Description Acquired Sold F St City Description Acquired Sold NC Stock 1 07 11 1990 08 07 2007 NC Stock 2 10 06 2000 10 28 2007 NC Mutual Fund 1 08 16 1995 12 19 2007 NC Mutual Fund 2 03 06 1994 04 12 2007 GA Mutual Fund 3 03 16 1994 12 12 2007 NC Mutual Fund 4 07 22 2001 12 28 20
96. the Drake Software Forums is voluntary Forums are not a substitute for obtaining help from Drake Support Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 193 FEDERAL STATE FACTS Fed State Facts enables you to quickly access important federal and state specific information such as electronic filing specifications form instructions and support links To access the Fed State Facts go to Support DrakeSoftware com 1 Log into Drake Support using your EFIN and password 2 Go to Resources gt Fed State Facts 3 Select an item to view its information page SOFTWARE RESOURCES There is more to the tax software than just the software Various resources including tax law research the Drake Help system an e mail program and updates to the manual are available within the software to help you find the answers you need RIA CHECKPOINT RIA s Checkpoint tax research tool is an extra benefit of using Drake Software Checkpoint is advanced research for tax professionals To access Checkpoint go to Help gt RIA Tax Research from the software or click Research This resource includes e The 2007 Federal Tax Online Handbook An extensive tax handbook containing answers to hundreds of tax questions e Public Domain Materials Federal case law and IRS rulings memoranda e Weekly Alert Newsletter Developments in the tax industry e mailed to you weekly e RIA Tax Return Guides Ava
97. the EIN database An EIN stored in the database acts as a shortcut to speed data entry 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 To edit entries in the EIN database see Edit EIN Database on page 218 Search Field To search the list of valid entries for the Resident City and School Code fields on screen 1 and the Business Code field on schedules C E and F use the data entry search function To enable the search feature complete the following steps 1 In an applicable field press CTRL SHIFT S to open Data Entry Search 2 Enter the term to search and click Go 3 Select a result and click OK or double click your selection to enter it in the field Drake 2006 Data Entry Search Please input search data computer Results 334000 Computer Electronic product mfg senna 541510 Computer systems design related services 443120 Computer amp software stores OK Cancel Shortcut Keys See the Quick Reference Guide insert for a complete list of shortcut keys or hot keys Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 17 Commonly Used Codes Throughout return data entry codes TS F ST and C are used to indicate whether the data is applicable to the taxpayer or spouse or to federal state or city returns e TS or TSJ Select T if a data entry scre
98. the following steps to begin entering asset sales information 1 From Income click a form name or type the code into the Selector field and press ENTER 2 Complete all applicable fields Press PAGE DOWN to access additional data entry fields 3 Press ESC to save and close Capital Gains Capital Losses Carryovers Use Schedule D Capital Gains and Losses to report capital gains losses and carryovers In Drake use the Capital Gains amp Losses and Loss Carryovers and Other Entries screens to enter Schedule D information Use Capital Gains amp Losses to enter basic information about short and long term capital gains and losses From Income click Capital Gains or type D into the Selector field and press ENTER Following are some data entry guidelines Description Field supports 32 characters Per IRS regulations only the first 15 letters transmit Additional characters appear in red text on the screen Date Acquired MMDDYYYY format If a single date does not apply type VARIOUS for multiple dates or INHERIT for an inheritance VARIOUS will treat it as a long term gain Date Sold MMDDYYYY format If a single date does not apply type BANKRUPT or WORTHLESS as applicable N OTE If Date Sold is bankrupt the return must be paper filed Various and worthless entered as a date are acceptable for electronic filing Drake Software Manual Sales Price Enter the sale amount If only the gain amount is availabl
99. the form name until the forms are listed in the desired order 4 Click Save Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 65 Document Manager DDM Setup N OTE 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 The DDM is a stand alone application that can be integrated with Drake Software For details see Document Manager on page 235 To implement the Drake file structure complete the following steps 1 From the Home window go to Setup gt Printing gt Document Manager to open Drake Document Manager Integration Options 2 In the Document Manager Location text box enter the path of the DDM or click Search If you choose Search and the DDM is found in more than one location you must choose a location 3 Check Allow Drake to Setup Document Manager Client Folders recommended The Drake predefined structure is established in the DDM directory N OTE The DDM button in data entry is not active until the Drake integration option in Step 3 is enabled in Setup gt Printing gt Document Manager PDF Printer Setup PDF Printer setup installs the PDF995 program which allows you to print files in PDF format NOTE You need PDF995 version 8 0 or later Even if you already have PDF995 on your computer you may need to upgrade Version 8 0 supports Windows Vista Use the following
100. this manual instructs you to click or double click an item on the screen you should click or double click the left button on the mouse e Right button During data entry right click the mouse anywhere on the screen to display a menu of common program functions Right click on a specific data entry field to undo cut copy paste delete or view help for that field Keyboard N OTE See the Quick Reference Guide insert for a list of keyboard key shortcuts or hot keys that can be used during data entry It is not necessary to use your mouse to access menu items Press ALT to display the underlined shortcut key for each menu on the menu bar The underlined letter for each menu is the shortcut key After a menu is selected choose a shortcut by pressing only the shortcut key ALT is not needed For example to open a return press ALT to show the shortcut keys then press F File menu then O Open Drake 2007 Tax Software la EF Tools Reports Last Year Daly Open Create Returns Ctrl O Calculate Ctrl C Print Ctrl P view Ctrl V Pre Prepared Entry Quick Estimator Ctrl Q Exit Esc Rend tte Oh a Logout Preparer QPP ODEDP ARER we Amp L Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 7 THE HOME WINDOW The main screen in the Drake program is referred to as the Home window The Home window consists of a menu bar toolbar status bar and lists of recent f
101. time Drake also prevents filing of piggyback returns or bank products The IRS gives conditional acceptance but an ack of E is still returned in the acknowledgement Processing time may take up to six weeks Bank generated acknowledgement codes are as follows e Bank Product Accepted Bank product application has been approved e Bank Product Rejected Bank product application has been rejected e Check Print Checks are ready to be printed e Prep Fees Deposited Preparer fees have been deposited State acknowledgement codes vary Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 157 To log into Drake and receive any new acknowledgements without electronically filing a return click EF gt Transmit Receive and select Acks Only N OTE IRS acks are usually processed within 24 hours Bank acks are usually processed within hours of IRS acks depending on volume State processing times vary STEP 5 PROCESS LOAN CHECK If processed acks include one or more bank acknowledgements and your firm prints bank product checks in house then Step 4 Process Loan Check is necessary N OTE If your firm does not print checks in house post the acks to the EF Database so the bank selected by taxpayer can process the check Printing Checks for Bank Products To print bank product checks take the following steps 1 From the Home window select EF gt Check Print to open the Bank Pro
102. to be entered on its own 4562 screen Now it can be entered in the Land Value field of the 4562 screen under Other Information e Date Acquired Enter the date the asset was placed in service e Cost Basis Enter the full cost of the asset e Business use Default is 100 e Listed Prop erty Type If the asset is a listed property select a listed property type If nothing is selected issues with depreciation limitations may arise e Method Select the depreciation method e Life Enter the class life Press F1 for a recovery period listing To expense the entire amount of tangible property under Section 179 select EXP for Method Enter the useful life recovery period in Life so that depreciation adjustments for Form 6251 Alternative Minimum Tax can be calculated See Section 179 Expense e Prior Depreciation Amount carries from previous year if available Drake Software Manual Copyrighted Material 108 Return Preparation 2007 DRAKE SOFTWARE NEW FOR 2007 NEW FOR 2007 Section 179 Expense If EXP is selected the system calculates the amount up to an annual limit of 125 000 for all properties using Section 179 Expense The first assets entered are expensed first The limitation occurs even when the depreciable assets are listed on different schedules for example one on Schedule C and one on Schedule F To conform with IRS mandates the software automatically reports Section 179 expe
103. view data large tables e Resize a window Drag the window borders until the window is the desired size e Perform actions Clicking a toolbar button or press the associated hot key e Select a record Click a record or use the arrow keys e View menu of CSM functions Right click a record e View the total of client records See bottom of CSM screen WORKING IN THE CSM The following sections review the various functions that can be performed in the CSM OPENING A RETURN To open a return in the CSM complete one of the following e Highlight a client record from the list and click Open or press CTRL O e Right click a record and select Open Selected Record e Click the arrow next to the Open button and select one of the returns listed When you exit the return you are taken back to the CSM Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Client Status Manager 181 CREATING A NEW RETURN To create a return from within the CSM complete the following steps 1 Click the arrow next to the Open button on the toolbar and select New Client 2 Enter the SSN or EIN for the return 3 Press Open When prompted begin entering data for the a new return If the return already exists it opens SEARCHING FOR A RETURN IN THE CSM To search for a return in the CSM complete the following steps 1 Click Search to open the Find Client Record dialog box 2 Enter the SSN EIN or client n
104. worksheet is present co H J Student loan interest deduction When the return is printed the worksheet appears in view print mode as OVERFLOW See Viewing and Printing a Return on page 142 for more on view and print modes Tip To change the color of the field for detailed worksheets go to Setup gt Colors To print a description on a statement without a corresponding dollar amount enter a forward slash in front of the description e Open an existing worksheet Activate a shaded worksheet present fields and press CTRL W or double click it e Sort items in a worksheet Click inside the column to sort and follow the Sort Options instructions at the top of the Detail Worksheet screen e Delete a worksheet Open the worksheet and press CTRL D Click Yes to confirm Calculator A calculator is available in every numeric field in data entry To access the calculator press F3 from within the field Press F1 to insert the calculated results into the data entry field Drake Software Manual Copyrighted Material 20 Basics 2007 DRAKE SOFTWARE When the calculator is active the NUM LOCK status is enabled and cannot be disabled while the calculator is active NUM LOCK is disabled the calculator is closed N UTE See the Quick Reference Guide for details regarding calculator functions Macros Use macros to enter frequently used data entry items with minimal keystrokes e Launch a macro from a data
105. 0 106 Schedule B Interest amp Dividends 93 Schedule C Profit or Loss From Business 102 106 Schedule D Capital Gains and Losses 112 Schedule E Supplemental Income amp Loss 104 106 Schedule F Profit or Loss from Farming 103 106 Schedule H Household Employment Taxes 126 Schedule J Income Averaging for Farmers and Fishermen 103 Schedule K 1 Share of Income Deductions Credits etc 105 Schedule R Credit for Elderly Disabled 122 Schedule SE Self Employment Tax 116 Scheduler appointments 79 81 82 Copyrighted Material xiv Index calendars 78 creating schedules 76 front office login 77 modes 75 opening the 77 reminders 81 reports 83 schedule grid 78 searching 82 time options 79 view options 79 scholarships taxable 93 school codes 16 screen help 22 screens see also Data Entry second home 89 138 Section 179 expense 107 108 Section 501 c 18 pension plan 94 security 41 163 self employed income 102 self employment tax 116 SEP contributions 93 serial number packing slip 28 29 service bureau 38 168 setup administrative options 51 billing 50 directories and paths 43 electronic filing 50 firm 35 letterhead 61 letters 55 macros 54 options 46 pay per return 42 preparer 38 pricing 52 program colors 62 recommended 34 required 34 Setup Wizard 33 state specific options 50 Setup Wizard 33 shipment letters 1 shortcut keys see Quick Reference
106. 007 DRAKE SOFTWARE Resources and Support 185 Resources and Support Drake offers support resources online in the software and in the manual These resources are constantly updated and reviewed so our clients have 24 hour access to the latest information Drake Support does not provide tax law advice Knowledge of tax preparation is MPD RTANT the responsibility of the tax preparer Support is provided as an aid to tax return completion only Accuracy of the return filed with the IRS and various State Departments of Revenue is the responsibility of the tax preparer N Spanish support Si te gustaria hablar con alguien en espa ol llame al UTE 828 349 5500 y trataremos de conectarle con uno de nuestros agentes de apoyo que hablan espa ol e Electronic Training Center Train your office staff with tutorials practice returns and interactive tax courses Test and track their progress See Drake ETC on page 186 for details e Tutorials Access short movie clips demonstrating parts of the program step by step Each clip or tutorial has text boxes and sound to make each process as clear as possible This list is enhanced through out the season so check for new tutorials often See Tutorials on page 189 for details e Practice Returns Become familiar with the basics of data entry and electronic filing in Drake Software with these hands on practice activities See Practice Returns on page 190 for details e K
107. 040 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 Return 1040 Form Information Number of Copies Form 1040 z Classic Mode Form Description U S Individual Income Tax Returri Federal Record 2 EF Signature 0 Est Ext 0 Pricing Client Apply to this retum Apply to all retums Form Price 65 00 Item Price Not available V Include on the Bill Sets Preparer Federal State Cancel For pricing on the fly changes to take effect on the client bill the return must be recalculated Drake Software Manual Copyrighted Material 54 Installation amp Setup 2007 DRAKE SOFTWARE Macros Setup Macros speed the process of data entry Certain kinds of data are set to a combination of keys or hot keys Press a hot key to fill a chosen field with pre selected data 1 On the menu bar go to Setup gt Macros to open Setup Macros Two columns show the hot keys and corresponding macro data A data string already set to a hot key is displayed beside the hot key value in Data Any predefined data string may be edited 2 Select an item in the Data column that corresponds with the chosen hot key Change or enter the data string as needed 3 Click OK to save Use the following action symbols to build macros lt Moves cursor back one f
108. 07 NC Mutual Fund 5 12 18 1999 12 03 2007 NC Mutual Fund 6 01 07 2006 03 02 2007 NC Mutual Fund 7 09 09 1990 12 23 2007 GA Mutual Fund 8 09 18 1998 12 13 2007 GA Mutual Fund 9 11 26 1997 11 28 2007 GA Stock 3 09 22 1997 09 21 2007 FL Stock 4 01 07 2007 02 10 2007 FL Stock 5 06 15 1995 08 02 2007 FL Stock 6 02 16 1993 05 20 2007 Fl Stack 7 ANMAIINNA 1247 0007 woOonnoonfwh AaqaeeCeCeCoeecenwmunaasas 5 Click Finish to import the transactions The D screen opens and all imported transactions are listed Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 115 Other Gains and Losses From the Sale of Assets box on Income tab access entry fields for the following forms Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains Form 4255 Recapture of Investment Credit Form 4684 Casualties and Thefts Form 4797 Sales of Business Property Form 6252 Installment Sale Income Form 6781 Gains and Losses From Section 1256 Contracts and Straddles Form 8824 Like Kind Exchanges Worksheet for Sale of Residence the HOME screen Form 1099 A Acquisition or Abandonment of Secured Property Form 1099 C Cancellation of Debt N UTE The 1099 A and 1099 C are addressed in Other 1099 Forms on page 98 To access a form click the name or type the code into the Selector field and press ENTER Following are some data entry guidelines Drake Software Manual Fl
109. 1 ST OtherTax1 Overpayment Applied Overpayment applied from state return other tax type 1 ST OtherTax1 Overpayment Paragraph Inserts paragraph for overpayment on state return other tax type 1 ST OtherTax1 Refund Refund from state return being prepared other tax type 1 ST OtherTax1 Refund Paragraph Inserts paragraph for refund from state return other tax type 1 ST OtherTax1 Return Paragraph ST OtherTax1 Tax Inserts paragraph for state return other tax type 1 Tax from state return being prepared other tax type 1 ST OtherTax1 Tax Bracket Tax bracket from state return being prepared other tax type 1 ST OtherTax1 Tax Description Tax description from state return being prepared other tax type 1 ST OtherTax1 Tax Rate Tax rate from state return being prepared other tax type 1 ST OtherTax1 Total Estimate Total state estimate amount other tax type 1 ST OtherTax1 Zero Due Paragraph Inserts paragraph for zero due on state return other tax type 1 ST OtherTax1 1st Qtr Estimate Amt Due State estimate payment 1st quarter after overpayment applied other tax type 1 ST OtherTax1 1st Qtr Overpayment Applied State overpayment applied 1st quarter other tax type 1 ST OtherTax1 1st Qtr Total Est Amt 1st Qtr state estimate amount overpayment applied and amount due other tax type 1 ST OtherTax1 2nd Qtr Estimate Amt Due Drake Softw
110. 1040 com e mail address your EFIN 1040 com and are accessed through Drake Help gt Email See Broadcast E mail on page 199 for details Drake Software Manual Copyrighted Material 186 Resources and Support 2007 DRAKE SOFTWARE e Phone Support Work one on one with a Support technician to resolve software issues Drake Software technicians are trained year around on Drake Software topics such as connections conversions network ing and other specific customer service needs See Drake Support Contact Information on page 199 for phone numbers and e mail addresses e Fax Support with software questions using the fax cover letter See Fax Cover Letter for Support on page 201 We reply to faxes only with faxes not with phone calls See Drake Support Contact Informa tion on page 199 for phone numbers and e mail addresses e Multi Office Manager MOM View a snapshot of your business in a multi office environment See such important return statistics as demographics status and billing information See Multi Office Man ager on page 165 for details e Online EF Database View your EF Database online in real time It displays rejected and accepted returns lists checks that are available for printing and prints multiple reports See Online EF Database on page 162 for details DRAKE ETC The Electronic Training Center or ETC offers training for both single users and multi site offices by pr
111. 1040 concepts and a basic course on corporate 1120 tax reporting In the future look for basic courses for 1065 1120 and 1120S returns Earning CPE Credits To earn CPE credits for taking a tax course complete all units of study then take the final exam and score 80 or higher Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 189 i Basic Corporate Tax Course W Basic Corporate Tax Course Uniti Corporate Part One v2 comatenatime EE Unit 3 Corporate Part Three Exam Course Evaluation CPE Certificate print pas After you pass the test with a score of 80 or higher a Launch button appears next to Course Evaluation Click Launch to open the evaluation You must complete an evaluation to receive CPE credit Once the evaluation is complete print a CPE certificate TUTORIALS Click the Tutorials tab from the toolbar Tutorials teach the basics of Drake Software through text sound and animation To begin select an appropriate connection speed Click Launch to start a tutorial Completed tutorials are indicated with a green check mark NOTE Tutorials are also available on the Drake Support website Training Tools menu Drake Software Manual Copyrighted Material 190 Resources and Support Choose a connection speed Choose a tutorial and click Launch Each tutorial has its own quiz The quizzes not only test your knowledge of the subject but if you re an administr
112. 2007 Drake Software Manual Drake SOFTWARE Professional Tax Solution 2007 DRAKE SOFTWARE i Copyright The 2007 Drake Software Manual Drake Tax Software and any other related materials are copyrighted material All rights are reserved by Drake Enterprises LTD including all ownership rights This document associated software and related material are the property of Drake Enterprises LTD No part of this document or associated online documentation may be reproduced or transmitted in any form or by any means without the express written permission of Drake Enterprises LTD 2007 Drake Enterprises LTD All rights reserved Printed in USA While every attempt has been made to produce an accurate and complete manual there is no warranty expressed or implied to that effect Drake Enterprises LTD assumes no liability for damages or claims resulting from the use of the information contained herein Trademarks The Drake Software Logo and Drake 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 Drake Software Manual Copyrighted Material ii 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE iii Table of Contents Introduction e ssssecesssooesssoossesoccesssocesssoossssose 1 Electronic Filing and Banking 149 Ne w for 2007 pin ce
113. 4562 8829 Information or Text to be Entered Description Enter a description of the asset Date Acquired Enter the date the home was placed in service Cost Enter the smaller amount the cost of basis or the fair market value This is the amount that would normally be entered on line 36 of Office in Home Do not include the cost of the land Business Use Leave this field blank Method Federal column Select SL Straight Line Life Federal column Enter 39 Land value Enter the value of the land This is the amount that would normally be entered on line 36 of Office in Home Main Home for 8829 Check this box to indicate that the asset is the main home for Form 8829 Auto Expense Worksheet for Schedule C Use the auto expense worksheet to determine automobile related expenses for Schedule C Drake calculates business percent use based on mileage from this worksheet By entering business commuting and other mileage here you can omit the Business use field for automobiles on the 4562 screen Information entered in the worksheet carries to Schedule C only Do not use this MEO RTANT worksheet for data that properly belongs on Form 2106 Employee Business Expenses or Schedule E Rental Income Access the worksheet from the Adjustments tab or type AUTO into the Selector field and press ENTER e Which Schedule C If there are multiple Schedule Cs enter the applicable Schedule C number found o
114. 4797 Gains and Losses From Sales of Assets 1099 SA Distributions from MSA or Medicare Choice 8853 MSA MSA Foreign Employer Compensation NEW FOR Enter FEC amounts for foreign employers that do not issue W 2 statements Total 2007 NOTE FEC compensation is included on line 7 of the 1040 and is displayed with an FEC write in Take the following steps to enter foreign compensation data to an open return 1 Under the General tab click Foreign Employer Compensation or type FEC into the Selector field and press ENTER If a screen already contains data an Existing Forms List appears Select New Record and click Open Select a listed record and click Open to edit it 2 Enter or select data for each field accordingly 3 Press ESC to save and close Frequently Asked Questions FAQ Available for all packages the FAQ listing provides answers to commonly asked questions in the program Click a topic to access the associated Help screen Click X in the top right corner of screen to return to the FAQ list Press ESC to return to the main tab Schedule A Itemized Deductions Screen A covers Schedule A Itemized Deductions Take the following steps to itemize taxpayer deductions in Drake 1 Under the General tab click Itemized Deductions Schedule or type A into the Selector field and press ENTER 2 Enter information into each field accordingly 3 Press ESC to save and close Drake Software Manual Copy
115. 65 and 1041 packages Select print options for 1040A EZ suppress Form 1045 page 2 NOL and Form 2210 Select to turn ON Drake Software Manual W2 list if greater than select from 0 50 W2s 1099 list if greater than select from 0 50 1099s Dividend list if greater than select from 0 50 dividends K1 list business returns only if greater than select from 0 50 K1s Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 49 Optional Documents Tab Check the appropriate boxes to print the following with each return Folder cover sheet Generate notes page when applicable Prior year comparison form Privacy letter Return summary Federal Filing Instructions Displays detailed federal filing information including the date to file form to be filed address to file and payment amount Displays as FILEINST PG in view print mode Enabled by default Clear to disable or enable or disable on a per return basis on the PRNT screen State Filing Instructions Displays detailed state filing information including the date to file form to be filed address to file and payment amount It is displayed as STINST PG ST the abbreviation for the state return for example NCINST PG in View Print mode Enabled by default Clear to disable Enable or disable on a per return basis on the PRNT screen Referral coupons 3 per sheet Enter the number of sheets per return and or the coupon amount Sel
116. 709 Gift Tax Schedule B Drake Software Manual GO Zone Gulf Opportunity Zone screen Home Sale of Primary Home INCOME Income data entry screen K1iL Schedule K1 Cover letter LTR Custom paragraph for the letter MFS Community Property State Income Allocation Worksheet entry screen MISC Miscellaneous Codes and Foreign Address entry screen NOL CO CB Net Operating Loss Carryover Carryback entry screen NOTES Notes entry screen OBC OBC other business credits formerly form 3800 PIN Signature Page for paperless PIN returns PIN 2350 Signature page for paperless PIN returns for form 2350 9465 56 PMT Electronic funds withdrawal information PREP Preparer Information screen PRINT Print Options entry screen QE Quick Estimator RB Republic RAL ERC ERD information screen RENT RENT rental other than real estate ROTH Form 8606 nondeductible IRA contributions IRA basis and nontaxable IRA distributions RRB 1099 R railroad retirement benefits SBBT Santa Barbara RAL RT information screen SCH Unformatted Attachment to Return entry screen SCH 2 Subsidiary Schedule SCH 3 Unformatted Attachment to Return Copyrighted Material 2007 DRAKE SOFTWARE Appendix 261 Keyword Description SCH 4 Subsidiary Schedule for Schedule M 3 Schedule A Schedule A Itemized deductions Schedule B
117. BONUS S State check Check Product 8 R RAL C RAC BONUS S State check Check Status 1 Status of check 1 Check Status 2 Status of check 2 Check Status 3 Status of check 3 Check Status 4 Status of check 4 Check Status 5 Status of check 5 Check Status 6 Status of check 6 Check Status 7 Status of check 7 Check Status 8 Status of check 8 Check Type 1 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 2 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 3 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 4 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 5 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 6 C Check S SVC D Direct Deposit B Bank Printed Check Drake Software Manual Copyrighted Material 268 Appendix 2007 DRAKE SOFTWARE Check Type 7 C Check S SVC D Direct Deposit B Bank Printed Check Check Type 8 C Check S SVC D Direct Deposit B Bank Printed Check Current Type Current bank product type R RAL C RAC BONU DD Amt IRS Total amount of funds deposited by IRS DD Amt IRS Missing Amount of taxpayer s refund that is unfunded or underfunded by IRS deposits at the bank DD Amt IRS 1 IRS direct deposit amount DD Amt IRS 2 IRS direct deposit amount DD Amt IRS 3 IRS direct deposit amount DD Amt IRS 4 IRS direct deposit amount DD Amt State St
118. Box 12 Amount 2 Box 12 Amount 2 W2 Box 12 Amount 3 Box 12 Amount 3 on the W2 W2 Box 12 Amount 4 Box 12 Amount 4 on the W2 W2 Box 12 Amounts Box 12 Amounts on the W2 W2 Box 12 Code 1 Box 12 Code 1 on the W2 W2 Box 12 Code 2 Box 12 Code 2 on the W2 W2 Box 12 Code 3 Box 12 Code 3 on the W2 W2 Box 12 Code 4 Box 12 Code 4 on the W2 W2 Box 12 Codes Box 12 Codes on the W2 W2 Box 14 Amount 1 Box 14 Amount 1 on the W2 W2 Box 14 Amount 2 Box 14 Amount 2 on the W2 W2 Box 14 Amount 3 Box 14 Amount 3 on the W2 W2 Box 14 Amounts Box 14 Amounts on the W2 W2 Box 14 Code 1 Box 14 Code 1 on the W2 W2 Box 14 Code 2 Box 14 Code 2 on the W2 W2 Box 14 Code 3 Box 14 Code 3 on the W2 W2 Box 14 Codes Box 14 Codes on the W2 W2 Dep Care Drake Software Manual Dependent Care benefits from W 2 Copyrighted Material 256 Appendix 2007 DRAKE SOFTWARE Keyword Description W2 EIN Employer identification number from W 2 W2 Employer Address Employer Address on Form W 2 W2 Employer City City where employer is located from Form W2 W2 Employer Name Name of the Employer from form W 2 W2 Employer State State of employer on form W2 W2 Employer Zip Code Zip code where employer is located from Form W2 W2 Federal Withheld Federal tax withheld on form W2 W2 Local Tax 1
119. C Amount of earned income credit Refund Refund amount on federal return Refund State Refund expected from state return Return Type Number of return s main form Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 273 LETTERS KEYWORDS The following table lists all keywords and conditional paragraphs available for customizing letters For details on creating letters see Letters Setup on page 55 Keyword Description Appointment Date Date of tax preparation appointment Appointment Date Time Paragraph Inserts paragraph for scheduled date and time of client tax preparation appointment Appointment Time Time of tax preparation appointment Bank Check Amount 1 Bank product check amount from Return Tracking TRAC screen Bank Check Amount 2 Bank product check amount from Return Tracking TRAC screen Bank Check Amount 3 Bank product check amount from Return Tracking TRAC screen Bank Check Amount 4 Bank product check amount from Return Tracking TRAC screen Bank Fee Fees charged by bank for bank product Bank Fees Paragraph Inserts applicable paragraph if bank fees are present Bank Product Paragraph Inserts applicable paragraph if bank product is present Beneficiary Address Beneficiary address Beneficiary Name Beneficiary name City Direct Debit Date Date city balance due will be direct
120. Child s Interest and Dividends is used when a parent wishes to report a child s income on the parent s return Access this form from the Taxes tab or type 8814 into the Selector field and press ENTER Form 709 Gift Tax Return Form 709 United States Gift and Generation Skipping Transfer Tax Return consists of several parts and schedules Access these from the 709 menu Open the 709 menu from the Taxes tab or type 709 into the Selector field and press ENTER Drake 2007 Data Entry 001234567 SAF a I amp se Calculate View Print General General Information Computation of Taxable Gifts Gifts from Prior Periods TT Attached Statement ELEC Election Options for 709 ge P a e aN agate ror Drake Software Manual Copyrighted Material 128 Return Preparation 2007 DRAKE SOFTWARE From the menu shown under a General tab click an item to open it or type its code into the Selector field and press ENTER NEW FOR The ELEC screen Election Options for 709 provides a series of check boxes for 70 07 electing certain optional ways of treating some income and exclusion amounts For more information on each item click the item and press F1 e Attached Statements Use this screen if Form 709 requires an attachment for example if an election option requires the amounts in question to be identified e Extension request for 1040 and 709 If a six month extension is requested for a 1040 return no separ
121. Claim to Exemption for Child of Divorced or Separated Parents Form 8379 Injured Spouse Allocation Form 8815 Exclusion of Interest from Series EE and I U S Savings Bonds Issued after 1989 Form 8822 Change of Address Form 8828 Recapture of Federal Mortgage Subsidy Form 8857 Request for Innocent Spouse Relief Form 8862 Information To Claim Earned Income Credit After Disallowance Form 8866 Interest Computation Under the Look Back Method for Property Depreciated Under the Income Forecast Method Form TD F 90 22 1 Report of Foreign Bank and Financial Accounts screen 9022 Form 9465 Installment Agreement Request Press F1 for help in completing individual fields For instructions regarding individual forms see the IRS Web site PREPARING STATE AND CITY RETURNS State and city forms are generated automatically based on data entered on the federal return State returns are calculated based on resident state entered and on the state codes indicated on specific forms such as the W 2 Schedule C 1099 and Schedule B For information on entering data for part year residents see Taxpayer and Spouse Information on page 88 and Part Year Return on page 138 IMPORTANT Download applicable state and city updates to your office s computer or network regularly throughout tax season See Installing Updates on page 205 for more information on installing program updates Drake Software Manual Copyrighted Material 2007
122. Compensation FAQ Fre tly Asked Questions eS dite a 1 Under the General tab click Income or type 3 into the Selector field and press ENTER to open the Form 1040 Income screen 2 Enter data into the appropriate fields 3 Press ESC to save and close See W 2s 1099s and Foreign Employer Compensation on page 95 for N OTE instructions on entering earned income on Form 1040 See 1040 Income Tab on page 102 to complete separate income forms such as Schedules C E F J and K Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 93 NOTE NOTE Listed below are important points to remember when entering income information Taxable Scholarships line 7 Enter the amount received from any taxable scholarship not reported on a W 2 or 1099 T Interest and Dividend Income lines 8 9 Schedule B Interest and Ordinary Dividends is required only if the taxable interest or the ordinary dividends on the return exceed 1 500 Some taxpayers with bank or other financial accounts in foreign countries must file Schedule B regardless of the income amount Use the MISC screen to enter data for Schedule B Part IIl Foreign Accounts and Trusts See W 2s 1099s and Foreign Employer Compensation on page 95 Unemployment compensation received line 19 Enter the full amount for 2007 Enter any prior year compensation amounts repaid on Schedule A line 22 See Schedule A
123. Copyrighted Material 102 Return Preparation 2007 DRAKE SOFTWARE EF Options Override Use the EF screen to override e filing options on a per return basis Also if Form 8453 paper documents are to be attached to an e filed return use this screen to indicate any paper documents that apply Press F1 as needed to for information on overriding federal and state e file options including state piggyback and other states and cities to file 1040 INCOME TAB Use the Income tab selections to enter income amounts other than those on Form 1040 the W 2s the 1099s or those paid by a foreign employer that does not use W 2s Use this tab to access entry fields for the following NOTE Self employed and farm income Schedules C F and J Form 4835 Farm Rental Income deductible losses modified AGI Schedules E and K1 Depreciable Assets data for Form 4562 Depreciation and Amortization GO Zone Depreciation Elections Sales of Assets including Schedule D Capital Gains Schedule C Self Employed Income Screen C Self Employed Income covers Schedule C Profit or Loss from Business Sole Proprietorship If Schedule C shows a loss If all investment is not at risk Form 6198 At Risk Limitations is generated 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 Drake computes this au
124. D and password 6 mode in Scheduler 75 number 38 setup 38 Pre Prepared Entry 220 preseason letters 74 pricing 129 per return basis 145 setup 52 print files deleting 212 storage 47 print mode 147 print mode classic 148 printer setup 63 printing calculation details 142 options 133 order 63 return as PDF 65 148 sets 63 setup 63 prior year minimum tax credit 122 returns 70 proformas 72 Pubs see IRS 149 Q qualified electric vehicle credit 123 Indian reservation properties 110 zone academy bond credit 123 queue see electronic filing Quick Estimator 221 QuickBooks import 214 Copyrighted Material 2007 DRAKE SOFTWARE R RAL Refund Anticipation Loan see bank products RAL_Info sheet 171 real estate 104 recapture 109 receipt number 90 recent files 8 recommended setup 34 refund for deceased taxpayer 136 Refund Transfer see bank products refund application for tentative 136 reject codes 160 161 renewable electricity credit 123 renewal community employment credit 123 rentals 104 Report Viewer 153 183 reports adding search conditions 229 basic search conditions 229 conditions 229 creating 225 deleting 228 depreciation list 232 Drake Tax Planner 248 editing 227 Filter Manager 228 filters 228 fixed assets 232 keyword lists 251 portrait landscape 224 predefined 223 Report Manager 223 sample view 224 saving 164 view print utility 232 Republi
125. Drake program on each workstation Designate a server and ensure that each workstation can access the server drive through a single drive letter A network technician can map each workstation to the server using the same drive letter The drive on which Drake is installed must be shared on the network Map to the drive on which Drake is installed not to the Drake07 folder Open Drake from the designated server and go to Setup gt Directories Paths to open the Directories and Paths Setup window In the Configuration box for Network Options select 3a This is the server All other choices are disabled after you make a selection Click OK to exit Directories and Paths Setup Repeat steps 3 and 4 on each workstation with 3b This is a workstation as the network option and indicating the drive letter for file sharing as shown in the following example Drake Software Manual Copyrighted Material 32 Installation amp Setup 2007 DRAKE SOFTWARE 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 Je Network Options r Nw Client link installed on workstations 3 Software installed on server and workstations secondary network setup N TE Recommended When setting up each workstation ensure that all workstations can access al
126. Drake open in a Report Viewer For details on Report Viewer functionality see Report Viewer on page 231 EXPORTING CSM DATA INTO A SPREADSHEET Exporting displayed CSM data into a Microsoft Excel spreadsheet for more customization of filters and sorting To export the data click Export from the CSM toolbar Excel is opened automatically ADMIN ONLY FEATURES Some CSM features are available only to the office administrator To access the following features you must be logged in as Admin Deleting Records from the CSM Deleting a record from the CSM removes it from the CSM view To delete the record right click it and select Delete Record The record still exists in the software but is essentially hidden It can be viewed at any time through the use of a filter To display all deleted records in the CSM click Filter gt Display Deleted Records Drake Software Manual Copyrighted Material 184 Client Status Manager 2007 DRAKE SOFTWARE Restoring CSM Data To restore data the CSM scans a client file calculates the return searches the EF Database and updates the data in the CSM To restore a client file right click the record in the CSM and select Restore CSM Data This Client When prompted click OK Removing Duplicate CSM Entries Duplicate entries in the CSM can be easily removed Right click a record in the CSM and select Remove Duplicate Entries Entire Database Drake Software Manual Copyrighted Material 2
127. E LAST NAME SSN LOOKUP To look up and view detailed EF and bank information for a specific return use the SSN Lastname Lookup field Enter the SSN or EIN for the return and click GO TOOLBAR Reports are available for returns loans checks fees and summaries Returns Pending accepted and rejected federal and state returns extensions Loans Bank products Checks Reports by status anticipated printable pending and cleared Fees Preparer and bank fees Summary Summary reports by EFIN Preparer and ZIP code To select a report category click its corresponding button To view a report complete the following steps Although the fields may vary depending on the category chosen the reporting process does not change 1 NOTE Select one or more Report Criteria Enter a Start Date and End Date The report pulls only returns with records that fall within the date range selected Select an EFIN from Restrict to Multisite to restrict reporting to returns for a particular EFIN This field benefits multi site offices with an EFIN reporting hierarchy Click Run Report For electronic filing details for a particular return click the record s SSN To print the page of the report click the printer icon Reports may be downloaded in CSV format Suitable for Excel and Access by clicking the Excel CSV icon All data for the given report criteria are saved not just the data shown on the current page
128. EF Database allows companies with multiple EFINs to create an EFIN hierarchy to determine what information is available for a logged in EFIN Hierarchy Levels The reporting hierarchy consists of three levels e Master EFIN Default level View all data for the Master EFIN and any Level 1 and Level 2 EFINs configured below it e Level 1 EFIN View all data for Level 1 EFIN plus any Level 2 EFINs e Level 2 EFIN View Level 2 EFIN data only We recommend that you map out the hierarchy on paper before starting Be sure to have all of your EFINs and Drake passwords available Hierarchy Building To build an EF Database reporting hierarchy complete the following steps 1 Log in to the Online EF Database with a Master EFIN Click Options Click Configure EFIN Reporting Hierarchy to view Master EFIN level Click Add to create a second level Type the Level 1 EFIN into the EFIN to Add field and enter a description if desired A cata Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 163 6 Type the password into the Drake Password BBS field and click Add To add Level 2 EFINs click Add from the Level 1 row Continue this process until the hierarchy configuration is complete NOTE You can add and edit EFINs in the hierarchy only if logged in with a Master EFIN EFIN Removal To remove an EFIN from the hierarchy complete the following steps 1 Log into the EF Databas
129. FS returns can be opened for additional data entry When you open the return select a version to open at the prompt To access the taxpayer s MFS return enter the SSN and choose the split file To access the spouse s MFS return enter the spouse s SSN Detail Worksheet A detail worksheet is available in every numerical field in data entry Worksheets allow for up to 30 lines of descriptions and amounts When the worksheet is saved the amounts entered are totaled in the data entry field Detail worksheets are not electronically filed with a return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 19 To use a worksheet complete the following steps 1 Press CTRL W or double click a numeric field to open a Detail Worksheet for the field Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWEN Detail Worksheet Sort Options F1 Description Ascending F2 Description Descending F3 Amount Ascending F4 Amount Descending Title STUDENT LOAN INTEREST Description Amount jus soans 499 NELNET 250 DIRECT LOANS i s lt i lt a e ees E E a wll E a i sans ttedh E T pe ea Pr ae Se 2 Enter a worksheet Title If the title field is left blank Drake automatically prints a title for most fields 3 Enter a Description and Amount for each item 4 Press ESC to save and close the worksheet and add the amounts The data entry field is shaded to indicate a
130. FTWARE Basics 11 Form Codes and Selector Field Form codes are listed to the left of each screen name on the Data Entry Menu The Selector field at the bottom left corner displays a blinking cursor To access a screen using your keyboard type its form code in the Selector field and press ENTER Status Bar The status bar displays the Return Status see Client Status Manager on page 175 the Return Type and the Current Package WORKING IN A TAX RETURN The data entry process varies little from package to package The following section is an overview of data entry navigation and features See Return Preparation on page 87 for more detailed instructions on using data entry to prepare a return NOTE To view a list of navigation short cuts and data entry hot keys see the Quick Reference Guide insert of this manual Adding Modifying and Deleting Data Tax returns are prepared in Drake by entering pertinent information on specific data entry screens Entries are used to calculate the federal and state tax return forms To open a data entry screen use one of the following methods e Keyboard From any tab type the form code in the Selector field and press ENTER e Mouse Select a tab and click the screen name To exit and save data press ESC You are returned to the Home window To exit a screen without saving your changes press SHIFT ESC To reset a screen to the last save press CTRL U To delete a sc
131. Federal Amended Paragraphs Federal Estimate Paragraphs Federal Extension Paragraphs lt Current Date gt Federal Retum Results Letter including text Federal Amended Results lt Taxpayer Name and Address gt Federal Estimates sie i dala n h Federal Extension Results lt Greeting Title and Last Name gt POnGMONM PAAJIApNS Bank Product Paragraphs Banking lt Federal Electronic Filing Paragraph gt Miscellaneous Enclosed is your lt Current Tax Year gt Form 1040 U S Individual Prep Firm and Revenue Return prepared from information you provided Your return wil State Return Paragraphs electronically filed with the IRS once we receive your signed F State Amended Paragraph Signature Authorization State Estimate Paragrap Keywords and State Extension Paragrap Conditional Al Balance Due Paragraph gt State Return Results Pderal return reflects a balance due of lt Federal Balance State Amended Results Parag raph 3 State Estimates lt Federal Direct Debit Paragraph gt City Retum Paragraphs This amount will be directly withdrawn on lt Federal Direct Debit City Retum Results your lt Federal Taxpayer Bank gt lt Federal Taxpayer Bank Account Tyr ending in lt Federal Taxpayer Bank Account Number gt If you would this payment contact the U S Treasury Financial Agent at 88E later than two business days before the scheduled payment sett lt End Paragraph gt
132. Fees 2Week State Fees paid to the service bureau of the preparer Postal abbreviation of state for which a state Bonu RAC RT ERC amount exists 2Week State Amount Amount of state Bonu RAC RT ERC that exists 2Week Account Bonu RAC RT ERC direct account number 2Week Check Indicates a return with a 2week check 2Week RTN Bonu RAC RT ERC direct routing transit number 2Week Type Bonu RAC RT ERC direct account type C Checking S Savings Address 1 First line of address This line is often used as a care of line and may be blank Address 2 Second line of address This is the primary street address AGI Adjusted gross income City City of the taxpayer s address Debt Code2 IRS debt code with full description Duplicated Indicates that a return was duplicated EDT Indicates that a return record is for a EDT document such as an extension or payment agreement Email Email address of taxpayer Fee Expected Amount that is expected to be direct deposited to the preparer Fee Total Total amount of all fees that have been withheld from the taxpayer s refund Filing Status Filing status of return from demographics screen Filing Status State Filing status on state return Form 4136 Form 4136 indicator Form 8914 Amount Form 8915 amount Form 8915 Amount form 8915 amount Katrina Katrina victim indicator PIN Spouse Spouse s personal identifica
133. First Local Tax on the W2 W2 Local Tax 2 Second Local Tax on the W2 W2 Local Tax 3 Third Local tax on the W2 W2 Local Tax 4 Fourth Local Tax on the W2 W2 Local Taxes Local Taxes on the W2 W2 Local Wage 1 W2 Local Wage 2 First Local Wage amount from W2 Second Local Wage amount from W2 W2 Local Wage 3 Third Local Wage amount from W2 W2 Local Wage 4 Fourth Local Wage amount from W2 W2 Local Wages Local Wages on the W2 W2 Localities Localities listed on the W2 W2 Medicare Wages Amount of Medicare wages from FormW2 W2 Medicare Withheld Amount of Medicare withheld from Form W2 W2 Nonqual Plan Non qualified plan amount from W2 W2 SS Tips W2SS tips from W2 W2 SS Wages Amount of SS wages from Form W2 W2 SS Withheld Amount of SS withheld from Form W2 W2 State Code 1 First state listed on the W2 W2 State Code 2 Second state listed on the W2 W2 State Code 3 Third state listed on the W2 W2 State Code 4 Fourth state listed on the W2 W2 State Codes State listed on the W2 W2 State Tax 1 First State Tax amount from W2 W2 State Tax 2 Second State Tax amount from W2 W2 State Tax 3 Third State Tax amount from W2 W2 State Tax 4 Fourth State Tax amount from W2 W2 State Taxes State Taxes listed on the W2 W2 State Wages State Wages on the W2 W2 State Wages 1
134. First State Wage amount from W2 W2 State Wages 2 Second State Wage amount from W2 W2 State Wages 3 Third State Wage amount from W2 W2 State Wages 4 Fourth State Wage amount from W2 Year End End of Year Date Zip Code Zip code in address Interest Income Total Total amount of interest income on a return EF Ready Ready for EF indicator on the TRAC screen E filed Indicates that a Return has been E Filed and Accepted Fed Ack Code Acknowledgement Code for Federal 1040 Fed Ack Date Last Most recent federal acknowledgement Date Paper Return Paper Document Indicator from EF screen State Ack Code 1 Drake Software Manual First state Acknowledgement Code from TRAC screen Copyrighted Material 2007 DRAKE SOFTWARE Appendix 257 Keyword Description State Ack Code 2 Second state Acknowledgement Code from TRAC screen State Ack Code 3 Third state Acknowledgement Code from TRAC screen State Ack Code 4 Fourth state Acknowledgement Code from TRAC screen State Ack Code 5 Fifth state Acknowledgement Code from TRAC screen State EF Code 1 First State EF abbreviation from TRAC screen State EF Code 2 Second state Abbreviation from TRAC screen State EF Code 3 Third state abbreviation from TRAC screen State EF Code 4 Fourth State abbreviation from TRAC
135. Guide signing a return for e filing 101 SIMPLE contributions 93 small employer credits 123 software updates 206 Spanish language option 47 SSN ERO indicator 50 print on bill 50 standard deduction 100 state electronic filing 167 state programs in Drake electronic filing 51 releases 27 running from a CD 43 Drake Software Manual 2007 DRAKE SOFTWARE setup options 50 updating 137 state tax accessing forms 137 depreciation 109 filing instructions 49 returns 23 suppressing returns 89 states Federal State Facts 193 support contact information 200 statutory employees 96 Suite Products Client Write Up 250 Drake Document Manager 235 support see Drake Support suppressing returns 50 system requirements 27 tax Alternative Minimum Tax 126 deductions see deductions estimates 94 124 forgiveness 131 gift 127 household employment 126 in data entry 124 kiddie 127 on accumulation distribution of trusts 126 on lump sum distributions 126 on tips 126 planner see Drake Tax Planner returns see returns sales 100 self employment 116 shelters 127 underpayment of 125 year comparisons 129 test returns 23 text in letters 57 third party designee 49 133 toolbar Client Status Manager 176 data entry 10 Drake Tax Planner 245 Home window 6 Letter Editor 56 online EF database 164 print mode 147 Scheduler 78 view mode 147 tracking data TRAC screen 134 traded assets 115 transmi
136. LESS 400008008 LEWIS ALAN Updated From 2006 08 27 2007 JPLESS 400008009 CAESAR TY Updated From 2006 08 27 2007 JPLESS Record 1 of 8945 8945 Total Unfiltered Records Drake Software Manual Copyrighted Material 176 Client Status Manager 2007 DRAKE SOFTWARE CSM TOOLBAR The toolbar is located at the top of the CSM window and contains the following buttons e Open CTRL O Open a CSM file in data entry e Search CTRL F Search the CSM by name or ID number SSN or EIN e Customize CTRL D Tailor the look of the CSM on your computer e Refresh F5 Retrieve the latest information for the CSM database e Filters Narrow down the data viewed in the CSM according to your specific needs e Quick View CTRL Q View a summary of all client status information for a client e Reports CTRL R Generate reports from data stored in the CSM e Export CTRL E Export data to a spreadsheet e Help F1 Access the Drake Help System for further assistance e Exit Esc Close the CSM SETTING RETURN STATUSES Some preparer intervention is required for tracking return statuses within the CSM The Status column in the CSM is based on the return status which can be set automatically by the software or set manually by the preparer M py RTANT It is important that a work flow is established in your office and that any custom statuses are created before tax season begins Also to prod
137. Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 267 Check Flag 5 blank check not yet available A Available P Printed Check Flag 6 blank check not yet available A Available P Printed Check Flag 7 blank check not yet available A Available P Printed Check Flag 8 blank check not yet available A Available P Printed Check Number 1 Number of check 1 Check Number 2 Number of check 2 Check Number 3 Number of check 3 Check Number 4 Number of check 4 Check Number 5 Number of check 5 Check Number 6 Number of check 6 Check Number 7 Number of check 7 Check Number 8 Number of check 8 Check Print Date Date check was printed Check Print Date 1 Date check 1 was printed Check Print Date 2 Date check 2 was printed Check Print Date 3 Date check 3 was printed Check Print Date 4 Date check 4 was printed Check Print Date 5 Date check 5 was printed Check Print Date 6 Date check 6 was printed Check Print Date 7 Date check 7 was printed Check Print Date 8 Date check 8 was printed Check Product 1 R RAL C RAC BONUS S State check Check Product 2 R RAL C RAC BONUS S State check Check Product 3 R RAL C RAC BONUS S State check Check Product 4 R RAL C RAC BONUS S State check Check Product 5 R RAL C RAC BONUS S State check Check Product 6 R RAL C RAC BONUS S State check Check Product 7 R RAL C RAC
138. Manual Copyrighted Material 224 Reports 2007 DRAKE SOFTWARE My Reports My Reports consists of new reports you create either by editing predefined reports or by starting with a blank report All new report formats are automatically saved here Other Report Options Other Report Options includes reports compiled from the CSM Scheduler or Fixed Asset Manager Also choose from Depreciation Lists Hash Totals and the Alabama Extension Bulk Web File Report Alabama Returns Only Alabama has a web portal for filing single extensions and uploading files that contain bulk filed extensions The information for creating the bulk file is already available in our program it simply has to be collected and put into the correct CSV file format Go to the EXT screen under the AL tab for any package in data entry and check Generate an extension Next select to Add to Bulk Extension file If you haven t renewed your account with the Alabama Department of Revenue click the Create an 2007 Bulk File Account with AL DOR link to go to the AL DOR site This account must be renewed annually Collect the necessary information and put it into the client s return When several of these returns have been calculated you can get a report to view or print Also a file is created on your computer entitled Drake07 Report AL EXT CSV The report and the CSV file contain only the extensions that are calculated that day Upload to the DOR site and simultaneously
139. Number2 Taxpayer s bank account number for federal direct deposit or debit account 2 Federal Taxpayer Bank Account Number3 Taxpayer s bank account number for federal direct deposit or debit account 3 Federal Taxpayer Bank Account Type Taxpayer s bank account type for federal direct deposit or direct debit Federal Taxpayer Bank2 Taxpayer s bank for federal direct deposit or direct debit account 2 Federal Taxpayer Bank3 Taxpayer s bank for federal direct deposit or direct debit account 3 Federal Total Balance Due Total balance due from federal return Federal Total Exemptions Federal Total Overpayment Applied Total number of exemptions claimed on federal return Total overpayment applied from federal return Federal Total Refund Federal Total Tax Total refund from federal return Total tax from federal return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 277 Federal Wages Total amount of federal wages from return Federal Zero Due Paragraph Inserts paragraph for zero due on federal return Federal 1st Qtr Estimate Amt Due Federal 1st Qtr Total Estimate Amt Federal estimate payment 1st quarter after overpayment applied 1st Qtr federal estimate amount overpayment applied and amount due Federal 2nd Qtr Estimate Amt Due Federal estimate payment 2nd quarter after overpayment applied Federal 2nd Qtr T
140. OD New Appt Search Appts Print Reports Export Setup Help Exit CEM CAENIA DAI Calendar for 11 21 2007 Weekly Calendar Preparer Calendars Sun Mon Tue Wed Thu Fri Sat 1 3 4 5 6 7 8 10 11 12 13 14 15 V7 18 19 20 22 24 25 26 27 28 29 December 2007 Sun Mon Tue Wed Thu Fri Sat 1 e Front Office mode Designed for the receptionist and other personnel who manage appointments but do not prepare tax returns this mode allows a receptionist to set up views and manage appointments Only Preparer Calendars is available in this mode as shown in the following figure Drake Software Manual Copyrighted Material 76 Preseason Preparation 2007 DRAKE SOFTWARE Drake 2007 Appointment Scheduler eee 9 Bo oD New Appt Search Appts Print Reports Export Setup Current Calendar Date C EM October 2007 Sun Mon Tue Wed Thu Fri 30 1 2 3 4 5 7 8 3 0 1 2 14 E 16 17 18 19 21 22 23 24 25 26 28 29 30 31 November 2007 ie 5kinh pins Miad aaas Siani Front Office personnel are created in Preparer Setup Logging in with a Front Office preparer ID limits the functions available to the Scheduler The ADMIN login also accesses the Scheduler in Front Office mode PREPARING TO USE THE SCHEDULER Preparer schedules and Front Office logins must be created before the Scheduler can be used Generating Preparer Schedules Tip Preparer schedules and appointments are carried forward each year Go to Last Year Data gt Up
141. OTHER TAB Numerous forms worksheets and other data entry screens are available from the Other tab NEW FOR 2007 NOTE NOTE Adjusting Client Bill Amounts Although client billing prices are established in Setup gt Pricing you can override data on a client s bill including amounts charged from BILL A custom paragraph can be added to a bill from Setup gt Options Use BILL to add a custom paragraph on a per return basis From Other click Adjust Client Bill or type BILL into the Selector field and press ENTER Checking Information Use CHK to cross check Drake calculations with amounts of a previously prepared return From Other click Return Checking Information or type CHK into the Selector field and press ENTER To compare an open return with a previous return open CHK and enter the previous return s data into the fields provided If pre prepared data entry is used this screen is automatically filled During calculation if any data does not match a message page is generated Tax Year Comparisons Use COMP to compare a taxpayer s current tax year with the two prior tax years and identify how a tax situation has changed From Other click Tax Year Comparison or type COMP into the Selector field and press ENTER Child Support Issues Use EFPD to enter data for Form 2120 Multiple Support Declaration and for Form 8332 Release of Claim to Exemption for Child of Divorced or Separated Parents Fr
142. Once saved the report is saved open Excel or Access as applicable to open the report SAVING REPORTS The selected report criteria may be saved for future reporting use After selecting the report criteria enter a report name in the Save Report As field then click Save The report is now available for future use under Saved Reports To access a previously saved report select a report and click Load Managed Saved Reports From the Options tab click Managed Saved Reports The Report Administration page is displayed Reports are listed in columns which may be sorted by clicking column headers Click Delete to delete a report Drake Software Manual Copyrighted Material 2007 DRAKE IMPORTANT NOTE SOFTWARE Electronic Filing and Banking 165 Multi Office Manager The Multi Office Manager otherwise known as MOM is the online version of the Client Status Manger see Client Status Manager on page 175 Designed for the multi office environment MOM enables you to track the work flow of multiple offices providing a snapshot of your entire business To assist in practice management statistics on demographics return status and billing information are displayed Companies with multiple EFINs that wish to use MOM must have an EFIN hierarchy configured The data available in MOM depends greatly on the hierarchy structure For details on creating an EFIN hierarchy see Configuring the EFIN Reporting Hierarchy on page 162
143. Overrides and Adjustments Override fields and adjustment fields can be found throughout data entry e Override fields Data entry fields that allow overrides are preceded by an equal sign and display red text default Data entered in these fields replaces or overrides program calculations saloamnintintnte e Adjustment fields Data entry fields that allow adjustments are preceded by a plus minus sign and display blue text default Data entered in these fields adjust program calculations by the amount entered Enter a negative number to subtract an amount R eee on 3 Sapte RIM a ao i N TE Formatting options for these fields are available in Setup gt Options On the Data Entry tab select from the list under Override field indicators and Adjustment field indicators ZIP Code Database To ease data entry on screens requiring ZIP codes enter the ZIP code before entering city or state information City and state fields automatically fill from the system database The Tab to zip code field setup option is enabled by default To disable this option N OTE go to Setup gt Options Data Entry tab To edit a zip code in the database see Zip Code Editor on page 219 Drake Software Manual Copyrighted Material 16 Basics 2007 DRAKE SOFTWARE EIN Database Each time an EIN is entered from Form W 2 W 2G 1099 R 2441 8283 or 1099 G the number and the corresponding business name and address are stored in
144. Qtr state estimate amount overpayment applied and amount due for income tax ST IncomeTax 4th Qtr Overpayment Applied Drake Software Manual State overpayment applied 4th quarter income tax Copyrighted Material 280 Appendix 2007 DRAKE SOFTWARE ST IncomeTax 4th Qtr Total Est Amt State estimate amount 4th quarter before overpayment applied income tax ST OtherTax1 Balance Due Balance due from state return being prepared other tax type 1 ST OtherTax1 Balance Due Paragraph Inserts paragraph for balance due on state return other tax type 1 ST OtherTax1 Due Date State due date other tax type 1 ST OtherTax1 Estimate Amt for ES Letter Amount of state estimate due for the selected quarter s other tax 1 ST OtherTax1 Estimate Detail by Quarter State estimate detail by quarter other tax type 1 ST OtherTax1 Estimate MAIL TO Address ST OtherTax1 Estimate Paragraph State estimate MAIL TO address other tax type 1 Inserts paragraph for estimate on state return other tax type 1 ST OtherTax1 Estimate Payment Due Date ST OtherTax1 MAIL TO Address State estimate payment due date other tax 1 State MAIL TO Address other tax type 1 ST OtherTax1 Overpayment Overpayment from state return being prepared other tax type 1 ST OtherTax1 Overpayment Appl Paragraph Inserts paragraph for overpayment applied on state return other tax type
145. Report Filter Choose a report filter When a filter is selected a description for the filter appears below it If no filter is desired select All Clients N OTE To edit a filter or create a new filter click Edit Filters For details on editing filters see Filter Manager on page 228 e Sort Summarize report by this field Choose a keyword by which to sort the report This list includes all the keywords in the report in addition to taxpayer ID taxpayer last name ZIP code preparer number firm number and DCN e Summarize the Report Data Calculate and total each column Not all reports benefit from summarizing Several report keywords Count Average and Percentage can be added to a report to enhance the summary Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 227 Drake 2007 Report Editor Step 2 Filtering 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 Filter Selection Select a Report Filter All Individual 1040 Clients Edit Filters Filter Description Petar Tape ts Todt aser nop Choose a report filter Additional Report Options Sort Summarize report by this field Taxpayer Last Name by Summarize the Report Data Selec
146. Returns a ma 2004 Individual 1040 PPPPP 08 28 2007 DDDDD Corporate 1120 08 08 200 Sub 5 11205 06 06 2007 Partnership 1065 08 27 2007 Fiduciary 1041 08 27 200 Estate Tax 706 eae Tax Exempt 990 07 11 200 E 08 10 2007 Hide Inactive Returns rN 08 28 2007 Hide Completed Returns Display Deleted Records Fecorgs ACCESSING CLIENT QUICK VIEW Client data is displayed in rows To view all of a client s data at once select a record and click Quick View Click Print to print the client data Click Open to open the client s return USING CSM TO GENERATE REPORTS The following predefined status and financial reports are available in the CSM CSM Report Report Description Client Status Manager Data Cash Receipts Data fields currently displayed in the CSM are available to the Report Viewer suitable for viewing or export This report shows cash received from either a bank deposit resulting report pulls from your EF Database or payments received This is a direct entry on the BILL or TRAC screens Cash Receipts Bank Deposits This report lists actual cash amounts received from bank deposits resulting report pulls from your EF Database Cash Receipts Client Payments This report is based on actual amounts entered on the BILL screen in data entry Completed Returns Drake Software Manual This report shows a list of SSN EINs and client names of returns with a Co
147. Schedule B Other Information Schedule B Dividends Schedule B Dividend Income 1099 DIV Schedule B Interest Schedule B Interest income 1099 INT Schedule C Schedule C Business Income Schedule D Schedule D Capital Gains and Losses Schedule D C O Schedule D Loss Carryovers Schedule E Schedule E Rental and Royalty Income or Loss Schedule E Part II Schedule E Part II Partnerships and Corporations direct entry screen Schedule E Part III Schedule E Part Ill Estates and Trusts Schedule E Part IV Schedule E Part IV REMICs real estate mortgage investment conduits Schedule F Schedule F Farm Income Schedule H Schedule H Household Employment Taxes Schedule Schedule Alternative Minimum Tax override screen Schedule J Schedule J Farm s Income Averaging Schedule K Schedule K Other Information Schedule K1 Shareholder s Partner s or Beneficiary s Share of Income Credits Deductions etc Schedule K1 1041 Schedule K1 from fiduciary returns 1041 Schedule K1 1065 Schedule K1 from partnership returns 1065 Schedule K1 1120S Schedule K1 from Sub Chapter S Corporate returns 1120s Schedule L Assets Schedule L Balance Sheet Assets Schedule L Liabilities Schedule L Liabilities amp Capital Schedule M1 Schedule M1 Reconciliation of Income loss per books with Income per Return Sched
148. Spouse Spouse taxable income for state purposes Taxable Income Total taxable income Taxable Refund Total Assets Amount of refund that is taxable Total Assets on the Return Total Tax Amount of total tax W2 Wages Form W 2 Federal wage amount Wages Total wages Withholding Total amount of federal tax withholding for a return Drake Software Manual Copyrighted Material 266 Appendix 2007 DRAKE SOFTWARE EF BANKING REPORT KEYWORDS Use the following keywords when creating reports on electronic filing and banking data Keyword Description Add On Fee Software add on fee as entered on the firm setup screen Bank Accepted Indicates that a bank product was accepted Bank Code Bank blank no bank B1 Bank1 Chase RB Republic Bank SB Santa Barbara Bank Declined Indicates that a bank product was declined Bank Fee Fees paid to the bank Bank Flipped Indicates that a bank product was flipped Bank Pending Bank Product Indicates that a bank product is pending Indicates that a return includes a bank product Card Check Amount 1 Card number for Stored Value Card products Amount of check 1 Check Amount 2 Amount of check 2 Check Amount 3 Amount of check 3 Check Amount 4 Amount of check 4 Check Amount 5 Amount of check 5 Check Amount 6 Amount of check 6 Check Amount 7 Amount of check 7 Check Amount 8 Amount
149. Support Web site Training Tools gt Manuals DOCUMENT MANAGER The DDM is installed with Drake Tax Software Look for the DDM icon on your desktop Use the Drake Document Manager DDM to create an electronic organizational file structure for storing office documents Use the DDM to store PDF versions of tax returns scanned Form 8879s copies of driver s licenses and any other documents related to your business New in 2007 you can password protect files within DDM create new text Word or NEW FOR Excel files and open the DDM to the last selected folder You can also link external documents to a DDM folder Linked documents do not 70 07 have to be moved into the document manager structure Also new in 2007 you can select and attach multiple documents from a DDM folder to an e mail message Previously you could attach only one document per e mail The DDM file structure has three main levels Think of it as a virtual filing cabinet with drawers in the cabinet and folders in the drawers Level 1 is the cabinet Level 2 is the drawer and Level 3 is the folder Folders may also have sub folders Documents reside in the folders and sub folders Before storing items in the DDM determine the type of file structure to use Also review each setup option to determine which items your office may require SETTING UP THE DDM Review the following setup sections before you begin working in the DDM Technical Requirements The DDM application
150. TANT Always back up Drake files and the QuickBooks files prior to importing client files Prepare the QuickBooks File Before QuickBooks files can be imported into Drake Software they first must be placed into an import file inside QuickBooks To create the import file from inside QuickBooks select Report Accountant gt Taxes Income gt Tax Summary Click the Print tab to bring up the Print dialog box 1 Select the option button to the left of FILE 2 Select ASCII text file and press ENTER 3 Enter a file name of eight characters or less with no spaces Import Quickbooks Data To import data from a QuickBooks import file into Drake Software 1 Select Tools gt File Maintenance gt QuickBooks Import 2 Click Next 3 In Step 1 type in the name of the import file created from QuickBooks or Browse to the QuickBooks file The file extension is txt Drake searches the local hard drive C for the import file created by QuickBooks 4 In Client ID Number enter the EIN SSN for the file to be imported The program searches for a Drake file with the same EIN SSN If no Drake file is found with that EIN SSN you are prompted to create the file 5 Answer Yes and select a file type You are asked to confirm the file type selected e If Yes the file type is confirmed and the program begins importing the file If No because the file type is entered incorrectly the program displays the Change File Type screen Make necessary chan
151. The potential RAL and Bonus amounts may be calculated by checking the RAL and Bonus fields There are two override fields Override RAL amount and Prep fees w h Amounts entered in these fields override amounts entered on the Firm screen To calculate a return in the Quick Estimator press CTRL C The return may also be viewed Remember this is only for estimating taxes A full return should be prepared later MEO RTANT Information from the Quick Estimator flows to the full tax program and may need adjusting Drake Software Manual Copyrighted Material 222 Tools 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 223 Reports Drake Software offers several reporting options from the Reports menu This chapter reviews the Report Manager Report Viewer Depreciation List Fixed Asset Manager REPORT MANAGER The Report Manager provides a centralized location for managing reports Choose from predefined reports edit existing reports or create new reports using custom filters Include current and prior year data in reports and saved reports as CSV comma separated value Excel or TXT Notepad files From the Home window go to Reports gt Report Manager THE REPORT MANAGER WINDOW The Report Manager uses a standard tree format Click a plus sign to the left of a report options or highlight an option and from the numeric keypad of your keyboard press the plus sign to expand
152. This revision can be done online at www irs gov after signing up for IRS e services program Q Obtain IRS publications Order publications from the IRS or print them directly from the IRS Web site at www irs gov Contact the States Q Obtain state applications Some states require applications to file returns electronically so contact those states early to apply State information is available on the Fed State Facts page at www Support DrakeSoftware com Q Check state requirements for bank products Check with your state for special applications to offer bank products and contact appropriate states that may require different forms Q Check for state electronic filing mandates Mandates vary from state to state Q Check state requirements for business returns Requirements vary for e filing of business returns Contact Drake Q 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 go to www Support DrakeSoftware com and click My Account to make changes online Prepare to Offer Bank Products Q Complete the Drake bank application Go to www Support DrakeSoftware com Choose a bank Review bank information then complete the application or contract Order check stock Test print check After installing the software set check ranges and test print a check Ooov Set bank fees a
153. To in the New Message window to access address book options Drake Software Support Address Book The Drake Support Address Book displays general e mail addresses at Drake such as Support Accounting Spanish Support and federal and state programmers To insert an address in the To field click on a General e mail address or a Federal programmer category double click the desired state or highlight the state and click OK E mail questions to various Drake Software departments E mail questions to Drake s federal tax programmers Select Specific EMail Address eneral EMail Addresses Accounting Client Services Support Sales Windows Support Spanish Support Online Filing Support Feedback deral Support Electronic Filing Personal Corporation Fiduciary Federal Partnership Sub 5 Corporation Gift Estate Exempt State Support Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana lowa Kansas Kentucky Louisiana Maine Cancel Drake Software Client Address Book E mail questions to any of Drake s state tax programmers An e mail address is entered on screen 1 of aclient s return can be accessed from the Drake Software Manual Drake Software Client Address Book To fill this address book for the first time go to Tools gt Repair Index Files Select an e mail address from the left
154. Update below The component Program Files amp 1040 is required and therefore disabled State City programs update automatically unless unselected Use a Drake Tax Software CD Release to install missing State City programs or go to Tools gt Install Updates This will automate your updates Z 1041 Fiduciary ih MV Document Manager Installed States Cities States Cities To Update 1120 Corporation M 990 Tax Exempt IV Activate AutoUpdates Select download time 11205 S Corporation IV 706 Estate Tax Auto install updates Hour 03 1065 Partnership M 709 Gift Tax Manually install updates Minute 00 ND North Dakota a AL Alabama NE Nebraska J HOE E FL Florida NH New Hampshire GA Georgia NJ New Jersey NC North Carolina NM New Mexico Select All gt SC South Carolina NY New York OH Ohio OK Oklahoma sumac OR Oregon PA Pennsylvania lt Unselect All RI Rhode Island SC South Carolina TN Tennessee TX Texas Help Cancel Click Save when profile setup is complete Automating the Update Process If you have a continuous Internet connection you can have updates automatically downloaded and installed at a predetermined time N OTE All instances of Drake must be closed at the time of automated download The downloading computer or server must be left on and online To automate updates complete the following steps 1 Go to Setup gt Update Profile
155. View and Print modes on page 144 Return Notes The Return Notes section displays informational notes about the return Return notes provide details about the return but do not require that changes be made to the return They do not prevent electronic filing Return notes appear in the NOTES page in view mode See Working in View and Print modes on page 144 Fee Type and Amount The Fee Type and Amount columns list the preparer electronic filing and bank fee amounts charged A detailed breakdown of the fees can be seen on the BILL page in view mode See Working in View and Print modes on page 144 N ITE Drake does not display by default the fee type and amount in Summary To have these items displayed go to Setup gt Options Under Calculation amp View Print check Display client fee on calculation screen Drake Software Manual Copyrighted Material 142 Return Results 2007 DRAKE SOFTWARE Calculation Details The Details tab displays return amounts in an easy to read format Drake 2007 Calculation Results 600 00 1020 DE LA HALO TEST amp Summary Details Federal are PETEN A eee T a E D cel aaa TE NE e T EN Me Click Print at the bottom of the Details window to print the calculation details displayed Proceeding from Calculation Results If you accessed Calculation Results from data entry click Continue to resume data entry If you accessed Calculation Results as part of t
156. WARE DELETING A REPORT Only a report in My Reports can be deleted To delete a report complete the following steps select the report to delete then click Delete Report You will be prompted to confirm the deletion FILTER MANAGER Use the Filter Manager to customize report filters and refine output To access the Filter Manager click Edit Filters from Report Editor Step 2 See Creating a Report Procedure 2 on page 226 The Available Filters consist of Basic Search Conditions for the Selected Filter and Additional Search Conditions for the Selected Filter Drake 2007 Filter Manager Filter Manager The Filter Manager allows you to customize the behavior of Report defined by several Basic Search Conditions and up to 10 additional Conditions The softwa filter the resulting list of clients Select a Filter from list on the left Edit the selected Filter s prb the changes lable Filters Basic Search Conditions for the Selected Filter ients How Eater Return Type is Any ents All Clients Business a Edit All Clients By Name P All Corporate 1120 Clients Copy Filter All Estate Tax 706 Clients an Icke 1040 ea Rename Filter Additonal Search Conditions for the Selected Filter All Partnership 1065 Clients All S Corporate 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 Amendm
157. WN for more screens Drake Software Manual Copyrighted Material 96 Return Preparation 2007 DRAKE SOFTWARE Take the following steps to complete Form W 2 in Drake Follow these same instructions for Form W2 G except where otherwise specified 1 Under the General tab click Wages or type W2 into the Selector field click Gambling Income or type W2G for Form W2 G and press ENTER N OTE If a screen already contains data an Existing Forms List screen appears Select New Record and click Open Select a listed record and click Open to edit it 2 Enter or select data for each field accordingly Select any boxes that apply 3 Press ESC to save and close Note that the number of forms entered if more than one is displayed next to the form name General income Adjustments Credits 1 Name and Address 2 Dependents 3 3 Income 4 Adjustments 5 Payments h ES Estimated Taxes 2441 Child Care Credit W2 Wages 2 W26 Gambling Income 1099 1099 R Retirement Eana y E CE lace tuaia Listed below are important points to remember when entering W 2 and W 2G data e Federal ID Number If the EIN is already entered on the W2 screen the corresponding fields are automatically filled e Wages W2 only When wages are entered in box 1 boxes 3 6 are filled automatically Ensure that these amounts match those in the actual W 2 e ITIN SSN Override W2 only If the W 2 recipient has an ITIN on screen 1 and th
158. a category list and display the available reports in that category Click a minus sign to the left of one of the report options or press the minus key on the numeric pad of your keyboard to collapse the list hiding the reports in a category Drake 2007 Report Manager Drake Software Reports The list below contains several standard report options First select a category and then a report 4 sample of the selected report appears at the bottom of the screen When you have selected the report you wish to run click View Repott to continue SaaS SOPreefined Reports ee are in Client Reports or EF Bank Report EF Bank Reports ary Reports Sample Client Report Sample EF Report Edited reports and Other Report Options new reports are saved in My Reports Report Description Report layout Sample Report Sample EF report that can be used as a starting point for generating new Custom Portrait reports Sample EF Report Selected f Taxpayer ID Taxpayer Hame Transmission Date Ack Date Ack Code Columns Report Buttons New Report Edit Report Delete Repot Exit Predefined Reports Predefined reports are available in the Client Report and EF Bank Report categories You can use predefined reports as a basis for creating customized reports When planning reports for your office consider beginning with a predefined report that already includes most of the information you require Drake Software
159. a entry such as accepted entries and tax law specifics To access field help place the cursor in the field and press F1 or right click the field and select View Help The Data Entry Help window opens Drake Software Data Entry Help Months in home Direct entry Enter the number of months the dependent lived at home If the child was born during the year or died during the year and was considered to be in the home 12 months then enter 12 here If the field is blank then 12 months is assumed NOTE If you need to indicate that this dependent is not a US citizen or resident alien please mark the box on this screen titled Not US Citizen or Resident Alien Use the information in that field to help determine the residency status ERE Scien en AR E a O s Print field help Click Print from Data Entry Help If necessary adjust the Print settings and click OK Copy field help Click Copy from Data Entry Help The data remains on the Windows clipboard until it is pasted in another document N DTE To paste copied text press CTRL V Screen Help Screen level help provides detailed explanation of a screen and its associated form To access Screen Help click Screen Help at the top right corner of a screen Screen Hep AEE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 23 The RIA Form Line Finder can be accessed through Screen Help to locate information on the most commonly
160. a is read only and cannot be changed and other cells can be edited by entering amounts directly into the cells Read only cells are shaded gray To enter data in cells click a cell to activate it The active cell is the one with a heavy black border and sometimes an arrow with a drop list If a cell is activated and an arrow appears to the right of the cell click the arrow to view a list of selections Tabs Each time a planner is created the Tax Planner opens to the Client Setup tab Each of the other tabs correspond with sections of the 1040 The Summary tab does not accept direct entries Instead click a cell from the Summary tab to jump to its corresponding tab where you can make direct entries To move through the tabs click Next or Back on each screen click a tab at the bottom of the window or select Go to from the toolbar and select the desired tab Certain tabs are hidden New for 2007 the W 2 C D E and F tabs are accessible from the Income tab Double click a cell for one of these forms to open a worksheet for that form After making entries return to the Income tab and the worksheet is hidden Hidden worksheets can be accessed form the Go To list on the toolbar Selecting a Planning Preference Choose a planning preference from the Client Setup list Select multi year or multi case Multi year provides long range planning for up to seven years Select Options and choose Case Options to change the number
161. age and click Delete or click Delete in an open message Deleted messages go to Trash Attach Files Use one of the following methods to attach files to an e mail message Add Client File When contacting Drake Support with an issue you may be asked to attach a client file to an e mail To do so complete the following procedure 1 Inthe New Message window click Attach 2 Click Add Client File s in the Attachment window 3 Enter the client SSN or EIN then click OK to open Attach Client File s which lists all files saved in the client s 2007 DDM folder 4 Select a file hold down the CTRL button to select multiple files and click OK N OTE For more details on the DDM and saving client files see Document Manager on page 235 5 The attached client file is listed in Attachments To add more files click Add Client File again To remove a file select the file and click Remove Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE 6 Click Done when finished Add File Resources and Support 197 Use this conventional option to add other types of files to an e mail message 1 Inthe New Message window click Attach 2 Click Add File in the Attachment window 3 Browse for the file and click Open 4 The attached file appears in Attachments To add another file click Add File To remove a file select the file and click Remove 5 Click Done when finished Address Book Options Click
162. air Index Files and Repair All before accessing the test returns in the program Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE 25 PRESEASON Drake Software Manual Copyrighted Material 26 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 27 Installation amp Setup The information in this section is for the person responsible for installation setup and other administrative tasks regarding the software The 2007 Drake Software CD includes the federal packages state packages and PDF995 software required for printing PDF files For instructions on installing PDF software go to page 65 State programs are included on the January release of the software Both federal and state programs are updated with each software release You can also download updates daily through the software See Installing Updates on page 205 After installing the software complete the required and recommended software settings Setup instruction begins on page 32 SYSTEM REQUIREMENTS 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 MHz or higher e For optimum performance 540 megabytes MB available ha
163. al check issued will not be cashed If you do not physically possess a check that needs to be reissued for example if a check is lost missing or stolen follow procedures for a lost or stolen check Do not reprint the check Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 173 POST SEASON PROCEDURES Complete the following tasks after tax season has ended e Return Completed Bank Applications Refer to your bank s operating procedure to determine the proper holding of taxpayer bank applications e Return or Destroy Remaining Check Stock Refer to your bank s operating instructions to determine proper handling of excess check stock e Notify Drake of Closing If your office is closing for any extended period between April and October notify Drake so the bank can print any late checks BANK FORMS AVAILABLE IN DRAKE Access blank forms to view and print documents related to banking and bank products From the Home window select Tools gt Blank Forms to access the following forms form file names are provided in parentheses next to each form name Voided Check Return List VOID_CK PG Used to track all RAL Bonu checks voided in the office Retain a copy of this form as a record Also send a copy to the RAL bank along with the corresponding voided checks Check Register REGISTER PG Enables accurate record keeping of all RAL checks both voided and issued in
164. ame The software searches for and highlights the record 3 Click Close UPDATING DATA IN CSM When the CSM is open click Refresh periodically to incorporate the latest return updates FILTERING DATA IN THE CSM Filters determine what records display in the CSM To select a filter take the following steps 1 Click Filters to open the Filters menu which is divided into four sections All Preparers and Current Preparer Status Types Return Types and Hide and Display 2 Select a filter You can select one filter item from each section to build a complex filter The selected filter displays with a checkmark For example if you chose All Preparers All Status Types and Individual 1040 the CSM shows only the items that match those criteria N OTE In the Status column a red File Not Found message indicates a deleted return Deleted files remain in the CSM for tracking purposes Drake Software Manual Copyrighted Material 182 Client Status Manager 2007 DRAKE SOFTWARE eS Srey p p x amp AS VW W hy Refresh Filters N Quick View Reports Expor v All Preparers Last Chang ISAN A Current Preparer 08 27 2007 J 08 27 2007 y 4ll Status Types 08 27 2004 Work In Progress 08 27 2007 NDA Completed Returns 05 10 2007 EF Not Sent 08 27 2007 EF Pendin 08 13 2007 9 06 18 2007 EF Accepted 07 10 200 EF Rejected 08 27 2007 Missing Files 08 27 2007 YN 08 27 2007 v All Return Types 07 24 2007 ASFA All Business
165. ance Instance of rejected form For example first or second schedule C Reject 1 Sequence Sequence number of the reject Sequence numbers correspond to IRS documentation Reject 2 Code Reject 2 Form Reject code for first reject To look up the reject code see the Search EF Database utility Rejected form name Reject 2 Instance Instance of rejected form For example first or second schedule C Reject 2 Sequence Sequence number of the reject Sequence numbers correspond to IRS documentation Reject 3 Code Reject code for first reject To look up the reject code see the Search EF Database utility Reject 3 Form Rejected form name Reject 3 Instance Reject 3 Sequence Instance of rejected form For example first or second schedule C Sequence number of the reject Sequence numbers correspond to IRS documentation RSN Return Sequence Number unique document identifier for a transmission return Service Center Name of service center State Filed Two character state abbreviation of the state return filed Transmission Date Date the return was transmitted Transmission Time Time the return was transmitted TRSN Transmitter Return Sequence Number of the filed return Extension Only Extension only indicator Form 8836 Form 8836 indicator Form 8862 Form 8862 indicator Form 9465 Form 9465 ONLY indicator Thi
166. and five digit PIN If the IRS is allowed to discuss the return with the default third party designee already established leave all fields blank e Other Preparer Information For returns prepared by firms not set up in Drake enter firm demographic information in the Federal and State Preparer Information boxes of the PREP screen Overriding Default Print Options Print Options enable you to override default print options for a specific return From Other click PRNT or type PRNT into the Selector field and press ENTER PRNT no longer has a Letter override If you used Letter override on the PRNT screen in 2006 you can choose whether to update that letter selection to LTR when the return is brought forward Drake Software Manual Copyrighted Material 134 Return Preparation 2007 DRAKE SOFTWARE Print options relate to the following e Suppressing or printing certain forms schedules and worksheets e Printing or suppressing next year information proforma organizer depreciation listings e Printing summaries and comparisons e Printing or suppressing cover sheets dates and filing instructions e Disaster designations Click F1 within fields for further information the available options Unformatted Statements Use SCH to add certain statements and explanations not supported elsewhere in the return From Other click Unformatted Statement or type SCH into the Selector field and press ENTER Type of Attachmen
167. and press ENTER e Form 3903 qualification Due to time and distance limitation exceptions Drake does not prevent Form 3903 Moving Expenses from calculating even if the taxpayer does not meet the mileage test The preparer determines if the taxpayer qualifies for the moving expense deduction See Pub 521 for details e Multiple moves If there are multiple qualifying moves within a single year use a separate Form 3903 for each move Press PAGE DOWN for additional forms IRAs and Savings Accounts Access IRA and savings accounts screens and from Adjustments or type the applicable code into the Selector field and press ENTER Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 119 ee a E General Income Adjustments redits ale SE Self Employment Adjustment 8829 Office in Home AUTO Auto worksheet for Schedule 8873 Extraterritorial Income Excl 3903 Moving Expenses IRA Penalty Computation IRA Contributions Roth IRA Medical Savings Account Health Savings Account 8917 Tuition and Fees Deduction A TA hee bt OS SEHI SE Health Insurance SE Pensions OF ee eee e Penalty Calculations Use the IRA Penalty Computation screen to calculate what penalties apply This screen reflects IRS Form 5329 Additional Taxes on Qualified Plans Including IRAs and Other Tax Favored Accounts Exception numbers 01 and 06 Part 11 Line 2 apply only to distributions from qualified employee pla
168. anges and click Continue See Editing Search Conditions on page 231 If a previously saved version of the report is detected you are prompted to click Yes to create the report again using the most current data or click No to open the previously saved report If Yes The report is re created using current data If a Basic Search Conditions box appears make any desired changes and click Continue See Editing Search Conditions on page 231 If No The previously run report is opened The report is displayed in a Report Viewer REPORT VIEWER All reports open in a Report Viewer From this window view print or export the report Also all previously run reports can be viewed from the Report View Print Utility or Report Viewer located on the Reports menu The Report Viewer toolbar provides the following functions e Print Prints the report e Export Opens the report in your choice of formats XLS Excel CSV comma separated value or TXT Notepad When exporting to CSV the file is saved in Drake07 Reports Select a different location by browsing from the Save CSV file window e First Previous Next Last Navigates to the first page the next page the previous page or the last page of the report Keyboard arrow keys and PAGE UP and PAGE DOWN keys also navigate the report window e Font Allows you to choose the font size from 8 9 10 12 14 and 16 point e Exit Exits the Report View
169. appointment available by preparer complete the following 1 Click Find Next Appt from the Appointment Detail toolbar to open Find Next Appointment Find Next Appointment Starting Date 10 15 2007 Preparer chris X Date Day of Week Time 10 15 2007 Monday 03 45 Ph 10 15 2 04 00 P d 04 1 2007 10 15 2007 Monday 15 Ph 10 15 2007 Monday 04 30 Ph 10 15 2007 Monday 04 45 Ph 10 15 2007 Monday 05 00 Ph 10 15 2007 Monday 05 15 Ph 10 15 2007 Monday 05 30 Ph 10 15 2007 Monday 05 45 Ph 10 15 2007 Monday 06 00 Ph Select Start Over Find More 2 Choose a preparer from the Preparer list 3 Select a Starting Date to searches for appointment times after a specific date 4 Click Find The next available appointment for the preparer is displayed At this point you can highlight an appointment time and click Select click Start Over to do another search click Find More to view the next set of available appointments or click Cancel to close Find Scheduled Appointments To search for a scheduled appointment complete the following steps 1 Click Search from the Scheduler toolbar 2 Enter a search term in the Enter Search Term field Search terms can consists of one or more words 3 Click Search Any instance of the search terms in the Date Name ID Number Preparer or Time fields is displayed by appointment Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 83 4 Doub
170. 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 r 2 Software installed only on Server preferred network setup Vv N wClient link installed on workstations 3 Software installed on server and workstations secondary network setup r Indicate server drive letter for sharing client files To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below Click OK to close Directories and Paths Setup The server only system is now in place Installing Drake on Multiple Computers This following method is for firms that do not have sufficient system resources to run one copy of Drake from a server Although files may be shared among computers updates must be installed to each computer For files on the server that are not shared you must increment the DCN counter see Staggering the Declaration Control Numbers DCNs on page 36 on each machine to avoid duplicate DCN errors when filing electronically This method allows increased calculation speed on individual machines To implement the designated server system take the following steps 1 2 IMPORTANT Using the instructions in Tax Software Installation on page 28 install the
171. aragraphs Copyrighted Material xiij Index net operating losses 130 networks data paths 44 installing Drake on 30 options 30 setup 30 sharing files 43 new markets credit 123 NOL carryovers 130 noncash charitable contributions 121 nonrecaptured losses 115 nonresident alien 128 notes in return 141 NOTES page 146 NowRAL see bank products NR see nonresident alien office closings 173 online EF database 162 manual 2 training see Drake ETC opening a return 8 organizers 72 orphan drug credit 123 overpayments 94 override dependent type 91 electronic filing options 102 fields 15 fields changing default format 47 letters 131 preparer fees 90 parsonage 121 part year residency 89 138 passive activities credit limitations 122 depreciable asset sales 110 flowing correctly from K 1 105 loss limitations 102 104 passive income 105 pass through entities 105 password protect files 212 passwords 6 32 paths setup 43 pause option for calculation 47 143 Pay Per Return 42 payroll see Client Write Up PDF printer setup 65 Drake Software Manual 2007 DRAKE SOFTWARE penalties 94 pensions 94 120 personal use 105 PG page 146 piggyback 146 153 156 PIN signature 40 plus minus sign for adjustments 15 postcards 217 power of attorney 40 136 PPR see Pay Per Return practice returns 23 preparer alternative 133 generate list of preparers 41 login I
172. aration 89 DEMOGRAPHICS axpayer First Name HUGH Mid Init F LastName ena SAMPLE SU e Phone Number A telephone number is required e Resident State If a taxpayer is a part year resident of the state of residency select PY Part Year in Resident State If you do not want to prepare a state return select 0 Suppress State 12345 PRESQUE ISLE DRIVE Apt No Resident State PLAQUEMINE State LA gt zip 70765 Py zl IBERVILLE ee T a N CANE Of a i S M aa N ee ee ee neondll ON T ea Return Options The information in the Return Options box does not appear on the 1040 Entries override the equivalent data entered in Setup Return Options Fed ST zl Estimated Tax J A zl Overpayment code z z Data Entry 0 0 0 z Receipt ERO eect z Fee Override z N ITE The red equal sign is the default marker in Drake to indicate an override field For more on methods of indicating override and adjustment fields see Overrides and Adjustments on page 15 e Firm and Preparer Defaults are entries in Setup gt Firm s Firm and preparer data appear on Forms 1040 and 8453 Transmittal for e file Return e Data Entry Default is preparer number from Setup gt Preparer Used for tracking purposes only e ERO Default is entry in Setup gt EF Appears on Forms 8453 and or 8879 IRS e file Signature Author
173. are CD Import capital gain and loss transactions into Drake using the Schedule D Import utility Import transaction information from Excel 2007 Excel 97 2003 TAB tab delimited or CSV comma delimited files For the information to import correctly the spreadsheet must contain specific columns of information Each column represents the fields on the D screen TSJ F State City Description Acquired Sold Sales Price Cost or Basis S L Misc The required columns are demonstrated in the following image Example Spreadsheet 1 2 3 4 5 6 7 8 9 Drake Software Manual A 8 c E F G H 1 dalek TS F State City Description Acquired Sold Sales Price Cost or Basis S L Misc T NC 100 SHS ABC Stock 10191992 12192007 3 987 00 4 880 00 NC 200 SHS Microsoft 12171995 12152007 1 374 00 3 242 00 GA 200 SHS Apple Inc 10181993 11152007 4 266 00 1 870 00 SC 100 SHS ABC Stock 11041998 11122007 2 933 00 3 820 00 NC 200 SHS Microsoft 12252006 12172007 2 275 00 4 126 00 NC 200 SHS Apple Inc 09121999 11142007 1 866 00 2 799 00 NC 100 SHS ABC Stock 12042004 12132007 2 091 00 1 886 00 NC 200 SHS Microsoft 07121998 08052007 4 407 00 3 024 00 NC 200 SHS Apple Inc 04051997 07072007 4 145 00 3 292 00 NC 100 SHS ABC Stock 05191991 08222007 1 666 00 934 00 NC 200 SHS Microsoft 02092005 06072007 757 00 2 905 00 S J T S J T S J T S To import the information complete the following steps 1 From within the client s
174. are Manual State estimate payment 2nd quarter after overpayment applied other tax type 1 Copyrighted Material 2007 DRAKE SOFTWARE Appendix 281 ST OtherTax1 2nd Qtr Overpayment Applied State overpayment applied 2nd quarter other tax type 1 ST OtherTax1 2nd Qtr Total Est Amt 2nd Qtr state estimate amount overpayment applied and amount due other tax type 1 ST OtherTax1 3rd Qtr Estimate Amt Due State estimate payment 3rd quarter after overpayment applied other tax type 1 ST OtherTax1 3rd Qtr Overpayment Applied State overpayment applied 3rd quarter other tax type 1 ST OtherTax1 3rd Qtr Total Est Amt 3rd Qtr state estimate amount overpayment applied and amount due other tax type 1 ST OtherTax1 4th Qtr Estimate Amt Due State estimate payment 4th quarter after overpayment applied other tax type 1 ST OtherTax1 4th Qtr Overpayment Applied ST OtherTax1 4th Qtr Total Est Amt State overpayment applied 4th quarter other tax type 1 4th Qtr state estimate amount overpayment applied and amount due other tax type 1 ST OtherTax2 Balance Due ST OtherTax2 Balance Due Paragraph Balance due from state return being prepared other tax type 2 Inserts paragraph for balance due on state return other tax type 2 ST OtherTax2 Due Date State due date other tax type 2 ST OtherTax2 Estimate Amt for ES Letter Amount of state estimate due for the
175. are Manual Copyrighted Material 8 Basics 2007 DRAKE SOFTWARE RECENT FILES The Recent Files list displays the most recent files up to nine opened in data entry Click a client file or type its key number to open it in data entry APPOINTMENTS The Appointments list displays the current day s appointments for the logged in preparer To access the schedule click Open Scheduler MESSAGE CENTER The Message Center lists important electronic notifications including messages that you have data to download or software to install STATUS BAR The status bar displays the current User Name the date the software was last Updated the Drive on which Drake is installed the computer s Operating System and the current Date CREATING AND OPENING RETURNS From the Home window click Open New or go to File gt Open Create Returns to open the Open Create a New Return dialog box To open a return use any of the following methods Select a Name from the left hand column of recently opened returns Type the client SSN EIN or last name then click OK or press ENTER The closest match is shown If a name was entered the corresponding SSN EIN appears with the match Select a return type to the right of the listing then select the client from the client list Press ENTER to view all available records then select from the client list and click OK To create a return use the following procedure 1 2 Enter an SSN or EIN and c
176. arty Designee PIN if indicated on the Setup gt Options Optional Items on a Return tab e Use PIN for 8879 PIN Signature Check this box to enable the 8879 PIN signature e Use PIN for Alternative Electronic Signature Check this box to enable the Alternative Electronic Signature N OTE For more on alternative electronic signatures see Entering Alternative Preparer Data on page 133 6 Enter Power of Attorney information if applicable Choose a Preparer Designation If the preparer has a Central Authorization Number from the IRS enter it in the CAF field Also enter the jurisdiction for which the information is valid Enrolled agents should enter enrollment numbers in the Jurisdiction field N OTE Power of Attorney information is used only for Form 2848 Power of Attorney and Declaration of Representative 7 Enter W 7 Acceptance Agent information for the preparer if applicable 8 Enter the Preparer LTP Number for Oregon Tax Preparers if applicable 9 Click Save to save changes Click Cancel to close without saving Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 41 Setting up Preparer Security A security setting is required before a preparer can begin working in the software Use Security Options in Preparer Setup to define and limit which functions a preparer can access Two security options are available e Custom Security Determine specific screens a preparer
177. ast name if different 91 months in home 91 overrides 91 depreciation entering 106 for Schedule C 103 GO Zone 111 group sales 110 installment sales 110 like kind exchanges 110 115 list report 232 MACRS 110 method 107 of home 117 passive activity sales 110 placed in service 110 prior year 107 recapture 109 115 rental properties 110 sales of assets 110 state specific 109 depreciation see also Section 179 106 detail worksheet 18 details calculation 142 direct debit 101 direct deposit 101 directories setup 43 disabled access credit 123 disaster payments crops 103 dividend income 93 Document Manager see Drake Document Manager domestic production activities deduction DPAD 122 downloading fonts 207 Drake Document Manager adding files to folders 240 audit logs 243 building the index 237 creating cabinets 240 creating drawers 240 creating folders 240 data path 237 dragging and dropping 242 file structures 236 installing 235 integrating with Drake 236 linking files 241 managing files 241 navigating 238 Drake Software Manual Index vii opening 237 opening new files 241 password protecting 243 scanning files 241 searching 239 selecting a scanner 237 setup 65 technical requirements 235 Drake ETC 186 administration 191 creating an account 186 earning CPE 188 logging in 187 navigation 188 practice returns 190 report card 191 tax courses 188 tutor
