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Drake Software User`s Manual Tax Year 2011

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1. State or City Package Tax Type Description Colorado Individual OtherTax1 Severance Tax Corporation OtherTax1 Severance Tax S Corporation OtherTax1 Severance Tax Partnership OtherTax1 Severance Tax Fiduciary OtherTax1 Severance Tax Connecticut Individual OtherTax1 Gift Tax OtherTax2 Business Entity Tax S Corporation OtherTax2 Business Entity Tax Partnership OtherTax2 Business Entity Tax Delaware S Corporation OtherTax1 Composite Partnership OtherTax1 Composite District of Partnership OtherTax1 Franchise eet Individual OtherTax1 Franchise Fiduciary OtherTax1 Franchise Florida Individual OtherTax1 FL 405 Corporation OtherTax1 FL 405 S Corporation OtherTax1 FL 405 Partnership OtherTax1 FL 405 Fiduciary OtherTax1 FL 405 Georgia S Corporation OtherTax1 Composite Partnership OtherTax1 Composite Illinois S Corporation OtherTax1 Composite on IL 1023 OtherTax2 Withholding on IL 1000 Partnership OtherTax1 Composite on IL 1023 OtherTax2 Withholding on IL 1000 Fiduciary OtherTax1 Composite on IL 1023 OtherTax2 Withholding on IL 1000 Kansas Individual OtherTax2 Homestead Corporation OtherTax2 Unitary S Corporation OtherTax2 Unitary C 4 Tax Year 2011 Drake Software User s Manual Appendix C Keywords Table C 1 Letter Keywords Other Tax Types for State Packages State or
2. Figure 4 9 The Appointment Scheduler features a toolbar 1 a calendar overview 2 calendar tabs 3 and a scheduled appointment list 4 If the user is logged in as an administrative user the Batch Appts button is displayed in the toolbar See Batch Appointment Generator on page 16 Setting Up Scheduler Options Use the Scheduler Setup feature to establish the logged in preparer s default settings for appointment durations automatically filled data and calendar views Only the logged in preparer s calendar and view are affected by any changes 72 Tax Year 2011 Drake Software User s Manual Scheduler Click the Setup icon in the Scheduler toolbar The Scheduler Setup consists of two me tabs a General tab for default settings and a Calendars tab for setting viewing Setup options for calendars Options are described in Table 4 1 Tab Table 4 1 Scheduler Setup Options Setup Option Description General Appointment duration Set the default appointment time displayed in the Appointment Detail dialog box see Scheduling Appointments on page 13 Values are set in five minute increments Scheduler times Set time intervals 15 30 or 60 minutes to be dis played on the calendar grid rows of the Appoint ment Scheduler see Figure 4 9 on page 72 Appointment reminders Activate the appointment reminder establish how far in advance to receive a reminder
3. a Return Due Dates WI Municipality Codes 5GA MI MS OH OR April 15 2011 Deadline Extended to April 1 a WI Line 11 of Form 1 and the Married Couple Credit WI Medical Expenses Not Carrying To WI Sch 1 Top 10 Frequently Asked Questions How do send paper documents with an e filed 1040 return a CWU Why do get a malicious script error when trying to update 5 What does Authentication Failed mean when trying to transmit imak CWAG ere lo fipdhe AN BOX 12690052 sash mame entitle annann gin panaan nan A uit Figure 10 1 KB tabs item 1 search fields item 2 and suggested articles item 3 Begin your queries by viewing the Latest Articles those most recently published or changed Hot Topics those most viewed in the past month and Top 10 Frequently 236 Tax Year 2011 Drake Software User s Manual Online Support Searching the KB Search Within Tax Year 2011 Asked Questions See item 3 in Figure 10 1 Next search for specific articles ques tions or terms using the five tabs listed in Table 10 1 Table 10 1 KB Tabs See item 1 in Figure 10 1 Tab Description Search Search for articles using word searches Enter search criteria under Search for articles See item 2 in Figure 10 1 see also Searching the KB following Browse Open folders containing all articles on a selected subject Choose from more than two dozen folders of tax software topics and 18 folders
4. Federal income tax withheld Social Security wages Figure 4 3 Sample of W 2 page from an organizer Available for individual and business packages proformas have numbered fields cor responding to the fields on Drake data entry screens Figure 4 4 Proformas are designed to be internal documents and can be used during the interview process 2011 Form W 2 Wage Seca Lats Statement Charlotte Employee s name address if different Noo 8 8 d 3 A TESSA ORANGE 32 TEST DRIVE cro Sat ns PES TER emia a ee Figure 4 4 Sample of W 2 page from a proforma L Blank proformas and organizers can be viewed and printed from Tools gt Blank Forms See Printing Organizers and Proformas for Clients on page 70 for informa tion on printing for selected clients 68 Tax Year 2011 Drake Software User s Manual Organizers and Proformas Entering Information from Proformas Heads down Data Entry Tax Year 2011 Use proformas during the interview process or have a data entry operator enter tax information from proformas following the interview Each sheet in a proforma has special codes printed on the left side of the page For example Figure 4 4 shows that the proforma code for the W2 screen is 2 6 As an alternative to the screen code of W2 the data entry operator or tax preparer can use the screen s proforma code 2 6 To access a screen by entering its p
5. 223 Online EF Database Drake Software User s Manual ABCvoice Also under Tools the option to Download ABCVoice Files applies to preparers using Files the ABCvoice File tool For more information call Versicom at 937 438 3700 NOTE If using ABCvoice go to the ABCV screen to indicate whether the tax payer has signed the Consent to Disclosure of Tax Return Information Contact Lists To build lists containing contact information for your clients 1 oe PN From the online EF database toolbar click Tools Click Generate Contact List Enter report criteria by selecting or clearing the check boxes To further restrict the results enter start and end dates to search Click Run Report optional To export the report into a spreadsheet click the Excel icon You are asked whether you want to open or save the file Click Open or Save as desired If you click Open you will have another opportunity to save it from within Excel Multi Office Manager MOM The Multi Office Manager MOM is the online version of the Client Status Manager CSM See Chapter 9 Client Status Manager Designed for the multi office envi ronment MOM allows you to track workflow of multiple offices providing a snap shot of your entire business Reports and statistics on demographics return status return type bank payments fees and billing information are available Transferring For CSM data to be transferred to MOM the software m
6. Edit Remove Move Up SEN a T N giana apna NEE Do Figure 2 14 Entry list of Edit Entries dialog box 7 Click Save Changes to close the Edit Entries dialog box Click Exit to return to the Administrative Options tab The drop list is now available in data entry The Edit Entries dialog box also offers the following options e Changing the order of a listed item Use the Move Up Move Down Sort Ascending and Sort Descending buttons to change the order of items in the drop list See Figure 2 14 e Removing a listed item Select an item and click Remove See Figure 2 14 e Editing a listed item Double click an item The Selected Entry box see Figure 2 13 is activated with the item properties Make changes and click Save You can also create drop lists for the Adjustments and Payments field NOTE of the BILL screen When viewing a customized drop list in data entry click F1 to see the item descriptions 28 Tax Year 2011 Drake Software User s Manual Software Setup Pricing Setup Use the scroll bar or arrow keys to find forms Double click a form to select it quickly Two New Fee Options Tax Year 2011 Use Pricing Setup to enter prices and allow Drake to calculate charges and generate them on the client s bill Prices can be defined for each form and on some forms for each item You can also enter minimum and maximum charges for a completed return NOTE Bank product fees are establish
7. Delete Printing a List of Firms nat Print ERO Setup Tax Year 2011 3 Edit the firm information See Adding a Firm on page 12 for information on individual fields 4 Click Save and then click Exit to close the Firm Setup window To delete a firm from Firm Setup 1 From the Drake Home window go to Setup gt Firm s 2 Select the firm to delete and click Delete 3 Click Yes and then click Exit to close the Firm Setup window To print a list of firms entered in the program From the Drake Home window go to Setup gt Firm s Click Print The Report Viewer displays the report on the screen Click Print to open the Print Drake Report dialog box Change any print options necessary and then click Print again ae a S Click Exit and then click Exit again to close the Firm Setup window An Electronic Return Originator ERO must complete ERO Setup in order to e file returns use the Drake e mail program download software updates access the online e filing database and access TheTaxLibrary online tax research Fields needed for e filing are marked in the program by red text To set up your firm as an ERO in Drake 1 From the Drake Home window go to Setup gt ERO 2 Enter General Information for the ERO Fields needed for e filing are marked by red text 3 Under Connection Settings choose a connection setting The default is Always use my existing Internet connection this setting