178. ate DrakeSoftware com Massachusetts mastate DrakeSoftware com Washington wastate DrakeSoftware com Michigan mistate DrakeSoftware com West Virginia wvstate DrakeSoftware com Minnesota mnstate DrakeSoftware com Wisconsin wistate DrakeSoftware com Mississippi msstate DrakeSoftware com Wyoming wystate DrakeSoftware com Missouri mostate DrakeSoftware com Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 201 FAX COVER LETTER FOR SUPPORT Name Company Name EFIN Phone Number Fax Number To department or individual Computer Operating System check one QO Windows 98 O Windows 2000 UO Windows Vista 0 Windows NT U Windows ME U Windows XP Are you working on a network U Yes CI No If this fax is concerning a prior year Drake Program Year program what year Give us a brief description of the situation Drake Software Manual Copyrighted Material 202 Resources and Support 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE 203 PRACTICE MANAGEMENT Drake Software Manual Copyrighted Material 204 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 205 Tools This chapter covers the various tools and file maintenance utilities available on the Tools menu and details on other utilities and tools in Drake INSTALLING UPDATES Install updates daily to ensure you always have the latest version
179. ate direct deposit amount DD Date State Date of state direct deposit DD Date 1 Date of IRS direct deposit DD Date 2 Date of IRS direct deposit DD Date 3 Date of IRS direct deposit DD Date 4 Date of IRS direct deposit DD Prep Date Date prep fees where deposited DD Proc Fee Fees paid to the bank for opening Direct Deposit account DD SB Amt Amount of service bureau fees direct deposited DD SB Date Date that service bureau fees were direct deposited Debt Chase Prior debt to Bank One Chase Debt Chemical Bank Prior debt to Chemical Bank Debt CO BK Prior debt to CO BK Debt FB DE Prior debt to FB DE Debt FSB Prior debt to FSB Debt MEL Prior debt to MEL Debt RCB Prior debt to RCB Debt REP Prior debt to REP Debt SBBT Prior debt to Santa Barbara Bank and Trust Decline Number Reason the loan was declined An updated list can be obtained from your bank EF Fee Amount paid to preparer for e filing the return as entered on the firm setup screen Flipped Indicated a RAL that was Flipped to a 2 week check Fees Deposited Amount that HAS BEEN direct deposited to the preparer IRAL Indicates that a return was submitted for an Instant RAL IRAL Accepted Indicates that a return was accepted for an IRAL IRAL Amount Instant refund anticipation loan amount IRAL Declined Indicates that a return was declined for an IRAL Loan Amount Amount of selected loan Loan Status Status of bank loan BLANK No loan product P Pending
180. ate extension request is required for Form 709 Form 4868 Application for Automatic Extension of Time To File U S Individual Income Tax Return covers extension requests for both documents This form is available in Drake and may be electronically filed e Extension request for 709 only If an extension is needed for the 709 only Form 8892 Application for Automatic Extension of Time To File Form 709 and or Payment of Gift Generation Skipping Transfer Tax must be 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 Schedules A B and C of Form 709 are not the same as Schedules A B and C of NOTE Form 1040 If you are on a Form 709 screen in Drake and enter A B or C into the Selector field and those screens within Form 709 are display To access the more common 1040 schedules you must be in the 1040 Data Entry menu Non resident Alien Income Tax Return Form 1040NR U S Nonresident Alien Income Tax Return can be opened from the Taxes tab or by typing NR into the Selector field and pressing ENTER Although you can enter data for Form 1040NR in Drake this form cannot be MPL RTANT electronically filed it must be mailed See Form 1040NR instructions available on the IRS Web site Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 129 1040
181. ates that a return was accepted Ack Code Federal acknowledgement code Ack Code State State acknowledgement code Ack Date Date of federal acknowledgement Ack Date State Date of state acknowledgement DCN Document Control Number unique per SSN re used for every transmission DD Account IRS direct deposit bank account number DD Account State Account number for state direct deposit DD Account Type Type of account for IRS direct deposit C Checking S Savings DD Account Type State Type of account for state direct deposit C Checking S Savings DD RTN Routing transit number used in IRS direct deposit DD RTN State State routing transit number for direct deposit Debt Code Debt code I IRS debt F FMS debt student loans child support etc B both IRS and FMS debt Extension Indicates that an extension was filed Never Accepted Indicates that a return that has never been accepted by the IRS Never Accepted State Indicates that a return that has never been accepted by the state PIN Taxpayer Taxpayer s personal identification number Reject Codes Summary of the reject codes that are present on the return Reject 1 Code Reject 1 Form Reject code for first reject To look up the reject code see the Search EF Database utility Rejected form name Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 271 Reject 1 Inst
182. ation Credits Hope and Lifetime Learning Credits See Adding a Dependent on page 90 Form 8867 Preparer s Earned Income Credit Checklist This form can be used to adjust EIC program calculations and must be completed for returns with EIC and no qualifying children If a return qualifies for EIC but the 8867 is not completed then the program produces a message page and the return is not eligible for filing electronically Form 8864 Biodiesel and Renewable Diesel Fuels Credit Form 8874 New Markets Credit Form 8880 Credit for Qualified Retirement Savings Contributions Form 8881 Credit for Small Employer Pension Plan Startup Costs Form 8882 Credit for Employer Provided Childcare Facilities and Services Form 8885 Health Coverage Tax Credit Form 8896 Low Sulfur Diesel Fuel Production Credit Form 8907 Nonconventional Source Fuel Credit Form 8908 Energy Efficient Home Credit Form 8909 Energy Efficient Appliance Credit Form 8910 Alternative Motor Vehicle Credit Drake Software Manual Copyrighted Material 124 Return Preparation 2007 DRAKE SOFTWARE e Form 8911 Alternative Fuel Vehicle Refueling Property Credit e Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds e Form 8917 Tuition and Fees Deduction See Tuition and Fees Deduction on page 120 1040 TAXES TAB Selections listed under Taxes enable further completion of the Payments section of the 1040 Enter data relating to the following top
183. ator the quizzes help you track the progress of your firm s employees as they 2007 DRAKE SOFTWARE Choose Tutorials or Quizzes Tutorials Appointment Scheduler A eee eel Client Status Manager eena m Y E Direct Deposit Screen CIII mmo Drake setup E Drake Tax Planner a ao mm a Electronic Filing in Spanish oe Email to Drake Sae O m Introduction to Data Entry oom Y train to use Drake Software through Drake ETC tutorials PRACTICE RETURNS Click the Practice Returns tab from the toolbar Basic and intermediate data entry practice returns are available Click Launch to open the PDF document Prepare a return in data entry according to the scenario Calculate the return and compare it to the corresponding solution To practice filing returns electronically and working with bank products scroll to Electronic Filing and Banking and click Launch Follow the instructions located on the PDF NOTE Training Tools menu Drake Software Manual Practice returns and Tutorials are also available on the Drake Support website Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 191 REPORT CARD Click the Report Card tab from the toolbar View the following e Training Progress View courses completed description date started and date completed e Test Results View results of each test completed Each course and description is listed only once and the h
184. ayer s bank account type for city direct deposit or direct debit City Total Estimate Total city estimate amount Current Date Today s date Current Tax Year Current tax year DCN Declaration Control Number DCN of return Dependent Name and SSN End Paragraph Name and SSN of dependeni s Ends a conditional paragraph End of Letter End of letter Entity Name Name of business partnership organization or decedent for 706 Estimate Payment Number Estimate payment number for federal or state estimate Federal Additional Child Tax Credit Amount of additional child tax credits on federal return Federal AGI Adjusted Gross Income AGI on federal return Federal Amended Bal Due Inserts paragraph for balance due on federal amended return Paragraph Federal Amended Balance Due Amended balance due from federal return Federal Amended Refund Amended refund from federal return Federal Amended Refund Paragraph Federal Amended Return Paragraph Inserts paragraph for refund on federal amended return Inserts paragraph for federal amended return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 275 Federal Amended Zero Due Paragraph Inserts paragraph for zero due on federal amended return Federal Balance Due Balance due from federal return Federal Balance Due Paragraph Federal Bank Product Insert
185. ayer s casual rent expense Casualty Cost Casualty Insurance Cost of adjusted basis of a casualty loss or theft Amount of insurance or other reimbursement from a casualty or loss Casualty Property Date Acquired date of casualty or theft property Casualty Property Description Description of casualty property from Form 4684 Casualty Property Location Location of Casualty Property Casualty Property Type Type of casualty loss or theft City City in the taxpayer s address Client 06 Indicates the client was active in the Prior Year Client 07 Indicates the client is active in the Current Year Client Inactive Indicates the client has not returned as a client from Prior Year Client New Indicates the client is a new client for the Current Year Client Retention Indicates the number of years as a client Calculated from the First Year field on the TRAC screen Client Returning County Indicates the client is a returning client from the Prior Year County in which the taxpayer resides Dep of Another SP Spouse is dependent of another Dep of Another TP Primary taxpayer is dependent of another Dependent no EIC Dependent is not eligible for earned income credit purposes Dependent Other Dependent is not son daughter or child Dependent Age Age of the Dependent Dependent Birthday Dependent
186. b and check Duplex Printing Sets Use Print Sets to customize the forms printed with each set Sets may be defined in Printer Setup or in the Printer dialog box as forms are printed Follow the instructions below to define sets in Printer Setup 1 2 3 Drake Software Manual On the menu bar go to Setup gt Printing gt Printer Setup Click Sets The Copies Per Set window opens Select a Form Category The package selected determines the choices available in the Form Name list Double click to select a form The default information for that form fills the form In the boxes under each set name EF Signature Est Ext Client Preparer and Federal 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 Click Update Repeat steps 3 6 for each form or determine set numbers for only the most common forms and determine sets for all other forms as they are prepared on the fly See Changing Print Set Settings on the Fly on page 64 Click Save or press ESC to save and exit Copyrighted Material 64 Installation amp Setup 2007 DRAKE SOFTWARE Changing Print Set Settings on the Fly Editing on the fly applies settings globally changing the Printer Setup Sets settings therefore changing a form s set amount on the fly changes the amount for all future set printing not just on a per return basis To change or add prin
187. be viewed printed or exported from the Check Register dialog box To print the check register take the following steps 1 From the Home window select EF gt Check Register to open the 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 Use the toolbar buttons to print export or scroll through the register The Check Register must be transmitted to Drake Software in order for you to M PI RTANT receive fees from the bank When there is a new check register to send the program automatically detects the register and transmits it the next time Transmit Receive is run Drake recommends transmitting after printing large batches of checks USING THE EF DATABASE The EF Database displays information about all returns that have been electronically filed for the current tax year Peer to Peer Networks Only In order for the non transmitting workstations to view N OTE the EF Database the drive letter assigned to the transmitting machine must be entered in the Shared Drive Letter field in Directories and Paths Setup See Directories and Paths Setup on page 43 for more information Use the following procedure to access the EF Database search function 1 From the Home window click EF gt Search EF Database 2 Using the SSN EIN Name To Sea
188. binet drawers labeled 0 9 and A Z folders in each drawer for each client labeled by last name or business name a Tax sub folder and a 2007 sub folder When you create a return for a new client in Drake Software the New Return dialog box requires entry of the client s first and last name or business name for business returns This ensures a new client folder is created in the DDM See Creating and Opening Returns on page 8 for more on creating a new return The Doc Mgr button in data entry opens the DDM to the client s tax year folder 91005 MAPLE TEST 2346 T3 Tax Planner ao Pent sami When tax returns are printed using PDF995 software see PDF Printer Setup on page 65 they are saved to the correct DDM folder Files saved in a client s folder can be attached through the Drake e mail program For more details see E mail on page 195 To implement the Drake document file structure complete the following steps 1 From the Home window go to Setup gt Printing gt Document Manager 2 Set the Document Manager Location If the default location is incorrect click Search then click Yes to choose the appropriate location 3 Check Allow Drake to set up Document Manager client folders recommended 4 Click Save N OTE If the Drake file structure is introduced into an existing system the Drake structure is added to the existing system The Drake structure does not overwrite it Drake Soft
189. ble IRA s Form 8609 Form 8609 Low income Housing Credit Allocation Certification Form 8611 Form 8611 Recapture of low income housing Credit Form 8615 Form 8615 Tax Computation for Children under 14 with Investment Income Form 8801 Form 8801 Credit for Prior Year Minimum Tax Form 8814 Form 8814 Parent s Election to Report Child s Interest and Dividends Form 8815 Form 8815 Exclusion of Interest from Series EE Bonds Form 8820 Form 8820 Orphan Drug Credit Form 8822 Form 8822 Change of Address Form 8824 Form 8824 Like kind Exchanges Form 8825 Form 8825 Rental Real Estate Form 8826 Form 8826 Disabled Access Credit Form 8828 Form 8828 Recapture of Federal Mortgage Subsidy Form 8829 Form 8829 Office in Home Form 8830 Form 8830 Enhanced Oil Recovery Credit Form 8834 Form 8834 Qualified Electric Vehicle Credit Form 8835 Form 8835 Renewable Electricity Production Credit Form 8839 Form 8839 Qualified Adoption Expense Form 8844 Form 8844 Empowerment Zone Employment Credit Form 8845 Form 8845 Indian Employment Credit Form 8846 Form 8846 Credit for Employer SS and Medicare Taxes Paid on Certain Employee Tips Form 8847 Form 8847 Credit for Contributions to Selected Community Development Corporations Form 8853 Form 8853 Medical Savings Account MSA Form 8857 Form 8857 Request for Innocent Spouse Relief Form 8859 Form 8859 District of Columbia First time Home Buyer Credit Form 8860 Form 8860 Qual
190. c Bank 100 request for innocent spouse relief 136 requests for extensions 130 required setup 34 research credits 122 residence sale 115 residency part year 138 residential energy credits 122 resources contacting Drake 3 data entry help 195 Drake Support Web site 191 Email 195 fax cover sheet 200 Federal State Facts 193 Help System 193 KnowledgeBase 191 state support 200 support contact information 199 result letters see letters retirement plans 122 retirement savings contributions credit 123 Drake Software Manual Index xiii Return Selector 143 returns adding data 11 Alabama extensions 224 calculating 139 151 calculating upon exit 47 comparing with prior year 129 cover letters see letters 55 cover sheets 49 creating and opening 8 deleting data 11 imperfect 50 156 modifying data 11 multiple forms for depreciation 106 111 notes 141 piggyback 156 practice 23 printing 142 145 printing as PDF 148 requests for copies 136 signing for electronic filing 101 splitting joint to separate 17 state 22 statuses 176 summary documents 49 test 23 150 tracking 134 transmitting 153 updating 9 viewing 142 145 RIA form line finder 23 Web site 193 right click menu 22 Roth IRAs 119 rounding amounts 49 royalties 104 sale of residence 115 sales tax 100 Santa Barbara Bank amp Trust 100 savings accounts 118 Schedule A Itemized Deductions 99 10
191. can access e Quick Setup Admin login only Set security to match that of another preparer allow or deny access Creating Custom Security Complete the following steps to customize security settings for a preparer 1 Select a preparer to edit 2 Select Security gt Custom Security 3 In the Preparer Security Setup window select menu items the preparer should be able to access Items left blank will be inaccessible to the preparer 4 Click Save or press ESC to save and exit When prompted click OK Setting Quick Setup Security Options Select a preparer to edit Click Security and choose one of the following options e Set Security to Allow No Options Prevent preparer from accessing any part of the program e Set Security to Allow All Options Give preparer access to all parts of the program e Set Security equal to Preparer Select a preparer whose security settings are to be copied Removing Security Settings To remove rights from all preparers excluding Admin go to Setup gt Preparers from click Remove Rights Creating Preparer Schedules Before you can use the Scheduler program you should create schedules for the preparers Choose a preparer to edit and select Schedule See Scheduler on page 75 for details Printing a List of Preparers Click Print from the Preparer Setup toolbar to print a list of preparers entered in the software Drake Software Manual Copyrighted Material 42
192. ces 1 Divide the allowable amount using the 179 Expense ALLOWED this year field The total of the amounts entered on the different screens must equal the allowable amount calculated by the worksheet 2 Let the system allocate the allowable amount among the current year assets based on a cost basis comparison IRS recommended Example A taxpayer has two assets to expense a 10 000 hay rake and a 15 000 plow It is determined that the business income limitation is 18 000 Of the 25 000 that is 179 elected only 18 000 is deductible The system allocates 7 200 to the hay rake 10 000 25 000 x 18 000 and 10 800 to the plow 15 000 25 000 x 18 000 The remainder of each Section 179 expense that cannot be deducted in the current year is carried forward to future years Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 109 For first year filers using the system the prior Section 179 expense must be entered N OTE manually for the depreciation to calculate correctly In the future the 179 Expense Allowed in Prior Years field will update based on the system calculations added for the 2007 software Other Information Enter investment credit code asset and department number and land value in Other Information on the 4562 screen This section also allows for recapture due to decrease in business use and designation as main home for Form 8829 e Business Use of Home If the 8829 screen is
193. chedule A net operating loss Form 1045A B Form 1045 Schedule A net operating loss and Schedule B net operating loss carryover Drake Software Manual Form 1098 Form 1098 Mortgage Interest Form 1099 A Form 1099 A Form 1099 C Form 1099 C cancellation of debt Form 1099 Div 1099 Div dividend income Form 1099 G Form 1099 G Unemployment Compensation Form 1099 INT Form 1099 INT Interest Income Form 1099 M Form 1099 Misc Form 1099 R Form 1099 R Retirement Pensions Form 1116 Form 1116 Foreign Tax Credit Form 1120 H Form 1120 h US income tax returns for homeowners associations Form 1120W Form 1120W corporation estimated tax Form 1120X Form 1120X Amended US Corporation Income Tax Return Form 1122 Form 1122 authorization and consent of subsidiary corporation to be included in a consolidated inc Form 1139 Form 1139 Application for Tentative Refund for Current Year Loss Carryback Copyrighted Material 258 Appendix 2007 DRAKE SOFTWARE Keyword Description Form 1310 Form 1310 Refund due a Deceased Taxpayer Form 2106 Form 2106 Employee Business Expenses Form 2120 Form 2120 Multiple Support Declaration Form 2210 Form 2210 Penalty for Underpayment of Estimated Tax Form 2439 Form 2439 Notice to Shareholder of Undistr
194. click Save e E mail a DDM File Click Email or right click a file and select Email or press F8 The default e mail program on your computer is opened with the files attached Attach multiple files to an e mail message Hold down the SHIFT key to select multiple files before selecting the Email function Files can also be attached through the Email program See E mail on page 195 e Delete a DDM File Click Delete or right click a file and select Delete The DDM prompts you to confirm the deletion Dragging and Dropping Files in the DDM The drag and drop feature allows files to be moved into the DDM from other locations on your computer You can also drag and drop files within the DDM To enable the drag and drop feature click Drag The following image is displayed A Drag Use your mouse to drag and drop the selected file to the new location Drake Software Manual Copyrighted Material 2007 DRAKE NOTE SOFTWARE Suite Products 243 Password Protecting DDM Files New for 2007 Protect files with a password in the DDM With password protection enabled a password must be entered before accessing files in the DDM e Assign a Password to a File Right click a file and select Password Protection Enter the password twice then click Continue Passwords have an eight character limit and are case sensitive e Open a Password Protected File The Password Protection dialog box launches when you try to ope
195. complete for a return where the home was placed in service during the current year see Form 8829 Expenses for Business Use of Your Home on page 117 NEW FOR tne 20 07 Check Main Home for 8829 if the depreciable item is the residence listed as the taxpayer s main home on Form 8829 Expenses for Business Use of Your Home e Department number This field allows for the entry of up to 999 departments and can be used to track assets and run reports in the Fixed Asset Manager see Fixed Asset Manager on page 232 e Recapture Check if business use for the asset has dropped to 50 or below The software recaptures excess section 179 or depreciation expenses and carries it to Form 4797 Sales of Business Property and to the other income line on the form such as Schedule C Schedule F Form 8825 business packages only etc Amortization Information Select the amortization code for the depreciable item as applicable NEW FOR ee f P A Check the applicable box in this section to elect an additional first year deduction of 2007 ss000 State Specific Information Complete the State Asset Type ITC Code and State Basis fields as applicable ensuring that all state rules and guidelines are followed NEW FOR d ia a en 20 07 State Basis if different is an override field Default is the Cost Basis selected for the federal return near the top of the 4562 screen Drake Software Manual Co
196. count gt Bank Application and select to migrate prior year bank application information or create a new application from scratch Select a bank from Select RAL Bank if necessary Click Update Bank and or Edit Information for Main EFIN to proceed and complete or verify all required fields of the application Click Proceed to Confirmation R View or print as desired If necessary go back to make changes Submit the completed application NN in Contact the bank to order check stock and complete any additional agreements 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 complete the following steps 1 From the Home window select EF gt Search EF Database 2 Click Reject Code Lookup 3 Select either Loan Status Codes or Bank Decline Reasons to view the corresponding codes in the lower window If you select Bank Decline Reasons specify a Category A RAL reverts to a non loan product Refund Transfer Bonu if denied Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 171 Paperwork and Check Stock Most bank product activity is done electronically but some paperwork is required e Bank Application Agreement For every RAL or Bonu a three page three part application agreement form must be completed by both the prepare
197. cted for a main item all the sub items are also selected or click the to expand the selection and make specific selections for an item For example select Preparer Information to bring forward all prior year preparer information or click to expand Preparer Information and select specific preparers Drake Software Manual Copyrighted Material 72 Preseason Preparation 2007 DRAKE SOFTWARE WARNI NG Selecting a previously updated item can cause a loss of current year data Drake 2007 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 C Hard Drive X Firm Information Client Status Manager Setup gt Options Pricing Federal Pricing State City Continue N OTE If updating Pricing State City an Update Setting dialog box appears Enter a percentage increase and choose to apply the increase to per form or per item items 4 Click Continue then Confirm the selections to start the update process 5 Click Exit when the status for each item displays Completed ORGANIZERS AND PROFORMAS Use proformas and organizers to assist the taxpayer in collecting records and the tax preparer in interviewing Print prior year data on an organizer or proforma for one or more clients or run a report to create a batch of
198. d lt FEDERAL REFUND PARAGRAPH gt YOUR TAX RETURN SHOWS THAT YOU ARE DUE A REFUND CEND PARAGRAPH gt Conditional Paragraph Nesting Conditional paragraphs can be nested by inserting one paragraph within another In the following example the Federal Direct Debit Paragraph is nested inside the Federal Balance Due Paragraph The Federal Direct Debit Paragraph is generated only when applicable and only when the Federal Balance Due Paragraph is generated You can nest up to five conditional paragraphs Each nested conditional paragraph tag is displayed in a different color first in blue then green then purple then brown etc for easier viewing In the following example Federal Balance Due Paragraph is displayed in blue in the letter and Federal Direct Debit Paragraph is displayed in green Example of two level nesting lt Federal Balance Due Paragraph gt Your federal return reflects a balance due of lt Federal Balance Due gt lt Federal Direct Debit Paragraph gt This amount will be directly withdrawn on lt Federal Direct Debit Date gt from your lt Federal Taxpayer Bank gt lt Federal Taxpayer Bank Account Type gt account ending in lt Federal Taxpayer Bank Account Number gt If you would like to cancel this payment contact the U S Treasury Financial Agent at 888 353 4537 no later than two business days before the scheduled payment settlement date lt End Paragraph gt lt End Paragra
199. d N UTE If you are not accessing files on a network the deleted files go to the recycle bin To delete a client file from the database Select Tools gt File Maintenance gt Delete Client Files from the menu bar Type the SSN or EIN Press ENTER Select Yes to delete the client file or No to cancel and close the screen Press ENTER or click Yes Press ESC to return to the menu cl a So CHANGE RETURN TYPE Use Change File to change a return to another file type without having to create a new file When a return type is changed the following information is transferred for all returns e Name address telephone and county e Fiscal year e All depreciation data including screens 6 7 8 9 and 10 In Corporate to S Corporation conversions balance sheet and Schedule A information also transfer M Pi RTANT Not all data is transferred Before using Change File Type back up the original file To change a return type Select Tools gt File Maintenance gt Change File Type on the menu bar Enter the SSN or EIN of the file to convert Click OK or press ENTER Select the new file type Individual Corp Sub S Corp Fiduciary Partnership or Tax Exempt at ae Se Drake Software Manual Copyrighted Material 214 Tools 2007 DRAKE SOFTWARE 5 Click OK or press ENTER 6 When the conversion is complete click Exit QUICKBOOKS IMPORT Use QuickBooks Import to import QuickBooks files into Drake Software MPD R
200. d Deduction Total amount from IRA and pensions Either the total of the itemized deductions or the standard deduction Overpayment Overpayment of federal taxes Refund Refund due to taxpayer Refund Method How the taxpayer will receive their refund Schedule C Net Net profit or loss from each schedule C Schedule C Total Total Schedule C amount from all schedule C s Schedule E Net Net profit or loss from each schedule E Schedule E Total Total Schedule E amount from all schedule E s Schedule F Net Net profit or loss from each schedule F Schedule F Total Total Schedule F amount from all schedule F s Self Employment Tax Tax on self employment as shown on the SE form Soc Sec Received Total amount of social security payments received for this return Soc Sec Taxable Total of Social Security benefits which are taxable State AGI Adjusted gross income for state State AGI Spouse State adjusted gross income for spouse when applicable State Amended Due Balance due for state amended returns State Amended Refund Refund to taxpayer for state amended returns State Applied State overpayment applied to next year State Applied State overpayment applied voucher 1 State Applied2 State overpayment applied voucher 2 State Applied3 State overpayment applied voucher 3 State Applied4 State overpa
201. d Printing Parts of a Return To view or print a page in the cascade double click the page or select the page and click View or Print in the toolbar Tip Once you have selected a page use the arrow keys on your keyboard to move from page to page Click ENTER to view or print the highlighted page For example to view Form 1040 of the return shown in previously double click 1040 The page view shows the familiar tax form with entered and calculated data in red text Scroll to view multiple pages of a form To close click the X in the top right corner From print mode the Print Selection dialog box is displayed Adjust printer options as desired then Print the return or click Cancel to close without printing Tip Right click a form in the cascade to view print or select to print the form or to adjust its properties individually NEW FOR i oe es ch i 07 To change pricing on a per return basis right click a form from View mode and select Properties Page Titles in Cascade of Forms Each page in the cascade of forms has a unique title Drake Software Manual Copyrighted Material 146 Return Results 2007 DRAKE SOFTWARE DRK_INFO BILL LAINST LETTER 1040 LAWKS540 PG2 FILEINST EFSTATUS LAWKS40 WK_CARRY LAS40E G WiK_CTC4 LAS40 N OTE State document titles begin with the two letter state code For example the LA540 page above is Louisiana Form 540 and LA MSG is a message page for that return e Form Names Page
202. date Settings 2006 to 2007 and select Preparer Schedules Preparer schedules display in the Scheduler on the schedule grid Enter the preparer in Preparer Setup before setting up a schedule NEW FOR 7 07 Access preparer schedules from within the Scheduler To create a preparer schedule complete the following steps 1 Open Setup Schedule using one of the following methods e Click Setup from the toolbar and select a preparer from the Preparer Schedule Setup list e Select Setup gt Preparer s on the menu bar Select a preparer and click Edit Preparer Click Schedule to create the preparer s schedule 2 In Setup Schedule select a day from the Select day list Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 77 3 Choose the In and Out times for that day As times are selected they appear on the schedule grid Continue to set In and Out times for each day of the week To apply the selected times for every day of the week at once click Apply to All 4 Click Save to save the schedule then click Save and Exit to exit Preparer Setup Creating a Front Office Login A Front Office login limits functionality to the Scheduler Once a Front Office employee is in the Scheduler the Today s Calendar tab is displayed with each preparers schedule for the day selected To create a Front Office login go to Setup gt Preparers and create a new preparer Select Security gt Front Office
203. ddress 50 _ Include Return Address No Lines from top to position Return Address 13 _ Spaces from left to position Return Address 15 _ Invert Print Orientation Include or Current Resident statement 6 Click Finish 7 Click OK or press ENTER then click Print Envelopes POSTCARDS This option prints addresses on postcards p From the menu bar choose Tools gt Letters gt Postcards Select filtering and sorting options from the Filter Selection box If a more complex filter is needed click Edit Filters See Filter Manager on page 228 Click Next Modify the Basic Search Conditions if desired then click Continue In the Postcards dialog box update the postcard formatting information as needed Click Finish to open the Print Postcards dialog box Click Print Y oE amp Drake Software Manual Copyrighted Material 218 Tools 2007 DRAKE SOFTWARE AMORTIZATION The Amortization tool prepares loan repayment schedules and provides various loan scenarios Select Tools gt Amortization and complete the following fields on the Amortization dialog box Schedule Title This is the title that appears at the top of the amortization schedule Loan Amount Enter the original amount of the loan Amortization Periods Enter the number of payments to be made over the life of the loan For example if the loan is for two years and monthly payments are required enter 24 for the numbe
204. disable the following options Autocalculate tax return when exiting data entry Display client fee on calculation screen Print only one overflow statement per page Go directly to form when accessing view or data entry mode Audible notification of calculation error messages Select an option from the list Drake Software Manual Layout for depreciation schedule Portrait or Landscape Pause option for calculation Choose when Calculation Results appear Number of days to store print files 1 9 days or after being selected for electronic filing If a return is needed after the print file is removed recalculate the return to recreate the print file Sort options for Interest Dividends Alphabetical or numeric ascending or descending Copyrighted Material 48 Installation amp Setup 2007 DRAKE SOFTWARE Form amp Schedule Options Tab Many of these settings can be adjusted from the PRNT screen in data entry An on the fly adjustment does not affect the setting in Setup gt Options Select to print forms when required Print Schedule A only when required Print Schedule B only when required Print Form 1116 for Alternative Minimum Tax Worksheet Print Form 4562 only when required Print Form 6251 only when required Print next year depreciation schedule Print optional worksheets Print W2 1099 forms Print two W2 1099s per page Print carryover worksheet Print Page 2 of Schedule K 1 in the 1120S 10
205. djustment entered carries foward to and adjust the projected for the following years To apply the adjustment to all future years or cases right click the cell with the newly entered adjustment and select Carry Adjustment Across Direct Entries and Overrides To make a direct entry in a cell click a cell and enter an amount To override a calculated amount make an entry in a calculated cell or right click the cell and select Override Calculated Amt to open the Calculation Override dialog box Enter the override amount and click OK Drake Software Manual Copyrighted Material 248 Suite Products 2007 DRAKE SOFTWARE Copying Cutting and Pasting Amounts To copy cut or paste amounts in a tax planner right click a cell and choose to either Cut or Copy Then right click the desired cell and choose to Paste the cut or copied data You can also press CTRL C to copy CTRL X to cut or CTRL V to paste Opening Additional Worksheets In some cases a worksheet is available for entry of additional data e Tax Planner Worksheets To access an additional tab or worksheet for a form or line in the planner double click the cell to jump to the worksheet NEW FOR s Click the Wages C D F or E line from the Income tab to open an additional 0 7 worksheet for these items e Drake Detailed Worksheet To attach a detailed worksheet to a cell in the tax planner press CTRL W in a cell or right click and select Drake Detai
206. duct Selection dialog box 2 Select whether to print checks or to print the Truth In Lending Agreement TILA disclosures for non check bank products 4 FON nd wre aaa rtd hee aeree pe SIT AT C oer Select Bank Product Print available Checks Print TILA for Non Check Bank Products 3 Click Continue The Selection window for checks or TILA is displayed showing all checks or TILA available for printing 4 Check each row corresponding to the check to be printed Use Select All or Unselect All as needed N UTE To enter check stock ranges and indicate the printing order click Setup Checks 5 Click Continue The Check Print Options window opens to display the client name ID number check amount and check number Drake Software Manual Copyrighted Material 158 Electronic Filing and Banking 2007 DRAKE SOFTWARE CNY d i wires a PE A wre pee tee E E r AUMBEMLA triechek itsen S werthe appfopriale opticn and click Contre Client Name TIPTON DARENDAR ID Number Amount 3 097 32 Check Number 70000005 Check Options Print this check on 70000005 C Delete this Client s check client should not get it Skip this Client s check for now print later ts Help Setup Checks Exit 6 Select the applicable check option and click Continue 7 Inthe Print Checks dialog box set printer options as needed and click Print Opening the Check Register A detailed register of issued RAL Bonu checks can
207. e Greeny Go East Greenville Greenvale Greenview Greenville Greenville Junction Greenv found 5 time s Select 5 Double click the desired selection The program inserts the new city number for the ZIP code entered 6 Confirm that the city is correct then click Yes 7 Click Save The ZIP code you entered in the ZIP Code field will now be applied to the selected city in Data Entry PRE PREPARED ENTRY The pre prepared entry tool allows a previously prepared return to be entered in Drake Software To enter a pre prepared return in Drake complete the following steps 1 Go to File gt Pre Prepared Entry 2 Select a form Click a form from the Pre Prepared Entry screen type the form in the Make A Selection field or press the corresponding F1 F8 keys 3 Fill in the fields with return data and press ESC to save the form 4 Continue to enter form data until complete 5 Click View or Print from the toolbar Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 221 QUICK ESTIMATOR The Quick Estimator allows you to prepare an individual return and quickly calculate the results WAR N NG Do not electronically file or mail the return generated in the Quick Estimator to the IRS If the return is filed from the Quick Estimator an amended return is required Go to File gt Quick Estimator Select a return to open or create a new return using the client s SSN If a return previous
208. e Selector field and press ENTER NOTE If the 1099 screen already contains data an Existing Forms List appears Select New Record and click Open Select a listed record and click Open to edit it 2 Enter or select data for each field accordingly 3 Press ESC to save and close N UTE Press PAGE DOWN to access additional 1099 screens Drake Software Manual Copyrighted Material 98 Return Preparation 2007 DRAKE SOFTWARE Listed below are important points to remember when entering 1099 data e 1099 R Retirement To indicate a 1099 rollover early distribution into the same type of plan enter S into the Exclude from income rolled over into another qualified plan field in the bottom left corner of the 1099 R screen The word rollover appears beside line 15a in the 1040 Enter an X to indicate a rollover to another type of account e 1099 G Other Government Income Report unemployment compensation state and local income tax refunds and qualified state and local income tax refunds The last four fields are required in order to compute the taxable amount of state and local tax refunds Other 1099 Forms The table below shows where to enter data for series 1099 forms 1098 forms and Form 1042S Form Title Where Accessed in Drake 1042 S Foreign Person s U S Source Income Subject to 2555 Foreign Earned Income culate elle NR Form 1040NR U S Nonresident Alien Income Tax Ret
209. e The Flag Fields for Review window opens and resembles data entry Flag fields First select a screen Then select field to flag To flag click the field press F2 or right click and select Flag for Review To remove a flag click the field press F4 or right click and select Remove Flag Flagged fields are displayed with a colored background Continue this process until all the desired fields are flagged Press ESC to exit the Flag Fields for Review window and click OK to close Setup Options N A unverified global flag produces a message page only if the screen exists for the DTE return For example if you flag the Employer ID field on the Schedule C screen the flag creates a message only if a Schedule C screen is present on the return Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 15 Magnify Fields New for 2007 Data entry fields can be magnified for the ease of viewing When this feature is enabled the active field displays large text with a yellow background P PE V E E eat tyme Dea et ie Wages tips 2 Federal tax wih 3 Soc Sec wages 4 Soc Sec wih 5 20000 5 Medicare wages 6 Medicare tax wih J 20000 290 S280 Sestina granaadi nlna 6 L Enable or disable this feature from Setup gt Options Under the Data Entry tab Tip select or clear Magnify data entry then click OK The color of magnified fields can be changed in Setup gt Colors See Color Setup on page 62
210. e enter the gain amount and leave Cost or Basis blank Cost or Basis Enter the cost or basis If only the loss amount is available enter the loss amount and leave Sales Price blank S L From the dates entered Drake calculates if an item is long term or short term If no specific dates select S or L to force short term or long term Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 113 Misc Press F1 to access codes Check with states for codes that are required for state purposes only The Loss Carryovers and Other Entries screen is for short term gains losses from other sources Schedule D lines 4 and 5 long term gains losses from other sources Schedule D lines 11 12 and 13 and loss carryovers from 2006 Schedule D lines 6 and 14 This screen also contains fields for capital gain tax computation From Income click Carryovers or type D2 into the Selector field and press ENTER Long term short term gain loss from other sources Data for lines 4 5 11 12 and 13 flows from applicable sources in the program if the data has been entered For example if a return has record of a short term gain through a partnership Drake automatically fills out line 5 Carryovers from 2006 If Drake Software was used for the taxpayer in 2006 these fields are updated automatically Otherwise they are direct entry fields Schedule D Imports New for 2007 This feature will be available on the January Drake Softw
211. e DrakeSoftware com Montana mtstate DrakeSoftware com Alaska akstate DrakeSoftware com Nebraska nestate DrakeSoftware com Arizona azstate DrakeSoftware com Nevada nvstate DrakeSoftware com Arkansas arstate DrakeSoftware com New Hampshire nhstate DrakeSoftware com California castate DrakeSoftware com New Jersey njstate DrakeSoftware com Colorado costate DrakeSoftware com New Mexico nmstate DrakeSoftware com Connecticut ctstate DrakeSoftware com New York nystate DrakeSoftware com Delaware destate DrakeSoftware com North Carolina ncstate DrakeSoftware com District of dcstate DrakeSoftware com North Dakota ndstate DrakeSoftware com Columbia Florida flstate DrakeSoftware com Ohio ohstate DrakeSoftware com Georgia gastate DrakeSoftware com Oklahoma okstate DrakeSoftware com Hawaii histate DrakeSoftware com Oregon orstate DrakeSoftware com Idaho idstate DrakeSoftware com Pennsylvania pastate DrakeSoftware com Illinois ilstate DrakeSoftware com Rhode Island ristate DrakeSoftware com Indiana instate DrakeSoftware com South Carolina scstate DrakeSoftware com lowa iastate DrakeSoftware com South Dakota sdstate DrakeSoftware com Kansas ksstate DrakeSoftware com Tennessee tnstate DrakeSoftware com Kentucky kystate DrakeSoftware com Texas txstate DrakeSoftware com Louisiana lastate DrakeSoftware com Utah utstate DrakeSoftware com Maine mestate DrakeSoftware com Vermont vitstate DrakeSoftware com Maryland mdstate DrakeSoftware com Virginia vast
212. e SSN on the W 2 does not match the ITIN enter the SSN here e Statutory Employees Statutory employees must file Schedule C for expenses related to W 2 income N OTE A C screen must be completed for a statutory employee Select the number of the C screen from the F code on the W2 screen e Foreign W 2s To indicate a foreign employer on a W 2 enter the city and country in the City field of the W2 screen then select Foreign from the State field a dot appears in the field Leave the ZIP code field blank Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 97 1099s Enter data for the following 1099 forms via the General tab in Drake e 1099 R Distributions From Pensions Annuities Retirement or Profit Sharing Plans IRAs Insurance Contracts etc N OTE If a 1099 R was not received for a pension annuity or IRA distribution the return cannot be electronically filed e 1099 DIV Dividends and Distributions Schedule B e 1099 INT Interest Income Schedule B e 1099 G Certain Government Payments e 1099 MISC Miscellaneous Income Use Schedule C for self employment tax e RRB 1099 Payments by the Railroad Retirement Board e 1099 SSA Social Security Benefit Statement N UTE See Other 1099 Forms on page 98 to access other 1099 forms Take the following steps to complete 1099 forms in Drake 1 Under the General tab click the form indicated or type the form code into th
213. e computer unless the tax software is installed on MPI RTANT a dedicated server Otherwise transmitting and receiving from more than one computer may affect the ability to print checks Your computer must be connected to the Internet in order to transmit files Drake Software Manual Copyrighted Material 154 Electronic Filing and Banking 2007 DRAKE SOFTWARE To transmit a return take the following steps 1 From the Home window select EF gt Transmit Receive to open the Transmit Receive dialog box TIP Pressing CTRL T also opens the Transmit Receive dialog box Drake 2007 Transmit Receive Transmit Receive Files This screen is used to e file returns and receive Federal and State acknowledgements from Drake Software The Files for EF list contains a summary of files that will be transmitted Use the Review button for a detailed list To receive acknowledgements without transmitting use the Acks Only button Files for EF IRS Files 3 Review Communications Send Receive Acks Only Help Cancel EFIN 561332 Intemet LAN RAS Installed 2 Optional Click Review to open the Transmit File Editor dialog box To remove a return from the queue at this point select the return and click Remove Click Select All or UnSelect All as needed N UTE Check a return in Transmit File Editor it to remove it from the queue 3 Optional Click Acks Only to pick up federal and state acknowledgements bank product ackno
214. e e E e N 1 Preparing to File Electronically 149 About this Manual 0000 2 Filing a Return Electronically 151 Contacting Drake Support 3 Using the EF Database 158 Online EF Database 00 162 Pasi Sneon ee eis 5 Copying EF Return Data 166 Getting Started 0 eee eee eee eee 5 a ne Pia ee he ee aes i The Home Window 20e ee eee Te Seg ee ee Creating and Opening Returns 8 Dala PaA a ahenn an a g Client Status Manager e sseessseesseceesecesseeseee 175 About State Returns 2 0000 23 The CSM Window 020 e eee 175 Practice Returns and Test Returns 23 Setting Return Statuses 0 176 Navigating the CSM 000 180 Installation amp Setup scssccscssssescscssseseeees 27 Working in the CSM 0005 180 System Requirements 0 27 Tax Software Installation o ee cea eee 28g Resources and SUpport ssssesseeseeeeesecesseessee 185 Initial Login 0 2 nena susana isr ana 29 Drake ETC seca wwe Vee ed nsa ee n hens 186 Running Drake on a Network 29 Drake Support 000 191 Software Setup 0 0 0 0 eee ee ee eee 32 Software Resources 0 000 008 193 Drake Support Contact Information 199 Preseason Checklist c sccscssssscs
215. e most common filtering criteria Make any changes required below and click Ok to Save Return Type s V All Return Types V Individual 1040 V Partnership 1065 M Corporation 1120 M S Corporation 11205 IV Fiduciary 1041 V Tax Exempt 990 IV Estate Tax 706 Allow MFS 1040 Returns Return Result Vv Any Result MV Refund V Balance Due V Zero Due Activity Any Status Type IV Active Retum s Inactive Retum s Preparer and Firm Specific Preparer lt All Preparers gt Specific Firm lt All Firms gt Allow Test Sample Returns JV Ask about the Basic Search Conditions each time the Filter is used Help Cancel 2 Modify the Basic Search Options by selecting the desired properties described below Return Type s Types of packages to include in the report Return Results Filter by returns with Any Result or with Refund only Balance Due only or Zero Due only Activity Filter by Any Status Type or by Active or Inactive Returns only Preparer and Firm Filter by Specific Preparer and Firm Allow Test Sample Returns Select to include test or sample returns in the report Ask about the Basic Search Conditions each time the Filter is used If this option is selected the Basic Search Conditions dialog box will open each time you create the report allowing you to customize filters at that time 3 Click OK to save the options Additional Search Conditions Add as ma
216. e these steps 1 2 3 Go to Tools gt City Tax Rates Select the desired city from the list Press ENTER or TAB The city s details fill the text boxes To change information edit the boxes where necessary and click Update N DTE Verify Ohio city tax rates and addresses before preparing returns Ohio returns ZIP CODE EDITOR New for 2007 The ZIP Code Editor enables you to revise Drake s ZIP code database in your software should the USPS change add or re assign a ZIP code during the tax year Take the following steps to assign a ZIP code to an existing city using the ZIP code database 1 To open the ZIP Code Editor click the My Computer icon on your desktop then go to DRAKEO7 FT zipedit exe and double click to launch the editor Enter the new ZIP code to be assigned then click Look Up or press Enter If the ZIP code already applies to an area the applicable city code appears in the New City Number field Click Search to open the City Number Lookup dialog box Enter the city name The search displays both partial and exact matches for the city codes not ZIP codes as shown in the following example Drake Software Manual Copyrighted Material 220 Tools 2007 DRAKE SOFTWARE 7 Drake 2007 City Number Lookup Drake 2007 City Number Lookup Key in all or part of the city name you are looking for and each match will be displayed in the list Double Click to select new city number ESC To Cancel City Nam
217. e to system incompatibility or if circumstances otherwise prevent you from using Depreciation Detail Depreciation Data Relating to Other Forms If the Date Sold and Property Type are completed on the 4562 Form 4797 Sales of Business Property is generated automatically For more information on completing Form 4797 in Drake see Other Gains and Losses on page 115 Gulf Opportunity GO Zone Depreciation The GO Zone Act of 2005 establishes tax incentives and bond provisions to rebuild local and regional economies devastated by hurricanes Katrina and Rita The Income tab has two screens for entering GO Zone information Drake Software Manual Copyrighted Material 112 Return Preparation 2007 DRAKE SOFTWARE GO Zone Depreciation Elections GO Use if all depreciable assets listed are qualified GO Zone property if taking the 50 bonus depreciation on all qualified GO Zone assets listed or both Depreciation Detail Screen 4562 Use to indicate that an asset is in the GO Zone property and as applicable if taking the 50 bonus depreciation N ITE If most depreciable assets are GO Zone properties but some do not qualify you can indicate that all qualify but you must check the Does NOT qualify box in the GO Zone portion of the 4562 screen for non qualifying assets Sale of Assets The Sale of Assets box under the Income tab displays screens for reporting gains and losses of assets due to sales exchanges theft etc Take
218. e total amount accrued 7 Click Save or click Cancel to exit without saving changes ERO Setup Electronic Return Originators ERO must complete ERO Setup in order to file returns electronically use the Drake E mail program download software updates access the Online EF Database and access RIA online tax research Drake Software Manual Copyrighted Material 38 Installation amp Setup 2007 DRAKE SOFTWARE NOTE NOTE To complete ERO Setup complete the following steps 1 From the Home window go to Setup gt ERO to open Electronic Filing Setup 2 Enter General Information for the ERO Yellow fields are required for electronic filing Preparers who are new to electronic filing and wish to transmit live returns must apply to the IRS for an EFIN For more details on applying for an EFIN see EFIN Application on page 150 Until you receive an EFIN a temporary EFIN assigned by Drake allows you to test electronic filing and to access Drake Internet utilities 3 If necessary choose Connection Settings In the Connection Settings section the default settings are those that work for most computers If you are experiencing problems connecting to Drake please contact Drake Support for technical assistance 4 Enter Service Bureau Information if your firm practices as service bureau See Service Bureau Requirements on page 168 5 Click OK to save changes or click Exit to exit without saving changes Preparer