8. Schedule D Figure 13 19 Worksheet totals are highlighted in blue e Tax Planner Worksheets To access an additional tab or worksheet for a form or line double click the shaded cell Making Each numerical column in the Tax Planner has an Adjustment column to the right of Adjustments it Use this column to enter dollar amounts or percentages by which to adjust the amounts Default is dollar amount to use a percentage enter the number with a per cent symbol See Figure 13 20 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 324 Tax Year 2011 Drake Software User s Manual Client Write Up Income Items 2009 Adjustment Adjustment 2012 Wages 550K 1200 gt K 50 2 29 375 Nontaxable combat pay Taxable interest Nagiaxablerint eget andmast an Figure 13 20 Adjustments To apply an adjustment to all future years or cases right click the cell with the adjust ment and select Carry Adjustment Across Running To access reports click Reports from the Tax Planner toolbar and select to print a Reports Detailed or Summary Report Standard charts and graphics are also available Printing a To print Tax Planner data Tax Planner 1 Click Print Planner 2 In the Print Selector select your printing options e Sheet Selection Sheets pertain to specific tabs in the Tax Planner
9. See Batch Uploads on page 315 for scanning for batch uploads Drake has reviewed the following scanners and found them compatible with the DDM s 2011 release This list does not represent product endorsement or preference by our company Pricing is subject to change e Fujitsu fi 6130 950 e HP Scanjet 5000 800 e Fujitsu fi 6140 1500 e HP Scanjet 7000 1000 More details on these scanners are provided in Drake s online help Many TWAIN compliant scanners will work with the DDM Always review scanner specifications before purchasing a scanner Create a link between a DDM file and a document outside the DDM The DDM main tains the link to the external document so that if the document is updated the link remains and you do not have to replace the document in the DDM To create a link to a file in the DDM 1 Select a folder in which to store the link 2 Click the Link File button from the DDM toolbar 3 Browse to and select the document to be linked and click Open The link is indi cated in the Type column of the DDM Document Name Type Last Modified Descrig Todd_Sale_of_Home LINKED DOCFile 11 11 2011 13 58 19 4 R aaa a on E ETE aninninnn tian stnhen siren Figure 13 10 Link is indicated in Type column of DDM Tax Year 2011 Drake Software User s Manual Drake Document Manager Using the DDM Audit Log Setting Document Status txt doc xIls File Security Tax Year 2011 Each t
10. WORKSHEET 3 For Form 8582 CR Lines 3a and 3b keep for your records Name ELLA T SAMPLE Sokl Scurt No 4400 00 1001 Current Year Prior Year oe From Credits Unallowed Credits Torel Gracie Name of Activity F on a Credit line 3a b Credit line 3b c Add cols a and b E amp S PARTNERSHIP 8586 I 1 500 617 2 117 Figure 5 38 Drake displays the name of the entity such as partnership or S corporation with which the credit is associated in data entry Form 8582 CR Passive Activity Credit Limitations Form 8582 CR is calculated using the credit carryforward amounts from the PACR screen rather than from individual credit screens Use screen CR in Drake to access other fields for Form 8582 CR Passive Activity Credit Limitations Child Tax Credit The Child Tax Credit is calculated automatically in the program See Additional Child Tax Credit and Combat Pay on page 139 Retirement Savings Contributions Credit Screen code 8880 Use the 8880 screen accessible from the second Credits tab for Form 8880 Credit for Qualified Retirement Savings Contributions NEW FOR When this credit can apply Form 8880 is produced automatically and a note is produced stating that retirement plan contributions have been Alii carried to Form 8880 The note also provides instructions for prevent ing Form 8880 from being generated 128 Tax Year 2011 Drake Software User s Manual Other Credits
11. office in home 154 Ohio city tax rates 280 online EF database 221 224 opening see also activating see also creating Drake tax software 7 49 xiv Drake Software User s Manual password protected files in the DDM 312 returns from the CSM 230 returns in Drake 53 test returns 64 the DDM 301 the EF return selector 210 the Scheduler 72 the Tax Planner 321 optional documents with return 22 items on return 23 options setup 20 28 order of forms 183 Organize GruntWorx function 313 organizers 68 71 overflow statements 21 overlapping appointments in Scheduler 78 overpayments 135 override fields 21 60 overriding bill amounts 45 EF options 216 letters setup 46 setup options 43 48 P PAD screen preparer notepad 167 paper boy 94 paper document indicators 218 paper jams 204 parsonage allowance 122 see also clergy partner programs 247 passive activities 108 activity loss limitations 108 activity numbers PANs 107 income 89 125 password protecting client files 270 DDM files 311 e mails with PDFs 181 online EF database reports 223 pause option for calculations 21 Pay Per Return PPR 18 payment options electronic 143 payroll see Client Write Up PCM see Personal Client Manager PDF files e mailing forms as 146 saving returns as 185 penalties estimated tax 137 Tax Year 2011 Drake Software User s Manual for early withdrawal of savings 120 for late filed returns 163 IRA 104 121 Pennsylvani
12. 4 Click a package button The Flag Fields for Review window for that package is opened Note that this window resembles the Data Entry Menu Select a screen to open it 6 Choose one of the following options e Flag a field for a screen Click the fields to flag The field is flagged with the word Screen e Flag a field for all new returns Right click a field and select Flag For Review When Return is Created The field is flagged with the word Return as shown in the example in Figure 3 16 i Tax Year 2011 59 Data Entry Drake Software User s Manual till B Business code D Employer ID Figure 3 16 Field has been flagged for all new returns NOTE Click a field a second time to remove the flag 7 Return to Setup gt Options Press ESC to exit each window press ESC again to exit the Flag Fields for Review window and then click Exit 8 Click OK Override amp By default fields that allow overrides are preceded by an equal sign and display Adjustment red text Data entered in these fields replaces or overrides program calculations Fields A 100 Direct entry field E neces 100 lt gt Override field Lene i 100 Adjustment field j Figure 3 17 Direct entry override and adjustment fields Fields that allow adjustments are preceded by a plus minus sign and display blue text by default Data in these fields adjust program calculations by the amount en
13. Appointments can be scheduled for an individual preparer or a group of preparers Preparer schedules and appointments are carried forward each year NOTE Go to Last Year Data gt Update Settings 2010 to 2011 and select Preparer Schedules Foran To schedule an appointment for a preparer Individual 1 In the Scheduler click New Appt or double click an appointment time in the schedule grid The Appointment Detail dialog box is displayed If you accessed the dialog box by double clicking a time in the schedule grid it is opened to that date and time Figure 4 13 Drake 2011 Appointment Detail a G be ay x AHO RKR g fi Find Net ppt Save Delete Lookup Data Entry Organizer Proforma Help Exit Date 1 10 2012 Time 04 15 PM omin Ae Bine Preparers SSN EIN Clienttype Returning Y Appointment type ndividual Name Troy amp Rebecca Rivers Street 1215 Coleridge St City Denver st CO zp 80221 Phone day 855 555 5555 Evening Cell Ext Ext Email Email Notification Comments M Add reminder l Private appointment Recurring appointment Figure 4 13 Appointment Detail dialog box 2 Select the appointment Date Time and Duration Complete the applicable client information fields If a client record already exists in Drake the program automatically completes the Name Address Phone Client Type and Appointment Type fields once the SSN EIN is entered You ca
14. Batch Calculation Enter the SSN or EIN and press the ENTER key to add it to the list of retums to calculate or press the corresponding F1 through F9 key to add recent returns that are listed on this screen Click OK to start the batch calculation To delete an item from the list highlight and press the DELETE key F1 500001006 TOWNSEND WATSON amp REBE F2 500001004 SANDERS CLYDE F3 500001003 HAMPTON JOHN amp LINDA F4 500001002 James Bill F5 500001001 JONES SAMANTHA F6 400001005 PURPLE BARRY F 400001003 Brown Jeff amp Wanda F8 400001002 White Mary F9 400001001 GREEN DAWN OK Cancel Figure 6 1 Batch Calculation dialog box Tax Year 2011 171 Calculation Results Drake Software User s Manual 2 Using one of the following methods indicate the returns to calculate e Press the function key of a return to calculate The return s identification num ber SSN EIN appears in the field to the left of the list e Type the SSN EIN of a return into the top field and press ENTER 3 Repeat the previous step until all returns are indicated 4 Click OK The program calculates the returns Calculation Results When you calculate the results of a return from data entry the Calculation Results window is displayed by default The Calculation Results window consists of a Sum mary tab and a Details tab See Figure 6 2 The pause option in Setup Options m