219. e with the Master EFIN 2 Inthe row of the EFIN to be removed click Remove NOTE If you remove a Level 1 EFIN that has Level 2 EFINs below it the Level 2 EFINs is also removed CONFIGURING REPORT SECURITY Security is managed at the office level For offices using an EFIN hierarchy security must be set at each level For example report security set at the master EFIN level does not apply when logged in as a Level 1 EFIN below it To set security complete the following steps 1 From the Online EF Database click Options Click Configure Report Security 3 Enter your e mail address and password then click Add Update Security Password e From the Tab Security section click Secured or Unsecured as desired 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 TOOLS Use the Tools tab to Download ABC Voice File This applies only to preparers utilizing the ABC Voice File utility For more information call Versicom at 937 438 3700 SELECTING A PRIOR YEAR DATABASE By default the current tax year database is available for reporting when you enter the Online EF Database You may search data from only one tax year at a time To view a previous year EF Database choose a tax year Drake Software Manual Copyrighted Material 164 Electronic Filing and Banking 2007 DRAKE SOFTWAR
220. eating DDM Drawers Add drawers to cabinets for file storage The Drake filing system uses alphabetically labeled drawers for each client To add a drawer to a cabinet highlight the cabinet you want to use Next click New Drawer or go to Setup gt New Drawer or press F2 Enter a name for the drawer and click OK The new drawer appears in the left pane Repeat as needed Creating DDM Folders Documents are stored at the folder level Store folders in drawers and create sub folders inside folders as needed The Drake filing system creates a folder with the client s name a sub folder labeled Tax and sub folders for each tax year To create a folder highlight the drawer or folder that will house the new folder Next click New Folder or go to Setup gt New Folder or press F2 Enter a name for the folder and click OK The new folder appears in the left pane within the drawer or folder you selected Repeat as needed Once you have created cabinets drawers and folders you can begin adding files to the DDM WORKING WITH FILES IN THE DDM This section s focus is on adding and managing files in the DDM Adding Files to Folders The DDM supports many file types Import scan or link files to the DDM Once added to a folder the file is listed in the right pane of the DDM window NOTE The following instructions for adding files to the DDM can be performed from the toolbar or through the Documents gt Add Document menu Drake S
221. ect to print either a small medium large or extra large envelope sheet size from the following lists e Taxpayer address e IRS service center address e State address e City address Result letter New for 2007 Select the default result letter to print with a tax return for all packages N OTE To override the default letter for an individual client enter the desired result letter number on the LTR screen of the return Optional Items on a Return Tab Click to enable or disable the option Gross Social Security benefits only when required Date on return This date pulls from the date on the computer To change this date enter the required date on the PRNT screen If desired select to print dates for taxpayer and spouse signatures excluding 1040 Taxpayer phone number Pulls from screen 1 Select an option Drake Software Manual Third party designee Prints on the main form on the tax return Rounding amounts Select Dollar or Penny rounding Dollar rounding is required for electronic filing Penny rounding prints penny amounts on all forms Copyrighted Material 50 Installation amp Setup 2007 DRAKE SOFTWARE Billing Tab Click to enable or disable the option e Print taxpayer s SSN on the bill e Show RAL preparer fees as withheld on bill e Show bank fees on bill e Sales Tax Sales tax percent to add to client statement Enter a number greater than 1 For example 4 5 would represe
222. ed automatically Miscellaneous Codes Up to four miscellaneous codes can be used for reports Dependent Information Screen 2 Screen 2 Dependents covers the Exemptions section lines 6a 6d of Form 1040 Grid data entry can be used for entering dependent information To enter grid data entry mode press F3 on your keyboard See Grid Data Entry on page 12 Adding a Dependent Take the following steps to enter a client s dependent information 1 Under the General tab click Dependents or type 2 into the Selector field and press ENTER The Dependent Information screen displays 2 Enter data into each field accordingly Check any boxes that apply Dependent Information fields are now grouped into categories The EIC Information fields are now included in Dependent Information Screen 2 This section must be completed for each qualifying dependent if the taxpayer has EIC with qualifying dependents Screen 8867 EIC Checklist must also be completed otherwise an EF Message is generated upon calculation 3 Optional To add another dependent press PAGE DOWN to open a new Dependent Information screen Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 91 4 Press ESC to save and close Dependent Information Note that the number of dependents entered is now displayed General income Adjustments Credits F Name and Address Dependents 1 2 te En aan Listed below are impo
223. ed if you would like to review old acknowledgements After the acknowledgement file is read an Acknowledgement Report shows the ack code and Batch ID All acknowledgements are stored by batch ID The three acknowledgement codes generated by Drake are as follows e P Tax return transmitted successfully to Drake and processing e T TEST return transmitted successfully to Drake e B Bad transmission try re transmitting after installing updates and recalculating the return Re send any SSN that receives a B acknowledgement Acknowledgement codes generated by the IRS are as follows e A Tax return has been accepted by the IRS e R Tax return has been rejected by the IRS e D Tax return is a duplicate of a previously filed return or DCN rejected by IRS The IRS conditionally accepts imperfect returns if either of the following occur in N OTE the subsequent filing of a return Adependent s SSN or name on a Schedule EIC does not match the IRS master file A dependent s SSN or name on Form 1040 does not match the IRS master file The first time the return is submitted the IRS rejects it using reject codes 0501 and 0504 If the information on the taxpayer s Social Security card is correct go to the EF Options Override EF screen in data entry and check Imperfect Return Election under Additional Options When the return is calculated Drake displays a NOTES page indicating the return is imperfect At this
224. ederal EF e Print the EF status page e Alert preparer when bank product is not included e Activate imperfect return election in data entry Enables the Imperfect Return Election check box on the EF screen in data entry e ERO SSN Indicator Choose a preparer number Paid Preparer or None The default can be overridden in data entry Session Options e Check for e mail during EF Transmit Receive Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 51 e Combine EF steps Select Transmit Post Acks If this option is selected the only screen that needs to be opened on the EF menu is Select Returns for EF After the returns are selected click OK to start the remainder of the EF routine e Transmit return data to Drake for multi office web reports Selecting this option sends CSM data to the MOM during the EF process State EF Options e Suppress Check the box to suppress electronic filing of state returns Select to Suppress all states returns or Suppress individual states returns If you selected Suppress individual states enter the state abbreviations in the List states text box Administrative Options Tab You must be logged in as Admin to access Administrative Options This tab enables you to customize the Data Entry Menu to reduce data entry errors by limiting screens available on the menu To customize the Data Entry Menu complete the following steps 1 From the H
225. edure 1 Go to Tools gt Blank Forms Form categories are listed in the left pane of the Blank Forms window and all available forms for selected categories are displayed on tabs 2 Click a category in the left pane Categories include federal proformas organizers all states and some cities 3 Form names and descriptions are displayed If necessary select a tab category 4 Scroll through the form listing to locate a form Forms are listed in numerical and alphabetical order as applicable Click a column header to sort the forms in ascending or descending order 5 Select a form and click View or press ENTER to view it Click Print to print the form N OTE If a state prohibits printing of blank state forms contact the state revenue office to obtain blank forms REPAIR INDEX FILES Repair files on a regular basis as part of your general file maintenance routine Certain events may require files to be repaired The following events may require that index files be repaired Repair the Name Index after using Backup Restore to restore files Repair the EF Index if the Search EF Database is not functioning properly Repair the Name Index if a file for data entry does not open Repair EIN Database when adding records to it Repair index files to update the CSM index Also when a client is deleted through Tools gt File Maintenance gt Delete Client Files index files should be repaired in order to remove the client from the
226. eens to show most fields without scrolling Disable sizing of data entry screens Use grid data entry format for select screens Tab to zip code field skip city state and use zip code database Show notes reminders to preparer when opening a return Display formatting in SSN EIN date phone and ZIP code fields Verify SSN when creating new return Enable classic mode simulates DOS data entry Enable Windows standard keystrokes in data entry 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 Enable a small cursor in data entry fields New for 2007 Enable auto filling of Firm and Preparer fields in data entry New for 2007 Magnify active fields in data entry for easier viewing New for 2007 Activate preparer fee override This is the default option so preparers can 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 Select an option from the list Language for menus and data entry screens English or Spanish Language for field specific help in data entry English or Spanish Letter case for data entry Upper Case or Mixed Case Override field indicator Format of override fields in data entry Adjustment field indicator Format of adjustment fields in data entry Calculation amp View Print Tab Click to enable or
227. en applies to the primary taxpayer S if it applies to the spouse or J if it belongs to each spouse equally Default is T e F Indicates whether the data should be used in calculating the federal return Data does not carry to the federal return if a zero is entered in this box e ST The two digit state code indicates whether the data should be used on a specific state return The items are included on the state form if the software is preparing that state return If this field is left blank the software uses the resident state by default The data does not carry to any state or city if a zero is entered in this box e City The code entered indicates the source of the income on city returns Drake 2007 Data Entry 400001001 SCHMOE JOE MFJ to MFS Split The MFJ to MFS function splits a joint return into two separate returns Before splitting a return use the TS or TSJ fields identify each item such as W 2s as applying to the taxpayer or the spouse Also to force either the standard or itemized deduction check the applicable field on Schedule A Itemized Deductions WARNI NG Do not mark the return Ready for EF on the EF Options Override screen before splitting the return or all three returns are marked as eligible for electronic filing To split a return complete the following steps 1 Press CTRL S or click Split while in the joint return The software calculates the split and displays a calculation summa
228. ename are required If no company logo is available enter C DRAKE 0 7 CF LOGO BMP C indicates the drive letter to which the program is installed change if necessary for the default simple graphic Leave this box blank for no logo Click OK to save and exit Copyrighted Material 62 Installation amp Setup 2007 DRAKE SOFTWARE Color Setup Use Color Setup to customize the appearance of the Drake program on your screen Have the color scheme to match your Windows scheme or select other custom colors Customizing Program Colors To customize program colors complete the following steps 1 From the Home window go to Setup gt Colors 2 Under Program Colors choose Use Windows System Colors or Use Custom Created Colors e Windows System Colors Program screens inherit the color scheme used by the operating system e Use Custom Created Colors The Program text color and Program background color boxes to the right become available Click a box to view the Windows color palette and choose a color or click Define Custom Colors to create your own color 3 Click OK to save your selections Customizing Data Entry Colors To change the color of a specific area in data entry complete the following steps 1 Click a color box associated with a specific a program area from the Data Entry Colors section of the screen to open a Windows color palette 2 Select a color from the color pallet box or click Define
229. entry field With the cursor in a field press the applicable shortcut key combination e View available macros Press CTRL SHIFT M from within a field The Data Entry Macros window opens e Launch a macro from a macro list Open the Data Entry Macros window and select a macro from the list then click Execute or double click the row Data Entry Macros closes automatically e Close the list without launching a macro Click Exit or press ESC For information on setting up macros see Macros Setup on page 54 Auto Complete Another time saving tool is the auto complete function When a bank name or financial institution is entered in data entry it is saved in the auto complete database The next time you need to enter that bank name in a data entry screen the program automatically fills or auto completes the name when you type first few letters For example enter First Bank in the Name of Payer field on the DIV screen The next time that bank name must be entered in that field typing F automatically fills the entire bank name field from the auto complete database The Name of Payer fields on the DIV and INT screens and the Name of financial institution fields on the Bank DD and PMT screens activate this feature Add edit or remove auto complete entries from the Edit Auto Complete Data screen As needed change the order of your auto complete list to designate priority entries e Access Auto Comp
230. ents Clients with Balance Due Clients with Dependents Clients with EIC iiis Clients with Estimates Add any new Clients with Extensions s conditions to your filter Choose an existing filter or create a new filter The Available Filters list includes predefined filters and custom filters Highlight a filter to view the Basic Search Conditions for the Selected Filter in the top right portion of the screen You can edit these basic search conditions and add as many as 10 additional custom search conditions SELECTING A FILTER Click a filter to select it If one is not available to suit your needs edit or create a filter All new filters are added to the Available Filters and can be edited as needed e Create a filter Click New Filter enter a Filter Name and click OK e Copy a filter Click Copy Filter enter a Filter Name and click OK e Rename a filter Click Copy Filter replace the Filter Name and click OK Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 229 Basic Search Conditions When you select a filter the Basic Search Conditions for the Selected Filter appear in the Filter Manager To edit a filter s basic search conditions complete the following steps 1 Click Edit from Basic Search Conditions for the Selected Filter to open Basic Search Conditions Drake 2007 Basic Search Conditions Basic Search Options The Basic Search Options allow you to modify th
231. er Drake Software Manual Copyrighted Material 232 Reports 2007 DRAKE SOFTWARE REPORT VIEW PRINT UTILITY All reports including those created in the Report Manager and during the EF process are accessible from the Report View Print Utility The name date generated and description of each report are listed Click a column header to sort the list in ascending or descending order To access the Report View Print Utility go to Reports gt Report Viewer To view or print a report in the Report Viewer double click the report in the report list or select it and press ENTER DEPRECIATION LIST Create a report displaying depreciation information for one or more clients Start by selecting Reports gt Deprecation List from the Home window Complete one of the following procedures in the Depreciation List Client Selection dialog box To print a depreciation list for one or more specified clients 1 Enter the SSN EIN in the blank field and click Add Client Continue this until all the desired cli ents are entered 2 Click Next 3 Choose to Print to Printer Export to File or Cancel To filter your client database and print a depreciation list 1 Click Next to open the Basic Search Conditions dialog box 2 Edit settings as desired see Basic Search Conditions on page 229 then click Continue 3 Choose to Print to Printer Export to File or Cancel N OTE The Depreciation List report is also accessible from Other Report
232. es the CLGY screen includes all four worksheets from IRS Pub 517 Clergy workseets are producted as a result of ANY of the following a completed N DTE CLGY screen a P selected for the F code on a W2 screen and or Business Code 813000 on the C screen The worksheets display in View mode as WK_CLGY1 and WK_CLGY2 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 121 Use this screen for those who have housing allowance either in the form of a parsonage or a rental or parsonage allowance provided by the church generally reported in box 14 of the W 2 Choose the applicable scenario for the data entered to flow appropriately into the program e Parsonage If a parsonage is provided enter its Fair Rental Value If a separate Utility allowance is provided enter the allowance amount and the amount of Actual Expenses for Utilities e Rental Parsonage Allowance If the church provides a rental or parsonage allowance but no parsonage enter the Parsonage or Rental Allowance amount and the Actual Expenses for parsonage If a separate Utility allowance is provided enter the allowance amount and the amount of Actual Expenses for Utilities Finally enter the Fair Rental Value of the housing used The following information is 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 expen
233. es as calculated on the BILL form Fee TRAC Fees entered on the TRAC screen Fees Paid to Preparer Amount of fees already paid to the preparer as keyed on the BILL screen Firm Name Override Override for the Firm Name Firm Number Drake Software Manual Number of the firm Copyrighted Material 2007 DRAKE SOFTWARE Appendix 263 Keyword Description Paid Prep City City override of paid preparer Paid Prep EIN Employee identification number override for the paid preparer Paid Prep First Name First name of paid preparer override Paid Prep Last Name Last name of paid preparer override Paid Prep SSN Social security number override for the paid preparer Paid Prep State Override of state of paid preparer Paid Prep Street Street address override of paid preparer Paid Prep Zip Zip code override for paid preparer Payments Track Payments amount from TRAC screen Prepared Direc Deposit Total amount expected to be deposited in preparer s account from RAL bank Preparer Name The name of the Preparer based on the Preparer Number entered on the Name and Address Screen Preparer Name Override Override for the Preparer Name Preparer Number RAL Prep Fee Number of preparer Refund anticipation loan preparation fee as display on the BILL form 4562 AMT Depreciation Current Year AMT Depreciation on Form 4562 4562 B
234. escriptions are provided below e Preparer Name The preparer name on the return is pulled from this field e Email Optional Enter the preparer s e mail address e Self Employed Check the box if the preparer is self employed e Social Security Number Required field Preparer SSN appears on each return unless a PTIN is entered e PTIN Optional If a PTIN is entered the PTIN prints on returns instead of the preparer SSN To apply for a PTIN complete Form W7 P and send to the IRS e Office Number Optional Enter the office number that the preparer normally works in multiple offices use this program Entering the office EFIN is acceptable e Hourly Rate If the preparer chooses to bill by the hour rather than charge by the form the hourly rate entered here is used to calculate fees The TRAC screen in data entry shows a log of billable time that is tracked by the program For more on the TRAC screen see Keeping Track of Return Data on page 134 e Firm New for 2007 Enter a preparer firm When a preparer logs in to Drake that preparer s setup and firm information pulled from Firm Setup and dependent upon the firm selected here is used for certain lines on the tax return 4 Enter Login Information A password is not required 5 Enter a PIN Signature and select Return Signature Options e PIN Signature Enter the 8879 PIN signature for the preparer This PIN may also be used as the Third P
235. et drawer or folder in the DDM enter part of the name to Find and click Find The file location is highlighted in the tree 1 RO ee Filing Cabinets Cae BUILDING A FILE STRUCTURE If you are building your own file structure Drake recommends that you map it out on paper before creating it in the DDM Additional cabinets drawers and folders can be added to a Drake integrated file structure As each level is created an icon representing that level appears in the left pane of the DDM creating a tree structure amp Clients oe l B 1040 MYE 111111111 P Tax ap Aa aai To aarp e a P Taaa etree a Drake Software Manual Copyrighted Material 240 Suite Products 2007 DRAKE SOFTWARE Creating DDM Cabinets Filing cabinets are the first level of the filing structure The Drake filing system creates a Clients cabinet but you might want to separate clients by return types and have an Individual and a Business cabinet instead Regardless of the structure you choose cabinet are required for storing drawers and folders To create a cabinet in the DDM click New Cabinet or go to Setup gt New Cabinet or press F2 Enter a cabinet name and click OK The new cabinet appears in the left pane Repeat to create additional cabinets N OTE File cabinets are not stored inside file cabinets Each cabinet is for Level 1 storage Drawers are for Level 2 storage and folders are for Level 3 storage Cr
236. et for spouses who are married filing separately MFS Click F1 for further details e Domestic Production Activities Deduction Use to figure a taxpayer s domestic production activities deduction DPAD e Katrina Retirement Plan Distributions This screen reflects Form 8915 Qualified Hurricane Retirement Plan Distributions and Repayments Parts I and III 1040 CREDITS TAB Screens for the following forms are accessed from the Credits tab Schedule R Credit for the Elderly or the Disabled Form 1116 Foreign Tax Credit Form 4136 Credit for Federal Tax Paid on Fuels Form 3468 Investment Credit Form 3800 General Business Credit Form 5695 Residential Energy Credits Form 5884 Work Opportunity Credit Form 6478 Credit for Alcohol Used as Fuel Form 6765 Credit for Increasing Research Activities Form 8396 Mortgage Interest Credit Form 8582 CR Passive Activity Credit Limitations Form 8586 Low Income Housing Credit Form 8609 Low Income Housing Credit Allocation and Certification Form 8801 Credit for Prior Year Minimum Tax Individuals Estates and Trusts Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 123 NEW FOR 2007 Form 8812 Additional Child Tax Credit See Other Adjustments on page 122 The 8812 screen formally EIC 8812 calculated automatically as applicable has been revised so preparers can electronically track data related to IRS due diligence requi
237. eturn e Return Results The Calculation Results screen now includes an EF Electronic Filing button enabling you to place a return directly into the queue for transmission e Due Diligence for Form 8867 With access to new and updated screens preparers can electronically track data related to IRS due diligence requirements for Form 8867 Paid Preparer s Earned Income Credit Checklist Numerous other screens have been added and improved throughout the software and both the Drake Document Manager DDM and the Tax Planner include new features as well look for the NEW FOR 2007 tags throughout the manual to learn more State and federal tax rules and regulations can change at any time Read the Drake M PI RTANT shipment letters broadcast e mail and manual addenda throughout the season to stay up to date on the latest changes to the software and how they reflect changes in the state and federal arenas Drake Software Manual Copyrighted Material 2 Introduction 2007 DRAKE SOFTWARE ABOUT THIS MANUAL This manual has been developed for Drake clients to provide clear easy to find instructions and guidelines for using the software It is one of several tools available along with the online and on screen help features tutorials training and phone support Use this manual in conjunction with other Drake resources Be sure to take advantage of our index which has been expanded to help you locate information more efficiently
238. eywords appear as red text within lt angle brackets gt A keyword displays a description of the text that prints on the actual return For example the keyword lt Date gt is at the top each letter When a letter prints with a return the lt Date gt keyword is replaced with the current date Keywords allow one return letter to be used for multiple clients because individual information is pulled from the return when the letter is printed Keywords are listed in the left pane in a category tree format Click a category plus sign to expand and view the keywords in the category Rest your mouse pointer over a keyword to view a description of the keyword While the result letters are designed with keywords inserted to handle most situations additional keywords can be added to further customize the letter Conditional Paragraphs Copyrighted Material 58 Installation amp Setup 2007 DRAKE SOFTWARE Conditional paragraphs like keywords contain lt angle brackets gt Unlike keywords however conditional paragraphs begin with a descriptor followed by a paragraph of text and ending with an lt End Paragraph gt marker The pair of tags for example lt Federal Refund Paragraph gt and lt End Paragraph gt enclose a paragraph or a sentence The enclosed paragraph or sentence between the tags prints only if the situation applies in that letter For example the conditional paragraph below is generated only if the taxpayer has a refun
239. f data entry Numb g FimName EFN Rac f The Tax Dood Ferrie 09965 10 10 2 Marx s Taxes 555444 00000 10 10 Hees Edit Firm Firm Number 7 New Firm Delete Firm Adding a Firm To a firm complete the following steps 1 From the Home window go to Setup gt Firm s 2 Click Add The bottom half of Firm Setup becomes active 3 Enter the firm information Yellow fields must be completed for electronic filing 4 Click Save to save changes or click Cancel to exit without saving changes Editing a Firm A firm can be edited at any time Take the following steps to edit a firm in Firm Setup 1 From the Home window go to Setup gt Firm s Double click the firm to edit or delete or highlight the selection and click Edit Firm The bottom half of Firm Setup becomes active Edit the firm information wp YN Click Save to save changes or click Cancel to exit without saving changes Deleting a Firm To delete a firm go to Setup gt Firm s and select a row to delete Click Delete When prompted click Yes Drake Software Manual Copyrighted Material 36 Installation amp Setup 2007 DRAKE SOFTWARE Printing a List of Firms To print a list of firms go to Setup gt Firm s and click Print When the report opens click Print again Staggering the Declaration Control Numbers DCNs It is necessary to stagger the DCN numbers only if multiple stand alone computers are electronically filing in one office with t
240. fetime learning epenses paid Number eligible for child care credit a Use navigation buttons Amount of child care paid or click to select a tab Dee e Tabs Mib Client Setup Demographics Summary Income Adjustments Itemized Deductions Credits _ Other Taxes Tax Planner Toolbar The Tax Planner toolbar provides functions specific to the Tax Planner New Planner Open a blank planner Open Planner Search for a populated planner to open Save Planner Save the planner as a dtp Drake Tax Planner or xls Excel file Delete Planner Open the Delete Planner dialog box Print Planner Open the Print Selector Reports Open the Client Report dialog box Options Open a menu with Send to DDM Case Options and Directories and Paths Backup Restore Open the Backup and Restore dialog box Go To Open to a planner worksheet of your choice Close Planner Close the Tax Planner WORKING IN A TAX PLANNER Read the following sections before you begin tax planning for your clients Tax Planner Cells and Tabs When client information is imported from Drake Software all applicable 2007 information and amounts are automatically filled in on the tabs Drake Software Manual Copyrighted Material 246 Suite Products 2007 DRAKE SOFTWARE TIP Cells Each tab contains data entered in cells Some dat
241. for both federal and state returns oe EF related notifications e The EFSTATUS page displays transmission options including any piggyback transmissions to the federal return and any additional state returns to be transmitted e The MESSAGES or state MSG page red default is displayed only if there are issues within the return that prevent it from being eligible for electronic filing The MESSAGE page lists the error codes and descriptions of these issues N OTE All error descriptions on the MESSAGE page have a designated error code All error codes below 5000 are IRS codes All others are Drake error codes Drake Software Manual Copyrighted Material 152 Electronic Filing and Banking 2007 DRAKE SOFTWARE STEP 2 SELECT RETURN FOR EF NEW FOR 1 07 To bypass this step you can select the return directly from the Calculation Results screen See Calculation Details on page 142 Once a return has been calculated and determined eligible for electronic filing take the following steps to prepare the transmission file 1 From the Home window select EF gt Select Returns for EF to open the EF Return Selector TIP Pressing CTRL S also opens the EF Return Selector 2 Select the boxes of the EF eligible test returns to transmit only recently calculated returns are shown Click Select All or Unselect All as needed to check or clear multiple boxes Drake 2007 EF Return Selector EF Return Selecto
242. for offices with a network installation e Update Profile Indicate the file types to update during the Install Update process e Pay Per Return Activate pay per returns PPR or purchase additional returns This option is necessary only if you purchased the a PPR package N ITE Prior year Drake clients can bring forward most required program settings from last year s program See Updating Settings on page 71 for details Additional setup screens are available See Optional Program Settings on page 46 to determine which options best suit your office needs Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 35 Firm Setup Enter information for each firm in Firm Setup Firm information must be entered for each individual firm Information in the yellow fields is required for electronic filing NEW FOR er 20 07 The Firm Setup window is redesigned for 2007 Functions are now available from the toolbar Provide as much information as possible when adding or editing a firm The N OTE information entered is used for electronic filing return calculation fee calculation and tax return information If information is inaccurate or missing tax returns could be electronically filed with incorrect information When a firm is created it is given a firm number in the Number column of Firm Setup Use this number to identify which firm is associated with a tax return in screen 1 o
243. for letters NEW FOR 2007 Result and Extension letter overrides have been added in 2007 to control the filing type paragraph that prints EF or Paper in a letter From the Other tab click Letter or type LTR into the Selector field and press ENTER NOTE NOTE Letter If left blank the default is the selection in Setup gt Letters Personalized letter greeting Enter the name to be displayed on the letter overrides the default greeting Example You have prepared a tax return for your friends Hugh and Gwen Sample Since the default greeting for all letters begins with Mr and Mrs and you want to use a less formal greeting for your friends you might enter Hugh and Gwen in the Personalized letter greeting field The generated letter would then begin with Hugh and Gwen rather than Mr and Mrs Sample If you want to begin the greeting with the word Dear write it with the name in the Personalized letter greeting field If you want all letters for a package type to begin with Dear or another greeting of your choice then you should make the change in the actual template in Setup gt Letters See Letters Setup on page 55 Custom Paragraph Compose a custom paragraph in the field provided The custom paragraph appears by default at the end of the letter where a P S would go To adjust the location of custom paragraph appears move the Paragraph from LTR Screen key
244. fter overpayment applied income tax ST IncomeTax 1st Qtr Estimate Detail 1st Qtr state estimate amount overpayment applied and amount due for income tax ST IncomeTax 1st Qtr Overpayment Applied State overpayment applied 1st quarter income tax ST IncomeTax 1st Qtr Total Est Amt State estimate amount 1st quarter before overpayment applied income tax ST IncomeTax 2nd Qtr Estimate Amt Due State estimate payment 2nd quarter after overpayment applied income tax ST IncomeTax 2nd Qtr Estimate Detail 2nd Qtr state estimate amount overpayment applied and amount due for income tax ST IncomeTax 2nd Qtr Overpayment Applied State overpayment applied 2nd quarter income tax ST IncomeTax 2nd Qtr Total Est Amt State estimate amount 2nd quarter before overpayment applied income tax ST IncomeTax 3rd Qtr Estimate Amt Due State estimate payment 3rd quarter after overpayment applied income tax ST IncomeTax 3rd Qtr Estimate Detail 3rd Qtr state estimate amount overpayment applied and amount due for income tax ST IncomeTax 3rd Qtr Overpayment Applied State overpayment applied 3rd quarter income tax ST IncomeTax 3rd Qtr Total Est Amt State estimate amount 3rd quarter before overpayment applied income tax ST IncomeTax 4th Qtr Estimate Amt Due ST IncomeTax 4th Qtr Estimate Detail State estimate payment 4th quarter after overpayment applied income tax 4th
245. ger 1 Click Edit Macros Drake 2007 Macros for the Fixed Asset Manager Fixed Asset Manager Macros That screen is used to setup a set of standard reports that you want to run Such as you want a federal depreciation schedule for the return then a state depreciation schedule for that return then a AMT Depreciation schedule ou would set that up in the first 3 lines of this screen then pick auto code print when you go to the fixed asset manager Report Depreciation 01 Depreciation Schedule FD Federal FL Full Schedule 03 Sec179 Asset List FD Federal DP By Department FD Federal Make your choices from the various drop lists cae _ 2 Choose Report Depreciation and Style for all reports to run in the set then click Save 3 Choose Auto Code Print as the Report type from the first list and click Run Report 4 Choose to Print to Printer Export to File or Cancel Click Cancel to close the Fixed Asset Manager Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 235 Suite Products Integrate Drake Software suite products with Drake tax software to run your business more efficiently The suite includes the Document Manager Tax Planner and Client Write Up programs All three are free of charge and are installed from your Drake Software CD This chapter s focuses are the Document Manager and Tax Planner For Client Write Up instruction refer to the Client Write Up Manual available on the Drake
246. ger path must be correct before creating returns for 2007 For details see Document Manager DDM Setup on page 65 Also to get the most out of the CSM custom statuses must be determined before tax season begins so that they are available during tax season and provide accurate reporting For details see Client Status Manager on page 175 When all required settings are marked complete with a green check you are prompted to continue displaying the Wizard at startup or to no longer show the Wizard This message also appears when the Do not show Setup Wizard at program startup check box is cleared To exit the Setup Wizard click Exit or OK REQUIRED PROGRAM SETUP Complete the following setup screens before you begin using the program N ITE Firm ERO and Preparer Setup must be completed before preparing and electronically filing returns While a return can be prepared with just these three settings all other required settings are needed for proper program functionality e Firm s Set up or edit firm information that appears on tax forms select bank set fees e ERO Enter electronic filing information required for EROs and other preparers who use Drake e mail and other Internet related features e Preparer s Enter each preparer s general information designate a login name and password and set security options e Directories Paths Select configuration settings based on your office setup required
247. ges to the file type N ITE If the answer is Yes but the QuickBooks file type does not match you are prompted to convert the QuickBooks file while importing for example if there is a QuickBooks S corporation file to import into a Drake C corporation file Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 215 Once the SSN EIN is matched information from the QuickBooks file is imported into the Drake Software file N OTE After importing the QuickBooks files enter Inventory amounts and details for Other Deductions and items requiring details on the return LETTERS Go to Tools gt Letters to access batch printing of letters mailings labels envelopes and postcards LETTERS Preseason After Season Estimate and Schedule letters can be printed for one or multiple clients To edit letters before generating them see Letters Setup on page 55 1 Go to Tools gt Letters gt Letters to open Client Letters Drake 2007 Client Letters Client Letters Select the desired letter from the list below Click the Next button to continue Select letter to print for clients Post season for 2007 Clients Pre season for 2006 Clients Individual Estimate Payment Reminder for 2008 Scheduled Appointment Reminder for 2007 Clients Eer T Oe ee T as TOTEN 2 Select a letter type to print for clients and click Next to open Client Selection 3 Complete one of the following tasks e Printa let
248. hat an IRAL Request was Declined IRAL RB IRAL Request indicator on the bank screen IRAL Rejected Indicates that an IRAL Request was Rejected IRAL SBBT IRAL Request indicator on the bank screen Prefile Indicates that a Prefile Loan was Requested on the Bank screen Prefile Accepted Indicates that a Prefile Loan Request was Accepted Prefile Chase Prefile Loan Request indicator on the bank screen Prefile Declined Indicates that a Prefile Loan Request was Declined Prefile RB Prefile Loan Request indicator on the bank screen Prefile Rejected Indicates that a Prefile Loan Request was Rejected Prefile SBBT Prefile Loan Request indicator on the bank screen 501C Contrib SP Contributions to section 501 c 18 pension plan for spouse 501C Contrib TP Contributions to section 501 c 18 pension plan for primary taxpayer Alimony Paid 1 Spouse First amount of alimony paid by the spouse Alimony Paid 1 Taxpayer First amount of alimony paid by the taxpayer Alimony Paid 2 Spouse Second amount of alimony paid by the spouse Alimony Paid 2 Taxpayer Apartment Drake Software Manual Second amount of alimony paid by the taxpayer Number of the apartment in the taxpayer s address Copyrighted Material 252 Appendix 2007 DRAKE SOFTWARE Keyword Description Casual Rent Expense Spouse Spouse s casual rent expense Casual Rent Expense Taxpayer Taxp
249. hat employer name EIN number and corresponding information is automatically added to the EIN database The EIN and name index can be created separately or both at the same time To build the EIN Name index for the current year go to Last Year Data gt Build EIN Name from 2006 In the Build EIN and Name Index dialog box select Both EIN and Name EIN Only or Name Only NOTE The Both EIN and Name option takes about one minute to build per 2 000 clients UPDATING SETTINGS NEW FOR 2007 Previously known as Update Configurations the 2007 Update Settings tool is now easier to use and can bring forward the following settings from the previous year ERO setup Letterhead setup color settings DDM setup Printing setup custom reports and filters Setup Options and CSM Custom Statuses Copy your 2006 software settings into the 2007 program to save preseason preparation time Once the settings are brought forward for the year you can adjust them individually Use the following procedure to update settings 1 NOTE Go to Last Year Data gt Update Settings 2006 to 2007 The software detects all Drake 2006 locations In Drake 2007 Update Settings select a drive from Get update settings from drive Select the items to update All items except for previously updated items are selected by default If there is a plus sign in front of an item click the to expand that item and view the specifics for that item If the is sele
250. he file to the desired name location Drake Software Manual Copyrighted Material 250 Suite Products 2007 DRAKE SOFTWARE CLIENT WRITE UP Client Write Up is free to Drake clients and is shipped on every release of Drake Software Client Write Up enable you to prepare and print both live and after the fact payroll W 2 1099 940 941 943 944 941SS and 944SS A number of reports including multi column profits and losses pre posted reports comparative or single column balance sheets and payroll reporting 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 New for 2008 print vendor checks using Client Write Up s Accounts Payable program This year file 940 941 944 and 944SS and upload W2s W3s 1099s and 1096s electronically Install Client Write Up from your Drake Software CD A manual is also available on the Drake Support website Training Tools gt Manuals N OTE Review the CWU manual to learn how to print W 2s W 3s 1099s and 1096s on the fly without using the live or ATF payroll function in Client Write Up Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 251 Appendix REPORT KEYWORDS The following tables lists all client and electronic filing and banking keywords available for creating reports For details see Reports on page 223 CLIENT KEYWORDS Choose fro
251. he program These fonts work with HP compatible laser printers and allow preparers to produce federal and state tax forms When the printer is turned off these fonts are lost from memory Download the fonts again when the printer is turned back on By default Drake downloads fonts with each print job To change font download settings go to Setup gt Printing gt Printer Setup From F7 Options select the correct option from the PCL Soft Font Option list Complete the following steps to manually download fonts 1 To download fonts go to Tools gt Download Fonts Drake Software Manual Copyrighted Material 208 Tools 2007 DRAKE SOFTWARE 2 3 4 5 Click Download to open the Download Fonts dialog Select the printer from the printer list Click Download As downloading proceeds the font download status is displayed Click Exit when the download is complete BLANK FORMS Print blank tax forms and interview sheets from Blank Forms Some forms not available in data entry may be available as a blank form IRS Revenue Procedure 96 48 requires that a copy of the Paperwork Reduction Act M PI RTANT Notice be distributed on federal tax forms When providing a blank copy of a federal f orm to a client a copy of the notice must be included To access it go to Tools gt Blank Forms gt Federal select Individual and open PAPERWRK PG VIEWING AND PRINTING BLANK FORMS To view or print blank forms complete the following proc
252. he same EFIN Each computer assigns a DCN to every calculated return The starting DCN created by the software is 01000 Every return created after the first return is assigned a DCN in sequential order 01001 01002 01003 etc The option to change that DCN number is in Firm Setup W To avoid duplicate DCNs when working on multiple stand alone workstations not on AR N NG i a network or on workstations using the alternate network setup not sharing all shared files on server stagger the starting DCNs before creating 2007 returns To stagger the DCNs complete the following on each workstation 1 From the Home window go to Setup gt Firm s 2 Select firm and click Edit Firm or double click a firm The bottom half of Firm Setup becomes active 3 Change the DCN Serial Number Drake suggests choosing starting DCNs that are at least 2 000 numbers apart 4 Click Save to save changes or click Cancel to exit without saving changes Depending on the amount chosen to stagger each workstation now produces DCNs 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 Each computer can process 2 000 returns before duplicating a DCN Be careful when changing DCNs after tax season begins and returns are processed MPD RTANT If done improperly returns may be processed with duplicate DCNs
253. he server so setup preparer firms directories paths etc is simplified e Updates are installed only to the server e A single firm setup file is shared by all computers therefore only one DCN counter is needed There is no need to increment the DCN on each computer To implement the server only system take the following steps 1 Using the instructions in Tax Software Installation on page 28 install the Drake program on the server You are now ready to set up the workstations N OTE The program can be installed to the server from a workstation if necessary Be sure to select the correct server drive Steps 2 and 3 must be performed on each workstation not at the server Steps 4 MFO RTANT through 6 can be performed on either a workstation or the server and need to be completed only once 2 Click Start gt Run on the Windows Start menu at a workstation to open the Run dialog box 3 Type F DRAKEO7 NWCLIENT NWCLIENT EXE substituting the server drive letter for F then click OK 4 In Drake go to Setup gt Directories Paths to open the Directories and Paths Setup window 5 In the Configuration box for Network Options select 2 Software installed only on Server All other choices are disabled when you make a selection Network paths are set accordingly Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 31 6 Configuration Choose the
254. he viewing or printing procedure click Back to return to data entry or click Continue to proceed to either view or print mode NEW FOR If a return is determined eligible for EF you can add it to the EF queue directly from the Calculation Results window To do so click EF at the bottom of the window If a l 07 return is not eligible for EF the EF button is disabled For more on selecting a return for electronic filing see Filing a Return Electronically on page 151 VIEWING AND PRINTING A RETURN From view mode preview the printed version or a return on your screen From print mode you can send multiple pages copies and sets of a return to your printer ACCESSING VIEW AND PRINT MODES View or print a return from either the Home window without opening the actual returns or from within a return data entry mode Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Results 143 Take the following steps to view or print one or more returns from the Home window 1 Open the View or Print screen by doing one of the following e Select File gt View or File gt Print from the menu bar e Click the View or Print icon in toolbar e Press CTRL V or CTRL P The Return Selector lists all recently calculated returns available for viewing or printing Drake 2007 Return Selector Return Selector Press the SPACEBAR or click checkboxes to select return s for Viewing Printing Sorting is avai
255. ials 189 Drake Forums 192 Drake Software installing 28 login and passwords 6 manual addenda 2 new features for 2007 1 online manual 2 shipment letters 1 system requirements 27 updates 1 Drake Software Manual addenda 199 online 199 Drake Support contact information 3 199 field help data entry 22 screen help data entry 22 Drake Support Web site see resources Drake Tax Planner backup restore 249 case options 246 cells 246 creating a planner 244 data entry 247 detailed worksheet 248 direct entries 247 editing 248 installation 244 layout 244 making adjustments 247 notes 248 opening a planner 244 paths 246 planning preferences 246 printing 248 reports 248 saving 249 tabs 246 technical requirements 243 DTP see Drake Tax Planner due diligence 123 Copyrighted Material viii Index duplexes 105 early withdrawal 94 Earned Income Credit after disallowance 136 and combat pay 123 calculating 123 checklist 90 123 EF button 142 EF Database 158 EF Ready option 153 EF Return Selector 152 EF Transmission Record 154 EF see electronic filing e filing see electronic filing EFIN application 150 hierarchy 162 multiple EFINs 162 EFSTATUS page 146 151 EIC see Earned Income Credit EIN database editing 217 using 220 election options 130 elections for gift tax 128 electric vehicle credit 123 electronic filing acknowledgements see acknowledgements copying data
256. ibuted Long term Capital Gains Form 2441 Form 2441 Child and Dependent Care Expenses input screen Form 2553 Form 2553 Election by a Small Business Corporation Form 2555 Form 2555 Foreign Earned Income Form 2758 Form 2758 Application for extension of time to file Form 2848 Form 2848 Power of Attorney and Declaration of Representatives Form 3468 Form 3468 Investment Credit Form 3469 Form 3469 computation of investment credit Form 3800 Form 3800 General Business Credit for 1040 returns Form 3903 Form 3903 Moving Expenses Form 4136 Form 4136 Federal Tax on Fuels Credit Form 4137 Form 4137 Computation of Social Security Tax on Unreported Income Form 4255 Form 4255 Recapture of Investment Credit Form 4506 Form 4506 Request for copy of tax return Form 4562 Form 4562 Depreciation Form 4626 Form 4626 Alternative Minimum Tax adjustments amp preferences Form 4684 Form 4684 Casualties and Thefts Form 4797 Form 4797 Gains and Losses from Sales of Assets Form 4835 Form 4835 Farm Rental Income Form 4852 Form 4852 Substitute for form W 2 1099 R Form 4868 PIN Signature page for paperless PIN returns for form 4868 Form 4952 Form 4952 Investment Interest Expense Deduction Form 4970 Form 4970 Tax on Accumulation Distribution of Trusts Form 4972 Form 4972 Tax on Lump sum Distributions Form 5329 Form 5329 Additional Taxes on IRA MSA etc Form 56 Form 56 Notice Concerning Fiduciary Relationship Form 5695 Form 5695
257. ics e Estimated Taxes e Alternative Minimum Tax AMT e Recapture of Low Income Housing e Other taxes including household employment taxes kiddie tax and taxes on tips and distribution N TE For information on entering self employment tax data see Schedule SE Self Employment Tax on page 116 The SE screen is accessible from both Adjust ments and Taxes From Taxes you can also access screens to enter information for Form 1040NR U S Non Resident Alien Income Tax Return and Form 709 United States Gift and Generation Skipping Transfer Tax Return Take the following steps to enter tax related data for an open return 1 From Taxes select a screen or type a code into the Selector field and press ENTER 2 Complete all applicable fields Press PAGE DOWN to access more data entry fields 3 Press ESC to save and close Following are details on the screens accessed from the Taxes tab Estimated Taxes The ES screen or Form 1040 ES is accessible from both General and Taxes or by typing ES into the Selector field and pressing ENTER Use this screen to enter the following data e Overrides or adjustments to estimated calculations from Demographics screen 1 e Estimated tax payments made during 2007 e Apply override the overpayment if the system determines no estimate is needed For further instructions on using the ES screen see Estimated Taxes for 2007 and 2008 on page 94 Also use Screen Help and F1 F
258. idual OtherTax1 Kansas City OtherTax2 St Louis Fiduciary OtherTax1 Kansas City OtherTax2 St Louis Corporation OtherTax1 Kansas City OtherTax2 St Louis New Partnership OtherTax1 Interest and Dividends Hampshitg Individual OtherTax1 Interest and Dividends Fiduciary OtherTax1 Interest and Dividends 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 and Cities Rhode Island Partnership OtherTax1 Composite Individual OtherTax1 Composite Fiduciary OtherTax1 Composite Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 285 State Package Tax Type Description Tennessee S Corporation OtherTax1 Franchise and Tax Individual OtherTax1 Franchise and Tax Corporation OtherTax1 Franchise and Tax Texas S Corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Individual OtherTax1 Franchise Corporation OtherTax1 Franchise Drake Software Manual Copyrighted Material 286 Appendix 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Symbols fields marked by 95 adjustment fields 15 override fields 15 ABC Voice File 163 acknowledgements Acks Only 154 157
259. ield gt Moves cursor forward one field Escapes the screen Saves and Exits D Inserts the current date Toggles heads down data entry mode If a macro requires multiple gt s use heads down mode to jump directly to the field For example create and implement use of this macro from the Data Entry Menu EF gt 25 gt X gt This macro opens the EF screen from the Selector field EF gt toggles heads down data entry mode to ON enters field number 25 gt checks the box to Suppress Federal State EF and all Bank Products X toggles heads down mode to OFF and saves and escapes the EF screen Bypasses the Existing Forms List when executing a macro W2 dependent etc When a macro is used for a screen with multiple records the Existing Forms List window opens to allow selection of the record to apply the macro To bypass the New Record window and use the macro on the first record enter an asterisk in front of the macro For example W2 gt opens the first W2 record To open the second record begin the macro with W2 2 W2 3 for the third and so on The asterick only needs to be entered one time in any macro and should only be placed at the beginning of the macro New Executes the macro on a new record For example W2 New gt opens a new record The asterisk bypasses the Existing Forms list and must be present for the New function to work properly New Prevents a macro f