15. Completed Firms You have completed the firm information required for e filing You can add more firms by going the Setup gt Firms Ex ERO ERO is missing some or all of the fields needed for e filing Go to Setup gt ERDI to complete the needed information You have completed the preparers information required for 2 P e filing for at least one of your preparers However one or reparers more preparers have incomplete information Go to Setup gt Preparers to complete this information sana Matinnah Catenin te eanan srt nat Nn iia Figure 2 2 A green check mark indicates a completed setup item a red X indicates an incomplete setup item and a question mark indicates a partially complete setup item You are not required to use the Setup Assistant To keep it from opening at program startup select Do not show Setup Assistant at program startup See Figure 2 2 Click Help gt Setup Assistant to return to the Setup Assistant at any time Running Drake on a Network Your network s designated server should meet the following minimum specifications e Windows 2000 or later for a peer to peer network e 500 MHz processor e A minimum of 64 MB RAM 128 MB is recommended As computers are added to the network RAM and processing speed of the server and the workstations should be upgraded to improve performance Your office s network must be properly configured for Drake to run cor NOTE rectly Drake cannot pr
16. D rake User s Manual None ep Support DrakeSoftware com gt 828 524 8020 Drake Software User s Manual Tax Year 2011 Support DrakeSoftware com 828 524 8020 Drake Software User s Manual Copyright The 2011 Drake Software Manual Drake Tax Software and any other related materi als are copyrighted material All rights are reserved by Drake Enterprises LTD including all ownership rights This document associated software and related mate rial are the property of Drake Enterprises LTD Drake Enterprises LTD hereby authorizes you to download display print and repro duce the material in this document in an unaltered form only for your personal non commercial use or for non commercial use within your organization Copyright trademark and other proprietary notices may not be removed 2011 Drake Enterprises LTD All rights reserved While every attempt has been made to produce an accurate and complete manual there is no warranty expressed or implied to that effect Drake Enterprises LTD assumes no liability for damages or claims resulting from the use of the information contained herein Trademarks The Drake Software Logo and Drake Tax are registered trademarks of Drake Enterprises LTD Other product names mentioned in this manual may be trademarks or registered trademarks of their respective companies il Tax Year 2011 Drake Software User s Manual Table of Contents Table
17. Drake Software User s Manual Supplemental Income from K 1 schedules The corresponding screens in Drake E2 E3 and E4 primarily contain override fields data entered here overrides amounts that would otherwise flow from the K 1 IMPORTANT Use screens E2 E3 and E4 only if transcribing the information from a previously calculated Schedule E Form 1099 To reflect form changes for 2011 screen E now includes check boxes for indicating Reporting 1 if any Forms 1099 were required to be filed and 2 whether the required Forms 1099 were filed Schedule E Rental TSJ ST ciy PAN Property description for reporting A O eee eens Sf Did you make any payments in 2011 that would require you to file Form s 1099 I Yes No If yes did you or will you file all required Forms 1099 cccccccssssssssesssesvsvevoveesseeseseees Yes P No ene naa i that mn Aten anih ata iA Rin ten dant hhi NAR em en Molten A saat D Aane a Figure 5 22 1099 check boxes on screen E General New to the E screen in 2011 is a Property description for reporting field at the top Property of the screen shown in Figure 5 22 The description entered here appears in the Information headings of all generated worksheets associated with the activity The following general information fields are also located at the top of screen E e Activity type If option D Not a passive activity is selected and EIC is involved the program pr
18. I Not eligible for EIC Yes No know So IS ORME OF Bina a Wane 2 a aan ea r E The child is unmarried OR The child is married can be claimed as the taxpayers dependent and is not filing a joint return except to claim a refund 1411 Didthe child live with the taxpayer in the U S for more than half of the year n nsnnnnsnnnssnrosnnssnnnssnnsssnnssnnnsnsnssnnnssnnnsnnnnnnnnsnnn r a 13a Could another person qualify to daim this cli La 130 Cts Telam orate py Go heo ohor pornon a z 13c Ifthe tiebreaker rules apply would the child be treated as the taxpayer s qualifying CIID esc ceececccssssceececevsssveeeeeeesvsneeeeee u E L Figure 5 46 One example of a completed EIC Information section screen 2 Ifa child is not eligible for EIC this ineligibility must be specified by selecting the Not eligible for EIC box above item 10 see Figure 5 46 Questions 10 11 and 13 can be left blank if this box is selected Tax Year 2011 137 Earned Income Credit EIC Drake Software User s Manual EIC Preparer Checklist Screen codes EIC 8867 IRS due diligence rules require that all paid preparers complete an EIC Checklist Form 8867 for each prepared return claiming EIC Form 8867 has four parts e PartI All Taxpayers e Part II Taxpayers With a Child e Part III Taxpayers Without a Qualifying Child e Part IV Due Diligence Requirements In Drake Part II of this checklist is addressed on screen 2 Fields for P
19. Other deductions line The partnership name and EIN are displayed on these lines and all other amounts flow to the appropriate forms schedules and lines GBC screen This screen which has fields for Part III of Form 3800 General Business Credit has been developed to accommodate the IRS s restructuring of Form 3800 The top section of this screen contains fields for entering current year credits from forms not programmed by Drake codes A B E and F while the bottom section contains fields for required information on prior year credit carry overs codes C and G Carryforwards and codes D and H Carrybacks NEW FOR Where pass through credit amounts are carried to actual credit forms 201l from the new K1P screen the pass through entity s EIN is reported on Form 3800 Part Ill of the generated return Screen Redesigns The following screens in the Corporation package have been redesigned in 2011 for easier data entry INC Income screen Now includes fields for all income reported on Form 1120 page 1 lines 1 through 10 that do not require a separate schedule or addi tional information screen also includes fields for tax exempt interest income reported on the Schedule K DED Deductions screen Now includes all deduction items reported on Form 1120 page 1 lines 13 through 26 that do not require a separate schedule or form J screen This screen for Schedule J Tax Computation now includes fields for l
20. Status Descriptions Under Extension Drake 2011 Status Description On Hold 7 Under Review Edit Signed i Delivered Reset continue Check lt Custom Status 7 gt lt Custom Status 8 gt lt Custom Status 9 gt 10 lt Custom Status 10 gt Enter new status description Awaiting Paymend w opon n e a N OK Cancel Select status to customize OK Cancel Figure 9 2 Creating custom statuses 3 Click Edit 4 Enter a status description in the Status Description text box Figure 9 2 and click OK To restore all original statuses click Reset NOTE When a custom status is created in the CSM it is also created in the PCM Setting Statuses Set return statuses at any time during the return preparation cycle A status can be set from within the CSM or from data entry For consistent and valid CSM status reports set statuses for each stage of a return You can ensure that the CSM Status column is always correct From the Drake Home window go to Setup gt Options Under the Tip Calculation amp View Print tab select Auto calculate tax return when exiting data entry When the return is calculated upon exit the Status column will be automatically updated Setting a Status from the CSM To set the status of a return from within the CSM 1 Right click a return record in the Client Status Manager list 2 Select Set Client Status A status list is
21. er View T Description f ype escriptio Print X Preparer s EFT note use for including voluntary information thatis EF_NOTE related to the tax return but unlike a statement is not required E Explanation for certain IRS code elections where no official IRS ELECTION form is designed for that purpose R Explanation for certain regulatory elections where no official IRS REG_NOTE form is designed for that purpose blank Statement to be added to the return STATMENT Note that a title is required for each unformatted statement to be attached to the return and that each statement should have a unique number Statement numbers can be a maximum of three characters Note that some statements are generated automatically with the number already assigned Verify this by reviewing the calculated return The program numbers required statements in the order in which you create them and provides a reference where applicable on the printed return Figure 5 63 Figure 5 63 The attached explanation see item c is Statement 1 Even if you have not created a required statement yet the program prints a reference to the statement For example in Figure 5 63 the Statement 1 label is triggered by marking Other for item c on screen C not by creating the statement on the SCH screen View a created statement by clicking the STATMENT label in View mode Tax Year 2011 Drake Software User s Manual Return Tracking Screen
22. requested payment date cannot be later than April 17 If the return is transmitted after April 17 the requested payment date cannot be later than the current date Required A Withdrawal selection item 1 in Figure 5 51 is required if the program is to direct Information tax authorities to electronically withdraw funds from the taxpayer s account Account 1 beeen State city selection lame of financial institution RTN Account number Type of account I Checking I Savings Repeat account information I Checking M Savings Requested payment date Daytime phone number 3 Payment iS F002 F 1040 4868 M 2350 The ACH payment dates for estimates must be the estimate payment due dates Federal 1040 ES First Quarter Second Quarter Third Quarter Fourth Quarter Withdraw the following quarterly payments L m r B Paman 2S m State State payment amount Requested payment date Daytime phone number Figure 5 51 Required fields on PMT screen withdrawal selection 1 account information 2 specified return 3 The name of the financial institution the bank s routing number RTN the client s account number and the type of account checking or savings are required As with the DD screen the RTN Account number and Type of account must be entered twice item 2 in Figure 5 51 Finally the PMT screen must indicate
23. will be displayed when in Print mode F8 Edit Printer Settings used to edit print settings for a selected printer Select printer Select the printer For printers other than Drake PDF Printer the fields listed below are activated If you select Drake PDF Printer you ll be given the option to launch Adobe after printing to the Drake PDF Printer Printer type Select the printer type from the drop list DPI override Change the dots per inch DPI setting Adjust margin Select this option if printed forms are running off the lower edge of the paper Check adjust ment vertical Use this field if text is being printed too high or low on checks Enter whole numbers to adjust the printed text 1 4 inch ata time Enter 1 to move the type 1 4 inch 2 to move 1 2 inch etc Positive numbers move the placement down negative numbers move the placement up This printer supports PCL PCL Printer Control Language is supported by most HP laser jet printers If your printer supports PCL the remaining fields on the screen will be filled automatically If your printer does not support PCL you must complete the remaining fields manually Main paper Select the tray that is to be the main paper source for the source selected printer Alternate Select the paper source to be used when the main paper paper source Opt large paper source Manual feed source is not available Select
24. you can click Get Updates in the lower left corner to download your updates Tax Year 2011 Drake Software User s Manual Drake Document Manager Setting up the DDM Technical Require ments File Structure rah Doc Mar Tax Year 2011 Review the following information before beginning work in the DDM The DDM takes up very little disk space but more space may be required for storing office files The storage drive for an average sized office needs approximately 1GB of space for each year Most new computers have at least a 20GB hard drive if you own a new computer storage should not be an issue Be aware that while long file names can be used this naming convention might not function properly on older systems that limit file names to eight or fewer characters The DDM stores files in a file structure You can build a file structure entirely from scratch create an automatic file structure by integrating the DDM with the tax soft ware or implement a combination of both approaches Among the benefits of integrating the DDM with the tax software e The DDM s default file structure contains a Clients filing cabinet drawers labeled 0 9 and A Z added by the software as they are required folders in each drawer for each client labeled by last name or business name a Tax subfolder and a 2011 subfolder Figure 13 2 Ce E 400006665 Carter Scott 5008 Carter Scott 6767 3 Carter William 6665 3 T
25. 216 Tax Year 2011 Drake Software User s Manual EF Override Options in Data Entry E filing Special Returns and Forms The EF screen includes the options to e file the following forms on y without e filing any other forms e Extensions Forms 4868 and 2350 e Form 9465 Installment Agreement Request e Form 56 Notice Concerning Fiduciary Relationship To e file one of these types of forms 1 Open the return and go to the EF screen accessible from the General tab 2 Under Federal E file Override Figure 8 6 select the forms to e file FEDERAL E FILE OVERRIDE Select one of the options below 1040 4868 M 2350 M 9465 only V 56 Do NOT send Federal Figure 8 6 Federal E file Override options in this example Form 56 will be e filed Be aware that if the 9465 screen is completed Form 9465 will be transmitted with the 1040 but if the 9465 only box is marked on the EF screen only Form 9465 will be transmitted the 1040 will not be transmitted Similarly by selecting the check boxes for 4868 2350 or 56 you are indicating that the program should transmit only the form you ve selected no other forms will be transmitted Leaving the 1040 box blank does not prevent the 1040 from being transmitted if it is otherwise ready to be e filed It will not be trans MPORTANT mitted however if you ve marked one of the other check boxes in the Federal EF Override section of the EF screen If filing an exte
26. Click Help for more on individual fields Click Finish Set printer options in the Print dialog box as needed and then click Print The Amortization tool prepares loan repayment schedules for various loan scenarios To prepare a loan repayment schedule 1 2 3 4 From the Home window select Tools gt Amortization Enter a Schedule Title to be displayed at the top of the amortization schedule Complete all other applicable fields Fields are described in Table 11 4 Click Calculate The program creates the amortization schedule To print the schedule click Print To save it for later viewing using Reports gt Report Viewer click Save Table 11 4 Amortization Schedule Fields and Descriptions Amortization Baseradon Schedule Field P Loan Amount The original amount of the loan Amortization Periods The number of payments to be made over the life of the loan Example If the loan is for two years and monthly payments are required you would enter 2 4 2 years 24 months Payments Per Year The number of payments to be made each calendar year Annual Interest The annual interest amount for the loan This amount is calculated automatically If the interest is unknown but the payment amount is known leave this field blank Payment Amount The amount of the payment In most cases this amount is calcu lated automatically based on the other information entered If this field is left blank and the
27. Drake Software User s Manual Tutorials teach the basics of Drake Software through text sound and animation For a list of available tutorials in ETC click Tutorials The Tutorials and Quizzes page displays a list of Drake tutorials Figure 10 8 with green check marks indicating tutorials completed and red Xs indicating tutorials not yet begun Subject General z Subject Tutorials i 7216 Launch Tutorial Vv i gt i 8615 Export Launch Tutorial Od ip Appointment Scheduler Launch Tutorial x ip Archiving Launch Tutorial x SAN nn T a ae E nnn amine anton ee ee oe apse aa gina Figure 10 8 Tutorial list Click Launch Tutorial for the desired tutorial Tutorials do not have to be completed in the order listed Fach tutorial has its own quiz Quizzes test the student s knowledge of the subject and if you re an administrator can help track student progress To access a quiz select Quizzes from the Subject drop list and click Launch Quiz for the desired quiz Tutorials are added throughout the season so check for new tutorials N ITE often To view tutorials for Drake CWU select Client Write Up from the Subject drop list shown in Figure 10 8 Practice returns have been designed as hands on tools to help your firm become famil iar with the basics of data entry and e filing in Drake Software To access practice returns in ETC click Practice Returns The Practice Returns page displays instruc tions and a l
28. Drake Software User s Manual Archive Manager Archive Manager The Archive Manager is a tool that allows you to archive returns and to review restore or delete the archived returns This means you can save various versions of a return such as the amended return and the original return prior to amending The Archive Manager is accessible from both Basic and Enhanced modes i Archive NOTE Archives are saved as PDF documents and can be accessed and viewed from the DDM Creating an Archive To create an archive of an open return 1 From View mode select Archive gt Archive Client Return or select Archive gt La Archive Manager and click the Archive icon in the Archive Manager toolbar Archi as 2 Inthe Archive Client Return dialog box enter a description of the archived file Figure 6 11 and click OK Enter a description for the archived file Ex Original Return before Amending Original return before amending OK Cancel Figure 6 11 Archive Client Return dialog box 3 After the program has created the archive click OK again The program adds the archived return to the Archive Manager list The DDM and Archive Manager use your description to help identify specific archives The program creates an archive file name beginning NOTE with Archive followed by the date time stamp Example Archive 20110908153145 indicates September 8 2011 20110908 at 3 31 45 153145 in the afternoon R