260. ield Help as needed Estimated Tax Adjustments Data entered on the ETA screen adjusts not replaces calculated values Any number entered is added to the current year value For example if a taxpayer claimed four exemptions in 2007 and expects to claim five in 2008 you would enter 1 in the Change column for Number of exemptions If an amount is expected to decrease enter a negative number Calculations are displayed on a WK_ES page Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 125 Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWEN ETA Income Changes for Year 2008 to Recompute Federal Estimates Enter the CHANGE can be or to the 2008 Amounts Increases by 1 the Changs umber of exemptions Number of exemption that were claimed in prior year W 2 income Interest amp dividend income ee Ce ee ee Se Oe ae E S Underpayment of Estimated Tax Form 2210 Underpayment of Estimated Tax by Individuals Estates and Trusts is used to determine if a taxpayer owes a penalty for underpayment of estimated tax and if a penalty is owed the penalty amount Use the 2210 screen if the taxpayer is required to file Form 2210 for any of the reasons listed in Part II of the form e 2210 Requirements The IRS does not recommend that taxpayers complete Form 2210 unless required Check the applicable box of this screen to indicate why the form is required
261. ient name ID number EF status and federal and state including piggyback documents to be filed Click Save to retain any changes you make 3 Click Continue The Report Viewer list all returns in the send queue See Report Viewer on page 231 for more on the Report Viewer 4 optional Print or export the reports 5 Click Exit to close Report Viewer Troubleshooting EF Transmission If a return does not appear in the EF Return Selector take these actions to troubleshoot e Recalculate the return e To check for an EF Message on the return open the return and click View or press CTRL V and look for MESSAGE pages MSG for state returns Or look for EF Messages on the Calculation Results window e To check setup options to see if EF Ready is selected go to Setup gt Options gt EF If Require Ready for EF Indicator on EF Screen is selected open the return and go to the General Information screen Click EF Use the EF Ready field to select Ready for EF e To ensure the return has not been sent and accepted by the IRS go to EF gt Search EF Database or open the return type TRAC in the Selector field and press ENTER e Ensure that the return does not contain forms that cannot be electronically filed STEP 3 TRANSMIT RETURN Once an EF eligible return has placed into the send queue it is ready for transmission An Internet connection is required for transmitting returns Do not transmit from more than on
262. ified Zone Academy Bond Credit Form 8861 Form 8861 Welfare to Work Credit Form 8862 Form 8862 Information to Claim Earned Income Credit After Disallowance Form 8863 Form 8863 Education Credits Form 8864 Form 8864 Biodiesel Fuels Credit Form 8864 8896 Form 8864 Biodiesel Fuels Credit and Form 8896 Low Sulfur Diesel Fuel Production Form 8866 Form 8866 Interest Computation under the Look back Method Form 8868 Form 8868 Application for Extension of Time to File an Exempt Organization Return Form 8873 Form 8873 Extraterritorial Income Exclusion Form 8874 Form 8874 New Markets Credit Form 8880 Form 8880 Credit for Qualified Retirement Savings Contributions Form 8881 Form 8881 Credit for Small Employer Pension Plan Startup Costs Form 8881 2 Form 8881 Credit for Small Employer Pension 8882 Credit for Employer provided Child Care Form 8881 8882 Form 8882 Credit for Employer provided Child Care Facilities and Services Form 8882 Form 8882 Credit for Employer provided Child Care Facilities and Services Form 8884 Form 8884 New York Liberty Zone Business Employee Credit Form 8885 Form 8885 Health Insurance Credit for Eligible Recipients Form 8889 Form 8889 Health Savings Accounts HSAs Form 8900 Form 8900 Qualified Railroad Track Maintenance Credit Form 8903 Form 8903 Domestic Production Activities Deduction Drake Software Manual Copyrighted Material 260 Appendix 2007 DRAKE SOFTWARE
263. ighest score achieved and the number of times the test was taken is indicated The date of the last time the test was taken is also displayed e CPE Credits View all courses for which a CPE certificate was printed The course description date credits were earned and date certificate was printed is available for view Click Print to reprint a certificate ADMINISTRATION The Administration tab is available only when logged in as an Administrator A list of active students is displayed e Click Add New Student to add a new student e Select a student list from the Active Students list Active Inactive or All Students To change the status of a student click Edit e Click Report Card to view a student s report card e Click Edit to edit student information Edit the desired fields An active or inactive status may be selected from the Active Status list Click Save Information LOGGING OUT OF ETC Click Administration to log out of ETC and return to the main login screen DRAKE SUPPORT The Drake Support Web site provides support around the clock Get answers print manuals access your account information and much more To access the Support Web site go to www Support DrakeSoftware com KNOWLEDGE BASE The Knowledge Base KB is a database consisting of articles about Drake s tax software and Client Write Up software changes in state and federal tax law tax return troubleshooting using bank products researching tax
264. ilable for Individual Corporate Partnership and Estate packages Use in conjunction with the Form Line Finder e Form Line Finder Content based search on the actual line on the tax return e Calculators Eighty calculators for use in auto and home loans investments personal retirement savings and tax calculations Use in conjunction with the Drake Tax Planner e Training Training resources available in RIA Training and Support HELP SYSTEM The Drake Software Help System answers many of the most commonly asked questions about the software It is easy to use and fully searchable To access do one of the following e Go to Help gt Drake Software Help e Click Manual from the toolbar e Click Help on any window except in data entry to launch the help for that window For example if you are in Pricing and click Help the help for the Pricing screen opens e In data entry right click outside of a field and select Read Manual Drake Software Manual Copyrighted Material 194 Resources and Support Drake 2007 Help 4 f Print Options divided into books 2007 DRAKE SOFTWARE Welcome to Drake 2007 Welcome to the 2007 Tax Season We are looking forward to another tax season and we are excited about the new functions and enhancements this year s tax program has to offer Support Tools The Manual and Help System Drake for Windows Help is available from every windo
265. iles accessed appointments and messages amp Drake 2007 Tax Software Menu Bar File EF Tools Reports Last YearData Setup Help E p oZ JoB Open New Calculate Print view Support Manual Research CSM Scheduler Exit Recent Files Key eves Toolbar with Speed Buttons EAU DE TOILETTE TEST amp z bed Return Test 2 SCHMOE JOE 3 _ _ Recent FEN List JVaKe Appointments Open Scheduler 2 30 PM JOHN BALLOON THE FAX SOLUTION E E Ji m Jey 4 4 00 PM EDWARD SMITH Scheduled Appointments Message Center Message Center You have acks to process You have mail to read Copyright 1985 2007 Drake Software Li Status Bar fi User Name CHRIS u Drive C 105 Windows XP 10 12 2007 MENU BAR The menu bar lists the Drake menus commands and hot keys for commands Menu bar items are File EF Tools Reports Last Year Data Setup and Help TOOLBAR Use the Home window toolbar for the following tasks and resources e Open New Open or create a return e Calculate Open the Batch Calculation window calculate returns e Print Open the Return Selector print returns e View Open the Return Selector view returns e Support Open www Support DrakeSoftware com e Manual Launch the Drake Help system e Research Launch the RIA Checkpoint web site e CSM Launch the Client Status Manager CSM e Scheduler Open the Scheduler e Exit Exit the software Drake Softw
266. imated Taxes for 2007 and 2008 Screen ES Estimated Tax Payments for 2007 and Overrides for 2008 covers Form 1040 ES Estimated Tax for Individuals This information appears on the taxpayer s quarterly estimate vouchers On this screen you can also enter overrides for 2008 N OTE If you need to make adjustments instead of overrides use the ETA screen Income Changes for Year 2008 to Recompute Federal Estimates Take the following steps to enter estimate information in an open return 1 Under the General tab click Estimated Taxes or type ES into the Selector field and press ENTER The Estimated Tax Payments for 2007 and Overrides for 2008 screen is divided into eight main sections one section for 2007 Federal Estimates one section for 2008 Estimated Taxes Due and six sections for State City Estimates 2 Enter data into each field accordingly e ES Code If a code is selected Form 1040 ES printed for the return e OP Overpayment Code Enter overpayment code for a taxpayer who wants to apply part of the 2007 overpayment to the 2008 estimate 3 Press ESC to save and close Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 95 If no estimate is necessary the system does not apply an overpayment to estimates To force the system to apply the overpayment to 2008 select 0 in the OP Code field and leave the ES Code field blank No vouchers print An entry in the Estimated Tax and
267. in 2007 STRUCTURE Following this Introduction our Basics section provides a general overview of Drake Software For those new to Drake Software read this section first In the Preseason category find instructions for Installation and Setup and Preseason Preparation to include updating the software and developing organizers and proformas for clients The Tax Season category consists of Return Preparation Return Results Electronic Filing and Banking the Client Status Manager and Resources and Support The Practice Management section addresses Tools Reports and Suite Products The Appendix includes charts that list keywords for creating reports and letters ADDENDA Drake strives to keep its manual as up to date as the tax software and provides manual addenda pages as necessary with software updates To keep your manual current update it each time you update your software Addenda pages from the Drake Support Web site Training Tools gt Manuals gt Drake Software The following options are available e Addenda Pages Print these pages to insert in or replace in your manual e Addenda Instructions View instructions on addenda pages and how they work e Manual Print a version of the manual that includes all addenda pages Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Introduction 3 CONTACTING DRAKE SUPPORT In addition to the manual on screen Help and online resources Drake offers unpa
268. ine code explanations are displayed in the lower box Drake Software Manual Copyrighted Material 162 Electronic Filing and Banking 2007 DRAKE SOFTWARE LEAVING THE EF DATABASE Take one of the following actions to close the EF Database and or access another application from within the EF Database e Return to the Home window Click Exit e Open the Online EF Database Click F10 Online DB or press F10 The EF Database in Drake remains open e Access data entry for the displayed return Click F5 Data Entry or press F5 The EF Database is closed ONLINE EF DATABASE The Online EF Database displays information about electronically filed returns in real time Run reports on returns loans and checks or search for electronic filing information for a single SSN or EIN Access the Multi Office Manager or MOM and view Client Status Manager data for one or multiple offices To access your Online EF Database from within the software log in to Drake Support and go to My Account gt EF Database or click F10 Online DB from within the EF Database The Online EF Database displays the electronic filing detail page for the return View the status of each Service Center along with any important notes or alerts Across the top of the screen are buttons for the available reports types Returns Loans Checks Fees Summary and MOM Also listed are Tools Options and Exit CONFIGURING THE EFIN REPORTING HIERARCHY The Online
269. ith being the page number of the form The following example highlights pages 2 3 and 4 of Form 1065 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Results 147 View Mode Print Mode Toolbar Use the view and print mode toolbars to switch modes edit properties adjust the window s look access the DDM access Drake help view or print pages within a return or exit The print mode toolbar contains additional buttons for printing sets using Classic Print and selecting forms to print Buttons and their functions are as follows Print Mode Switch from view mode to print mode Use the view mode button in the print mode toolbar to switch from print mode back to view mode DE Switch to data entry mode for the open return By switching to Data Entry you are closing view mode and must recalculate the return before entering view mode again F9 Prop Update the MESSAGES description pricing and number of copies on a per form basis If you change anything in the Form Information or Pricing sections you must recalculate the return in order to see the changes Color Cfg Customize color preferences for view mode In Color Configuration click a color to access the color palate from which to select a new color Click Restore Colors at any time to restore the default colors DDM Open the Drake Document Manager DDM View mode remains open while you are in the DDM For more on the DDM
270. ithin an office In addition to displaying information about each return the CSM allows you to set the status of each tax return giving you a snapshot of return progress Track statuses and print reports on individual preparers or an entire office Choose from predefined statuses or create custom statuses that suit your office needs Client files listed in the CSM are easy to search view and organize Customize the CSM view and use filters to refine your data searches Data viewed in the CSM is only for returns prepared on site in a single office but can N OTE be sent to Drake Software through the e filing process Then the data can be combined with information other offices CSMs using the Web based Multi Office Manager MOM See Multi Office Manager on page 165 Open the CSM in one of the following ways e Select the CSM button from the Home screen toolbar e From the menu bar go to Reports gt Client Status Manager e Press CTRL L from the Home screen THE CSM WINDOW The Client Status Manager window displays return data in rows and columns All 2007 returns are listed including returns brought forward from previous years new returns and returns that were started in Drake but deleted The CSM also includes client files imported from QuickBooks Each column displays specific information about the return Drake 2007 Client Status Manager BDR yi ao Y amp ooN Refresh Filters Quick View Reports Export Help Exit
271. ization e Estimated Tax and Overpayment Code Field contents affect how numbers entered in the ES Estimated Tax Payments and Overrides screen in Drake are applied See Estimated Taxes for 2007 and 2008 on page 94 for more on ES Drake Software Manual Copyrighted Material 90 Return Preparation 2007 DRAKE SOFTWARE NOTE NOTE NEW FOR 2007 e Receipt Not an override field assign a receipt number if desired e Fee Override Default is fee calculation in Setup gt Pricing Depending on the options selected in Setup gt Options this field may not be enabled for all users If the fee override was brought forward from 2006 a the field is flagged as a verification field See Field Flags on page 13 for more on field flags in Drake Do not use Fee Override for fee adjustments and comments Use BILL instead See Adjusting Client Bill Amounts on page 129 2210 Options The 2210 Options fields refer to Form 2210 Underpayment of Estimated Tax by Individuals Estates and Trusts e 2210 Code When any information is entered on Form 2210 screen 2210 in Drake the program calculates the form but the form is not printed unless it must be filed To force Form 2210 or Form 2210F to print select the applicable code e 2006 Fed State tax Enter the prior year tax amount The program calculates whether the taxpayer qualifies for the 2210 deduction In an updated return the prior year tax is display
272. k products for 2007 and explains how to do the following in Drake e Set up an electronic filing account e Test your electronic filing system e File a return electronically e Understand Drake government and bank acknowledgments e Prepare and process loan checks Although Drake tax software incorporates IRS regulations where feasible to ensure returns are filed correctly the tax preparer needs to be well versed in the IRS rules and processes Before tax season begins you should do the following e Consult IRS Publications 1345 and 1346 for information on the process laws and regulations for electron ically filing income tax returns e Know your state s electronic filing and banking requirements e Consult the handbooks and brochures provided to you by banks regarding their bank products PREPARING TO FILE ELECTRONICALLY Before your firm can electronically file a return it must meet several qualifications Also it is important to test your system to ensure that it is functioning properly ERO APPLICATION New Electronic Return Originators EROs must submit to following to the IRS e Form 8633 Application to Participate in IRS e file Program e A set of fingerprint cards for each principal and responsible official of the company An established ERO must file Form 8633 only if changing the original information in the application The IRS accepts applications throughout the year however be aware that processing can take up
273. ke Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Appendix 283 State Name Name of state if state return being prepared State No Direct Debit EF Inserts applicable paragraph if state direct debit is NOT Paragraph selected for e filed return State No Direct Debit Paper Inserts applicable paragraph if state direct debit is NOT Paragraph selected for paper filed return State No Direct Deposit Inserts applicable paragraph if state direct deposit is NOT Paragraph selected State Return Paragraph Inserts paragraph for state return State Taxpayer Bank Taxpayer s bank for state direct deposit or direct debit State Taxpayer Bank Account Taxpayer s bank account number for state direct deposit or Number direct debit State Taxpayer Bank Account Taxpayer s bank account type for state direct deposit or direct Type debit Tax Matters Contact Name Tax Matters contact name Taxpayer Bank RTN Taxpayer bank Routing Transit Number RTN account 1 Taxpayer Bank RTN 2 Taxpayer bank Routing Transit Number RTN account 2 Taxpayer Bank RTN 3 Taxpayer bank Routing Transit Number RTN account 3 Taxpayer Name and Address Taxpayer s name and address Taxpayer Phone Taxpayer s phone number Taxpayer Tax ID Taxpayer s SSN or ITIN STATE TAX TYPE SUMMARY FOR LETTERS The following charts lists the state tax types referred to by the Other Tax letter keywords
274. l shared files To do so click Admin Override in the Paths group box then select the drive letter for the shared files 7 Click OK to close Directories and Paths Setup W Changing these settings during tax season can cause server problems Contact AR N NG i Drake Support first if you need to change the network settings after tax season has begun SOFTWARE SETUP Before preparing and electronically filing returns you must complete some program setup See Required Program Setup on page 34 for a list of the required settings Additional setup screens are available for optional program performance See Optional Program Settings on page 46 and determine which should be configured to suit your office needs LOGGING IN AS ADMIN Use the administrator login when accessing items on the Setup menu The Admin login gives you access to features not available with any other login These features include the following 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 Creating an Admin Password An Admin password is recommended but not required If you do create a password be sure to make a record of it Drake Support cannot retrieve lost or forgotten Admin passwords To set a password for the Ad
275. lable by clicking the desired column header SSN EIN Date Time Name Fed Refund Status O 690000003 O 424007240 O 864514522 O 511003333 O 529003001 O 110000009 2 Select returns to view 10 05 13 25 48 10 05 13 24 33 10 05 13 22 25 10 05 13 19 57 10 05 13 19 02 10 05 12 44 52 10 05 12 16 00 10 05 12 09 18 10 05 11 47 46 10 05 11 43 04 10 05 11 38 03 10 05 11 37 54 10 05 11 34 47 10 05 11 33 23 10 05 11 29 00 10 05 11 27 44 10 05 11 25 00 10 05 11 11 47 10 05 11 09 14 CARLTON ASSET MANA STATMENTS DEPCARE NOME ALONE INC BOBS CORP TEST STA CONSTITUTION FINAN CARE DEPENDENT A EAU DE TOILETTE T WESTERN PAINTERS P TEST PARTNERSHIP O IA GENERAL PARTNER RANGE WRANGLERS IN TESTS Ill PENALTY SOMEONE TEST T amp SHORT FORM CORPORA TREE FIXR UPPER IN HELP FOR ALL INC UPDATE PRINT TEST SMITH TEST O amp LY CREDIT DEPENDENT 0 6688 54620 80068 0 1957 0 0 0 0 222495 34884 119904 107477 0 48716059 0 6371 1312 Msg Msg 9099 8466 580878 Select All UnSelect All View Exit e To select returns individually click the box next to each return to view or print To select all returns listed click Select All Click Unselect All to clear 3 Click View or Print to display the first return listed in View or Print mode N TE Depending on your setup options Calculation Results may open at this point click Continue to proceed To change this option
276. le click an appointment or select an appointment and click Open CREATING APPOINTMENT REPORTS To generate reports based on scheduled appointments complete the following steps 1 From the Home window open the Scheduler and select Reports Select the type of report to run e Preparer Appointments List of a preparer s appointments for one day Enter appointment date and preparer The report is printed e Preparer Calls List List of a preparer s calls for one day e Call List for All Preparers List of all preparers calls for a specific date e New Client List List of new clients entered in the Scheduler N OTE Select New from the Client Type list to indicate an appointment is for a new client The New Clients report does not pull new client information from other areas of Drake Software It only pulls information from the Scheduler itself 3 Choose a preparer except when running the Call List for All Preparers 4 Click View to generate the report and open the Report Viewer EF PREPARATION For details regarding preseason tasks Preparing to File Electronically on page 149 Drake Software Manual Copyrighted Material 84 Preseason Preparation 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE 85 TAX SEASON Drake Software Manual Copyrighted Material 86 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation
277. lected date displays with a blue circle e To view a specific day on the schedule grid select the day from the calendar Schedule Grid Depending on the day and calendar tab selected the schedule grid displays the day broken into rows by time and columns by details day or preparer Rows and columns create time slots When there is a scheduled appointment the time slot displays the appointment Double click a time slot to open Appointment Detail for a scheduled appointment or a blank Appointment Detail for an empty time slot N OTE To change the time slot increments go to Setup from the Scheduler toolbar See Setting Default Times on page 79 Calendar Tabs The calendar tabs that appear vary according to the login type Preparers can view all tabs and Front Office logins can only view the Preparer Calendars e Today s Calendar date Displays daily appointments for the logged in preparer only e Weekly Calendar Displays the week s appointments for the logged in preparer only e Preparer Calendars Displays the day s appointments for all preparers in their view N OTE To determine what preparers display in your view go to Setup from the Scheduler toolbar See Selecting Preparers Schedules to View on page 79 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 79 SETTING VIEW AND TIME OPTIONS Customize the Scheduler view and set default times in Scheduler View Setup
278. led Worksheet Enter a description for each item and an amount then click Add Once all items are entered click Exit and the total is displayed in the cell with a blue background Entering Notes in a Planner A Notes section is available on each tab Record pertinent comments or thoughts here Running Planner Reports To access standard reports click Reports from the tax planner toolbar and select a report Standard charts and graphics are also available Printing a Tax Planner Click Print Planner from the toolbar to access the Print Selector e Select one or multiple sheets or reports to print e Click Print Preview to preview your selection e Enter or select the number of Copies to print e Click Save Selection to save page selections as the default Click Print the print the planner after making selections Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 249 Backing Up and Restoring Tax Planner Files Use the Backup Restore Selector to back up or restore Tax Planner client files Backing Up To backup files complete the following steps 1 Click Backup Restore from the Tax Planner toolbar 2 In the Backup Restore Selector choose a backup location 3 Click the browse button to open the Browse for Folder dialog box After locating the file click OK 4 Choose the client files to back up e Select All Clients to make a backup of all tax planner client files e Select Select C
279. lete Data to Edit complete one of the following e From a field that contains the auto complete feature press CTRL SHIFT E e Right click a field that contains the auto complete feature Select Edit Auto Complete Data e Edit an auto complete entry Select an entry and click Edit or double click the entry Edit the Selected Entry and click Save e Remove an auto complete entry Select an entry and click Remove e Add an auto complete entry Enter a financial institution name in the Add Entry field and click Add Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 21 If multiple entries begin with the same letter or letters you must enter more of the name before the field is automatically filled To set a priority for a bank entry sort the auto complete list using one of the following methods e Click Sort Ascending or Sort Descending to sort the list e Click and drag an entry to the desired location in the list Click Save Changes to exit Edit Auto Complete Data Heads Down Data Entry Heads down data entry provides an efficient method of data entry when working from a proforma interview sheet See Organizers and Proformas on page 72 for more on proformas DERK Drake 2007 Data Entry 400007003 Smith John amp Jane Form 1040 Income Gis da a Description Taxpayer Spouse 7 Taxable scho Aap irae rem an E E E tne CT 7 Otherincome
280. lick OK or press ENTER Click Yes or press Y when prompted to create a new return The New Return dialog box opens Contents of the New Return dialog box vary according to your setup Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 9 Drake 2007 New Return New Return Select the Return Type and enter the required information below This information is required based on the PPR Status and the SSN Verification and Document Manager configurations SSN EIN Verification Verify SSN EIN First Entry 400004333 Return Type Individual 1040 Fiduciary 1041 C CCormp 1120 Tax Exempt 990 C S Corp 11205 C Estate 706 C Partnership 1065 Name Entry For Document Manager First Name MI Last Name Sample 4 Return Help Cancel e SSN EIN Verification Enter the taxpayer SSN do not use dashes or spaces This section is available to those running a Pay Per Return package or if this option is selected in Setup PPR clients cannot disable this selection N ITE When an SSN or EIN is entered to open a return the software searches both current and prior year files If a client if found in the prior year files only an Individual 1040 Update Options window opens See Updating Client Files on page 70 to perform an update e Return Type Select a return type required e Name Entry Type the client name or entity name for other packages in the appropriate fields req
281. lients to choose specific clients to backup Click the browse button and browse to the location of the files Hold down the CTRL key to select multiple clients Click Open 5 Click OK to backup files Restoring To restore files complete the following 1 Click Backup Restore from the Tax Planner toolbar 2 Inthe Backup and Restore Selector choose the Restore tab 3 Select the location of the backup files to restore Click the browse button to open the Browse for Folder dialog box After locating the file click OK 4 Select backup files to restore e Select All Clients to restore all backup files e Select Select Clients to choose specific backup files to restore Click the browse button and browse to the location of the files Hold down the CTRL key to select multiple clients Click Open 5 Click OK to restore files After restoring files rebuild the index so restored files appear in the Open Planner From the Restore tab of the Backup and Restore Selector click Rebuild Index Saving a Tax Planner Tax Planner files have a dtp Drake Tax Planner extension Tax Planner files may be saved as Excel xls files to e mail to clients Drake Software supports Excel 2000 and later Save a planner Click Save Planner from the Tax Planner toolbar and choose to Save under the current name location or Save As to a new name location Save a planner as an Excel file While in Excel click Save or File gt Save As and save t
282. livered 6 lt Custom Status 6 7 lt Custom Status 7 8 lt Custom Status 8 gt Select a status to customize odify the Status Descriptions that are available in Data Entry a Nescrintion select the Sta on the list and click Edit Enter a new status description Awaiting Paymnet Drake Software Manual Copyrighted Material 178 Client Status Manager 2007 DRAKE SOFTWARE Resetting Custom Statuses To restore all original status descriptions in Customize Display click Reset CUSTOMIZING CSM DISPLAY Initially the CSM displays client data in the most commonly referenced columns The selected columns pull data from specific areas of the return See page 179 N OTE Column customization is saved and displayed according to the logged in preparer therefore each preparer can set his or her own display Click Customize from the CSM toolbar to open Customize Display to the Column Layout tab Available Columns are listed in the left pane and Columns in Current View in the right Drake 2007 Customize Display Column Layout 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 P Status Settings Available Columns Columns in Current View Days Filing S
283. llowing e Adjustments related to self employment SE 8829 AUTO 8873 SEHD e Moving expenses e IRAs e Medical and Health Savings Accounts e Ministerial Income Allocation CLGY e Additional Itemized Deductions 4952 8283 e Other Adjustments Crop Insurance Payments Administrative Adjustment MFS Community Property Allocation Domestic Production Activities Deduction and Katrina Retirement Plan Distributions Some screens display one column each for taxpayer and spouse If an entry must be split divide it evenly between the two Press PAGE DOWN for more data entry screens Amounts from the Adjustments fields are added to the amounts in corresponding MFO RTANT fields elsewhere if you duplicate an entry the amount is doubled rather than adjusted Adjustments Related to Self Employment Income Take the following steps to enter self employment and Schedule C adjustments 1 From Adjustments click the screen to access or type the code into the Selector field and press ENTER 2 Complete all applicable fields Press PAGE DOWN for more data entry screens 3 Press ESC to save and close Schedule SE Self Employment Tax Schedule SE is required if net earnings from self employment exceed 400 For church employees 108 28 Access the Self Employment Adjustment or SE screen from Adjustments or type SE into the Selector field and press ENTER Data from Schedules C and F along with any self employment income from partne
284. lso be used with Form 1065 e Schedule J Income Averaging for Farmers and Fishermen e Form 4835 Farm Rental Income and Expenses Take the following steps to access farm related entry fields 1 Do one of the following e Access Schedule F fields Click Farm Co Op Income or type F or FARM into the Selector field and press ENTER e Access Schedule J fields Click Farmer s Income Averaging or type J into the Selector field and press ENTER e Access Form 4835 fields Click Farm Rental Income or type 4835 into the Selector field and press ENTER 2 Enter information into the appropriate fields N ITE Crop insurance and disaster payments for Schedule F and Form 4835 must be recorded on the Crop Insurance and Disaster Payments screen See Other Adjustments on page 122 3 Press ESC to save and close Limitations Entry fields for the following limitations related 1040 documents are located under the Income tab Drake Software Manual Copyrighted Material 104 Return Preparation 2007 DRAKE SOFTWARE e Form 6198 At Risk Limitations e Worksheet for Form 8582 Passive Activity Loss Limitations Take the following steps to access limitations related entry fields 1 Do one of the following e Access Form 6198 fields Click Amount Not at Risk or type 6198 into the selector field and press ENTER e Access Form 8582 worksheet Click Modified AGI Worksheet or type 8582 into the Selector field and press ENTER
285. ly prepared in the program is selected the Quick Estimator does not override entries previously made N DTE A return created in the Quick Estimator counts as one Pay Per Return Enter W 2 Unemployment Advanced EIC Social Security and retirement information A total for all dividend interest and other income is entered in the Int Div Other Income field Other income includes amounts from Schedules C E F and forms 1099 MISC and K1 The amount entered in this field carries to line 8a on the 1040 return If the return is entered in Drake Software data entry information from this field would flow to lines 9a 14 and lines 18 19 and 21 For estimating purposes only it is entered in the Int Div Other field in the Quick Estimator Because all interest dividend and other income is entered in one field the RAL NOTE Bonus and preparer fees may not be reflected accurately on the bill The income may be overestimated or underestimated Enter the IRA deductions in the IRA Adjustments field This is the only adjustment reported in the Quick Estimator The Quick Estimator will produce only one return if filing a Married Filing Separate return The preparer must generate a separate return for the other spouse Enter the total number of dependents number of children qualifying for the Child Care Credit EIC and Child Care in the applicable fields The appropriate credit amounts are generated but individual names are not shown on the return
286. ly withdrawn from taxpayer account City Direct Debit Paragraph Inserts applicable paragraph if city direct debit is selected for e filed return City Direct Deposit Paragraph City Estimate Detail by Quarter Inserts applicable paragraph if city direct deposit is selected City estimate detail by quarter City IncomeTax Balance Due City IncomeTax Balance Due Paragraph Balance due from city income tax return being prepared Inserts paragraph for balance due on city return income tax City IncomeTax Due Date Due date of city income tax City IncomeTax E Filing Paragraph Inserts applicable paragraph if electronic filing is selected for city income tax return City IncomeTax MAIL TO Address City MAIL TO Address income tax City IncomeTax Paper Filing Paragraph Inserts applicable paragraph if electronic filing is NOT selected for city income tax return City IncomeTax Refund Refund from city income tax return being prepared City IncomeTax Refund Paragraph Inserts paragraph for refund from city income tax return City IncomeTax Tax Description City IncomeTax Zero Due Paragraph Tax description from city income tax return being prepared Inserts paragraph for zero due on city return income tax City Name Drake Software Manual Name of city if city return is being prepared Copyrighted Material 274 Appendix 2007 DRAKE SOFTWARE City No Direct Debit EF
287. m a Schedule E that has already been calculated and completed by hand e Personal Do not enter personal residence expenses on Schedule E If a taxpayer rents one unit of a duplex and lives in the other and an 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 e Kind of Property Property income on Schedule E is always passive unless marked as Real Estate Professional property Schedule K 1 Schedule K 1 is used to report a taxpayer s share of a pass through entity s income credits deductions etc There are three different types of K 1s S Corporation 1120S Partnership 1065 and Fiduciary 1041 You can enter information directly into any of these three forms in Drake or you can export K 1 information from a pass through entity into an individual return To enter data directly into a K 1 access the desired form from the Income tab and enter information into the appropriate fields M p RT A NT Remember to indicate that a passive activity is indeed passive otherwise passive losses may not flow as desired from the K 1 into other forms To export K 1 data you must first have a completed Partnership S corp or Fiduciary return as well as an existing individual return for the partner or beneficiary listed Take the following steps to export K 1 data 1 From within the business return click View in the to
288. m bank Complete all applicable fields Consulting bank literature press F1 and use Screen Help as needed Press ESC to save and exit Direct Deposit Enter a taxpayer s direct deposit information in the DD screen This screen contains fields for completing IRS Form 8888 Direct Deposit of Refund to More Than One Account To access this screen click Direct Deposit Form 8888 from the General tab or type DD into the Selector field and press ENTER If one account is entered the information carries to the 1040 If multiple accounts are entered Form 8888 is produced for the return Georgia and Maine have unique requirements for Direct Deposit Note the fields at the bottom of the DD screen if electronically filing a return for Georgia or Maine Electronic Funds Withdrawal Use the PMT screen to enter electronic funds withdrawal direct debit data for up to three accounts per return To access click Electronic Funds Withdrawal from the General tab or type PMT into the Selector field and press ENTER E file Signature An e file signature is required for all returns except amended returns and applications for extensions Use the PIN screen for Form 8879 IRS E File Signature Authorization and Form 8878 IRS e file Signature Authorization for Form 4868 or Form 2350 extension applications To access click 8879 8878 e file signature from the General tab or type PIN into the Selector field and press ENTER Drake Software Manual
289. m the following keywords when creating reports on client data Keyword Check Amount 1 Description Amount of first check from bank Check Amount 2 Amount of second check from bank Check Amount 3 Amount of third check from bank Check Amount 4 Amount of fourth check from bank Check Amounts Check amounts on the TRAC screen Check Number 1 First check number as it appears on the TRAC screen Check Number 2 Second check number as it appears on the TRAC screen Check Number 3 Third check number as it appears on the TRAC screen Check Number 4 Fourth check number as it appears on the TRAC screen Check Numbers Checks Numbers on the TRAC screen Check pick up date 1 Date the first check was picked up by the taxpayer as entered on the TRAC screen Check pick up date 2 Date the second check was picked up by the taxpayer as entered on the TRAC screen Check pick up date 3 Date the third check was picked up by the taxpayer as entered on the TRAC screen Check pick up date 4 Date the fourth check was picked up by the taxpayer as entered on the TRAC screen Check pick up dates Check pick up dates on the TRAC screen IRAL Indicates that an IRAL was Requested on the Bank Screen IRAL Accepted Indicates that an IRAL Request was Accepted IRAL Chase IRAL Request indicator on the bank screen IRAL Declined Indicates t
290. m the previously selected file type The files listed on Advanced Backup contain only the file types selected For example if the Client File group is not checked then no client files 1040 1120 1120S 1065 1041 or 990 are displayed To filter or sort files by date check Files with a date newer than and select a date Files with a date equal to or newer than the date selected are listed All of the file level filters refresh the list with the matching files each time a new filter is selected If no filter is selected all of the files of the previously selected file types are displayed Once a filter is selected files matching the criteria are listed 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 dash and the number of the backup for the day For example the second backup file of September 28 2007 would be titled DS09282007 02 Restore Use Restore 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 computer to another or to restore lost files To restore files take the following steps 1 2 Select Tools gt File Maintenance gt Restore Browse to the location of the files to restore Select folder to restore from lists all of subdirectories created during backup Folder directories are displayed in
291. me 91 Form 1040 ES Estimated Tax 94 124 Form 1040NR Nonresident Alien 128 Form 1040X amended return 135 Form 1045 Application for Tentative Refund 136 Form 1098 Mortgage Interest Statement 136 Form 1099 series 97 98 Drake Software Manual Index ix Form 1099 A Acquisition Abandonment of Property 115 Form 1099 C Cancellation of Debt 115 Form 1116 Foreign Tax Credit 122 Form 1310 Refund Due Deceased Taxpayer 136 Form 2106 Employee Business Expenses 100 106 117 137 Form 2120 Multiple Support Declaration 129 136 Form 2210 Underpayment of Estimated Tax 90 125 Form 2350 extension application 130 Form 2439 Undistributed Long Term Capital Gains 115 Form 2441 Child amp Dependent Care Expenses 95 Form 2555 Foreign Earned Income 136 Form 2848 Power of Attorney 136 Form 3468 Investment Credit 106 122 Form 3800 General Business Credit 122 Form 3903 Moving Expenses 118 Form 4136 Federal Tax Paid on Fuels 122 Form 4137 Unreported Tip Income 126 Form 4255 Recapture of Investment Credit 115 Form 4506 Request for Copy of Tax Return 136 Form 4562 Depreciation amp Amortization 106 Form 4684 Casualties amp Thefts 115 Form 4792 Lump Sum Distributions 126 Form 4797 Sales of Business Property 106 109 110 115 Form 4835 Farm Rental Income amp Expenses 103 106 Form 4852 Substitute for W 2 or 1099 R 136 Form 4868 extension application
292. min account complete the following steps 1 Go to Setup gt Preparer s 2 Select the Admin row Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 33 3 Click Edit Preparer 4 Enter a password in the Password field Passwords can be up to eight characters alpha and or numeric and are not case sensitive 5 Re enter the password in the Password Repeated field 6 Click Save then Exit SETUP WIZARD Redesigned for 2007 the Setup Wizard guides you through the required and recommended software setup screens The Setup Wizard opens the first time you log into Drake and each time you access the program until all the Required items are completed or until the wizard is disabled To prevent the Setup Wizard from automatically launching each time you enter the program click the Do not show Setup Wizard at startup check box Drake 2007 Setup Wizard Welcome to the Drake Software Setup Wizard The setup wizard will guide 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 OJ not show Setup Wizard at program startup equired Completed M Setup Firm s Enter information about your company M Setup ERO Enter information required for electonic filing M Setup Preparer s Enter information about your tax preparer s Recommended Completed
293. mode press F3 on the keyboard Grid data entry is enabled by default To enable or disable grid data entry go to Setup gt Options from the Home window Under Data Entry check to enable or disable Use grid data entry format for select screens Drake 2007 Grid Entry 001234567 SAMPLE HUGH amp GWEN Drake 2007 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 Date Of Birth Child Care Exp FRANCIS 111 22 3333 S0N 10071996 JOY 222 33 4444 DAUGHTER 02182000 333 44 5555 DAUGHTER 09042003 e Add data Type directly into the grid Press TAB to navigate from field to field e Delete a record Select a row number and click Delete or press CTRL D At the prompt click Yes or press Y e Return to full screen mode Click Item Detail or press F3 Page Down for Additional Forms Press PAGE DOWN to open an additional blank data entry screen Each time a new screen is produced the record number is indicated on the status bar Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 13 TP ce AT etter pm TS pe tet ge ee Over 18 and a student I Chil M Over 18 and disabled M N
294. mpleted status The date completed pulls from the TRAC screen which is automatically set when the status of Complete is selected from the CSM button on the data entry toolbar To manually set the complete date enter it on the TRAC screen Copyrighted Material 2007 DRAKE SOFTWARE Client Status Manager 183 CSM Report Report Description Problem Returns Old Returns This report lists returns that have taken longer than a specified number of days to complete Report criteria include Days Old report on a specific preparer and whether to include completed returns Problem Returns Missing Files This report scans client files to determine if any are missing Files statuses of File Deleted client file was deleted under the Tools File Maintenance menu and File Not Found client file does not exist in the current data path are used The report also includes activities that occurred with the client file N OTE 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 To run a report complete the following steps Poa Se YS Select Reports from the toolbar to open CSM Reports Select a report from the list If necessary select any specific fields for the report Click Report to view the report To print the report go to File gt Print or click the printer icon N OTE Reports generated in
295. n To access data entry for Form 8863 Education Credits and Form 8917 Tuition and Fees Deduction click Tuition and Fees Deduction from Adjustments or type 8917 into the Selector field and press ENTER NEW FOR Form 8863 data entry fields are accessible from both Adjustments and Credits 2007 Form 8917 is a new form in 2007 Self Employed Health Insurance Deduction Enter self employed health insurance deduction and self employed pension SEPs data in SE Health Insurance SE Pensions Access this screen from Adjustments or type either SEHI or SEP into the Selector field and press ENTER N ITE Recall that the red equal sign indicates an override field Complete override fields only if you want the data entered to override what would normally flow from another area of the return e SE Health Insurance Deduction Worksheet The top half of SEHI incorporates the Self Employed Health Insurance Deduction Worksheet line 29 from the 1040 instructions This information can also be entered in the Family Health Coverage fields of Schedule C or Schedule F as applicable Do not enter duplicate fields e Self Employed Pensions Data entered here flows to the WK_SEP Worksheet for Self Employed Rate Deduction See IRS Pub 590 for more information Ministerial Income Allocation Access the Ministerial Income Allocation screen from Adjustments or type CLGY into the Selector field and press ENTER NEW FOR 70 07 Now two pag
296. n the value must be alphabetic Optional Select Ask about this Condition each time the Filter is used to have the Filter Condition editor open each time a report is viewed using this filter giving you an opportunity to enter a new value if necessary Drake 2007 Filter Condition Editor Filter Condition Editor To add a Condition first select a Keyword from the list below Then select the desired Comparison and Value Condition Filter Settings Keyword Name Taxpayer LastName sss Comparison fistewen o Value A And Z IV Ask about this Condition each time the Filter is used Help Cancel Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Reports 231 Editing Search Conditions Complete the following steps to edit a search condition 1 Select a filter from Available Filters 2 Double click a condition in the Additional Search Condition for the Selected Filter list or select the condition and click Edit Condition 3 After editing the condition click OK Deleting Additional Search Conditions To delete a search condition in the Filter Manager select a filter from the Available Filters then select the condition and click Delete VIEWING A REPORT FROM THE REPORT MANAGER To view a report complete the following steps from Reports gt Report Manager 1 Locate and select the report in the report tree view 2 Click View Report If a Basic Search Conditions box appears make any desired ch
297. n Employer Compensation Vv Vv Vv M Vv Vv Vv Vv XI KI XI KI KI KI lt 1 lt I TI XI xI Frequently Asked Questions Select All Unselect All 5 Enable or disable screens by checking the boxes next to the screen codes If needed click Unselect All to clear all selections or click Select All to enable all screens Drake Software Manual Copyrighted Material 52 Installation amp Setup 2007 DRAKE SOFTWARE 6 Click Save to save and close While a disabled screen NOTE no longer appears on the Data Entry Menu as a selection the screen can still be accessed by entering the screen code NEW FOR 2007 Look for an addenda page on an administrative option to set automatic field flagging when a return is updated from a prior year Print addenda pages from Drake s Support Web site Training Tools gt Manuals gt Drake Software Manual gt Addenda Pages Pricing Setup Use Pricing Setup to calculate and generate a client bill during return calculation Prices can be defined for each form completed return NOTE each item on some forms and minimum and maximum charges for a Bank product and electronic filing fees are established in Setup gt Firm Pricing may be overridden during data entry either by entering an amount in the Fee Override field on screen 1 or by adjusting the fee amounts on the BILL screen To set pricing complete the following procedure 1 From the Home window go to Se
298. n in the Pay Per Return window 1 Enter the number of returns to activate on the computer 2 Ifyou have an Internet connection click Get Code or call Drake Accounting at 828 349 5900 for an approval code 3 Reenter to confirm the approval code 4 Click Process to activate the PPR returns Purchasing PPR Returns Purchase additional returns from the Pay Per Return screen over an Internet connection Enter credit card address and the number of returns to purchase Click Purchase to process your order NOTE To purchase more PPR returns by phone call Drake Accounting at 828 349 5900 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 43 Directories and Paths Setup Use Directories and Paths Setup to manage the data access and storage locations From the Home window go to Setup gt Directories Paths After completing the screen click OK to save your changes Information on screens is provided in the following sections Directories Path settings must be configured before you begin using the program MEO RTANT and that they are not changed during tax season If you need assistance with this portion of the setup please contact your office IT professional or Drake Support Configuring Network Settings When installing Drake on a network configurations must be set according to installation type For details on setting network configurations see Network Options on page 30 Sha
299. n only when needed Go to Setup gt Options to force this form to generate with all returns To produce it on a per return basis use the PRNT screen See Overriding Default Print Options on page 133 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 127 Tax Shelter Investor Reporting Form 8271 Investor Reporting of Tax Shelter Registration Number is generated with any return on which the taxpayer claims or reports a deduction loss credit other tax benefit or income from an interest in a registration required tax shelter Access this form from Taxes or type 8271 into the Selector field and press ENTER N OTE If the Tax Shelter Registration Number has been entered on the K1 screen it flows automatically to the 8271 There is no need to enter it again here Recapture of Low Income Housing Credit Form 8611 Recapture of Low Income Housing Credit is used when under certain circumstances a taxpayer must recapture part of low income housing credit claimed previously Access from the Taxes tab or type 8611 into the Selector field and press ENTER Kiddie Tax Kiddie Tax is computed using Form 8615 Tax for Children Under Age 18 or 18 24 and a student With Investment Income of More Than 1 700 Access this form from the Taxes tab or type 8615 into the Selector field and press ENTER Parents Election to Report Child s Interest and Dividends Form 8814 Parents Election To Report
300. n the Existing Forms List for the C screen e Mileage and Expenses Drake determines which is more advantageous standard mileage or actual expense You may however Force mileage or Force expenses The following figure the bottom half of the auto expense worksheet shows the location of these options Drake Software Manual Copyrighted Material 118 Return Preparation 2007 DRAKE SOFTWARE IMPORTANT Note DO NOT key the business use E percentage for this r Auto on the 4562 screen Parking fees FRBMBIILG OS ceseressteccsecrtsssrress New Screen Press F1 or Right Click for Help The Business mileage field must be completed to compute business use percentage for depreciation Form 4562 e Other Expenses Enter any expense descriptions not provided in the auto expense worksheet Only three entries are acceptable loan interest tax state and tax local Form 8873 Extraterritorial Income Exclusion Use Form 8873 to determine how much extraterritorial income must be excluded from gross income on a return Access this screen from Adjustments or type 8873 into the Selector field and press ENTER Additional Expenses IRA and Health Information The Adjustments tab includes data entry screens for moving expenses IRAs Medical and Health Savings Accounts and self employment health insurance and pensions Moving Expenses e Access Moving Expenses from Adjustments or type 3903 into the Selector field