29. Evaluation Once you have completed and submitted the evaluation you will be able to print a CPE certificate To re print a CPE certificate click Report Card in the Drake ETC side bar Scroll to the bottom of the Report Card window to the CPE Credits NOTES list and click Print for the desired certificate To access information on all the ways to earn CPE credits from Drake without logging in to ETC go to Support DrakeSoftware com and select Training Tools gt CPE Drake ETC provides webinars on various topics with new webinars added every month The webinars are presented with panelists available to answer viewers ques tions during the event CPE credits are available no test required see NOTES below You or your account administrator can keep track of completed webinars and CPE credits earned through the ETC site Attendees must respond to several polls offered during the webinars and complete a short evaluation after the webinar to qualify for CPE N l TE g credits A fee is required for most webinars Please join webinars at least 10 minutes before the scheduled starting time Speakers or headphones are required To register for a webinar from Drake s Support website From the blue menu bar to the left go to Training Tools gt Drake ETC 2 Sign in using your username and password see Logging In on page 240 for details to open the ETC Welcome page 3 From the blue menu bar to the left on the Welcom
30. If only the Date sold field contains data nothing flows to Form 4797 Assets For a Section 1250 property an entry in the Form 4797 line 26d depreciation field flows to that line of Form 4797 An entry in the Form 4797 other Part III deprecia tion field flows to the appropriate line of Form 4797 depending on the property type Installment Unlike Form 4797 Form 6252 Installment Sales is not generated automatically if the Sales If sold fields are completed For information on entering installment sales see Installment Sales on page 99 Depreciation Elections Two screens are used for indicating depreciation elections Use screen 10 Additional Depreciation Elections to elect out of 50 bonus depreciation for some or all of the assets placed in service in 2011 You can access this screen for an asset by clicking the Additional Depreciation Elections link on screen 4562 for that asset Use the ELEC screen for other Form 4562 elections listed under the Form 4562 heading on that screen For more on the ELEC screen see Election Options on page 157 Auto Expenses Screen code The Auto Expense Worksheet AUTO screen accessible from the Adjustments tab AUTO is used for calculating automobile expenses related to certain types of income The program calculates the mileage rate automatically NEW FOR Enter data for Schedule C Part IV Information on Your Vehicle on the 70l AUTO screen instead of the C screen Use the For
31. If the symbol is inserted after the selected data in a macro the program enters the data then activates heads down data entry To have heads down closed from the macro add a second symbol See Heads Down Data Entry on page 63 Bypass the Existing Forms List when performing the task set by a macro Enter an asterisk only once in any macro and place it at the beginning of the macro When you open a screen that has mul tiple records an Existing Forms List is displayed and you have the choice of selecting an existing record or creating a new one To bypass the New Record option and open the first record listed enter the symbol in front of the macro For example C opens the first Schedule C record To open the second record enter a 2 inside brackets 2 thus the macro C 2 opens the second C screen C 3 opens the third etc New Perform the assigned task on a new record For example C New opens a new C screen The aster isk bypasses the Existing Forms list It must be present for the New function to work properly Home Return to first field on a screen If Home is inserted into a macro the cursor moves to the first field on the screen End Move to last field on a screen If End is inserted into a macro the cursor moves to the last field on the screen FF Cursor jumps ahead a prescribed number of fields For instance FF 5 jumps the cursor ahead five
32. No Third Party Designee To indicate that no one other than the taxpayer is allowed to discuss the return with the IRS go to the PREP screen and select No from the drop list in the Third Party Des ignee section See Figure 5 52 If no third party designee is indicated in Setup gt Options the No box is marked on the third party designee line of Form 1040 NOTES If you select Yes on the PREP screen the PREP screen fields override any third party information in setup If you select Yes but leave the other fields blank the third party section of Form 1040 will be blank Tax Year 2011 145 Signing the Return Drake Software User s Manual Signing the Return An e filed tax return must contain electronic signatures of both the taxpayer and the ERO in order to be accepted Electronic signatures are produced using PINs Form 8879 Form 8879 an electronic signature document used to authorize e filing allows tax payers to select a PIN signature or have the software choose a random number for them It also authorizes the ERO to enter the taxpayers PIN signatures authorizing electronic withdrawal of funds for tax payments The signed Form 8879 does not have to be mailed to the IRS It must NOTE instead be retained by the ERO for three years See Form 8879 instruc tions for more information Screen codes Use the PIN screen accessible from the General tab to complete Form 8879 The 8879 PIN generated return uses both th
33. Offices that use multiple computers that are not networked must stag ger DCNs to avoid duplication DCNs should be staggered before cre ating any 2011 returns For instructions on staggering DCNs see Staggering DCNs on page 214 Non paid prep If the firm is not a paid preparer enter a non paid code here Acceptable codes are VI VITA VT VITA T TE TCE X IP IRS PREPARED and IR IRS REVIEWED e Banking Information Choose a bank and include add on fees If you have completed your online Drake bank application through the Enterprise Office Manager EOM click Retrieve to import your banking information directly from the bank application For information on the EOM see Banking Application on page 195 Select a bank and enter the applicable fee and receiver information For more on available options see Table 7 4 on page 197 For more on indi vidual bank selections see Chapter 7 Banking 4 Click Save The program assigns a number for each firm entered in Firm Setup NOTE To view a report of the revenue earned from the additional add on fees for e filing log in to Support DrakeSoftware com gt My Account To edit a firm s information 1 From the Drake Home window go to Setup gt Firm s 2 Select the firm to edit and click Edit Firm to activate the bottom half of the Firm Setup window Tax Year 2011 Drake Software User s Manual Software Setup Deleting a Firm
34. Preparer Setup on page 14 Macros See Macros Setup on page 30 Directories Paths See Directories and Paths Letters See Introduction to Letters in Setup on page 18 Drake on page 32 Pay Per Return PPR clients only see PPR Colors See Color Setup on page 37 manual on CD or the Drake Support website Printing See Printing Setup on page 38 If you used Drake last year you can bring forward most required program settings from your 2010 program See Updating Settings on page 67 for details Logging in as an Administrative User Setting an ADMIN Password Shortcut Double click the ADM row to edit it Tax Year 2011 Log in as ADMIN to enter setup information The administrative login can access the following features not available to non administrative users Preparer setup security features in Setup gt Preparer s Additional features in Setup gt Firm s and Setup gt Directories Paths The Administrative Options tab of Setup gt Options Additional tracking information on the ADMN and ESUM screens in data entry An ADMIN password is not required If your firm chooses to have an ADMIN pass word keep a record of the password Drake cannot retrieve lost or forgotten login passwords To set a password for the ADMIN account 1 2 3 From the Drake Home window select Setup gt Preparer s Click the Administrator ADM row and then click Edit Prepa
35. Profit or Loss from Business Sole Proprietorship Access screen C from the Income tab Several screens in Drake such as the 99M AUTO and 4562 screens can be associated with a Schedule C using the For and Multi form Code boxes of those screens See Associating One Screen with Another on page 61 NEW FOR Enter data for Schedule C Part IV Information on Your Vehicle on the 701l AUTO screen Program Defaults for Screen C The program s default accounting method item F is cash Select Accrual or Other as applicable for accounting methods other than cash If Other include a description The program s default position for activity type item G is that the activity is not a passive activity option D For more information on activity type options see Activ ity Type Codes following The program s default position for investments item 32b is that all investments are at risk If this is not true for your client select Some investment is NOT at risk Note that item 32b includes a link to screen 6198 for entering data to compute deductible losses for Form 6198 At Risk Limitations The program s default inventory valuation method item 33 is cost If the valuation method is not cost select the correct method under Part III Cost of Goods Sold Activity Type Codes Screen C offers two options for activity type item G and shows where on Form 8582 Passive Activity Loss Limitations the calculation f
36. Returns are prepared in data entry mode Access data entry screens from the Data Entry Menu See Figure 3 8 When in data entry press ESC to save your data exit the open screen and return to the Data Entry Menu Pressing Esc from the Data Entry Menu returns you to the Home window Figure 3 2 Also in data entry you can use the TAB key the UP ARROW and DOWN ARROW keys and the PAGE UP and PAGE DOWN keys to move from field to field or from screen to screen Data Entry Menu The Data Entry Menu Figure 3 8 is displayed when you open a return It consists of a toolbar tabs screen codes and names the selector field and the status bar 54 Tax Year 2011 Drake Software User s Manual Data Entry Drake 2011 Data Entry ELM Cann Many Th ii Se amp amp gt jo a W Toolbar Perform tasks and Calculate View Print Split Doc Mar Tax Planner Import CSM Email Help Exit access program features Name andAddress Dependents Income Adjustments Payments Estimated Taxes Child Care Credit Wages Gambling Income 1099 R Retirement 1099 DIV Dividend Income 1099 INT Interest Income 1099 G Government Payments 1099 MISC Miscellaneous Income RRB 1099 R Railroad Retirement 1099 SSA Social Security 4 2 3 4 5 ES 2441 w2 W2G 1099 DIV INT 99G 99M RRB SSA BILL FAQ Client Bill Adjustments Frequently Asked Questions General income Adjustments Credits Credi
37. Schedule H Household Employment Taxes 131 Schedule J Income Averaging for Farmers and Fishermen 113 Schedule K 1 Share of Income Deductions Credits etc accessing screens 108 applying expenses to 154 basis worksheets for 110 entering data for 107 110 exporting data from another return 110 letters 23 34 42 48 printing page 2 22 state amounts if different from federal 109 Schedule R Credit for the Elderly or the Disabled 126 Schedule SE Self Employment Tax 119 Scheduler 71 81 establishing daily schedules 73 new features this year 71 reports 80 283 searching 80 Tax Year 2011 Index screen captures 63 search conditions in Filter Manager 290 292 searching appointments 80 business codes 94 city codes 84 CSM 231 DDM 307 Drake Software User s Manual 1 EF database 219 federal and state publications 247 Help feature in Drake 249 Knowledge Base 237 preparers 18 reject codes 220 reports 290 student records ETC 245 section 179 expensing entering data for 148 150 for general partner on K1P screen 109 report of assets 294 SecureFileProTM 319 321 security Document Manager 302 group 16 levels online EF database 223 of client files 270 preparer 15 selecting a filing status 83 self employment see also Schedule C Profit or Loss From Business adjustments 119 120 clergy see clergy foreign income 117 tax 119 Series I Savings Bonds 142 sets printing 178 setup procedures 11 41 Setup Wizard
38. Tax Year 2011 r p Drake 2011 Email Attachments crams Client Data Files V Attachments SSN EIN search 1 Browse 4FE97D71 D11 2 400006665 Search A Document Manager Files SSN EIN Search Drake Software program files Browse All other files aca Diagnostic attachments for use with support System Drake Software Information Printer Settings Program Settings Installation into Done Figure 10 18 In the Attachments dialog box enter a SSN or EIN and click Search item 1 the encrypted file is attached item 2 5 Click Search or press ENTER The file appears in the Attachment s pane to the right item 2 in Figure 10 18 Clicking Browse opens the Attach File dialog box displaying the vari ous DT folders listed 0 through 9 Returns are stored in these DT folders by the last digit of their SSN EIN for instance return 400006665 Tip is stored in the 5 folder To find and attach a return double click a folder to open it select the proper data file and click Open at the bot tom of the dialog box That data file now appears in the Attachment s pane of the Email Attachments dialog box See item 2 in Figure 10 18 Follow Step 6 below 6 Click Done You are returned to the Compose Message window with the file attached See Figure 10 17 on page 254 7 Complete the To and Subject fields and compose your message 8 Click Send The message and attachm
39. Tax Year 2011 Viewing and Printing a Return To print specific sets of a return from Enhanced mode 1 Select the Sets tab All sets in the return are shown in the tree view Figure 6 4 AllFoms Sets EF EF Signature Client Preparer Federal New Jersey 4 gt nel Dee Figure 6 4 Example of a return that has five printer sets 2 Select the sets to print 3 Click Print to open the Print Sets dialog box If you click the arrow next to the Print icon select Print Selected Forms 4 optional Select any printing options shown in the Print Sets dialog box 5 Click Print again All of the selected items are printed Enhanced mode allows you to print the document currently in view Printing a single form in this manner is referred to as quick printing To quick print a single form from Enhanced mode 1 Click a form or document name to display it in the viewer pane In the example in Figure 6 5 the 1040 form is selected for viewing All Forms Sets EF Figure 6 5 Click the form to view 2 Click the arrow next to the Print icon and then click the Quick Print selection or press CTRL Q P Data Entry Print Setup Archive Email Print Selected Form s Ctrl P Print Selected Form s to PDF Document Ctrl D Email Selected Form s Ctrl M Quick Print ETD_MSG Ctrl Q _e Select Forms All Forms MARARA h ae Figure 6 6 Click the arrow next to the Print icon to see pr
40. The Backup dialog box is dis al played Note that the Selected Folder is marked as the default folder to back up Original DDM DDM 2 f r D Drake Document Manager Backup E Backup boh Backup Restore Manager Select the Backup or Restore location and options needed This may take a Location C DDMBackup Free Space 203 0 GB few minutes You may minimize this window and continue working When the gt backup restore process is complete you will be notified Backup Restore a Backup Restore Location C DDMBackupi Free Space 203 0GB Backup Backup Name 2011 12192011 Backup Name 2011 12192011 Selected Folder Clients D DE LA HALO TEST 1020 Tax 2011 Selected Folder CLIENTS D DE LA HALO TEST 1020 TAX 2011 Entire DDM Estimated Backup Size 0 0 MB C Entire DDM Estimated Backup Size 0 1MB C Restore No Backups were found at C DDMBackup Figure 13 1 Backup dialog boxes for DDM and DDM 2 3 optional If you do not want to use the default location to store your backup click the button to the left of Backup Restore Location and specify a new location In DDM 2 click the Location button in the upper left corner 4 optional If you do not want to use the default Backup Name enter a new name The default name uses the cabinet drawer or folder name and the current date If more than one backup of the same selection is done on the same day
41. The Depreciation List is a report that displays depreciation information for selected clients There are two methods for creating depreciation lists in Drake manually entering client SSN EINs to be listed and filtering the client database for clients that meet specified criteria To create a depreciation list for one or more clients 1 From the Home window select Reports gt Depreciation List The Depreciation List Client Selection dialog box is displayed 2 Choose one of the following methods a Create a list Enter the SSN EIN and click Add Client Repeat for addi tional clients until all the desired clients are entered and click Next b Filter the client database Click Next to open the Basic Search Condi tions dialog box Edit settings as desired see Search Conditions on page 290 and then click Continue 3 Choose to Print the depreciation list or to Export to File e Print Send the list to the printer In the Print dialog box click Print e Export to File Depreciation lists exported to file are stored in Drakel1 Reports as CSV files Click OK 293 Fixed Asset Manager Fixed Asset Manager Use the Fixed Asset Manager to run reports based on client assets Eight report types shown in Table 12 4 are available Report Type Depreciation Schedules Drake Software User s Manual Table 12 4 Fixed Asset Manager Report Types Report Description Depreciation list sorted by asset n