301. n the file Enter the password and click Continue e Remove or Change a Password The Password Protection dialog box launches when you try to open the file Enter the password and click Continue When prompted to enter and reenter a new password enter a new password or leave the fields blank to remove all password protection and click Continue Viewing File Audit Logs Each time an action occurs for a file the DDM makes note of it in an audit log kept in the properties of the file An action includes importing linking exporting copying moving opening and renaming The audit log records of the action the date it was taken and the user who performed the action To view the audit log for a file right click a file and select Properties or press F9 DRAKE TAX PLANNER Use the Drake Tax Planner to help your clients plan how events such as the birth of a child a marriage or becoming a single parent affect their finances and tax liability The Tax Planner allows you to realistically forecast short and long term income and tax situations NEW FOR 2007 Click the Wages Schedule C D F or E lines from the Income tab in data entry to open an additional worksheet for these items New calculated credits and deductions added for 2007 Student Loan and Interest Deduction Tuition and Fees Deduction SEP Deduction Elderly or Disabled Credit Education Credit Adoption Credit AMT with Capital Gains Import a client s return data in
302. nd complete Firm Setup in the software Drake Software Manual Copyrighted Material 68 Preseason Checklist 2007 DRAKE SOFTWARE NOTE Review Equipment Staff Needs Q Upgrade computers as needed Ensure that your computers comply with system requirements See System Requirements on page 27 Test printers and modems to be used with Drake Software Q Check phone cords and connections to be used during tax season Q Check scanner Review Drake recommended scanners If necessary purchase a scanner to use with the Drake Document Manager See www Support DrakeSoftware com Review staffing needs and set staff software security levels Install and Set up Software C Review system requirements for software installation 0 Install the 2007 Drake Software CD Q Customize program settings Complete required and optional program settings Check the packing slip to verify the EFIN and enter new password on the ERO screen Q Perform database updates Update the EIN Database from the prior year Q Perform configuration updates Update configurations such as firm information and macros from the prior year LJ Install PDF995 Help Clients Prepare for Tax Season Q Prepare proformas or organizers for prior year clients Q Prepare preseason letters and coupons to send with organizers Q Order mailers from Nelco if necessary Reports organizers proformas and returns can stored and e mailed as PDFs
303. needed then click Continue From Options select specific options Select All options or click Unselect All to clear selected options Click Process 1040 If printing proformas for multiple return types additional Proforma Options dialog boxes appear Select additional options and click Process 1040 1120 1120S 1065 or 990 to proceed Select the documents to print Tabs are enabled according to what is being printed For example if printing 1040 and 1120S proformas make selections on the 1040 Proforma and 1120S Proforma tabs Click Print To omit an organizer or proforma or to view forms before printing see Omitting Organizers and Proformas on page 74 From the Print Selection window click Print again OMITTING ORGANIZERS AND PROFORMAS When printing multiple organizers and proformas specific ones may be omitted To enable or disable printing of a specific organizer or proforma or to view before printing compete the following steps during the print process 1 2 From Batch Printing Organizers Proforma click Detail e To disable printing of one or more organizers or proformas clear the applicable box e To view or print specific organizers or proformas select the row from the list and click View Print To select multiple organizers or proformas press and hold CTRL when making selections Click Save to save the information and exit the screen PRESEASON LETTERS For information on generating pre
304. nking HSBC DD PMT PIN EF NOTE PRNT 2007 DRAKE SOFTWARE Ex amp x CSM Manual Exit Itemized Deductions Schedule Sales Tax Worksheet Employee Business Expense Email HSBC RAL or RAC Direct Deposit Form 8888 Electronic Funds Withdrawal 8879 8878 e file signature EF Options Override Notes about the return Print Options Status Bar Return Type Individual Tax Return Current Package Federal Access the following tasks from the Data Entry Menu toolbar Calculate Calculate the return View Open View mode for the return Print Open Print mode for the return Split Split a married filing jointly MFJ return into two married filing separately MFS returns Doc Mgr Open the DDM only visible if DDM integration is enabled Tax Planner Fill a Tax Planner file with data from the return CSM Open a list of client return statuses Email Attach the open return to an e mail message in the Drake e mail program Manual Launch the Help system Exit Exit data entry and return to the Home window Tabs The forms and worksheets available for data entry are listed on each tab The tabs break down the screens into categories Categories vary depending on the tax package Click on a tab to access its categories To select a tab using your keyboard use TAB the arrow keys PAGE UP or PAGE DOWN Drake Software Manual Copyrighted Material 2007 DRAKE SO
305. nowledge Base KB Search a comprehensive collection of support categories This tool provides 24 hours a day support The KB consists of issues and solutions submitted by clients programmers IRS and DORs Search the 2006 Drake Software Manual the 2007 Drake Software Manual and the 2007 Cli ent Write Up Manual See Knowledge Base on page 191 for details e Forum Message Board Connect with other Drake clients and field questions regarding tax issues on Drake Forums See Drake Forums on page 192 for details e Fed State Facts Find answers to many state specific questions including reject codes exclusions state instructions and electronic filing explanations and instructions See Federal State Facts on page 193 for details e RIA Checkpoint Online Access one of the most advanced online research tools from within Drake Software See RIA Checkpoint on page 193 for details e Help Options Access help throughout the program from the Help System See Help System on page 193 for details e Software Manual Addenda Pages Update your manual with manual addenda See Software Manual on page 199 for details e E mail Use the Drake E mail program to e mail questions directly to support or e mail your clients See E mail on page 195 for details e Broadcast E mails Stay informed of the latest important IRS alerts or software related issues Broad cast e mails are sent to your
306. ns not to those from IRAs annuities or modified N endowment contracts UTE To force Form 5329 to generate from the 1099 R open the 1099 screen and select Carry this entry to Form 5329 and compute 10 penalty Form 5329 is automatically generated if 1 Early premature distribution no known exception is the distribution code in box 7 of the 1099 R Traditional IRA Contributions Use the IRA Contributions screen and complete all required blanks in Part I of IRS Form 8606 Nondeductible IRAs N ITE If no IRA contributions or distributions were made in the current year Form 8606 is not required To force the form select Print the 8606 even if not needed in IRA Contributions Check the form instructions to determine if the form is required Roth IRAs The Roth IRA screen addresses Parts II and III of Form 8606 Nondeductible IRAs Transfer amounts from traditional IRAs to Roth IRAs are entered on line 16 and carried to line 8 of Form 8606 e MSAs and HSAs For more on Form 8853 Archer MSAs and Long Term Care Insurance Contracts and Form 8889 Health Savings Accounts HSAs see Pub 969 e HSA Coverage and Contributions Lines 1 coverage indications and 2 HSA contributions for the year of the Health Savings Account screen are required if Form 8889 is to be electronically filed with the return Drake Software Manual Copyrighted Material 120 Return Preparation 2007 DRAKE SOFTWARE Tuition and Fees Deductio
307. nse on the first Form 4562 If multiple activities have Section 179 expensing a Section 179 summary is produced with the return e Section 179 Override If a Section 179 expense override is present on the 4562 Part 1 screen clear that field and enter the amount on the 4562 screen The entry appears on either the first Form 4562 or Section 179 summary e Expense Part of the Cost of an Asset under Section 179 Expense Enter all information as if depreciating the full amount then enter the amount to expense in the 179 Expense Elected this year field to override the system calculations If the amount must carry to a listed property make an entry in the Listed Prop Type field in the top right corner of 4562 screen You can now enter the 179 expense elected and allowed for the current and prior years on the 4562 screen geaen pTi e e in A n M L Override Regular PROMI CHAU OI enia 179 Expense Elected this year F 1 We y 179 Expense ALLOWED this year 179 Expense Elected in prior years 179 Expense ALLOWED in prior years Bonus Dapreciationin e hanes Prior Bonus Depreciation eects Other Information ee ee S ae T _ Fi Note that the current year fields for 179 expense are override fields Drake computes business income limitation on the WK_1179L worksheet replace the I with C S or P for Corp S corp and Partnership returns If not all Section 179 expense elected can be deducted this year the taxpayer has two choi
308. nstance of a schedule or form for example two Schedule Cs If an item is to apply to the second instance of the schedule or form its multi form code would be 2 Drake Software Manual Copyrighted Material 2007 DRAKE NOTE IMPORTANT NEW FOR 2007 NOTE SOFTWARE Return Preparation 107 Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWEN Form 4562 For C z A C E F 2106 4835 AUTO 8829 U Multi form code 2 1 999 1 is assumed if left blank Date Busi Description Acquired Cost Basis u al re AAR dante nna Mii anhalt on tat ee SN geen r N T d Depreciable asset is to carry to the second 2 Schedule C of the return For Schedule E rental properties each property should be assigned a multi form code of its own For more information see Depreciating Schedule E Assets on page 110 or press F1 from the Multi form code field e Description Field supports 42 characters Per IRS regulations only the first 24 characters transmit in electronically filed returns Additional characters are displayed in red Business packages only lf a description begins with the word LAND it is treated in the return as a land asset and not depreciable For a non land asset that begins with LAND such as Land Cruiser Land Rover etc begin the description with a word other than LAND for example RED LAND ROVER Previously land that was part of an asset such as for a rental house had
309. nt carries to line 29 of the 1040 Use the SEP or SEHI screen to calculate self employed pension and health insurance deduction amounts allowed See Self Employed Health Insurance Deduction on page 120 Drake Software Manual Copyrighted Material 94 Return Preparation 2007 DRAKE SOFTWARE e Penalty for Early Withdrawal of Savings Amount carries to line 30 of Form 1040 Do not duplicate entries in this field on the INT screen the 1099 INT asks for the interest or principal forfeited due to early withdrawal not for the actual amount of the penalty Deductible IRA If IRA contributions are not 100 deductible use Form 8606 Nondeductible IRAs instead of this field For more information see IRAs and Savings Accounts on page 118 e Contributions to Section 501 c 18 Pension Plan Do not include amounts that have already been assigned Code H in box 12 of the W 2 These amounts carry automatically to the 1040 Payments Screen 5 Screen 5 Payments also called Credits Other Taxes Payments covers the Tax and Credits Other Taxes Payments and Amount You Owe sections lines 38 77 of Form 1040 Take the following steps to enter a client s payment information 1 Under the General tab click Payments or type 5 into the Selector field and press ENTER The Form 1040 Credits Other Taxes Payments screen displays 2 Enter information into the appropriate fields 3 Press ESC to save and close Est
310. nt a sales tax rate of 4 5 Make a selection from the list e Billing statement format Select a statement option Only show total amount show form list and total show forms forms prices and total bill by time show forms number of forms and charges per form move prep time charges to bottom of bill or do not prepare a bill e Header on Bill Select the header to print on the bill preparer s name tax year professional services statement or none e New for 2007 Custom Paragraph Chose to print a custom paragraph at the top of the bill the bottom of the bill or not at all Enter the text for the paragraph in the field States Tab There are various specific options available for each state Select the state and the options that apply Set up each desired state separately Electronic Filing EF Tab Many of these settings may be adjusted from the EF screen in data entry These on the fly changes do not affect settings in Setup gt Options Click to enable or disable the option e Auto generate taxpayer s PIN e Require Ready for EF indicator on EF screen e Lock client data file after EF acceptance 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 their security settings e Print bank application when keyed on a return e Print Form 9325 when eligible for EF e Suppress f
311. nto the taxpayer s own account bypassing the need for a paper check Preparer bank and Drake fees are also avoided Cashier s Check The most frequently used method of bank product delivery is a cashier s check printed in the tax preparer s office See Printing Checks for Bank Products on page 157 Debit Cards The debit card is another method of receiving funds from the Refund Transfer Bonu or RAL The card operates with a PIN and can be reloaded with other products Drake Software Manual Copyrighted Material 170 Electronic Filing and Banking 2007 DRAKE SOFTWARE State Refund Add On A state refund is only available as a Transfer Bonu and is not offered apart from a federal bank product Check with your bank for a list of eligible states OFFERING BANK PRODUCTS TO CLIENTS To offer bank products you must set up your system with both Drake and the bank Bank Setup and Access Enable the appropriate bank in Setup gt Firm See Firm Setup on page 35 Once a bank is set up in your system you can access it from data entry For more on data entry capabilities see Electronic Filing and Banking in Data Entry on page 100 Applications All firms offering bank products with Drake Software must submit an online bank application to Drake each year Take the following steps to complete a bank application 1 Log on to www Support DrakeSoftware com or click Support in the Home window 2 Goto My Ac
312. ny as 10 more search conditions a filter Set a report to Match All Conditions or Match Any Condition that you have added e Match All Conditions Report output meets all conditions narrow results e Match Any Condition Report output meets any of the conditions broader results Drake Software Manual Copyrighted Material 230 Reports 2007 DRAKE SOFTWARE ee eT wy ra Moor Additonal Search Conditions for the Selected Filte Misc Codes is not lt Blank s Li Add Condition Receipt Number is not lt Blank gt Edit Condition Existing Delete conditions in current filter Add edit or delete Match All Conditions conditions Match Any Condition Choose to match any or all conditions To add search conditions complete the following steps 1 2 NOTE 5 From the Filter Manager highlight a filter in Available Filters From the Additional Search Conditions for the Selected Filter section click Add Condition In the Filter Condition Editor select a Keyword Name Select a Comparison option The comparison selections vary according to the keyword selected and determine whether a value is needed If a comparison requires a value the Value field appears The value entry can be either alphabetic or numeric For example if AGI is selected and the comparison selected is equal to the value entered must be numeric If Taxpayer s Last Name is selected and starts with is the compariso
313. o determine the amount of line 62 on Form 1040 Access screen H from Taxes or type H into the Selector and press ENTER Tax on Tips Use Form 4137 Social Security and Medicare Tax on Unreported Tip Income to determine tax owed on tips not reported to an employer and or to determine the amount of Social Security and Medicare tips to be credited to the Social Security record Access screen 4137 from Taxes or type 4137 into the Selector field and press ENTER Tax on Accumulation Distribution of Trusts Use Form 4970 Tax on Accumulation Distribution of Trusts to determine the amount of partial tax on accumulation distributions for beneficiaries of certain domestic trusts To complete Form 4970 you must have a completed Part IV of Schedule J 1041 provided to the beneficiary by the trustee Access screen 4790 from Taxes or type 4970 into the Selector field and press ENTER Tax on Lump Sum Distributions Use Form 4792 Tax on Lump Sum Distributions to figure the tax on a qualified lump sum distribution Access this form from Taxes or type 4972 into the Selector field and press ENTER Alternative Minimum Tax Use Form 6251 Alternative Minimum Tax lIndividuals to figure alternative minimum tax AMT and any credit limits Access this form from Taxes or type 6251 into the Selector field and press ENTER The AMT screen allows entries not allowed elsewhere NOTE Although Form 6251 is computed on all returns it is included in a retur
314. of any return being filed with a RAL report Making Notes on Returns Ensure that specific reminders in the forms of notes and EF messages appear for specific returns From the Other tab click Notes about the return or type NOTE into the Selector field and press ENTER N OTE If the notes option is selected certain notes appear when a return is opened See Optional Documents Tab on page 49 for selecting the notes option Hold E filing To delay electronic filing of a prepared return check Hold EF The return will not be filed when calculated A notice will be displayed as an EF message ELECTRONIC FILING MESSAGES MUST be corrected before electronic Mllng Is allowed Mane T y w SOCIA Security niundar HUGH F amp GWEN D SAMPLE ro oo mri 0029 Tax Return Identification Page 1 EFIN of Originator SEQ 0008b must be for a valid electronic filer 5350 A PIN signature is required for all returns to be filed electronically A PIN has not been keyed on this return Please return to the PIN screen and key a Taxpayer PIN Spouse PIN ERO PIN and PIN signature date 5421 You have indicated on the NOTE screen to stop this return from being E filed Please review the NOTE screen for outstanding issues and if all have been addressed remove the check from the Hold EF field s ERROR CODES ABOVE 5000 ARE DRAKE ERROR CODES NOT IRS ee Ee OF ee ee ee TN e Other Notes If Hold EF is not selected the note you type
315. oftware Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 241 Importing Files To import a file select a folder to store the document and click Import from the toolbar Browse to the document to import then click Save The DDM copies the document into the selected folder Scanning Files Scan documents into the DDM with a flat bed or document feeder scanner A flat bed scanner scans one page at a time creating one PDF at a time A scanner with a document feeder scans multiple pages and makes one document of many pages MPI RTANT To be compatible with the DDM a scanner must be TWAIN compliant Most newer scanners are TWAIN compliant Review scanner specifications before purchasing Begin the scanning process from the DDM which locates and uses your system s default scanner A Scanner Cannot be Located message implies that the scanner may not be TWAIN compliant or may be improperly installed To scan a document complete the following steps 1 Select a folder in which to store the file 2 Click Scan gt Use Scanner Bed or Use Document Feeder as applicable 3 Select a file type Documents may be saved as PDF BMP GIF JPG TIF or PNG 4 Enter a name for the file and click OK TIP To facilitate search and retrieval of DDM files establish a naming convention early Linking Files New for 2007 Create a link between the DDM and a document outside the DDM The DDM maintains the link to the external documen
316. okup In Care OF Home Phone 285240011 idia bae a a ee T A AET oe lee a Use the tabs described in following sections to locate return data Drake Software Manual Copyrighted Material 160 Electronic Filing and Banking 2007 DRAKE SOFTWARE General Information The General Information window contains the general transmission information for an electronically filed return In addition to the taxpayer address and telephone this tab displays the following information e IRS Acknowledgement Information Acknowledgement Code Acknowledgement Date Transmission Date Filing Status and Refund Amount or Balance Due are displayed in the left column This information is from the most recent transmission record for the client file e State Acknowledgement Information Under the State heading the middle column displays the State Acknowledgement Code Acknowledgement Date Filing Status and Refund Amount or Balance Due This information is from the most recent transmission record for the client file e Reject Codes Reject codes are displayed on the right side of the General Information window Fields are Reject Code Form ID Form Number and Sequence Number Double click a reject code to jump to the Reject Code Lookup tab e IRS Debt and Bank Codes The IRS debt indicator and bank codes are located below Reject Codes IRS Debt Codes indicate some sort of debt to the federal government and include the following
317. olbar Drake calculates the return via the Calculation Results screen 2 Click Continue 3 Click K1 Export in the View Mode toolbar The Export K1s screen lists all taxpayer SSNs that can be exported All rows are selected 4 Optional Click a row to clear it if you do not wish to export all K1s listed 5 Click Export then click OK in the Export complete dialog box The transferred data is highlighted in the K1 screen of the personal return Drake Software Manual Copyrighted Material 106 Return Preparation 2007 DRAKE SOFTWARE Depreciable Assets NEW FOR sede 20 07 It is no longer necessary to enter the Business Income Limitation for Section 179 Expense for the 4562 Part 1 screen 6 Form 4562 Depreciation and Amortization is used to claim deductions for depreciation and amortization to elect to expense certain property under section 179 and to indicate automobile and other listed property use for business investment purposes It is important to complete the 4562 screen accurately the first year an asset is entered in Drake because future calculations are based on data entered at that time While you can directly enter data into the Form 4562 fields in Drake you rarely need to do so Instead data entered in the 4562 screen Depreciation Detail flows to the correct fields in the actual Form 4562 Only if you are entering a pre prepared return with no supporting documentation should you enter data directly into the
318. om Other click Forms 2120 and 8332 or type EFPD into the Selector field and press ENTER Fill out only one form not both for a dependent Drake Software Manual Copyrighted Material 130 Return Preparation 2007 DRAKE SOFTWARE Election Options ELEC provides the ability to select various IRS code elections Upon calculation a Notes page details the elections selected Selections do not affect the calculation of the return NEW FOR Election options previously available on various screens along with some added l 07 elections can all be accessed from ELEC To alert the IRS of an election through a statement check the applicable box From Other click Election Options or type ELEC into the Selector field and press ENTER For information Form 709 election options see Form 709 Gift Tax Return on page 127 Filing Requests for Extensions Use EXT to complete one of the following extension application forms e Form 4868 Application for Automatic Extension of Time To File U S Individual Income Tax Return e Form 2350 Application for Automatic Extension of Time To File U S Individual Income Tax Return For U S Citizens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment From the Other tab click Extensions 4868 amp 2350 or type EXT or 4868 or 2350 into the Selector field and press ENTER Select the type of extension to be generated If special conditions apply select the applicable
319. ome window go to Setup gt Options and click Administrative Options 2 Check Use Customized Selection Menu to enable the Customize button 3 Click Customize then select a Package and Package Type 4 Click Load Menu The screen resembles the Data Entry Menu Drake 2007 Customize Data Entry Selection Menu Customize Data Entry Selection Menu Place a check next to each form you would like to display on the selection menu in data entry Remove the check to hide the form in data entry Hiding the form will make it invisible on the forms menu however it will still be accessible by typing in the form code NOTE Only installed states will be listed in addition to Federal Federal x Packone Type i040 Individual General income Adjustments Credits Taxes Other Name and Address VA Itemized Deductions Schedule Dependents lv STAX Sales Tax Worksheet Income M 2106 Employee Business Expense Adjustments Payments Electronic Filing and Banking Estimated Taxes lv CHAS Chase RAL or Bonu Child Care Credit DD Direct Deposit Form 8888 Earned Income Credit Checklist M PMT Electronic Funds Withdrawal Iv PIN 8879 8878 e file signature Wages Iv EF EF Options Override Gambling Income 1099 R Retirement M NOTE Notes aboutthe return 1099 DI Dividend Income V PRNT Print Options 1099 INT Interest Income 1099 G Govt Payments 1099 MISC Miscellaneous Income RRB 1099 R Railroad Retirement 1099 SSA Social Security Foreig
320. omposed of any of the described reports and any valid options associated with them See Fixed Asset Manager Macros on page 234 for details Select a report format tracking method Federal State Alternative or Book Select a sorting method Full Schedule By Department or by Form Schedule Click Run Report In Asset Manager Client Selection choose to create a report for one or more specific clients or to create a filtered report based on all clients Create a report for one or more clients Enter SSN EIN in the blank field and click Add Client Repeat for all desired client then click Next Create a filtered report based on all clients Click Next to open the Asset Manager Filter Selection dialog box Select a filter or sort option To edit filters click Edit Filters See Filter Manager on page 113 for details Click Next 6 Choose to Print to Printer Export to File or Cancel Click Cancel to close the Fixed Asset Manager Drake Software Manual Copyrighted Material 234 Reports 2007 DRAKE SOFTWARE FIXED ASSET MANAGER MACROS Use Fixed Asset Manager macros run a set of standard reports to run at one time For example to run a string of three Fixed Asset Manager reports designate the three reports in Fixed Asset Manager Macros Then choose Auto Code Print as the report type when running a report in the Fixed Asset Manager To set up macros complete the following steps from Reports gt Fixed Asset Mana
321. onus Depreciation Bonus Depreciation on Form 4562 4562 Book Depreciation Current year Book depreciation from Form 4562 4562 Cost Asset cost on the 4562 4562 Date Acquired Date Acquired on the 4562 4562 Date Sold Date sold on Form 4562 4562 Depreciation Current Year depreciation on Form 4562 4562 Description Asset description on Form 4562 4562 Form Form Reference on Form 4562 4562 ICC Investment Credit Code on Form 4562 4562 Life Depreciation Life selected on Form 4562 4562 LPT Listed Property Type on the 4562 4562 Method Depreciation method selected on the 4562 4562 MFC Multi Form code on Form 4562 4562 Prior 179 Prior Section 179 expense deduction on Form 4562 4562 Prior Bonus Prior Bonus depreciation on Form 4562 4562 Prior Depr Prior Depreciation on Form 4562 4562 PT Property Type on Form 4562 4562 Sales Price Sales price on Form 4562 4562 Sec 179 Section 179 expense deduction calculated on the 4562 4562 ST State Code on Form 4562 4562 ST Bonus Depreciation State Bonus Depreciation on Form 4562 4562 ST Depreciation State current year depreciation on Form 4562 4562 ST Life State Life on Form 4562 4562 ST Method State Method on Form 4562 4562 ST Prior 179 State prior Section 179 Expense Deduction on Form 4562 4562 ST Prior Bonus State prior Bonus Depreciation on Form 4562
322. operty types that have been depreciated and sold use the Form 4797 depreciation fields in the If sold section of screen 4562 The depreciation information entered in these fields is printed on the applicable line s of the Form 4797 Sales of Business Assets that is produced with the return Use field help F1 for more information on each field Form 4797 other Part lll depreciatio Group Sale Information ANP tha cats pit ee ey ee eee we ae N If any depreciation from an installment sale must be recaptured enter all required UTE fields for Form 4797 Sales of Business Property and select Yes when asked on Form 4797 whether the sale is also reported on screen 6252 Depreciating Schedule E Assets Because up to three rental properties may be listed on a single Schedule E depreciation for Schedule E assets is handled differently in Drake than it is for other types of assets Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 111 NEW FOR 2007 IMPORTANT SCHEDULE E Form 1040 From rental real estate royalties partnerships S corporations estates trusts REMICs etc See Instructions for Schedule E Supplemental Income and Loss t Department of the Treasury hteral Reverue Service 00 Names shown on retum Attach to Form 1040 1040NR or Form 1041 Income or Loss From Rental Real Estate and Royalties Note If you are in the a Schedule
323. ore specific instructions 3 Click OK to save the changes Drake Software Manual Drake 2007 Setup Options Data Entry Customize data entry functionality by indicating your preferences below Tabs Billing States EF Administrative Options Coats enty Calculation amp View Print Form amp Schedule Options Optional Documents Optional Items on Return Select To Tum ON Language for menus and data entry screens Engish v I Size data entry screens to show most fields without scrolling mear e e i I Disable sizing of data entry screens English Use grid data entry format for select screens Div Int 4562 etc Letter case for data entry IV Tab to zip code field skip city state and use zip code database Mixed Case Show notes reminders to preparer when opening a retum Override field indicator V Display formatting in SSN EIN date phone and zip fields Display bath indicators P Adjustment field indicator Display both indicators I Verify SSN when creating new return Classic Mode Enable Windows standard keystrokes V Small cursor Autofill preparer and firm number Magnify data entry Activate Preparer Fee override Help Cancel Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 47 Data Entry Tab Click to enable or disable the following options Maximize data entry screens where possible for easier viewing Size data scr
324. ormas 2 Enter a SSN EIN and press ENTER or Add Client for each client Click Next 4 From Options select specific options Select All options or click Unselect All to clear your selections a N OTE If printing proformas for multiple return types you are prompted to select additional Options After selecting options click Process 1040 1120 1120S 1065 or 990 5 Click Process 1040 6 Select forms to print then click Print again N OTE To omit an organizer or proforma or to view forms before printing see Omitting Organizers and Proformas on page 74 7 From the Print Selection window click Print N To print coupons select REFERRAL from Batch Printing Organizers Proforma DTE To customize the coupon see Letters Setup on page 55 To include a dollar amount go to Setup gt Options gt Optional Documents Drake Software Manual Copyrighted Material 74 Preseason Preparation 2007 DRAKE SOFTWARE PRINTING ORGANIZER PROFORMA BATCHES Take the following steps for to print organizers or proformas in batches This method allows filtering of the client database 1 NOTE 9 From the Home window choose Last Year Data gt Organizers or Last Year Data gt Proformas Click Next Select filtering and sorting options then click Next If a more complex filter is needed click Edit Filters See Filter Manager on page 228 for details Modify filtering criteria in Basic Search Conditions as
325. orms List on page 13 for instructions on editing and deleting information from a data entry screen Income Screen 3 Access Screen 3 Income to complete the unearned or non taxable income portion of Form 1040 Each line has two data entry fields one for taxpayer and one for spouse Enter amounts in the applicable columns If an entry must be split divide the amount between the two columns Press CTRL PAGE DOWN for additional Income screens Lines 7 22 of the 1040 may require attachments such as W 2s and 1099 forms Data entry screens for attachments are located in the bottom left portion of the General tab and also on the Income tab see 1040 Income Tab on page 102 Drake Software Manual Copyrighted Material 92 Return Preparation Take the following steps to enter a client s unearned income information Drake 2007 Data Entry 001234567 SAMPLE HUGH amp GWE 1 Calculate General income Adjustments Credits Taxes Other States 2 Dependents 3 Lines 7 22 Income 4 Adjustments of Form 1040 2007 DRAKE SOFTWARE 4 es His Pl View Print Split Doc Mgr Tax Name and Address Payments Estimated Taxes Child Care Credit Wages 2 Gambling Income 1099 R Retirement 1099 DIV Dividend Income 1099 INT Interest Income OLT a ee N 1099 G GovtPayments 1099 MISC Miscellaneous Income RRB 1099 R Railroad Retirement 1099 SSA Social Security Foreign Employer
326. ort Categories Available Columns All Categories Fil Taxpayer Name Select gt Spouse First Name E Filed Secta f lt Unselect Form W 2 Total Income category Emad Address lt Unselect All Tota Ta ERO Number ES ETA Estimated Tax Paid Prior Year Sample Report Portrait 1040s Taxpayer Name Spouse First Hame Dependent Form W 2 Total Income Total Tax E Fi lt Enter a Report Title and Report Description Optional Select and sort report columns Drake Software Manual Copyrighted Material 226 Reports 2007 DRAKE SOFTWARE Report columns are listed in categories Select a category to view column keywords in the Available Columns list Double click a keyword to add it to Selected Reports Columns or use the Select Unselect and Unselect All buttons Click and drag the columns in the Selected Report Columns list until they are in the desired order Place your mouse pointer over a keyword in the Available Columns list to display a Tip tooltip description of the item See Report Keywords on page 251 for a list of keywords and descriptions 5 After previewing the Sample Report click Save or click Next to continue to Procedure 2 CREATING A REPORT PROCEDURE 2 Step 2 involves setting custom filters and implementing options To set custom filters use the following procedure after completing Procedure 1 1 Select filtering and additional options from the Report Editor Step 2 screen e Select a
327. ot eligible for Child Tax Credit I Not US Citizen or Resident Alien Record 2 of 2 Press Page Down for New Screen Use PAGE DOWN in the following circumstances e To open another form or schedule for instance if you have completed one W2 screen and need to fill out a second one e To move to the next data entry screen For example instead of returning to the Data Entry Menu to move from screen 1 to screen 2 press PAGE DOWN N ITE The PAGE DOWN feature s properties vary depending on which screen is open If PAGE DOWN moves to the next data entry screen but you need a duplicate blank screen press CTRL PAGE DOWN Existing Forms List If there are multiple occurrences of a form in data entry the number of forms displays next to the screen name on the Data Entry Menu When the screen is accessed an Existing Forms List displays If multiple W2s are entered the Existing Forms List appears when the W2 screen is accessed Existing Forms List W2 Wages Le T 121212121 Tucker County Schools 2 011111111 SWEET AROMA HEALTH AND BEAUTY AIDES New Record ape a ements toss ste naga SO To open a screen from the list double click a row or select a row and click Open To open a new blank screen double click New Record or select New Record and click Open Field Flags New for 2007 Flagged fields require verification before filing Flag fields as you go or set flags globally for all new returns To flags fields a
328. otal Estimate Amt 2nd Qtr federal estimate amount overpayment applied and amount due Federal 3rd Qtr Estimate Amt Due Federal estimate payment 3rd quarter after overpayment applied Federal 3rd Qtr Total Estimate Amt 3rd Qtr federal estimate amount overpayment applied and amount due Federal 4th Qtr Estimate Amt Due Federal 4th Qtr Total Estimate Amt Federal estimate payment 4th quarter after overpayment applied 4th Qtr federal estimate amount overpayment applied and amount due Fiduciary Name Name of fiduciary Firm Bank Bank used for bank products Firm E mail Address E mail address of firm Firm Name Name of firm Greeting Entity Name Salutation displays entity name Doe Widgets Inc Greeting First and Last Name Salutation displays first and last names John Doe or John amp Mary Doe Greeting First Name Salutation displays first name s only John or John amp Mary Greeting In Care of Name Salutation displays In Care Of name John Doe if recipient is in care of John Doe Greeting Title and Last Name Indent TP Name amp Address Spaces Salutation displays title s and last name s Mr amp Mrs Doe Taxpayer s name and address indented by an adjustable number of spaces IRAL Paragraph Inserts paragraph for IRAL Misc Codes All miscellaneous codes from Data Entry Screen 1 Misc Codes1 Miscellaneous codes from Data Ent
329. other 4562 screen 6 7 and 8 Screen 4562 data is used as applicable to create depreciation or amortization schedules for the following forms Schedules A C E and F Forms 2106 Employee Business Expenses 4835 Farm Rental Income and Expenses and 8829 N OTE Expenses for Business Use of Your Home and the auto expense worksheet for Schedule C 4562 data flows as applicable to Form 4797 Sale of Business Assets and Form 3468 Investment Tax Credit Take the following steps to begin the process of entering depreciable assets in Drake 1 From the Income tab click Depreciation Detail or type 4562 into the Selector field and press ENTER 2 Enter data into the appropriate fields If enabled grid data entry opens Press F3 to toggle if necessary 3 Use a new 4562 screen for each item Press PAGE DOWN for a new screen 4 Once all applicable fields are completed press ESC to save and close T To access the 4562 screen directly from other screens click inside a depreciation IP field and either double click or press CTRL W This feature does not work from Grid Data Entry mode The For Description Date Acquired Cost Basis Method and Life fields are required All other fields should be completed as applicable Leave Business Use blank unless it is less than 100 e For Select the form name to which the depreciable item should be carried e Multi form code Enter a code only if a return has more than one i
330. our software vendor s user manual Backup Choose Backup and select from several options back up a single file all file types or groups of files An advanced option allows you to select files from multiple groups File types have been grouped into logical sections with multiple filter and sort options To begin backing up files from the hard drive complete the following steps 1 Select Tools gt File Maintenance gt Backup 2 Browse to the file storage location This can be a Universal Naming Convention UNC name a drive path or a drive letter Subdirectories are also available Drake Software Manual Copyrighted Material 210 Tools NOTE NOTE NOTE 3 4 2007 DRAKE SOFTWARE Click OK Select the type of files to back up e Single SSN or EIN Enter an SSN or EIN and press ENTER to enable Backup If a number is entered in the Single SSN or EIN field only that file is backed up e All File Types Back up every file type available for backup in Drake Software e Select one of the three listed file types and all files included in the group selected are backed up Setup Files Pricing Setup Information Files System Files Database IRS Bank and Scheduler Files Client Files 1040 1120 1120S 1065 1041 706 990 To back up files from each group Setup Files System Files Client Files check the appropriate box and click Advanced The Advanced Backup dialog box displays a list of all files fro
331. oviding tutorials practice returns and interactive tax courses With progress tracking tools and interactive testing ETC makes it simple for individuals and group administrators to monitor their personal and collective progress through the online training center ETC is offered free to Drake clients Non Drake customers may also access ETC but certain fees may apply To visit the Electronic Training Center go to DrakeSoftware com ETC CREATING AN ETC ADMIN ACCOUNT Initially an administrator admin account must be created for your office This admin account is used to create student accounts and track student progress From the login page at DrakeETC com complete the following steps 1 From the New to ETC section click Create admin account for the office Enter your EFIN and Drake password the password from your packing slip Click Submit 3 Complete the fields to create an admin account e Enter a username and password for the new admin account e Select Yes from the Administrator field e CTEC applies only to CA preparers wishing to receive CTEC approved credit e To receive CPE credit for completing the tax course select Yes from the CPE list 4 Click Save Information Once the admin account is established you can begin creating student accounts Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 187 CREATING ETC STUDENT ACCOUNTS You can create student accounts immediately afte
332. ow of Data When multiple forms require identical data for example when amounts from Forms 4684 and 6252 must be carried to Form 4797 Drake reproduces the data in the necessary forms when the return is calculated Nonrecaptured Losses Enter nonrecaptured losses on the 4797 screen Recaptured Depreciation For sold property listed on Form 4797 depreciation must sometimes be recaptured as ordinary income Like Kind Exchanges If an asset has been traded and needs continued depreciation and there is an increase in basis that needs to be depreciated the asset can be entered as a like kind exchange using the following steps 1 Open the 4562 screen for the asset that was traded 2 Make an on screen notation that the asset was traded for example type A after the description 3 Open the 8824 screen and complete the fields This is necessary to determine the new basis for the asset 4 Press CTRL V or click View to view the return 5 Note the amount shown on Form 8824 line 25 and enter this amount as the new basis for the item on the 4562 screen W 6 Make an on screen notation of the new asset in Description for example type after the description Copyrighted Material 116 Return Preparation 2007 DRAKE SOFTWARE 1040 ADJ USTMENTS TAB Selections listed under Adjustments enable you to enter adjustment data that does not necessarily carry from any other form Use this tab to access forms for the fo
333. pane and click Add to add them to the recipient list on the right To finish click Done Local Address Book The Local Address Book can be filled with e mail addresses of your choice To add an address click Add Enter first name last name and e mail address Click Done Copyrighted Material 198 Resources and Support 2007 DRAKE SOFTWARE Select e mail address from the left pane and click Add to add them 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 Report Generated Recipient List The Report Generated Recipient List option enables you to run a customized report from your client and EF data to generate a list of e mail addresses Keywords selected during the query are used to create e mail Keywords inserted into the body of the e mail message fill with the client s information 1 Click To from the New Message window and select Report Generated Recipient List 2 From the Report Manager select to either run a predefined report edit a predefined report or create a report from scratch The report generated is used to create an e mail list For details on creating reports see Reports on page 223 3 When reporting is complete e Click Yes to send a custom e mail message to each client including the selected report data e Click No to send a generic e mail me
334. pdate Returns Individually Recommended procedure When you enter a new client into Drake the program searches the prior year software for that client record If the record is found an Individual Update Options dialog box appears Take the following steps to update prior year client files 1 Select additional options or click Select All 2 Click Next press ALT U or click Update to start updating the client record 3 To exit without updating click Cancel or press ESC Update Returns Globally Take the following steps to update all returns in a package at one time 1 Goto Last Year Data gt Update 2006 to 2007 2 To select one or more specific returns enter the SSN or EIN in the top text box and click Add Client or press ENTER To proceed or to update files based on specific criteria click Next Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 71 In Basic Search Conditions select filters based on the types of returns to update on the preparer or on the firm For more details on Basic Search Conditions see Basic Search Conditions on page 229 Click Continue Select or clear options then click the Update button to start the update To exit without updating click Cancel or press ESC BUILDING THE EIN NAME INDEX The EIN Database consists of employer names and ID numbers used on returns prepared Each time an EIN is entered on Forms W 2 W 2G 1099R 1099G 8283 or 2441 t
335. pen Planner Enter the SSN or last name or double click the planner from the list to open e Click the Tax Planner icon in return data entry to open the planner file for the return THE TAX PLANNER LAYOUT Across the top of the Tax Planner are Excel Menu bars and just below the menu is a Tax Planner toolbar with Tax Planner specific functions Tabs representing setup and specific portions of the 1040 return are located across the bottom of the screen N DTE In Excel 2007 the Tax Planner toolbar items are located on the Add Ins tab Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 245 a oe Home Insert Page Layout Formulas Data Review Tax Planner toolbar rl Custom Toolbars i TAXPLNOT ibility Nege iii ita Excel menu and toolbars wow view saber Demographic Information Drake Tax Planner E TEST O MAPLE 400 00 1005 Base Year Multi Year Multi Year Multi Year Demographic Information 2007 2008 2009 2010 Filing Status Singe D If MFS Spouse lived with you during year Spouse itemized deductions axpayer is a dependent of another Spouse is a dependent of another axpayer is permanently and totally disabled Spouse is permanently and totally disabled Dependents Information Number of dependents Number eligible for child tax credit Number eligible for EIC Number eligible for education credit Amount of hope credit expense paid Amount of li
336. ph gt N OTE All conditional paragraphs are inserted in result letters allowing the letters to print all pertinent return information in most scenarios Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 59 Editing Letters in the Letter Editor The following sections describe how to edit letters in the Letter Editor Opening a Letter in the Letter Editor Complete the following steps in Setup gt Letters to open a letter for editing 1 From the toolbar click Open to display a list of tax packages N UTE The Letter Editor opens to the last letter viewed 2 Select a package Letters within the package are listed 3 Select a letter to open it in the Letter Editor The name of the letter is displayed in the title bar Editing a Letter in the Letter Editor Once a letter is opened in the Letter Editor you can add delete or modify text as desired Use the formatting and edit functions as needed From the tree view in the left pane add keywords or conditional paragraphs to the letter When you are finished editing the letter click Save from the toolbar M PI RTANT When editing a letter in the Letter Editor leave the first line of the letter blank with no text keywords or If Statements Drake Software Manual Adding and Removing Keywords and Conditional Paragraphs to a Letter Complete the following steps to add keywords or conditional paragraphs to a letter For details
337. preparers that their fees have been distributed to their direct deposit account PRINTING AND DISTRIBUTING CHECKS IRAL and RAL checks are typically printed at the preparer s office and given to the taxpayer Following are some important tips to remember before during and after the printing process IMPORTANT Transmit from one source Do not transmit from more than one computer unless the program is installed on a dedicated server Transmitting and receiving from more than one computer may affect your ability to print checks correctly Check date Ensure that the computer for EF transmissions has the correct date Wait for acknowledgements The appropriate IRS and bank acknowledgements must be received before checks can be printed Compare check numbers Before attempting to print a check first make sure the check number on the computer matches the check number on the physical check Connect to Drake Immediately 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 from Drake it deposits preparer fees which allows the taxpayer to cash the printed check Reissuing checks If an error or check damage occurs in printing you must reprint or void the check as necessary If reprinting or voiding a check you must physically possess check and write VOID on the face of the check Guarantee that the origin
338. 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 menu bar go to Setup gt Printing gt PDF Printer and select the CD drive 2 Click Install 3 At the Installation Complete message click Exit To print files to PDF format print the file as you normally would but select PDF995 as the printer Drake Software Manual Copyrighted Material 66 Installation amp Setup 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Checklist 67 Preseason Checklist Preseason planning can reduce or eliminate problems for tax professionals Take time now to prepare for the months ahead and ensure that your office is ready before the first client arrives GETTING READY FOR TAX SEASON The needs of each office vary in the months before tax season but your preseason preparations might include the actions listed here Contact the IRS Q Apply for Electronic Filing Identification Number EFIN If you are not already an ERO file Form 8633 and submit a fingerprint card to the IRS if you are not a CPA EA attorney banking official or officer of a publicly held company See Preparing to File Electronically on page 149 Q Authorized EROs must file a revised Form 8633 if their firm or filing information has changed since 2006 or if they will start electronically filing business forms this year
339. pyrighted Material 110 Return Preparation 2007 DRAKE SOFTWARE Placed in Service and Like Kind Exchange Info These fields are override fields As applicable choose to force a convention mid quarter or half year and specify if MACRS tables should not be used Press F1 for information on using Qualified Indian Reservation Property recovery periods Depreciable Asset Sales Enter sale information for depreciable assets into the box in the bottom right quarter of the 4562 screen e Group Sales Enter each depreciable asset of a group sale in a separate 4562 screen For the first asset of a group sale complete the Date sold Property type Group sales number Group sales price and Group expense of sale fields of this box For each subsequent asset only the Date sold Property type and Group sales number fields are required e Passive Activity Sale If the depreciable asset sold was from a passive activity complete the Date sold Property type and PAN passive activity number fields The PAN must match the passive activity number assigned to the activity on the schedule or form indicated in the For field at the top of the screen e Installment Sales If a depreciable asset was sold using installments enter only the Date sold Do not enter a property type code Instead enter all required sale data on Form 6252 Installment Sales See Other Gains and Losses on page 115 e Form 4797 For section 1250 1252 and 1254 pr
340. r The EF Return Selector allows you to select clients for Electronic Filing To include Client s ID Number Double Clicking on a client will allow you to verify modify the E appropriate selections click Continue to complete the process ID Number Client Name CORP FILING INSTRUCITO Message I SCORP FILING INSTRUCTI EF Message Sane BOBS CORP TEST STATE A EF Message I VOUCHER SCORP EF Message see RETURN VOUCHER A amp SC Ready For EF Seems RETURN ESTIMATED A amp No EF Documents MITCHELL SR DENNIS J Ready For EF Pye re Cheapo Test T Ready For EF aman RETRUN MNITWK No EF Documents Hama DAHLGREN MNCONWK L No EF Documents Saian GA CORP RETURN No EF Documents AAE JA GENERAL PARTNERSHIP No EF Documents AE MCGILLICUTTY BLACKIE No EF Documents tee SAMPLE HUGH F amp GWEN No EF Documents eee SHOEBILL LTD No EF Documents mM 1a FLOWER STORE ONE Ready For EF lt ii Help Select All Unselect All Record 19 of 188 HIDE N SEEK INC EF Message amen HOAGIE TEST A amp TUNA No EF Documents 3 Tip Click column headers to sort returns in ascending order by column provided Click header a second time to sort in descending order Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 153 To verify or modify returns from the EF Return Selector double click a return to N OTE view an EF Transmission Detail dialog box displaying the cl
341. r a topic click the topic e Index Use keywords to search topics in the Help screens Enter the keyword into the top text box and press ENTER Any matching topics are displayed in the lower box To see the Help screen for the matching topic do one of the following e Double click the topic e Click the topic and click Display e Use the UP ARROW and DOWN ARROW keys and press ENTER e Search Finds matches in the Help screens for the keyword entered in the upper box To see the Help screen for the matching topic e Double click the topic e Click the topic and click Display e Use the UP ARROW and DOWN ARROW keys and press ENTER Print the Help System 1 While the Help System is open click the Print icon 2 Choose to print either the topic or the selected book and all subtopics 3 Click OK to send the topic or topics to the printer T Workstations running NWCLIENT may encounter an error when accessing the Help IP System To correct this issue run F Drake06 Help FixHelp exe on each workstation Replace F with your server drive letter Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Resources and Support 195 DATA ENTRY HELP There are several ways to access help in data entry e Press F1 or SHIFT in any data entry field e Right click in any data entry field and select View Help e Click Screen Help where available Various screens in data entry offer screen level help presenting a