42. This will export all EF or Client data to a Text CS file The text or CSV file can be opened using word processor database and spreadsheet software Click Continue to export data or Exit to leave this screen without exporting files Export client data files Export e file data files Export to CSV Comma Separated Values I Include test retums Path File name for export data C drake11 export CLIENT TXT Help Continue Exit Figure 11 6 Export Client EF Data dialog box 2 Select to either Export Client Data Files or Export EF Data Files e Ifyou choose Export Client Data Files the path for client export is dis played Change the default path as needed e Ifyou choose Export EF Data Files the file and path names are displayed Change the default path as needed 3 optional Click Export to CSV Comma Separated Values if you want to export the data to a spreadsheet 4 optional Click Include Test Returns if you want to include Drake test returns in the export Click Continue 6 Click Exit when the export is complete a 269 File Maintenance Drake Software User s Manual Password Protecting Client Files The Password Protect tool protects files from unauthorized access A protected file cannot be opened in data entry until it is unlocked with a password To password protect a file 1 From the Home window go to Tools gt File Maintenance gt Password Protect Fil
43. batches For more information on the other types of letters available in Drake see Introduction to Letters in Drake on page 28 NOTES If printing an engagement letter for a taxpayer who has not been entered into the system you are prompted to provide the person s name and address information and type of return This action does not create a client file in Drake the information is used for the engagement letter only To print one or more letters 1 2 g 6 7 Mailing Labels Tax Year 2011 From the Home window go to Tools gt Letters gt Letters From the Client Letters dialog box select a letter type Figure 11 11 Select letter to print for clients Post season for 2011 clients Pre season for 2010 clients Individual estimate payment reminder for 2012 Appointment letter email notifications for 2011 clients EF status for 2011 clients Engagement letter VIII Figure 11 11 Letter choices in Client Letters dialog box Click Next to open the Client Selection dialog box Complete one of the following e Print a letter for specific clients Enter a client s SSN EIN and click Add Client Repeat for additional clients Click Next e Printa batch of letters Click Next to open Client Letters Filters Selec tion Select filtering and sorting options If a more complex filter is needed click Edit Filters See Filter Manager on page 7 Click Next for Basic Search Conditions Click Continue
44. e Report Selection Select Summary Report Detailed Report or both e Copies Select the number of copies to print Tip To save your printing options as the default click Save Selection 3 optional Click Print Preview to preview your selection Use the scroll bar to view additional pages and then click Print Backing Up To back up or restore Tax Planner files amp Restoring Files 1 Click Backup Restore from the Tax Planner toolbar al Select the Backup tab or the Restore tab Choose a backup or restore location or browse to the location PON Choose the client files to back up or restore Select All Clients to select all Tax Planner client files To choose specific clients click Select Clients and enter a cli ent s Tax Planner filename Browse to a location as needed 5 Click OK Client Write Up Client Write Up CWU is free to Drake clients and is shipped on every release of Drake Software You can use CWU to prepare and print both live and after the fact payroll and such forms as W 2 1099 940 941 943 944 941SS and 944SS A num ber of reports including multi column profit and loss reports pre posted reports com parative or single column balance sheets and payroll reports are also available Templates are included to allow easy creation of a Chart of Accounts and there is an export function to carry this information into Drake Software Install CWU from your Drake Software CD A manual is also a
45. fields This macro is not compatible with macros that use or are initiated in heads down mode FB Cursor jumps back a prescribed number of fields For instance FB 5 would jump the cursor back five fields FJ Cursor jumps to the prescribed field number For instance FJ 25 would jump the cursor to field 25 Obtain field numbers by viewing the screen in heads down mode This macro is not compatible with macros that use or are initiated in heads down mode Prevents a macro from clearing a flagged field Move to the next screen in a list For instance in a return with several W2s screens Dependent screens or 4562 detail screens press the macro to move from one screen to the next Move to the previous screen in a list For instance in a return with several W2s screens Dependent screens or 4562 detail screens press the march to move from one screen to the next Move from one linked screen to the next linked screen For instance for clients who receive a K 1 from a partnership press the macro and go from the 1065 K1 13 20 screen to the Basis Worksheet screen PREVTAB Move from a linked screen to the previous one For instance for clients who receive a K 1 from a part nership press the macro and go from the Basis Worksheet screen to the 1065 K1 1 12 screen Tax Year 2011 Software Setup Drake Software User s Manual Introduction to Letters in Drake The lett
46. install Drake 2011 January update to your sys tem Two icons will appear on your desktop one for the regular DDM and one for DDM 2 Click the icon of the version of DDM you prefer to use Users of systems that are pre Windows XP will see only the icon for the regular DDM If you run Windows Server 2003 Windows Server 2008 Windows Vista Windows XP or Windows 7 but 1 have not kept up with regular Window updates and 2 have an older version of NET IMPORTANT Framework you will automatically be directed to the Microsoft website where you can download at no charge the newest ver sion of NET If your system runs Microsofts NET Framework v3 5 or later a newer version is not necessary and no further steps are needed Backing Up Restoring DDM Contents The backup restore feature is used to copy files to a local networked CD DVD or USB drive You can back up and restore the entire DDM DDM 2 structure or a spe cific cabinet drawer or folder To back up individual files use the Copy To options See Table 13 2 on page 312 298 Tax Year 2011 Drake Software User s Manual Drake Document Manager Use this tool to back up and restore files from one computer to another Tip in regular file program maintenance or to store data off site as part of a disaster recovery plan Backing Up To back up DDM contents Contents 1 Select a specific drawer cabinet or folder to back up S 2 Click the Backup button on the DDM toolbar
47. right click the file to open the Password Protection dialog box Enter the password and click Continue When prompted to enter and re enter a new password do one of the following e Enter a new password twice to change the password e Leave the password fields blank to remove password protection Click Continue and then click Yes if removing password protection NOTE To require a password for opening the DDM program see DDM Access Options on page 302 Other tasks that can be performed in the DDM are listed in Table 13 2 Table 13 2 Other DDM File Tasks Task Description Click the File button and select Open Rename or Delete in order to open x rename or delete a file respectively Fie rr Select a file in the DDM document list and click Copy Choose to copy to a Tid location copy to the clipboard or copy to a CD If copying to a location choose Copy a location for storing the copied file and then click Save If copying to the clip board use the DDM s Paste button to paste the document into another folder If copying to a CD follow the instructions provided on your screen Use the Cut and Paste buttons to move documents from one folder to another Use the Cut and Paste buttons to move documents from one folder to another To copy a folder to another document use the Copy button do To copy a folder to another document use the Copy button Cut Paste Select a file i
48. see also importing check register 202 client data 269 CSM data 234 Kiddie Tax data 132 reports to spreadsheet format 222 Schedule K 1 data 110 extensions 158 F F federal code 61 FAQs 249 farm income 113 114 fax cover letter for support 260 federal state facts 246 fees add on 12 calculated 173 charging for bank products 12 in EF database 220 minimum and maximum 30 pricing setup 29 reports 233 reports of bank and preparer 221 setting 214 Tax Planner 45 types of 173 Fees to ACH bank acknowledgment 200 fiduciary 1041 returns 48 114 field flags see flags file maintenance 265 274 files automated backup of 267 backing up 266 changing types 271 client vs print 271 Drake Software User s Manual deleting from Drake 271 e mailing client files to Drake 254 exporting 269 password protecting 270 restoring 266 structure of in DDM 308 unlocking 270 filing instructions 23 late 163 status selection 83 filing instructions 43 filters and filtering see also reports CSM data 232 report data 287 fingerprint cards 208 firm setup 12 13 first time homebuyer credit 43 101 140 Fixed Asset Manager 294 flags activating 58 clearing 26 customizing 26 fonts for printing tax forms 39 263 foreign account reporting 162 earned income 116 employers 87 interest and dividends 91 mailing address for tax firm 12 tax credit 124 125 Form 56 Notice Concerning Fiduciary Relationship 147 162 217 Form 706 U S E