342. r and the taxpayer Some banks require the originals to be mailed in weekly Consult your bank N ITE If your firm has enabled the Print Bank Application When Keyed on Return option under the EF tab in Setup gt Options the application is printed when the bank screen is completed and the return calculated e Individual Bank Application Every taxpayer who applies for a RAL or Bonu must complete the bank application Applications are generated when the bank screen is completed in data entry e Check Stock Obtain additional check stock from your bank as needed All check stock must be verified and secured upon receipt Read and retain all information contained with checks N OTE For instructions on printing checks for bank products see Printing Checks for Bank Products on page 157 Maintenance Log on to the Drake Web site to make bank product changes Information is carried forward each year for prior bank customers must still be confirmed The bank product opti t be changed the IRS has acknowledged th MPORTANT ee proauct option cannot be changea once the as acknowieage e THE RAL PROCESS Always review and discuss the RAL_Info sheet with your clients Ensure that they M PI RTANT understand that a RAL is a loan not the refund and that bank and other charges apply To obtain a RAL for a client whose tax return is completed and calculated first ensure that the bank screen of the tax return has been completed
343. r creating an Admin account Once their account is created students log in to ETC with the established username and password This ensures that all student progress is recorded and tracked from the admin login 1 From the ETC toolbar click the Administration tab Click Add New Student Complete the fields to create a student account e Enter a username and password for the new student account e Select Yes from the Administrator field e CTEC applies only to CA preparers wishing to receive CTEC approved credit e To receive CPE credit for a completing the tax course select Yes from the CPE list Click Save Information LOGGING IN TO ETC To log in to ETC complete the following steps 1 2 3 Go to www DrakeETC com From the Login to ETC section enter a student or admin username and password Click Login to open the Welcome page SOFTWARE Home Tax Courses Tutorials Practice Returns Report Card Administration Logout e Christine Home Tax Courses Tutorials Practice Returns Report Card Administration Logout Drake Software Manual Copyrighted Material 188 Resources and Support 2007 DRAKE SOFTWARE NAVIGATING ETC Access the following items from the Welcome page toolbar TIP NOTE Tax Courses Interactive tax courses explore IRS tax law and terminology and how it applies to Drake Software data entry CPE credits are available Tutorials Step by step tutorials teach the basics of Drake Software
344. r for a Specific Return See Custom Paragraph for Letters on page 131 for instructions Previewing a Result Letter You can preview a result letter within the Letter Editor The preview function opens the letter using one of the test return scenarios for return data Complete the following steps to preview the letter with sample return data 1 From the Letter Editor select a letter to preview 2 Click Preview from the toolbar 3 Select a letter from the Select Sample Return list 4 Click Continue to view the sample letter Viewing the Result Letter for a Return To view the result letter for a return press CTRL V in a return to enter view mode Double click LETTER to view the letter For more on viewing result letters for returns see Viewing and Printing Parts of a Return on page 145 Bringing Forward a Prior Year Letter A letter from 2006 may be brought forward into the Letter Editor in place of a 2007 letter To replace a current year template with a prior year letter take these steps N DTE Drake recommends bringing forward a prior year letter into a 2007 letter template 1 Open a letter template to replace in the Letter Editor 2 Go to Setup gt Update Prior Year Letter Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 61 Click OK when prompted to proceed Select the drive where the prior year letter exists Select a letter to update Click Continue
345. r of Amortization Periods Payments Per Year Enter the number of payments to be made each calendar year Annual Interest Enter the annual interest amount for the loan The interest for each monthly period is calculated automatically If the interest is unknown but the payment amount is known leave the Annual Interest field blank Payment Amount In most cases Drake calculates the payment amount based on the other information entered If the Payment Amount field is left blank and the interest amount is entered in the Annual Interest field the program calculates the payment and displays it in this field If however the interest amount is unknown and the payment amount is known enter the payment amount in the Payment Amount field If the Annual Interest field is left blank the program calculates the interest and displays the amount in the Annual Interest field Payment Type There are two types of payments supported Fixed Payment and Fixed Principal The default is Fixed Payment Date of First Payment Enter the date the first payment for the loan is due This entry is used to determine the dates for subsequent payments After the information is entered click Calculate to create the Amortization Schedule Click Print to send the schedule to the printer or click Save to save the schedule for future viewing through Reports gt Report Viewer EDIT EIN DATABASE When an EIN is entered in data entry it is stored in the EIN databa
346. r the primary taxpayer Soc Sec Received Total amount of social security payments received for this return Soc Sec Taxable Total of social security benefits which are taxable Spouse Age Age of the Spouse Spouse Best Call Time Best time to call the spouse Spouse Birthday Spouse s Birthday for the current year based on the Spouse s Date of Birth Spouse Cell Phone Cell phone number for spouse Spouse Date of Birth Date the spouse was born Spouse Date of Death Date the spouse died Spouse Email Address Email Address for the Spouse Spouse Evening Phone Evening phone number for the spouse Spouse First Name First name of spouse Spouse ID Spouse ID SSN Spouse Last Name Last name of spouse Spouse Middle Initial Middle initial of spouse Spouse Name Spouse s Full Name Spouse Occupation Occupation of the spouse as listed on the Demographics screen Spouse Suffix Drake Software Manual Suffix of spouse s name Copyrighted Material 2007 DRAKE SOFTWARE Appendix 255 Keyword Description SSA Net Net benefits received from social security administration State State in address Street Address Street address Suite Suite number in the Taxpayer s address Tax IRA etc Additional tax on IRAs other qualified retirement plans etc Taxpayer Age Age of the primary taxpayer Taxpayer Bes
347. rake See Step 4 Process Acknowledgments on page 155 Q Access EF amp Banking Practice Access practice returns on the Drake Support Web site Training Tools menu Drake Software Manual Copyrighted Material 70 Preseason Preparation 2007 DRAKE SOFTWARE 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 PRIOR YEAR UPDATES Save time by updating prior year returns settings and the EIN Database from the previous year Ensure that the 2006 data path points to last year s data files before updating If the MPI RTANT path is not correct in Setup gt Directories Paths the program cannot find the data to bring forward Back up prior year data before updating UPDATING CLIENT FILES Update client names addresses ages filing statuses occupations dependent names installment sales depreciation business names and ID numbers from prior year returns Additional information can be carried forward if selected You can update client files individually as you meet with clients throughout tax season recommended or you can update them all at once NEW FOR oer Updated amounts no longer have a v for verification but appear as flagged fields 7007 Verify the field and press F4 to remove the flag before filing electronically U
348. ral Estimate Payment Due Date Federal estimate MAIL TO address Federal estimate payment due date Federal Extension EF Paragraph Inserts paragraph for e filed extension application for federal return Federal Extension Paper Paragraph Inserts paragraph for paper filed extension application for federal return Federal Extension Amount Being Paid Amount to be paid with extension entered on EXT screen Federal Extension Balance Due Paragraph Inserts paragraph if estimate balance is due with extension of federal return Federal Extension Direct Debit Date Date federal extension payment will be directly withdrawn from taxpayer account Federal Extension Direct Debit Paragraph Inserts applicable paragraph if direct debit is selected for federal extension payment Federal Extension Due Date Federal Extension Estimated Balance Due Due date of extension Amount of estimated tax due with federal extension Drake Software Manual Copyrighted Material 276 Appendix 2007 DRAKE SOFTWARE Federal Extension No Dir Debit Paragraph Inserts applicable paragraph if direct debit is not selected for federal extension payment Federal Field Housing Value Field Housing Value from EARN Screen Federal Financial Agent MAIL TO Address Federal Foreign Income Exclusion Mailing address of Federal Tax Deposit Processing Financial Agent Amount of Foreign Earned Income E
349. ralleled 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 more complicated Drake Software questions allows us time to research and answer your questions thoroughly e Telephone Support 828 524 8020 Recommended for simpler Drake Software questions Drake Support Hours 2007 2008 December 1 2007 April 15 2008 April 16 November 30 2008 Monday Friday 8 a m 10 p m EST Monday Friday 8 a m 9 p m EST Saturdays 8 a m 6 p m EST Saturday 9 a m 5 p m EST For more information on the many helpful resources provided by Drake Software see Resources and Support on page 185 Drake Software Manual Copyrighted Material 4 Introduction 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Basics 5 Basics This chapter addresses basic tasks in Drake and introduces the primary screens It covers the following e Getting Started Logging in and out general navigation e The Home Window Menu bar toolbar recently opened files appointments messages e Data Entry Layout navigation features Help resources GETTING STARTED A computer equipped with Drake tax software has three icons the desktop Drake 2007 Drake Tax Planner and Drake Document Manager For more on the Drake Document Manager see page 235
350. rch For field as the starting point for your search enter the search criteria Search by SSN EIN or taxpayer name or browse all SSNs EINs Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 159 Drake 2007 Search EF Database SSN EIN Name To Search For oo F1 General Information F2 Bank Direct Deposit Info a aod Ys ee E a e Search by Specific SSN EIN Enter an SSN or EIN and click Go All matching records are displayed with the most recent record appearing first Use the arrows at the bottom of the screen to view any multiple records for the SSN EIN entered e Search by Name Enter a last name or business name and click Go Only those records with perfect matches are displayed e Browse all SSNs Leave the entry field blank and click Go The first record in the database is displayed Use the arrows at the bottom of the screen to scroll through the records ae sais ae a a ce a a a en Cr i Record 7 of 47 TIP To scroll from your keyboard press PAGE UP and PAGE DOWN 3 Access return information bank information fee information general information and reject codes associated with a return Drake 2007 Search EF Database SSN EIN Name To Search For SSN Name Taxpayer 104110001 JAMES amp JILL lt TESTONE Spouse 104110002 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lo
351. rd 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 5 5 or later e Adobe Acrobat Reader for viewing PDF files e CD drive N OTE If running Windows Vista it may be necessary to upgrade your version of Adobe Acrobat Reader to version 8 0 or later To take maximum advantage of the software s features we also recommend the following e Hewlett Packard HP compatible laser printer e High speed Internet access or a 56K modem e Backup media source such as a USB drive memory stick floppy disk etc e Scanner Drake supports all TWAIN compliant scanners for use with the DDM N ITE If you do not have Windows XP and want to back up the software on CD you must use your CD burner software to perform the backup not the Drake backup utility If you have Windows XP you can back up directly to the CD without other software Drake Software Manual Copyrighted Material 28 Installation amp Setup 2007 DRAKE SOFTWARE TAX SOFTWARE INSTALLATION The installation procedure is identical for network and stand alone environments For details on configuring Drake over a network after installing see Running Drake on a Network on page 29 Use the following procedure to install the tax
352. rease Percentage Increase entry on the Bill Screen Bill Pay Amount 1 First amount for payment on bill screen Bill Pay Amount 2 Second amount for payment on bill screen Bill Pay Amount 3 Third amount for payment on bill screen Bill Pay Amount 4 Fourth amount for payment on bill screen Bill Pay Amount 5 Fifth amount for payment on bill screen Bill Pay Amount 6 Sixth amount for payment on bill screen Bill Pay Date 1 First Date for payment on bill screen Bill Pay Date 2 Second Date for payment on bill screen Bill Pay Date 3 Third Date for payment on bill screen Bill Pay Date 4 Fourth Date for payment on bill screen Bill Pay Date 5 Fifth Date for payment on bill screen Bill Pay Date 6 Sixth Date for payment on bill screen Bill Pay Description 1 First description for payment on bill screen Bill Pay Description 2 Second description for payment on bill screen Bill Pay Description 3 Third description for payment on bill screen Bill Pay Description 4 Fourth description for payment on bill screen Bill Pay Description 5 Fifth description for payment on bill screen Bill Pay Description 6 Sixth description for payment on bill screen Data Entry Number Number of data entry operator EF Fee Electronic filing fee withheld from the refund anticipation loan amount ERO Number Number of Electronic Return Originator Fee Total amount of fe
353. rect From Other type VER into the Selector field and press ENTER Press F1 for help N OTE If a taxpayer s W 2 has incorrect Social Security or Medicare withholdings a RAL is not allowed until the W 2 is verified with the employer If after contacting or attempting to contact the employer you suspect fraud M PL RTANT immediately contact Drake the RAL bank and the nearest IRS Criminal Investigation office Call the tax fraud hotline at 800 829 0433 Personal Allowances Worksheet To access an electronic Form W 4 Employee s Withholding Allowance Certificate from the Other tab click Personal Allowances Worksheet or enter type W4 into the Selector field and press ENTER Press F1 for help Applying for an ITIN Form W 7 Application for IRS Individual Taxpayer Identification Number ITIN is used for federal tax purposes only and is not eligible for electronic filing This form can however be accessed completed and printed using Drake tax software Access the W7 screen from Other or type W7 into the Selector field and press ENTER Use Screen Help or press F1 for further instructions and information Amending a Form 1040 Use Form 1040X or X to amend a 1040 1040A 1040EZ 1040EZ T 1040NR or 1040NR EZ return While the 1040X cannot be filed electronically it can be accessed completed and printed using Drake tax software Access this screen from the Other tab or type X into the Selector field and press ENTER
354. reen use one of the following methods e Press CTRL D from within the screen At the prompt click OK e Right click within the screen but not within a field and select Delete Screen e Ifthere are multiple occurrences of a screen for example if you have entered two 1099s an Existing Forms List is displayed See Existing Forms List on page 13 Select the appropriate screens to open and delete MPI RTANT If a screen is highlighted but contains no data it must be deleted to prevent electronic filing errors Drake Software Manual Copyrighted Material 12 Basics NOTE NOTE 2007 DRAKE SOFTWARE Navigating Data Entry Fields A blinking cursor indicates the active field The various ways to navigate these fields include the following e Click inside a field to activate it e Press TAB to move the cursor forward one field e Press SHIFT TAB to move the cursor back one field e Press CTRL J or CTRL to navigate up and down a data entry screen e Press BACKSPACE to delete a character behind the cursor e Press DELETE to delete a character in front of the cursor For a complete list of navigation hot keys see the Quick Reference Guide insert in this manual Grid Data Entry Only the most commonly used fields are displayed in grid data entry This feature allows for faster data entry and is available for certain screens including Dependents INT DIV and 4562 To access grid data entry from full screen
355. rements for Form 8867 Paid Preparer s Earned Income Credit Checklist In the event of a due diligence audit you have an electronic record corresponding to the printed 8867 This screen is strictly for overrides and includes fields for combat pay and Additional Child Tax Credit income Tax free combat pay is included in income when calculating EIC If combat pay is entered in Box 12 of the W 2 with a code of Q or in the Combat Pay field on the 8867 screen it is automatically included as earned income in EIC calculations when it benefits the taxpayer Access the 8812 screen as necessary to check calculations for Form 1040 line 68 Additional child tax credit Also refer to WK_8812 in the calculated return to examine the calculations used to determine Child Tax Credit Form 1040 line 53 Form 8820 Orphan Drug Credit Form 8826 Disabled Access Credit Form 8834 Qualified Electric Vehicle Credit Form 8835 Renewable Electricity Refined Coal and Indian Coal Production Credit Form 8839 Qualified Adoption Expenses Form 8844 Empowerment Zone and Renewal Community Employment Credit Form 8845 Indian Employment Credit Form 8846 Credit for Employer SS and Medicare Taxes Paid on Certain Employee Tips Form 8847 Credit for Contributions to Selected Community Development Corporations Form 8859 District of Columbia First Time Homebuyer Credit Form 8860 Qualified Zone Academy Bond Credit Form 8861 Welfare to Work Credit Form 8863 Educ
356. ress ENTER Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 53 NOTE IMPORTANT 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 Enter pricing information in the Per Item and Per Form fields e When a Per Item entry is not applicable for a form the field is unavailable e When per item charges are added to multiple forms all item charges for that form reflect on the first form entered Click Update to add the new information to Pricing Setup Repeat these steps for each form or price only the most common forms and set pricing for all other forms on the fly See Pricing on the Fly following Click Save If incorrect charges are generated on bills check form number 255 the Minimum Charge field The program automatically prints the amount entered in this field Also check form number 256 Maximum Charge Pricing On the Fly To edit or add pricing amounts without entering Pricing Setup edit on the fly Complete the following steps from View or Print mode 1 Right click a form and select Properties 2 Edit the description of the form and edit the price listed per form or per item 3 New for 2007 Choose to Apply to this return or Apply to all returns Applying to all returns changes the pricing file E 1040 Properties DRAKEO7 PR FED PER 1040 Properties Update the 1
357. righted Material 100 Return Preparation 2007 DRAKE SOFTWARE Listed below are important points to remember when itemizing deductions in Drake e Forcing Deductions When a Schedule A is completed the software determines which is more advantageous for the taxpayer the itemized or the standard deduction To force either type of deduction select Forced itemized or Force standard e Printing Itemized Deductions Schedule A is printed even if the software has determined that the standard deduction should be taken To print Schedule A only when required go to the Home window and select Setup gt Options Under the Form amp Schedule Options tab check Print Schedule A only when required then click OK Sales Tax Worksheet Use the Sales amp Local General Sales Tax Deduction Worksheet and the software will 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 applicable As applicable lines 2 3 and 7 should be entered in order to calculate the maximum deduction From the General tab click Sales Tax Worksheet or type STAX into the Selector field and press ENTER Form 2106 Employee Business Expense Screen 2106 covers Form 2106 Employee Business Expenses Take the following steps to enter employee business expense data in Drake 1 Under the General tab click Employee Business Expense or type 2106 into the
358. righted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 167 ABOUT STATE FILING Most U S states accept electronically filed returns in 2007 The following map displays all states that accept electronically filed state returns as shaded Various mandates exist for each state that accepts electronic filing and each state has its own application requirements for EROs and preparers that offer bank products Refer to the Fed State Facts page on the Drake Web site and to the state Web sites themselves for further information on individual state regulations BANK PRODUCTS This year Drake is working in conjunction with three banks to provide taxpayers access to bank product options e Chase formerly Bank One e Republic Bank amp Trust e Santa Barbara Bank amp Trust TAXPAYER REQUIREMENTS For a taxpayer to be eligible for a bank product the return must be eligible to be filed electronically In most cases the taxpayer must be 18 or older If married filing jointly both clients must be 18 or older Check with individual banks for state specific age requirements Both preparer and client must complete all parts of the non RAL Agreement or the RAL Application whichever is desired available in Drake from Tools gt Blank Forms NOTE Typically banks have specific minimum and maximum refund requirements For more information consult the taxpayer application available in Drake from Tools gt Blank Forms Drake
359. ring Files on a Network The Shared drive letter for all other shared files EF Firm Pricing Letters etc optional setting is associated with option 3b in the configuration settings Drake 2007 Directories and Paths Setup C DrakeO7 CF TAXSETUP 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 1 Standalone computer no network I Network Options 2 Software installed only on Server preferred network setup I N wClient link installed on workstations 3 Software installed on server and workstations secondary network setup 3a _This is the server 3b This is a workstation Indicate server drive letter for sharing client files To access all other shared files on a server EF Firm Pricing Letters etc J select appropriate shared drive letter in Admin override section below The Shared Drive Letter allows shared e EF data for Search EF Database e IRS bank and state acknowledgements e Configurations colors pricing preparers etc W When the shared drive letter is set do not change it unless instructed to do so by AR
360. rm based on the Firm Number entered on the Name and Address Screen First Year Client s first year from the TRAC screen Fiscal Year End Date the fiscal year ends Fiscal Year Start Date fiscal year begins Form 2350 Indicator Indicator for 2350 on the EXT screen X E B or P possible To check for all set filter for not Form 4835 Net Net profit or loss from each form 4835 Form 4868 Indicator Indicator for 4868 on the EXT screen X E B or P possible To check for all set filter for not Form 990 Type Type of 990 Return X 990 E 990EZ P 990PF Form Count Number of Forms present on a return FS HOH Filing Status is Head of Household FS MFJ Filing Status is Married Filing Joint FS MFS Filing Status is Married Filing Separate FS QW Filing Status is Qualified Widower FS Single Filing Status is Single In Care Of Address The in care of line Interest Accrued Amount of accrued interest Interest Bond Adj Adjustment for amortizable bond premium on interest income Interest Nominee Amount of interest that is nominee interest Interest OID Adjustment amount of original issue discount applied to interest income Interest Other Exempt Amount of other exempt interest included in interest income Interest PAB Amount of interest income from a private activity bond after 8 7 1986 Interest Penalty Early withdraw penalty for interest income Interest Per Payer Displays interest income not including US government interest per payer per screen
361. rom removing a flag from a field TIP To access a list of macros in data entry press CTRL SHIFT M Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Installation amp Setup 55 Letters Setup The various letters produced by the software are available for editing and customizing in Letters Setup These include preseason after season schedule estimate and result letters for all packages a coupon and privacy policy The individual result letters are available in English and Spanish Also customize the header of letters and bills to include your logo and firm information The information for result and extension letters is produced according to certain N OTE criteria For example if the return is eligible for electronic filing the result letter is printed for an electronically filed return If not eligible a letter is printed for a paper filed return Override the defaults from the LTR screen in data entry See Custom Paragraph for Letters on page 131 To edit letters and choose letterhead format settings go to the Home window and select Setup gt Letters The Letter Editor is displayed Selected letter Drake 2007 Letter Editor Individual Result Letter 01 Default Selected letter s i 9 G a ZN Q H e 2o a Wem S Save Print Edit Setup Preview Help Exit front Name Courier New FontSie 10 gt B Z U Client Information Federal Return Paragraphs Formatting Bar
362. rships flows automatically to Schedule SE Enter all other self employment income directly e Church income line 5a List income that is subject to SE tax All income tax must be reported on the W 2 with church income coded as C or P Any income entered on Schedule SE is added to the W 2 income amount e Adjustments to figures entered elsewhere Some fields are adjustments to amounts that flow from other sections of the return Adjustment fields are denoted by the sign e Short or Long Schedule SE Depending upon the employment terms the taxpayer must complete a short Schedule SE page 1 or long Schedule SE page 2 Schedule SE Drake determines the form required and processes it accordingly To force the long form to generate with the return check the applicable box Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 117 Form 8829 Expenses for Business Use of Your Home Access Office in Home or 8829 from Adjustments or type 88 29 into the Selector field and press ENTER Data from this screen flows to the applicable form in the return Schedule C Schedule F Form 2106 Employee Business Expenses or Schedule K 1 for Partnership Depreciation of Home Enter depreciation information under Part III of Office in Home If the home was placed into service during the current tax year leave Part III blank and enter the following on the 4562 screen Field in Screen
363. rtant points to remember when entering dependent information e Last Name if different Enter the dependent s last name only if it differs from that of the taxpayer e Months in Home Default is 12 dependent lived with taxpayer for entire year If 0 is selected for a son or daughter the default is that the child did not live with the N OTE taxpayer due to divorce or separation If 0 is selected for any other type of dependent parent grandchild etc the dependent is classified as Other Dependent You can override the default with an entry in the Additional Information section of this screen e TSJ Select T S or J to ensure that data is attributed to the correct person Default is T Belongs to the Primary Taxpayer e State codes With the cursor in this field press F1 for applicable state codes e Education Expense Information Enter the applicable amount for Hope Credit Lifetime Learning Credit or Tuition and Fees Deduction Do not complete more than one of the Education Expense Information fields e EIC Information Enter EIC information as applicable e Form 8901 Form 8901 Information on Qualifying Children Who Are Not Dependents is generated automatically when both the Not a dependent and the Qualifies for Form 8901 boxes are checked on Screen 2 There is no corresponding screen for Form 8901 in the software Editing or Deleting a Dependent s Information See Existing F
364. rvice bureau 168 state add ons 170 taxpayer requirements 167 types of 168 banking 100 bankruptcy 112 Basic Search Conditions 229 BILL page 146 billing clients 129 receipt number 90 setup 50 biodiesel fuel credit 123 blank forms 208 Bonu see bank products broadcast emails 199 business codes 16 103 credit 122 use percentage 105 calculation details 142 summary 140 calculator 19 Copyrighted Material vil Index calendars 78 capital gains and losses 112 carryovers 112 cascade of forms 144 change of address 136 charitable contributions noncash 121 Chase Bank 100 check register 158 173 check stock 171 checks list of voided 173 lost 173 printing 172 reprinting 172 voiding 172 child care credit 95 child support issues 129 church income 116 120 city tax codes 16 data entry 137 forms 137 Ohio 137 rates 219 updating data 137 classic print mode 148 client bill see billing client files see files Client Status Manager about 175 column descriptions 179 creating returns 181 custom statuses 177 customization 177 178 duplicate entries 184 filtering 181 navigation 180 opening returns 180 reports 182 restoring data 184 searching 181 setting statuses 176 status types 177 viewing client data 182 Client Write Up 250 coal credits 123 codes acknowledgement 156 bank 160 business 16 103 city 16 commonly used in data entry 17 debt indicator 160
365. ry Screen 1 Code 1 field Misc Codes2 Miscellaneous codes from Data Entry Screen 1 Code 2 field Misc Codes3 Miscellaneous codes from Data Entry Screen 1 Code 3 field Misc Codes4 Miscellaneous codes from Data Entry Screen 1 Code 4 field NC Annual Report Paragraph Inserts paragraph for NC Annual Report Next Tax Year Next tax year Omit Logo and Letterhead Cancels logo and letterhead on current page Page Break Inserts page break Paid Preparer Fax Paid Preparer Name Fax number of paid preparer Name of paid preparer Paid Preparer Phone Paragraph from LTR Screen Phone number of paid preparer Custom paragraph from LTR screen Drake Software Manual Copyrighted Material 278 Appendix 2007 DRAKE SOFTWARE Partner Address Partner s address Partner Name Partner s name Preparation Fee Fee for tax return preparation Prior Tax Year Prior tax year Projected RAC Bonus Check Amount Projected RAC Bonus check amount Projected RAL Check Amount Projected RAL check amount Projected Remaining Check Amount Remainder of federal bank product amount after the first check Proposed IRAL Check Amount Proposed amount of IRAL check RAC Bonus Paragraph Inserts paragraph for RAC Bonus RAL Check Paragraph Inserts paragraph for RAL check RAL Paragraph RAL Prep Fee Inserts paragraph for RAL RAL preparation fee RAL Prep
366. ry of the three returns See Calculation Results on page 140 for more information on reading calculation results 2 Press ENTER to close each Calculation Results screen and open the Return Selector Three return results are displayed the joint return and two separate returns Details for each return are listed 3 Select returns to print view or save the returns as desired Click the applicable button at the bottom of the window Drake Software Manual Copyrighted Material 18 Basics 2007 DRAKE SOFTWARE Drake 2007 Return Selector Return Selector Press the SPACEBAR or click checkboxes to select return s for Viewing Printing Sorting is available by clicking the desired column header SSN EIN Date Time Name Fed Refund State Refund F Type Status C 400007003 10 13 11 07 45 SMITH JOHN N SPLIT RETURN 2417 O PER Msg 406565656 10 1311 07 45 SMITH JANE SPLIT RETURN 300 Deen Msg C 400007003 10 13 11 07 45 SMITH JOHN N amp JA 379 O PER Msg Filing JOINTLY will save 1738 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 Retumfs First then Click Save and View Save Select All UnSelect All View Exit N OTE Do not save all three returns if the joint return will be filed rather than the separate returns The separate returns can be viewed without being saved 4 Click Exit If the split has been saved the MFJ and both M
367. s Birthday for the current year based on the Dependent s Date of Birth Dependent Child Care Expense Qualifying Child Care Expenses for the Dependent Dependent Date of Birth Date of Birth for the dependent Dependent Disabled The Dependent is over 18 and Disabled Dependent Employer Expense Portion of Qualifying Child Care Expenses for the dependent paid by the employer Dependent First Name First Name of Dependent Dependent Hope Credit Hope Credit qualifying expense paid for the dependent Dependent ID Dependent Lifetime Learning Ex SSN or ITIN of Dependent Lifetime Learning Credit Expenses paid for the Dependent Dependent Months in Home Number of months in the home for the Dependent Dependent No CTC Dependent is not eligible for Child Tax Credit purposes Dependent not with you Dependent did not live in house due to divorce or separation Dependent Relationship Relationship of the Dependent Dependent Student The Dependent is over 18 and a Student Dependent Suffix Suffix of the Dependent Dependent with you The dependent lived with you Dependents At Home Total of dependents who live at home Dependents Not At Home Total of dependents who do not live at home Dividends 14 Capital gain distribution subject to the 14 rate section 1202 small business stock Dividends 25 Capital gain distribution subject to 25
368. s column also displays the source of the payments e Direct Deposits NOT Involving Bank Loans These fields are located at the bottom of the window For the federal state and Bonu RAL Direct there is an account type and account number for each type of direct deposit Fees Miscellaneous Info This window contains general return information Earned Income Credit Adjusted Gross Income Taxpayer PIN s and Fee Distributions Reject Code Lookup The Reject Code Lookup tab is a search tool for accessing and understanding reject codes given by the IRS Enter the reject code received by the return and click Go The IRS explanation of the code is displayed in the lower box To search for a state reject code select 1040 then select the state from Category Enter Reject Code and click Go The state explanation of the code is displayed in the lower box Drake 2007 Search EF Database SSN EIN Name To Search For SSN Name Taxpayer 100130060 BRIAN SARAH lt SMITH Spouse 100130051 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup 1040 C 104 Category 1120 11205 Loan Status Codes C 1065 C Bank Decline Reasons Reject Code Ne ee a ee Tee Se ee ee Select Loan Status Codes to view codes and descriptions in the lower box To search the codes for bank decline reasons select Bank Decline Reasons then select a bank from Category The bank decl
369. s is used for installment agreements Average In a summary report the average field provides the average for the preceding column Count In a summary report the count field provides the number of items that were summarized Misc 1 Misc 1 field from demographics screen Misc 2 Misc 2 field from demographics screen Misc 3 Misc 3 field from demographics screen Misc 4 Misc 4 field from demographics screen Misc Codes Combination of the Misc codes that are present on a return Percentage In a summary report the percentage field provides the percentage for the preceding column Data Entry Number Number of data entry operator ERO Electronic Return Originator number ETIN EFIN that transmitted Fees deposited Amount that has been direct deposited to the preparer Fees not deposited Amount that has not been direct deposited to the preparer Firm Name Name of the Firm Firm Number Firm number or EFIN that prepared the return NonPaid Non Paid Preparer indicator Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE 272 Appendix Prep Fee Amount of preparer fee Preparer Name Name of the Preparer Preparer Number Number of preparer for this return SBIN Service Bureau EFIN Self Prepared Balance Due Self preparer return originator Balance due amount on federal return Balance Due State Calculated balance due for state returns EI
370. s paragraph for balance due on federal return Type of bank product s selected for federal refund Federal and State Results Federal results and state results from return Federal Child Tax Credit Amount of child tax credit on federal return Federal Direct Debit Date Date federal balance due will be directly withdrawn from taxpayer account Federal Direct Debit Paragraph Inserts applicable paragraph if federal direct debit is selected Federal Direct Deposit Inserts applicable paragraph if federal direct deposit is Paragraph selected Federal Due Date Due date of federal return Federal EIC Amount of Federal Earned Income Tax Credit Federal Electronic Filing Inserts applicable paragraph if electronic filing is selected for Paragraph federal return Federal Estimate Amt for ES Letter Amount of estimate due for the selected quarter s Federal Estimate Detail by Quarter Federal estimate detail by quarter Federal Estimate Direct Debit Paragraph Inserts paragraph if federal estimate payments are to be directly debited Federal Estimate for 1120 and 990 Total amount of federal estimate for corporations and tax exempt organizations Federal Estimate No Dir Debit Paragraph Inserts paragraph if federal estimate payments are to be mailed with vouchers Federal Estimate Paragraph Inserts paragraph for estimate on federal return Federal Estimate Payment Address Fede
371. s the DDM from data entry click Doc Mgr from the toolbar If your software is integrated with the DDM you will be able to DDM open folder of the active return Drake Software Manual Copyrighted Material 238 Suite Products 2007 DRAKE SOFTWARE THE DDM WINDOW The Drake Document Manager window consists of the file structure in tree view and listing of files in the selected folder Drake Document Manager DER 6 S825 2760 pO lew Folder New File Open Scal Import Copy Rename Email Delete Drag Link File Help Drake Document Manager Filing Cabinets Documents in this Folder 111111111 E Clients LINKED TXT File 10 8 2007 12 07 51 a DLL File 7 25 2007 15 33 42 Imported from FADRAKEO FT DSWEB 391 DLL File 8 15 2002 12 02 34 Imported from CADRAKEOA FTYDZIP22 3 1040 MYS 111111111 i DLL File 3 9 2005 1 18 14 3 Tax Files in the selected folder 2 Em X File structure e se Sc enc Sen Se Se Se SS SS SS VOZZH eC7 TOHMmMoooF G5 Gy Go Gy Gy Gy Ge Cy Gy Go Go Gy Go So Filing cabinets are organized in a standard tree format Click a plus sign to expand a portion of the tree and view its contents and click a minus sign to collapse and hide a portion of the tree Or with a folder selected press the or keys on the numbers pad of the keyboard Navigating the DDM Select a folder to view a listing of its files The DDM displays document name type the date the file was modified and description
372. s within the cascade have the actual form names as titles For example the cascade in the previous figure displays Form 1040 Schedule R and Form 6251 in the left column e Worksheets All labels that contain the two letter code WK designate Drake worksheets Drake worksheets provide a ready reference to show how certain amounts within the return were calculated e Associated Documents Associated documents include the client bill BILL cover letter LETTER and filing instructions FILEINST that accompany a return e EF Status for Federal Return The EFSTATUS page grouped with the federal return forms displays the electronic filing transmission status including state piggybacks for federal and state returns e Messages Red MESSAGES pages list data entry errors that prevent a return from being filed electronically All errors must be corrected before e filing the return e Notes Yellow NOTES pages do not prevent electronic filing but they do note potential problems in the return Read the NOTES to determine if the data in question is accurate N OTE The MESSAGES and NOTES pages correspond respectively to the EF Message and Return Notes sections of the Calculate window Documents with Multiple Pages Most multi page forms such as Form 1040 can be accessed by opening a page in the cascade Some multi page forms however are viewed or printed one page at a time When this is the case the page title includes PG w
373. s you go press F2 in a field or right click the field and choose Flag for Review The field is displayed with a shaded background default is green 9 Car and truck expenses 10 Commissions and fees l saga Contrast Lakas monensin finden Drake Software Manual Copyrighted Material 14 Basics 2007 DRAKE SOFTWARE Once you have verified the field clear the flag type in the field click the field and press F4 or right click the field and select Remove Flag A return with unverified fields generates an UNVER message page when the return is calculated Clear all flags to remove the message Tip To clear all return flags at once press CTRL SHIFT SPACEBAR from the Data Entry Menu of a return Previously when updating prior year returns verification fields carried forward with a N OTE v for verification rather than a shaded field Flag colors can be changed in Setup gt Colors see Color Setup on page 62 Flagging Fields For All Returns Globally Flagged fields can be selected for all returns Each time a new screen with a global flag is created in data entry the flag is present Only the ADMIN login can access the global flagging feature To set global flags complete the following steps 1 LR all Log in to Drake as ADMIN Go to Setup gt Options and select the Administrative Options tab Select Use Customized Flagged Fields on all Returns Click Flag Click to select a packag
374. screen State EF Code 5 Fifth State abbreviation from TRAC screen Trans Date First Date of the first transmission of a return Trans Date Last The Date of the last transmission of a return 1040 ES Input Screen for estimated tax payments for current year and overrides for next year s estimates 8867 8812 Earned income credit and additional child tax credit entry screen ADJ Form 1040 adjustments entry screen only Amended Amended Income Tax Return AUTO Auto expense worksheet for schedule C BILL Client Bill adjustments and payments screen Chase Chase entry screen CHK Checking information screen CIDP Crop Insurance and Disaster Payments for schedule F or Form 4835 CLGY Ministerial income computations clergy Dep Elections Additional depreciation elections Dependent Dependent exists for this return Direct Deposit Direct Deposit Information screen EF EF Selection screen ES Estimated tax payments ETA Income changes for recomputation of federal tax estimates Extension Extension screen used in this return Form 1040 Credits Form 1040 credits other taxes and payments entry screen only Form 1040NR 1040 Nonresident Nonresident alien income tax return Form 1040X Form 1040X amendment screen for current year returns Form 1045 Form 1045 Application for Tentative Refund Form 1045 NOL Form 1045 S
375. scription date placed in service cost Section 179 expense amount prior year carryover and the current year Section 179 deduction Dispositions List items disposed of within the current year List includes asset number asset description date acquired date sold gross sales price depreciation amount cost or other basis and loss or gain Department Summary Produce an asset summary sorted by department or schedule Summary includes department or schedule cost federal basis current Section 179 amount federal depreciation state depreciation alternative depreciation and book depreciation Year Summary Produces a summary of assets on a yearly basis grouped by department For each department there is a summary line for each year up to 10 years prior This report also totals depreciation for 11 years and prior This report is always sorted by department then year The items on this report include year acquired cost prior federal depreciation current federal depreciation total federal depreciation state prior depreciation state current depreciation and total state depreciation Preference Report Lists assets placed in service after 1986 List includes asset number department number data placed in service method and recovery period basis current depreciation alternative depreciation and preference amount Auto Code Print Produces a report based on the macro setup for each client selected The reports can be c
376. se Use the Edit EIN Database tool to edit EIN information 1 On the menu bar go to Tools gt Edit EIN Database 2 Enter the desired EIN and click Edit or press ENTER NOTE If the EIN is not known enter the name or a few letters of the name For example enter WAL for Wal Mart As you type the letters the list is searched Select the employer from the list and press ENTER or double click the name 4 Once the Edit EIN Employer Listing window opens edit any of the available fields Click Cancel to revert to the saved information Click Delete on the primary screen to delete the EIN from the database 5 Click Save Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 219 PRINT A LIST OF EINS To print a list of all EINs in the database click Print then select the EIN Company Name City State or Zip Code from Sort Options Click OK or press ENTER to display the list is in the Report Viewer Click Print The list can also be exported to Excel ADD A NEw RECORD To add a new record click New in the Edit EIN Database window Enter data for the new EIN then click Save A list is displayed showing the new record SCHEDULER For details on the Scheduler see Scheduler on page 75 CITY TAX RATES For use with Ohio cities only Use the City Tax Rate Editor to edit and add tax rates credits and addresses to be used when creating Ohio city returns To view and edit the city tax details tak
377. se Unlock Client Files to open the lock applied in Setup gt Options To unlock files in data entry a preparer must have security rights See Setting up NOTE Preparer Security on page 41 If a preparer has no access to this feature an informational message is displayed To unlock a return 1 Select Tools gt File Maintenance gt Unlock Client Files from the menu bar 2 Enter the SSN EIN for the return 3 Press ENTER or click OK The return is unlocked and opens data entry DELETE PRINT FILES Since print files appear on the EF transmission selection list a preparer may want to delete print files for returns that are not yet ready to send To delete print files 1 Select Tools gt File Maintenance gt Delete Print Files on the menu bar 2 To select the files to delete do one of the following e Click the desired files e Click Select All or Unselect All as applicable Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 213 3 Click Delete N UTE Print files are temporary files that can be re created by calculating the return s DELETE CLIENT FILES Client files and print files can be deleted by using File Maintenance options A client file is created when a return is prepared A print file is created when a return is calculated Print files are used for electronic filing and are stored in the system for the number of days designated in Setup gt Options before being automatically remove
378. season letters appointment reminders envelopes mailing labels and postcards see Letters on page 215 Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 75 SCHEDULER Redesigned in 2007 the Drake Scheduler allows you to create and manage the daily schedule for all preparers in a firm schedule appointments and reminders and run reports based on the schedule information Modes The Scheduler now opens in either Preparer mode or Front Office mode Expanded calendar You can view data for several months at one time Multiple users Multiple instances of the Drake 2007 program can be open at the NEW FOR same time allowing you to have a client return open in one instance of Drake and 7 07 the Scheduler opened simultaneously in another instance of Drake New appointment detail features Expanded fields for more extensive contact data Client Lookup in current and prior versions of Drake ability to assign up to three additional preparers for an appointment ability to designate an appointment as private or set a reminder for an appointment From the Home window click Scheduler SCHEDULER MODES The Scheduler offers Preparer mode and Front Office mode e Preparer mode Functions like the 2006 Scheduler with many enhancements As shown in the next figure three calendars are available Today s Weekly and Preparer Drake 2007 Appointment Scheduler os sa Y amp g
379. services Instant Refund Anticipation Loan An IRAL enables taxpayers to immediately receive a portion of the amount of their expected federal refund The loan is approved or denied on the spot so a check can be printed within moments of applying If the loan application is accepted by the bank the return is sent directly to the IRS If the application is denied the taxpayer has the opportunity to select a different bank product A W 2 is required from any taxpayer applying for an IRAL Refund Anticipation Loan A RAL is based on the taxpayer s anticipated federal tax refund and enables the taxpayer to receive the amount of a refund within a matter of days This RAL amount is paid in full when the IRS directly deposits the taxpayer s actual refund into the bank Preparer fees may be withheld by the bank through this loan process A preparer can print the RAL check once the loan is approved Preparer fees are be deposited into the preparer s account within days after the check is printed A RAL can be processed within 48 hours but that is not guaranteed N OTE RAL eligible refund amounts vary by bank and can range up to 9 999 99 To qualify for a RAL a client must have an income source other than Schedule C A RAL reverts to a non loan product Refund Transfer Bonu if denied Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 169 Non Loan Products Non loan bank products such as
380. ses marked with a P pastor in the F federal box e Appropriate self employment income to flow to the Schedule SE Complete all other applicable fields Additional Itemized Deductions Adjustments includes data entry screens for reporting data for Form 4952 Investment Interest Expense Deduction and Form 8283 Non Cash Charitable Contributions e Form 4952 Investment Interest Expense Deduction Use to determine how much investment interest expense can be deducted and how much can be carried forward e Form 8283 Noncash Charitable Contribution Use to report data about noncash charitable contributions NEW FOR 7007 The 8283 Donee ID field now stores in the EIN Database Drake Software Manual Copyrighted Material 122 Return Preparation 2007 DRAKE SOFTWARE Other Adjustments The following additional data entry screens are accessible from Adjustments e Crop Insurance Payments Record crop insurance and disaster payments for Schedule F and Form 4835 See Farm Related Income on page 103 e Administrative Adjustment Req Form 8082 Notice of Inconsistent Treatment or Administrative Adjustment Request AAR used for notifying the IRS of any inconsistencies between a taxpayer s tax treatment of an item and the way a pass through entity treated and reported the same item on its return e MFS Community Prop Allocation Overrides only This screen reflects the Community Property State Income Allocation Workshe
381. signed Form 8879 IRS e file Signature Authorization lt Federal Balance Due Paragraph gt Your federal return reflects a balance due of lt Federal Balance Due gt lt Federal Direct Debit Paragraph gt This amount will be directly withdrawn on lt Federal Direct Debit Date gt from your lt Federal Taxpayer Bank gt lt Federal Taxpayer Bank Account Type gt account lending in lt Federal Taxpayer Bank Account Number gt If you would like to cancel this payment contact the U S Treasury Financial Agent at 888 353 4537 no later than two business days before the scheduled payment settlement date lt End Paragraph gt lt Federal No Direct Debit EF Paragrap Mail your check or money order and Date gt to the following address ere lt Federal Due Conditional Paragraphs lt Federal MAIL TO Address gt 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 He Aaiun a a A AR ae RMN ARN ABAN RS DA tI OREN MBB AL a AA AAMAS A IR nat hatte anama RAR Mahe Aah One Text Text in the letter is displayed in black text To enter additional text into a letter simply place the cursor in the desired location and begin typing Text is displayed in the editor exactly as it will print in the output of the letter Keywords K
382. son begins to enter practice returns and review test returns PRACTICE RETURNS New clients of Drake Software can familiarize themselves with the program s data screens by practicing return entry PDF files containing practice returns are available on the Drake Support Web site Support DrakeSoftware com To open the Practice Return folder go to Support DrakeSoftware com and choose Training Tools from the title bar menu Select Practice Returns then choose Returns From the Returns page that is displayed you can view a PDF of the instructions or choose from the available practice returns or their solutions These returns are to be used only for data entry practice For EF testing refer to the N OTE EF section of this manual Practice returns are also available on Drake ETC at www DrakeETC com For details see Drake ETC on page 186 Drake Software Manual Copyrighted Material 24 Basics 2007 DRAKE SOFTWARE TEST RETURNS Test returns are located in the software and consist of various forms and schedules View these returns to see how different return scenarios are prepared in Drake and to test electronic filing The test returns are 400001001 through 400001005 To open a test return type a test SSN in the Open Returns window and press ENTER Once a return opens it appears in your return list N Test returns are installed during software installation See Tax Software Installation UTE on page 28 Go to Tools gt Rep
383. ss Set automatically when the first change is made to the return in data entry e EF Pending Set automatically when a P ack is received e EF Accepted Set automatically when a A ack is received e Printed Set automatically when the return is printed through Print Sets e Complete Set manually e Under Extension Set manually e On Hold Set manually e Under Review Set manually e Signed Set manually e Delivered Set manually CREATING CUSTOM STATUSES Drake provides for up to ten custom statuses for special situations For example if you want to keep a record of returns awaiting payment you can create an Awaiting Payment status Run reports on statuses and customize report output for suit your needs To create a custom status complete the following steps From the CSM toolbar click Customize to open Customize Display Click Status Settings then select a status from the list to customize Click Edit Enter a status description in the Status Description dialog box Click OK nak wn m Drake 2007 Customize Display Status Settings The Status Settings tab allows the user to m the Client Status Manager To chanoea Sta Status Description Column Layout Status Settings Enter the Status description OK Status Descriptions in the space below Click Ok 1 Under Extension i Cancel 2 On Hok to continue 3 Under Review 4 Signed De
384. ss State estimate payment due date income tax State MAIL TO Address income tax ST IncomeTax Overpayment Drake Software Manual Overpayment from state income tax return being prepared Copyrighted Material 2007 DRAKE SOFTWARE Appendix 279 ST IncomeTax Overpayment Appl Paragraph Inserts paragraph for overpayment applied on state income tax return ST IncomeTax Overpayment Applied Overpayment applied from state income tax return ST IncomeTax Overpayment Paragraph Inserts paragraph for overpayment on state income tax return ST IncomeTax Paper Filing Paragraph Inserts applicable paragraph if e filing is NOT selected for state return income tax ST IncomeTax Refund Refund from state income tax return being prepared ST IncomeTax Refund Paragraph Inserts paragraph for refund from state income tax return ST IncomeTax Tax Tax from state income tax return being prepared ST IncomeTax Tax Bracket Tax bracket from state return being prepared income tax ST IncomeTax Tax Description ST IncomeTax Tax Rate Tax description from state return being prepared income tax Tax rate from state return being prepared income tax ST IncomeTax Total Estimate ST IncomeTax Zero Due Paragraph Total state income tax estimate amount Inserts paragraph for zero due on state income tax return ST IncomeTax 1st Qtr Estimate Amt Due State estimate payment 1st quarter a
385. ssage to all e mail addresses generated by the report e Click Cancel to discard the e mail 4 If Yes is selected a blank e mail address appears In the To field is a note indicating that the recipient list includes those e mails generated during the query To view this list double click the To field Here you may view addresses and remove any address you don t want to include 5 A Keyword Selector also appears with a list of keywords available for insertion into your e mail To add a keyword double click it from the Keyword Selector 6 Compose the e mail inserting keywords Click Send to send the same e mail to each client but with the keywords personalizing the message T Close the completed e mail before sending and you are prompted to save it in the IP Drafts folder The e mail is saved along with the generated report list and keywords To send the saved e mail click the Drafts box from the main screen Creating an Alternative Reply Address The E mail program uses your 1040 com e mail address which is your EFIN 1040 com for example 777777 1040 com as your sender and reply address You can change this address to an alternative address To create an alternative reply address take the following steps in the E mail program 1 Go to Setup gt Options 2 At the bottom of E mail Options select Use Alternative Reply To Address 3 Enter an Alternative Address to replace your 1040 com address 4 Click Save Drake
386. sscsssecsesees 67 State Support Contact Information 200 Preseason Preparation cccscccssssccssscceees 70 EONS EA RETEA ATE 205 Prior Year Updates 4 4 4 03 0 dice soe Gwe wee 70 Installing Updates seen 205 Organizers and Proformas 72 Download Fonts 25s esses mas Ses hee 207 Preseason Letters 0 0 0 0 eee eee eee 74 Blank Forms sc sees eee eee eens 208 Scheduler o candy sehen ta sect nk eee 75 Repair Index Files 0 66 esses ee ees 208 EF Preparation 0 0 0 0 0000 ccc uuruuu 83 File Maintenance 0 00 eee 209 TQ ters aoe oj sey cle fad 5 See tae te 4 Beye Bee gp eee SE 215 Return Preparation s scscsssscssscscssssssencees 87 Amortization 2 sree eee 218 A Edit EIN Database 000 218 Completing an Individual Return 88 Scheduler ouch caine te aia Aia Gas 219 City Tax Rates sec o a ea dow 219 Return Resullts cccccccssssccssssecssssessssees 139 Zip Code Editor 00 cece ee eee e ee 219 Calculating a Return sso sadder ilies 139 Pre prepared Entry 0004 220 Viewing and Printing aReturn 142 Quick BStiMatOl 2 amp lt Seecuh dept nccdedet SoG ls dese sees o 221 Drake Software Manual Copyrighted Material JELE ION u PRESATE EEE AI DAR Report Manager 0 04 223 Filter Manager soca nan e a a S 228 Report Viewer 0 0
387. ssion testing 150 troubleshooting 153 Copyrighted Material 2007 DRAKE SOFTWARE troubleshooting e file transmissions 153 trusts accumulation distribution of 126 Truth in Lending Agreement TILA 157 tuition and fees deduction 91 120 underpayment of tax 125 unemployment compensation 93 unformatted statements 134 update profiles 44 updates automating 45 EIN name index 71 of prior year returns 70 settings 71 state and city 136 V vehicle alternative credits 123 vehicle electric credits 123 verify SSN EIN 47 view mode 147 Vista Windows operating system 27 voided checks 173 vouchers 94 wages 96 welfare to work credit 123 withholdings 135 work opportunity credit 122 worksheet WK pages 146 worksheets AUTO auto expense 117 detail 18 NOL carryovers 130 Sale of Residence 115 sales tax 100 Section 179 108 ZIP code database 15 Drake Software Manual Index xv Copyrighted Material xvil Index 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material
388. t Select an attachment type Leave blank if instructed to create a statement using a specific statement number such as 1A e Statement Number Do not assign a number that is already in use for another statement in the return If needed view the calculated return and check for statement numbers e In house Note Select if the statement is not to be sent to the IRS N OTE Amounts entered on this screen do not carry to any other form or schedule in the return Keeping Track of Return Data Use Return Tracking to track fees payments notable dates and electronic filing and banking information for a return Some fields in the TRAC screen autofill with data entered elsewhere while other fields require direct entries From Other click Return Tracking or type TRAC into the Selector field and press ENTER N Some fields can be incorporated into reports from the Report Manager and others DTE are required to create certain CSM reports See Reports on page 223 for details TRAC screens are available for 1040 1065 1120 and 1120S returns ADMIN ONLY fields are visible only for employees logged in as Admin M Pi RTANT Administrators should not provide the Admin passwords to a employee unless they are approved to access these fields Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 135 Verification W 2 Withholding Use VER to verify a W 2 if Social Security or Medicare withholding is incor
389. t so 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 select the folder in which to store the link then Browse to the document to import and click Save The new link is shown in the Type column of the DDM Creating a New Text Word or Excel File New for 2007 Create a new text Word or Excel file You must have Word or Excel to create one of these types of files Click New File from the DDM toolbar and choose to create a New Text File New Word File or New Excel File Managing DDM Files Select a file before completing the following functions Drake Software Manual Copyrighted Material 242 Suite Products 2007 DRAKE SOFTWARE NEW FOR 2007 NOTE Browse the file structure tree in the left pane and select the folder where the file is stored After selecting the folder the contents of the folders are displayed in the DDM window right pane e Open a DDM File Double click a file or right click it and select Open e Copy a DDM File Click Copy Browse to the desired location and click Save e Export a DDM File Right click a file and select Export or press F7 e Rename a DDM File Click Rename or right click the file and select Rename or press F6 Enter a new name and click OK e Enter a DDM File Description Right click a file and select Properties to open the Drake Document Manager Audit Log Enter a Description and
390. t Call Time Best time to call the primary taxpayer Taxpayer Birthday Taxpayer s Birthday for the current year based on the Taxpayer s Date of Birth Taxpayer Cell Phone Cell Phone number for primary taxpayer Taxpayer Date of Birth Date the taxpayer was born Taxpayer Date of Death Date the taxpayer died Taxpayer Daytime Phone Daytime phone number for the taxpayer Taxpayer Email Address Taxpayer Evening Phone Email Address for the primary Taxpayer Evening phone number for the taxpayer Taxpayer First Name First name of taxpayer Taxpayer ID Taxpayer SSN or ITIN Taxpayer Last Name Last Name of the Taxpayer Taxpayer Middle Initial Middle initial of taxpayer Taxpayer Name Name of taxpayer Taxpayer Name2 Taxpayer full name in Last First format Taxpayer Name3 Full name of the primary taxpayer Taxpayer Occupation Occupation of the taxpayer as listed on the Demographics screen Taxpayer Status Status for the Taxpayer as shown in the Client Status Manager Taxpayer Suffix Suffix of taxpayer s name Total Income Sum of all the income amounts on a return Total Tax Amount of total tax Unemployment Compensation Total of unemployment compensation W2 Advance EIC Amount of EIC Advanced W2 Allocated Tips Amount of employee allocated tips W2 Box 12 Amount 1 Box 12 Amount 1 on the W2 W2
391. t from additional Use Data from 2006 report options Choose to r Report output file name summarize results Report s name appears Sample layout Sample Report Portrait axpayer Name Spouse First Hame Dependent Form W 2 Total Income Total Tax E Fi gt e Use Data from 2006 Select to run a report using 2006 data Reports query 2007 data by default Report output file name Enter a report output name This name must be fewer than nine characters in length Use this name to locate the report in the Report View Print Utility See Report View Print Utility on page 232 M PI RTANT Reports with identical output names are overwritten in the Report View Print Utility To have multiple instances of the same report you must rename the output file 2 Click Save The new report is stored in My Reports See Viewing a Report from the Report Manager on page 231 EDITING A REPORT Report editing provides flexibility in customizing report output Any predefined or previously created report can be edited Edited reports are saved to My Reports To edit a report take the following steps in the Report Manager 1 Click a category and subcategory from the report tree to locate the desired report then highlight the report 2 Click Edit Report to open Report Editor Step 1 3 Click Save after editing The report is stored in My Reports Drake Software Manual Copyrighted Material 228 Reports 2007 DRAKE SOFT
392. t settings while in the return without entering Printer Setup complete the following steps while in print or view mode 1 Right click a form and select Properties then select the form and click Properties from the toolbar or press F9 View Form Print Form Select Form Se Cancel 2 Edit the Sets settings and click Save Settings are applied universally Pricing can also be changed using this option E 1040 Properties DRAKEO7 PR FED PER 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 Return 1040 Form Information Number of Copies Form 1040 Classic Mode Form Description U S Individual Income Tax Returri Sets Federal Record 2 EF Signature 0 Est Ext 0 Pricing Client 1 Apply to this retum Apply to all retums Preparer Form Price 65 00 Item Price Not available Federal 1 Include on the Bill State 0 Setting a Print Order Use this option to indicate the order in which forms print in Print Mode 1 Go to Setup gt Printing gt Printer Setup Click Set Form Order 2 Select a package series and choose a set type Normal Default is the IRS order 3 Forms are listed with their order number in parenthesis to the left To change the sequence in which the forms print click and drag
393. takes very little disk space but you may need more space to store your office files Drake recommends that the storage drive have approximately 1GB gigabyte of space available for each year of storage for an average sized office Most new computers have at least a 20GB hard drive if you own a new computer owners storage should not be an issue Long file names can be used although this naming convention may not function properly on older systems that limit file names to eight or fewer characters Drake Software Manual Copyrighted Material 236 Suite Products 2007 DRAKE SOFTWARE Installing the PDF Printer Even if you already have PDF creation software on your computer install the PDF995 folder off of your Drake CD to take full advantage of all of the DDM integration features For details on installing PDF995 Printing Setup on page 63 Choosing a File Structure The DDM allows you to store files in a file structure Build a file structure entirely from scratch or integrate with Drake Tax Software to create a file structure automatically or implement a combination of both approaches M PI RTANT Plan your file structure before creating it in the DDM Be aware that the structure can be difficult to rearrange once it is in place and contains files Integrating with Drake Some benefits of integrating the DDM with Drake Tax Software are as follows A predefined file structure is created in the DDM It has a Clients filing ca
394. tartup 123 Form 8882 Employer Provided Childcare Services 123 Form 8885 Health Coverage Tax Credit 123 Form 8888 Direct Deposit to More Than One Account 101 Form 8889 Health Savings Accounts 119 Form 8896 Low Sulfur Diesel Fuel Credit 123 Form 8907 Nonconventional Source Fuel 123 Form 8908 Energy Efficient Home Credit 123 Form 8909 Energy Efficient Appliance Credit 123 Form 8910 Alternative Motor Vehicle Credit 123 Form 8911 Alt Fuel Vehicle Refueling Property Credit 124 Form 8912 Clean Renewable Energy amp Gulf Tax Credit 124 Form 8917 Tuition amp Fees Deduction 120 Form 940 see Client Write Up Form 941 see Client Write Up Form 944 see Client Write Up Form 944SS see Client Write Up Form 9465 Installment Agreement Request 136 Form 970 LIFO Application 136 Form 982 Reduction of Tax Attributes 136 form codes 11 Form TD F 90 22 1 Foreign Accounts 136 Form W 2 Wage and Tax Statement 95 Form W 2G Gambling Winnings 95 Form W 4 Employee Withholding 135 Form W 7 Application for ITIN 135 forms blank forms 208 cascade view print mode 144 comparing to prior year 49 Drake Software Manual 2007 DRAKE SOFTWARE setup options 48 viewing 144 fraud 135 Frequently Asked Questions 99 front office mode in Scheduler 75 fuel credits 123 124 fuel taxes 122 full screen 47 general business credit 122 gift tax elections 128 extension requests 128 Form 709 127
395. tatus Extension Payment Flag Bank Deposits Pending Bank Deposit Date Client Payments Pending Client Payment Date Cash Receipts Receipt Bill Date ERO Efin Firm Bank Deposits Firm Efin Client Payments e Add columns Select an item in the left pane and click Select or double click To add items click Select All Click OK e Remove columns Select an item in the right pane and click Remove or double click To remove all click Remove All Click OK e Reset columns to original view Click Reset then click OK e Change column order Drag and drop items up or down field list Click OK Customizing Column Views Adjust column order widths and locations in the CSM e Sort For ascending order click the column header Click again for descending e Adjust width Use your pointer to drag the edge of the column header e Move column Drag and drop the column header to the desired location Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Client Status Manager 179 Client Status Manager Columns Keyword Data location Ack Code EF gt EF Database Ack Date EF gt EF Database Action Cumulative Actions taken with the return DE Calc Print Update Delete Renamed EF Check Print Amount Owed Amount of the bill that has not been paid BalDue Calculated data from return individual and business returns Bank Deposit Date EF gt
396. taxpayer resides Return Type Type of return submitted RRTA Tip Tax RRTA tax on unreported RRTA tip income Schedule C Gross Gross schedule C amount totaled from all schedule Cs Schedule E Gross Schedule F Gross Gross schedule E amount totaled from all schedule Es Gross Schedule F amount totaled from all schedule Fs Schedule K1 Address Address from the Schedule K1 Schedule K1 City City from the Schedule K1 Schedule K1 ID ID Number from the Schedule K1 Schedule K1 Name Name from the Schedule K1 Schedule K1 Phone Phone number from the Schedule K1 Schedule K1 State State from the Schedule K1 Schedule K1 Zip Code Zip Code from the Schedule K1 Scholarships SP Taxable scholarships for the spouse Scholarships TP Taxable scholarships for the primary taxpayer School District School district of the taxpayer SE Health Insur SP Self employed health insurance deduction for spouse SE Health Insur TP Self employed health insurance deduction for primary taxpayer Sec 453A Section 453A amount regarding special rules for non dealers and their disposition of property Sec 72M Excess Section 71 m 5 Excess Benefits penalty tax Sec 72P Tax Tax related to section 72 P regarding loans treated as distributions SEP SIMPLE Spouse SEP and or SIMPLE contribution for the spouse SEP SIMPLE Taxpayer SEP and or SIMPLE contribution fo
397. ter for a client Enter the client s SSN EIN and click Next Click Print e Printa letter for multiple clients Click Next to open Client Letters Filters Selection Select filtering and sorting options If a more complex filter is needed click Edit Filters See Filter Manager on page 228 Click Next then click Print MAILING LABELS Print mailing labels based on clients firms or service centers You can also use the Mailing Labels tool in running reports 1 Go to Tools gt Letters gt Mailing Labels to open Mailing Labels Select a label type from the list then take any needed actions described below Some labels may be edited e Client Addresses Select filter sort options from Filter Selection If a more complex filter is needed click Edit Filters See Filter Manager on page 228 e Single Client Addresses Enter the SSN EIN of client e Birthday Addresses Enter the start date and end date range e Firm Addresses Select the firm number Drake Software Manual Copyrighted Material 216 Tools dE as NOTE NOTE 2007 DRAKE SOFTWARE EF Service Centers Select the service center number e IRS Mail To Address Select the return type and region number e State Mail To Address Select the state and return type e User Defined Select if you want to enter a label directly e Labels for Folders Select filter sort options from Filter Selection If a more comple
398. the office Complete the check register as each check is written this information must be available at all times and may not be available from any other source Drake recommends that your office keep the check register in a three ring binder along with the computer generated check registers Loan Cancellation Request CANCEL PG Must be completed signed and submitted to Drake in order to cancel a loan once it has been accepted by the RAL bank If the check has already been printed the voided original must accompany this form If no check has been written indicate this on the form with the ERO initials 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 with checks M PI RTANT A loan cannot be cancelled if a stored value debit card is used A cancellation is not processed if the direct deposit to the IRS has already occurred Lost Check Affidavit LOST_CK PG Print complete sign and submit this form if a RAL check is lost or stolen Both taxpayer and ERO must sign Fax the completed form to Drake Software at 828 349 5745 Drake Software Manual Copyrighted Material 174 Electronic Filing and Banking 2007 DRAKE SOFTWARE Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Client Status Manager 175 Client Status Manager Use the Client Status Manager CSM to track workflow w
399. tion number Pending Phone Primary Indicates that a return is pending Taxpayer s primary phone number Phone Secondary Phone Number Taxpayer s secondary phone number Phone number for taxpayer Drake Software Manual Copyrighted Material 270 Appendix 2007 DRAKE SOFTWARE Rejected Indicates that a return was rejected SSN Spouse Spouse s Social Security Number Spouse age Spouse s age based on date of birth Spouse Date of Birth Spouse s birth date State State Accepted State of primary taxpayer s address Indicates that a state return was accepted State Duplicated Indicates that a state return was duplicated State Only State Only Indicator State Pending Indicates that a state return is pending State Rejected Indicates that a state return was rejected Taxpayer Last Name Taxpayer Age Primary taxpayer s age based on date of birth Taxpayer Date of Birth Taxpayer s birth date Taxpayer ID ID SSN or EIN of primary taxpayer Last name of the taxpayer Taxpayer Name Taxpayer Name2 Name of the primary taxpayer Taxpayer s full name in Last First format Unfunded amount Amount of taxpayer s checks fees that is currently unfunded or underfunded by IRS deposits W2 Substitute Substitute W2 indicator W2 Count Number of W 2 s in the return Zip Zip code of primary taxpayer s address Accepted Indic
400. to 45 days Drake Software Manual Copyrighted Material 150 Electronic Filing and Banking 2007 DRAKE SOFTWARE To access Form 8633 from the Home window select Tools gt Blank Forms Under the Individual tab select and print 8633 PG and 8633 PG2 Contact either Drake or the IRS to request the required federal fingerprint cards N TE Form 8633 is also available on the IRS Web site Fingerprint cards must be federal cards authorized by the IRS Contact either Drake or the IRS to request federal fingerprint cards EFIN APPLICATION All tax preparers who plan to file returns electronically must have an IRS Electronic Filing Identification Number EFIN which the IRS assigns when Form 8633 is processed If you do not have an EFIN yet Drake will assign you a temporary one This temporary EFIN is for bookkeeping purposes only and does not enable electronic filing You must submit your official EFIN to Drake before filing returns electronically TRANSMISSION TESTING While transmission testing is not required Drake strongly recommends running an initial transmission test to ensure that you understand all of the steps and that your system is working properly N OTE Before testing verify that the Setup gt ERO window is completed see ERO Setup on page 37 and that the test returns are eligible for electronic filing Do not transmit test returns that contain SSNs other than those in the 400 00 and M Pi RTANT 500 00 series provided
401. to a Tax Planner worksheet in Excel with predefined layouts and functions Enter data and adjust numbers accordingly Changes are applied to the current year and any future years designated in the planner Each worksheet contains Tax Planner specific functions and typical Excel worksheet functions TECHNICAL REQUIREMENTS To run the Tax Planner you must have Excel 2000 or later installed on your computer Drake Software Manual Copyrighted Material 244 Suite Products 2007 DRAKE SOFTWARE INSTALLING THE TAX PLANNER The Tax Planner is installed during the Drake Tax Software installation The installation creates an icon on the desktop The Tax Planner can also be accessed from the Data Entry Menu toolbar fen A An A a fe emt fon ae a F M gr Tax Planner CSM Teea a AM ana A te na adde CREATING A TAX PLANNER There are two ways to set up a client in the Tax Planner e Click Tax Planner on your desktop and create a file from scratch This method requires direct entry on each tab of the Tax Planner e Open a completed return in Drake Software and click the Tax Planner button in data entry The return is calculated the Tax Planner opens and the client s current year information is imported This information can be edited once it is in the Tax Planner OPENING A TAX PLANNER To open an existing planner complete one of the following e Launch the Tax Planner from the icon on your desktop From the toolbar select O
402. to calculate the selected return To close without calculating press Esc or click Cancel Drake Software Manual Copyrighted Material 140 Return Results FROM DATA ENTRY 2007 DRAKE SOFTWARE To calculate a return during data entry click Calculate or press CTRL C Results are displayed in the Calculation Results window To set up the program to calculate a return when the return is exited go to Setup gt Options from the Home menu bar Then under the Calculation amp NOTE View Print tab check Auto calculate tax return when exiting data entry The Calculation Results window opens after return calculation by default To change this setting go to Setup gt Options Then under Calculation amp View Print select the desired option from Pause option for calculation CALCULATION RESULTS The Calculation Results window consists of a Summary tab and a Details tab Calculation Summary The Summary tab has four main sections the calculation summary EF Messages Return Notes and Fee Type and Amount Also displayed are such as refund and balance due Drake 2007 Calculation Results 600 00 1020 DE LA HALO TEST amp RUBY il otal neame Taxable Income the DCN and the specific return results Balance Due Payment Method Eligible For EF Federal 80 268 lt item in the list below to fix the problem 0 Receive Check Four divisions of Summary tab Results Summary
403. tomatically See Limitations on page 103 Take the following steps to enter Schedule C data 1 Under the Income tab click Self Employed Income or type C into the Selector field and press ENTER Enter data in the appropriate fields Press ESC to save and close Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 103 Listed below are instructions for completing specific fields on this screen e Business Code field B Press CTRL SHIFT S to open the Data Entry Search screen Enter the search term and click Go Select a code and click OK e Employer ID field D Enter business EIN if applicable If no EIN leave blank e Car and truck expenses field 9 Use the Auto Expense Worksheet to manage automobile related expenses for Schedule C See Auto Expense Worksheet for Schedule C on page 117 e Depreciation field 13 Go to the 4562 screen to enter depreciable assets for Schedule C See Depreciable Assets on page 106 Tip Double click within the Depreciation field line 13 on the C screen or press CTRL W to open the 4562 screen e Other Expenses Part V Enter applicable expenses not listed elsewhere on the C screen For more than eight expenses click CTRL W to open a detail worksheet Farm Related Income Entry fields for the following farm related 1040 forms are located under the Income tab e Schedule F Profit or Loss from Farming can a
404. tomatically filled Data entered manually in these fields is not overridden You can also auto fill Appointment Detail using the Lookup feature to search for a client by last name See Adding a Reminder to an Appointment on page 81 for details 3 Choose to schedule the appointment for one or more Preparer s Tip To select more than one preparer for an appointment press and hold CTRL while making Preparer s selections Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Preseason Preparation 81 4 Click Save to display the appointment on the schedule grid Filling Client Data into Appointment Details Look up client details in the current year or prior year client database Select a client and details populate Appointment Detail Drake 2007 Scheduler Lookup Client List Select from the list of clients below Information will be copied to the Appointment Detail screen Select Clients from this location C Drake06 Drake 2006 SSN EIN Name 001009 ACAPPELLA TEST amp DUET ANDERSON JAIME BARRELL TEST amp TEST2 BARRELL TEST2 amp TEST BEHAVIOR TEST BLOWNAPART TEST amp FREDA BOSTON JONATHAN amp ELIZABET CADEN TEST CAESAR TEST amp CLEO CAESAR TY amp VERONICA CALIFORNIA TEST CANASTA JEREMY CANASTA TEST v OK Cancel Complete the following from Appointment Detail to fill appointment detail fields 1 Click Lookup 2 Select clients from either a c
405. tup gt Pricing to open Pricing Setup 2 Select a form package from the Form Categories list to display applicable forms Drake 2007 Pricing Setup Selectacategory ja iecick the fomm in the list below OR use the Tab kq Edit form details a TREY ometomran press the Enter key when the desired form is highlighted r Form Categories 1040 Forms 1120Forms 706 Forms 1120S Forms 990 Forms a State 1065 Forms City X 1041 Forms Form Name Form 1040 Form Description Jus Individual Income Tax Return 65 00 3 IV Include on Bill Update Per Item Per Form Pages Number Fom Name Fom Description Perltem PerFom Pages Form 1040NR Form 1040 Form 10404 Form 1040EZ Form 2210 Form 2210F Schedule amp Schedule B Schedule C Schedule C EZ Schedule D Form 4952 Schedule E Schedule E Schedule F Schedule A U S Individual Nonresident Income Tax Return U S Individual Income Tax Retum ivi e Las Return Select a form amers and Fishermen Underpayment Penalty Itemized Deductions Interest and Ordinary Dividends Profit or Loss from Business Net Profit from Business Capital Gains and Losses Investment Interest Expense Deduction Supplemental Income and Loss Page 1 Supplemental Income and Loss Page 2 Profit or Loss from Farming Credit for the Elderly or the Disabled 3 Use the scroll bar or arrow keys to find forms Highlight the correct forms then double click or p
406. uce valid CSM status reports statuses must be set for each stage of a return To manually set the status of a return complete one of the two following options e Right click a return record in the CSM choose Set Client Status and select a return status from the resulting list The status is updated in the Status column e Click CSM from the Data Entry toolbar while in a return and select a status E HUGH amp GWEN J 3 amp 3 i Doc Mar Tax Planner CSM Email Manual Exit k New Client ias Other States In Progress a EF Pending EF Accepted 4 sty Printed b 24d Complete q Under Extension gt 4 i 4 CH Under Review DD Signed 3 PM Delivered t PIN Custom Status 6 gt Ks S aa E a GETE S Ae Aten aihetilnan The status of a return can be set manually at any time The CSM is updated every time a return is calculated in data entry Ensure that Tip Auto calculate tax return when exiting data entry is enabled in Setup gt Options Calculation amp View Print to ensure the Status column is always correct Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Client Status Manager 177 STATUS TYPES Choose from predefined or custom status types Several statuses are set automatically as events occur in the software but other statuses must be manually set Listed below are the predefined return statuses in Drake e New Client Set automatically when a file is created e In Progre
407. uently Asked Questions eo Betur Status In Progress Return Type Individual Tax Return Current Package Federal e Taxpayer Name amp SSN Displayed in title bar Toolbar For information on using the data entry toolbar see Toolbar on page 7 e Menu Tabs Click General Income Adjustments Credits Taxes Other or States to access a tab e Menu Items Click a menu item to access the named data entry screen e Selector field Each menu item has a code listed to the left of it To access a data entry screen using your keyboard type the screen code into the Selector field and press ENTER e Status Bar Displays the status type and package of the open return Drake Software Manual Copyrighted Material 88 Return Preparation 2007 DRAKE SOFTWARE COMPLETING AN INDIVIDUAL RETURN This section describes steps and background information to complete an individual 1040 income tax return in Drake and how to access data entry fields for corresponding state returns 1040 GENERAL TAB Access the following forms and worksheets from the General tab TIP Form 1040 U S Individual Income Tax Return Earned income forms W 2s 1099s Foreign Employer Compensation Schedule A Itemized Deductions Sales Tax Worksheet Form 2106 Employee Business Expense Demographic Information Screen 1 Screen 1 Demographics covers the Label and Filing Status sections lines 1 5 of Form 1040 From this screen
408. uery Enables you to enter a sentence in the Search field The KB pulls out keywords for your search 3 Click Search Articles appear in order of relevance Click to select and open an article If only one article meets the search criteria the KB opens to that article Article Options From within a KB article you can go back to the previous screen print the article e mail the article save the article to a browser s Favorites or save the article to the computer Article Options q e H Feedback Every article has a Feedback button in the lower left corner Click Feedback to let us know whether the article was helpful to you and to make any suggestions for improving the KB for all who use this resource DRAKE FORUMS The online Drake Forums enable you to interact with other Drake clients To access Drake Forums go to Support DrakeSoftware com 1 2 3 4 5 Log in to Drake Support using your EFIN and password Go to Resources gt Forums First time users Click Click here to Register Read and accept the Registration Agreement Terms Complete Registration Information Profile Information and Preferences Required fields are indicated by an asterisk If you are already registered click Click Here to Login Browse the Forum to find discussion boards post replies to topics or post new topics If you post a topic you will be notified by e mail whenever a reply is posted Use of
409. uired if fields are activated The Name Entry section opens only if the Drake Document Manager DDM is integrated with the software For each client name is entered a client folder is created in the DDM 3 Click OK The return opens to screen 1 Demographics Begin entering taxpayer data 4 Press ESC to save and close screen 1 The Data Entry Menu for the return opens DATA ENTRY Returns are prepared in data entry mode This section is an introduction to data entry in Drake DATA ENTRY MENU After you create a new return and close screen 1 the Data Entry Menu for the return opens Existing returns open to the Data Entry Menu The default menu tab is the General tab Drake Software Manual Copyrighted Material 10 Basics Drake 2007 Data Entry 400004333 Return Sample amp a View Print Split a Calculate Income Adjustments Credits Taxes Other States 3 Income 4 Adjustments 5 Payments ES Estimated Taxes 2441 Child Care Credit 8867 Earned Income Credit Checklist Doc Mgr Wages Gambling Income 1099 R Retirement 1099 DI Dividend Income 1099 INT Interest Income 1099 G Govt Payments 1099 MISC Miscellaneous Income 099 R Railroad Retirement S al Security er Compensation FAQ Selector Field Enter Screen State or City Code C Return Status In Progress Frequently Asked Questions Data Entry Toolbar Tax Planner A STAX 2106 Electronic Filing and Ba
410. ule M2 Schedule M2 Analysis of Unappropriated Retained Earnings Schedule M3 Schedule M3 Net Income Loss Reconciliation Schedule M 3 Schedule M 3 Net Income loss reconciliation Schedule M 3 2 M 3 Income loss reconciliation part 2 Schedule M 3 3 Schedule M 3 Reconciliation of Income Part 2 Part III Schedule M 3 4 Schedule M 3 Part 3 Expense Deduction Items Schedule PH Schedule PH US Personal Holding Company Tax Schedule R Schedule R Credit for the Elderly or the Disabled Schedule SE Schedule SE Self Employment Tax SEHI Self employed health insurance deduction and self employed pensions SS 4 SS 4 application for employer identification number SSA SSA 1099 Social Security Benefit Statement entry screen STAX State and Local General Sales Tax Deduction worksheet STM Attached statement of explanation TRAC Return Tracking screen VER Verification of W 2 entry screen only AL EXT Date Alabama Extension Date for Bulk Web File report AL EXT Info Alabama Extension Detail Information for Bulk Web File report Average Gives the average for the immediately preceding column Calculated Number of times the return was calculated Count Displays on the report the total number of items that are being summarized Date Came In Date the Taxpayer first came in from the TRAC screen Date Changed Date the return was last changed Date Completed
411. urn 3 Form 1040 Income line 21 Other income 1098 Mortgage Interest Statement 1098 Form 1098 Mortgage Interest A Schedule A Itemized Deductions lines 10 14 1098 C Contribution of Motor Vehicles Boats amp A Schedule A Itemized Deductions line Airplanes 15 under 500 8283 Form 8283 Noncash Charitable Contributions over 500 1098 E Student Loan Interest Statement 4 Form 1040 Adjustments line 33 1098 T Tuition Payments Statement 8863 1099 A Acquisition or Abandonment of Secured Property 99A Form 1099 A See also Income tab 1099 B Proceeds from Broker amp Barter Exchange 3 Form 1040 Income line 21 Transactions 6781 Form 6781 Section 1256 Contracts amp Straddles D Schedule D Capital Gains amp Losses 1099 C Cancellation of Debt 99C Form 1099 C See also Income tab 1099 LTC Long Term Care amp Accelerated Death Benefits 8853 Form 8853 MSA line 8 1099 OID Original Issue Discount INT Form 1099 INT Schedule B Interest Income 1099 PATR Taxable Distributions Received from F Schedule F Farm Income line 5a Cooperatives Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Return Preparation 99 Form Title Where Accessed in Drake 1099 Q Distribution from Coverdell ESA or Qualified 5329 Form 5329 Additional Taxes on Tuition Program QTP IRA MSA etc Part Il line 5 1099 S Proceeds from Real Estate Transactions 4797 Form
412. urrent year location or a prior year location 3 Click to select a client from the list Clients are listed in alphabetical order by last name 4 Click OK Several of the fields populate with client data Adding a Reminder to an Appointment When a reminder is added to an appointment a reminder appears at a specific time before the actual scheduled time of the appointment To add a reminder to an appointment check the Add Reminder box in the Appointment Detail dialog box Set reminder times from Setup on the main screen of the Scheduler Designating an Appointment as Private Designating an appointment as private restricts Appointment Detail access for that appointment to other preparers including the Admin login The appointment is displayed to other preparers as Private To create a private appointment check the Private Appointment box in the Appointment Detail dialog box Drake Software Manual Copyrighted Material 82 Preseason Preparation 2007 DRAKE SOFTWARE Editing an Appointment To edit an appointment from the schedule grid double click the appointment to edit modify the information as needed and click Save Deleting an Appointment To delete an appointment from the schedule grid double click the appointment to delete then click Delete SEARCHING APPOINTMENTS Search the Scheduler for available appointments or for already scheduled appointments Find Available Appointments To search for the next
413. used data entry screens Enter a line number in Input Line and click Go to launch line specific instructions from RIA s online tax return guides Line numbers for fields are indicated in data entry N TE Not all screens contain a Screen Help button Also not all screens with Screen Help contain the RIA Form Line Finder feature Look for this feature to be added to more screens in the future Drake Software Data Entry Help Schedule C RIA Form Line Finder Form Schedule C Input Line Go Schedule C instructions ABOUT STATE RETURNS When a return is prepared Drake automatically generates state forms based on data entered on the federal return Calculation is based on the state entered on screen 1 for resident state and on the state codes indicated on W 2s Schedule C 1099 Schedule B etc For more information on preparing state returns see Preparing State and City Returns on page 136 In data entry click the States tab 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 data entry for that state It is not necessary to return to the States tab to enter a new state code City codes also may be entered in the Selector field at any time Another option is to go to the States tab select a state then click the Cities tab if available Cities are listed with their two letter codes PRACTICE RETURNS AND TEST RETURNS Take time before tax sea
414. ve select a format it is not necessary to complete this step again unless changing the name format 3 Right click the grey area and select Client Labels Choose from the following label types e Mailing Labels e Folder Label SSN EIN Name e Folder Label Name 4 Select the label printer from the Print dialog box Click OK to print the label Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Tools 217 ENVELOPES Not all printers are capable of printing envelopes Verify that your printer has this capability before using the Print Envelopes function in the program N UTE Always test print an envelope before printing an entire selection This option prints addresses on envelopes 1 From the menu bar choose Tools gt Letters gt Envelopes Select filtering and sorting options from the Filter Selection box If a more complex filter is needed click Edit Filters See Filter Manager on page 228 3 Click Next Modify the Basic Search Options if desired and click Continue 5 In the Envelopes dialog box make changes to update the envelope formatting information Drake 2007 Envelopes Print Envelopes This utility allows you to print envelopes based on the criteria selected in the client filter Select the appropriate options below and click Finish The software is designed to use standard business envelopes 4 x 9 5 Lines from top to position Address pS Spaces from left to position A
415. w in the Drake for Windows program The help system is easily accessible by clicking the HELP button located in most windows Many of the most commonly asked questions and help topics are covered in the Help System It is easy to use and fully searchable e Help is also available in the Drake Software Manual The manual provides an overview of the functionality of both the Windows and DOS based programs e Tutorials provide step by step lessons on the most common areas of Drake Software The tutorials are easy to use and can speed the training time of both veterans and new employees In order to use the tutorials the current Drake Tax 1 I Solutions CD must be in the CD drive The Internet Internet Support Available at Drake s website support drakesoftware com It is your 24 hour days a week resource during tax season e RIA Tax Research Drake Software provides every EFIN with a free tax research tool available exclusively from RIA Click the Tax Help button on the main screen to access this tool e Knowledge Base When issues with Drake Software program and tax iai iaaa dodan J aie a avin i She tindotan ara mon The Help screens are organized into three sections e Contents Arranged in a Table of Contents style this tab lists all help topics available Topics organized into books containing the help files for with a specific topic To access topics in a book double click the book To see the Help screen fo
416. ware Manual Copyrighted Material 2007 DRAKE SOFTWARE Suite Products 237 Creating Your Own File Structure It is not necessary to use the Drake file structure You can create an entire filing system according to your own specifications If you do use the Drake structure you can still add additional cabinets files and folders to your filing system Selecting Setup Options Access Setup Options from DDM window File gt Options Options are as follows e Document Manager Data Path To store DDM data in a location other than the DDM enter the data path here Browse as needed to the desired location e Use this scan device By default the DDM chooses a scanner To choose a different scanner select it from the list Turn off scanner interface Enable or disable the DDM s default scanner interface You may need to view the scanner interface window when making a scan especially if options not available in the DDM are required such as scanner resolution or color e Build index when DDM starts The DDM index used for searching the DDM must occasionally be rebuilt to ensure proper functionality Select to enable or disable the option to rebuild the index each time the DDM starts Tip Choosing to rebuild the index each time the DDM starts does not interfere with DDM operation Choose to rebuild the index by going to File gt Rebuild Search Index OPENING THE DDM Click the DDM icon to open the DDM N OTE To acces
417. window which you can access from the Home window without opening the actual return or from within a return data entry FROM THE HOME WINDOW Take the following steps to calculate one or more returns from the Home window toolbar 1 Do one of the following to open the Calculate dialog box e Select File gt Calculate from the menu bar e Click the Calculate icon in the toolbar e Press CTRL C on your keyboard 2 The Calculate dialog box displays up to the last nine returns calculated Each return is indicated by a function F key Drake 2007 Calculate 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 screen Click OK to start the batch calculation ee F1 123213123 SAMPLE HUGH amp GWEN F2 121212121 BALDWIN MARY F3 111111111 BRUTUS BUCK F4 520008888 TESTY COMPANY F5 590000012 MORROW STORAGE F6 500001002 JAMES BILL F7 400001003 ERTIA TEST F8 450582794 JOHNSON JIM amp BANKS T F9 012233344 WORTHY EULA MAE 3 Select a return to calculate using one of the following actions e Press the function key of the return to calculate The return s identification number such as SSN or EIN appears in the field to the left of the listing e Type the identification number such as SSN or EIN of the return to calculate into the top field then press ENTER 4 Click OK
418. wledgements and check authorizations without transmitting any files to Drake 4 Click Send Receive The Report Viewer display the EF Transmission Record M Po RTANT The EF Transmission Record is a list of returns that are planned for transmission Because transmittal can potentially be interrupted or a return denied the EF Transmission Record is not suitable as a record of files that have been transmitted Drake Software Manual Copyrighted Material 2007 DRAKE SOFTWARE Electronic Filing and Banking 155 5 Click Exit to close the EF Transmission Record The program immediately logs into Drake NOTE Software and transmits the return Transmission notes appear in the Communications box of the Transmit Receive window as transmission progresses Drake 2007 Transmit Receive Transmit Receive Files This screen is used to e file returns and receive Federal and State acknowledgements from Drake Software The Files for EF list contains a summary of files that will be transmitted Use the Review button for a detailed list To receive acknowledgements without transmitting use the Acks Only button Files for EF Review Communications Logging into Drake Software secure server Send Receive Checking for acknowledgements No acknowledgements available Transmitting files to Drake Software Success Checking for acknowledgements Retrieving files 1 acks retrieved Checking for email No new messages Acks
419. word in Setup gt Letters Override Options If a message page is present for a calculated return the system generates by default a letter for a paper filed return If no message page is present a letter for an electronically filed return is generated To override this default check the type of letter to generate for federal or desired state return Entering Miscellaneous Information Use MISC to enter the following types of information Return pickup date Foreign mailing address Foreign account questions Schedule B Part II RAL and RAC BONUS banks not approved for Drake Combat Zone Terrorist Military Action Tax Forgiveness Foreign Telephone Number of Taxpayer Parents Deceased for Form 8615 Kiddie Tax Drake Software Manual Copyrighted Material 132 Return Preparation 2007 DRAKE SOFTWARE Press F1 for instructions on specific fields Following is additional information on specific sections of the MISC screen e Pickup Information Enter Date promised Date picked up and 2006 payment information You may also enter Date promised and Date picked up on the TRAC screen See Keeping Track of Return Data on page 134 Date promised information can also be accessed in reporting e Foreign Mailing Address An address entered here overrides the address entered on screen 1 e Foreign Account Questions Answer questions in regard to foreign accounts e RAL RAC BONU Banks The IRS requires notification
420. x filter is needed click Edit Filters See Filter Manager on page 228 e Prior Year Clients Select filter sort options from Filter Selection If a more complex filter is needed click Edit Filters See Filter Manager on page 228 Click Next In the Mailing Labels dialog box enter mailing label settings Click Finish In the Print Labels dialog box select a printer and press Print to print the labels Service center addresses are available in Tools gt Letters gt Mailing Labels gt EF Service Centers Printing Client Labels From Data Entry New for 2007 Print single mailing or folder labels from within return data entry to a label printer Currently this feature has been tested only with the DYMO LabelWriter 400 Label Printer The data will print on any label size but DYMO Label Writer labels size 30252 are recommended because they work well for printing folder labels and mailing labels Size 30252 labels are included in the DYMO printer starter kit Before printing ensure that the label printer is installed properly per the manufacturer s instructions This label option is designed to print to a dedicated label maker To print a single label complete the following steps 1 From within return data entry go to screen 1 2 Choose a name format for the label Right click the gray area and select Client Labels gt Name Format Click to select LastName FirstName or FirstName Last Name Once you
421. xclusion on federal return Federal MAIL TO Address Federal MAIL TO Address Federal No Dir Debit Paper Paragraph Inserts applicable paragraph if federal direct debit is NOT selected for paper filed return Federal No Direct Debit EF Paragraph Inserts applicable paragraph if federal direct debit is NOT selected for e filed return Federal No Direct Deposit Paragraph Inserts applicable paragraph if federal direct deposit is NOT selected Federal Overpayment Federal Overpayment Applied Overpayment from federal return Overpayment applied from federal return Federal Overpayment Applied Paragraph Federal Overpayment Paragraph Inserts paragraph for overpayment applied on federal return Inserts paragraph for overpayment of federal return Federal Paper Filing Paragraph Inserts applicable paragraph if electronic filing is NOT selected for federal return Federal Refund Refund from federal return Federal Refund Paragraph Inserts paragraph for refund from federal return Federal Tax Amount Tax from federal return Federal Tax Bracket Tax bracket from federal return Federal Tax Rate Tax rate from federal return Federal Taxpayer Bank Federal Taxpayer Bank Account Number Taxpayer s bank for federal direct deposit or direct debit account 1 Taxpayer s bank account number for federal direct deposit or debit account 1 Federal Taxpayer Bank Account
422. yment applied voucher 4 State Balance Due State balance due State Balance Due2 State balance due for second tax varies by state State Balance Due3 State balance due for third tax varies by state State Estimate Total of state estimated tax vouchers State Estimate1 State estimated tax voucher 1 State Estimate2 State estimated tax voucher 2 State Estimate3 State estimated tax voucher 3 State Estimate4 State estimated tax voucher 4 State Form Form name or number up to 8 characters State Income Total income for state purposes State Income Spouse Total spouse income for state purposes State Name Name of state on state return State Overpayment Drake Software Manual Amount of overpayment to state Copyrighted Material 2007 DRAKE SOFTWARE Appendix 265 Keyword Description State Penalty Amount of penalty calculated for state State Refund State refund State Refund2 State refund for second tax varies by state State Refund3 State refund for third tax varies by state State Tax Amount of tax for state purposes State Tax Bracket State tax bracket State Tax Rate State Tax Rate State Tax2 Second state tax amount varies by state State Tax3 Third state tax amount varies by state State Taxable Taxable income for state purposes State Taxable
423. you through both the required and the recommended setup screens e Letter Editor Completely redesigned for 2007 the Letter Editor has a new look and functions including additional formatting options a preview feature and user friendly keywords Also a new comprehensive result letter allows you to meet nearly all of your letter needs e Organizers and Proformas Improvements this year include the expansion and enhancement of organizers and proformas for individual and business proformas only packages e Scheduler Redesigned for 2007 the Scheduler now offers two modes Preparer Mode has the same functions as last year s Scheduler with many enhancements Front Office Mode is for receptionists and other personnel who manage appointments but do not prepare tax returns e Preparer Setup Reorganized to display functions on toolbars expanded preparer list and Front Office security setting e Update Settings Previously called Update Configurations this tool allows for more items to be brought forward each year e Client Bill New features allow you to add a custom paragraph to a bill and change pricing on a per return basis e Data Entry Data entry now offers age indicators a magnify fields option field flagging by color and autofill options As always Drake s updates incorporate compliance requirements for the tax year including the new Form 8453 U S Individual Income Tax Transmittal for an IRS e file R

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