49. times for the selected days 5 Click Save In the Appointment Scheduler window the rows indicating a preparer s out times will be shaded a different color from the rows indicating the preparer s in times NEW FOR Use the Detail Schedule tab to indicate where the schedule changes 701l for a certain time for example if a preparer is going to be out several hours on a particular morning for a doctor s appointment Calendar Settings Calendar viewing options are shown in the Calendar Settings section of the Calen dars tab of the Scheduler Setup dialog box Figure 4 11 74 Tax Year 2011 Drake Software User s Manual Scheduler Calendar Settings Calendar view start time Current Time z Default calendar tab displayed at login Selected Date Calendars in my view IV Weekly M Preparer Figure 4 11 Calendar Settings section under Calendars tab These features are described with the Scheduler Setup features in Table 4 1 on page 73 For more information click the Help icon in the Scheduler Calendar To change the default colors displayed in the Scheduler calendar Colors 1 Inthe Scheduler Setup dialog box select the Calendars tab Default colors are displayed under Colors Colors Use application default colors C Use custom created colors Scheduler grid background color Preparer scheduled start time color Single appointment color iad Multiple appointment color Figure 4 12 Colors sect
50. tracking information on 169 updating from prior year 65 68 viewing and printing 174 180 River City Bank 191 rollover of pensions annuities 102 Roth IRAs 103 rounding amounts 24 royalties 104 RT Refund Transfer 191 S S corporations changing from C corps 271 sale of residence 100 sales tax 170 saving previously prepared returns 185 scanners 6 304 309 310 scanning Tax Year 2011 Drake Software User s Manual 2D barcode 87 DDM files 309 Schedule A Itemized Deductions and application for tentative refund 156 depreciation schedules for 147 entering data for 122 123 printing 22 42 Schedule B Interest and Ordinary Dividends entering data for 90 91 order of items listed on 21 printing 22 42 Schedule C Profit or Loss From Business applying expenses to 153 154 depreciation schedules for 147 e filing 95 entering data for 93 95 for clergy 122 for statutory employees 88 foreign income on 117 Schedule C EZ Net Profit From Business 95 Schedule D Capital Gains and Losses entering AMT cost basis on 96 entering data for 96 importing data from spreadsheet 97 sale of home 101 Schedule E Supplemental Income and Loss activity types 105 108 applying expenses to 153 depreciation schedules for 147 entering data for 104 107 using for farm income amp expenses Form 1041 114 Schedule F Profit or Loss From Farming applying expenses to 153 154 depreciation schedules for 147 entering data for 113 114
51. 165 configuring colors in basic mode 183 DDM 303 Consent to Use and Disclosure of Tax Return Information IRS Reg 7216 13 187 189 contact lists 224 conversions 247 copying DDM files 312 EF data 225 coversheets 22 CPE credits 242 creating see also opening amended returns 157 appointment reports 80 archived returns 185 CSM reports 233 EF reports 221 ETC accounts 239 filters 292 key combinations 30 macros 30 miscellaneous codes 26 27 preparer schedules 73 reports 285 returns 53 credit card as electronic payment option 143 credits Tax Year 2011 Index see also individual credit and form names child and dependent care 125 child tax 128 education 121 elderly disabled 126 foreign tax 124 home energy 126 homebuyer 43 101 140 retirement savings contributions 128 crop income for Form 1041 114 insurance 124 CSM see Client Status Manager Ctrl W detail worksheets 57 58 custom folders in DDM 302 custom paragraphs 24 47 customized supplemental letter 23 customizing colors 37 182 CSM display 230 data entry menu 26 drop lists 27 fields on BILL screen 26 flagged fields 26 greetings in letters 47 letters 33 miscellaneous code fields 26 report filters 288 security settings 15 D data entry bank screens in 198 basics of 54 64 colors 38 customizing 26 EF override options in 216 forms based 281 grid 56 85 148 heads down 69 help resources within 250 maximizing screens 20 menu 5
52. 2 verification option 21 addenda pages Appendix F adding custom paragraphs 24 47 employer information 279 firm information 12 preparer information 14 statements explanations to a return 167 student records ETC 245 add on fees 12 address book Drake e mail 256 addresses change of 162 foreign for tax firm 12 in care of 84 military 84 taxpayer 84 adjusted basis tracking 110 adjustment fields 21 60 ADMIN logging in as 7 administrative options setup 26 administrative rights assigning 16 administrator login see also ADMIN logging in as in CSM 234 in ETC 239 245 Tax Year 2011 Index passwords 11 Scheduler options 72 alimony 93 121 Alternative Minimum Tax AMT data entry of 124 amended returns 157 American Opportunity Credit 121 amortization codes 151 schedules 278 applications for bank products 190 195 appointment reminders 77 appointments see also Scheduler calendars 74 changing details of 79 on the Home window 50 overlapping 78 private 77 recurring 77 rolling over from prior year 77 scheduling 76 searching 79 Archer MSAs 115 archiving returns 185 186 assets depreciable 148 group sales 152 on Schedule C 95 sales of 95 section 179 expensing 149 sold 152 traded 100 associating two screens in data entry 61 attachments DDM files 301 e mail 254 Form 709 160 unformatted schedules 168 audit log DDM 311 auto expenses 153 154 automated backup of files 267 automatic updat
53. 20 database 60 Tax Year 2011 Xix Drake Software User s Manual Tax Year 2011
54. 2011 Drake is working in conjunction with the banks listed in Table 7 1 to provide taxpayers access to bank products Table 7 1 Drake Banking Partners Bank Phone Website Advent Financial 866 655 2340 http adventtax com EPS Financial 877 801 4411 http epsfinancial net Republic Bank amp Trust 866 491 1040 http republicrefund com River City Bank 888 820 7848 http rcbral com Tax Products Group 800 779 7228 http cisc sbtpg com This chapter covers requirements for you and your clients processes for setting up your software for offering various banking options and data entry for these products It also explains what these products are and provides valuable information you will want to review in addition to the information already provided by Drake and your banking partner Tax Preparer Requirements Tax Year 2011 IRS Regulation 7216 provides guidance to tax preparers regarding the use and disclo sure of their clients tax information to parties outside of the tax preparer s firm The Consent to Use of Tax Information must be signed and dated by the taxpayer and spouse if married filing jointly before the return is prepared The Consent to Disclo sure of Tax Information must be signed and dated by the taxpayers before the return is e filed and the information submitted to a third party 187 Tax Preparer Requirements Drake Software User s Manual Drake offers several options for making t
55. 208 Form 8801 Credit for Prior Year Minimum Tax Individ uals Estates and Trusts 41 129 140 Form 8812 Additional Child Tax Credit 139 Form 8814 Parents Election to Report Child s Income 131 Form 8815 Exclusion of Interest from Series EE and I U S Savings Bonds Issued After 1989 162 Form 8820 Orphan Drug Credit 129 Form 8822 Change of Address 162 Form 8826 Disabled Access Credit 129 Form 8828 Recapture of Federal Mortgage Subsidy 131 Form 8829 Expenses for Business Use of Your Home 154 Form 8834 Qualified Electric Vehicle Credit 129 Form 8835 Renewable Electricity Refined Coal and In dian Coal Production Credit 129 Form 8839 Qualified Adoption Expenses 129 Form 8844 Empowerment Zone and Renewal Community Employment Credit 129 xi Index Form 8845 Indian Employment Credit 129 Form 8846 Credit for Employer Social Security and Medi care Taxes Paid on Certain Employee Tips 129 Form 8857 Request for Innocent Spouse Relief 161 Form 8859 D C First Time Homebuyer Credit 129 Form 8862 Information to Claim Earned Income Credit After Disallowance 162 Form 8863 Education Credits 121 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 129 Form 8866 Interest Computation Under the Look Back Method 162 Form 8867 EIC Preparer Checklist 138 Form 8873 Extraterritorial Income Exclusion 122 Form 8874 New Markets Credit 129 Form 8879 IRS e file Signature Authori
56. 3 4 524 4644ud dee rnt cea edd dea E deed hb Sob aged dale bla dol acd weeded dale 71 E filing Preparation 0 ccc ccc ee ene e nent eee a nent ne E RAN 81 Ret rn Preparato Messes a EEE 83 Taxpayer Demographics ece errer cba neh neat sada eE E E e e e 83 EX IMPtlONS as e pege cnn eres EWA Adie Wh Re boa ET E E E E E E Ee E EE E E Aas 84 Personal Service Income W 2 1099 MISC 2 0 0 ccc cette nee n ene n ene 86 Passive and Investment Income 1099 DIV etc 2 0 cece ene ees 89 Taxable Refunds 03 i sista citoel bhae cee ciara nba eed chew eel tneiaes toe ees bebieuc 4 92 PVT OMY greas Sis ste oes ick fd i a arse eats Bre eater caliph oe nies dos fee ees foe Ek sich acide nes Acie 93 Self Employment Income Schedule C 0 tte eee e een n eee 93 Sales Of ASsets aia eves en race ecw nl ok Race abana chien hie gees eee Shida gud he ot E wa oa anRlesd E 95 Retirement Incomes c 06 6 cuca dae ces eae Hence eke Uae a ae Se ae dea G gua Gudea Gaal eee 102 Supplemental INCome lt 025 55 4 c8e 0bed4 26 Nooo a a a ww oe hel Stes 104 Farm INCOM se Saad oe garrisons e tern ences acs cea eee teas we ati nse Poh aca Gr ace Marat eee 113 Unemployment Compensation 0 0 0 eee een n ene n ete n nee 114 Social Security and Railroad Benefits 0 ccc cece ene n eens 115 Other Income 4 626 ccs ones eth n ceed bbae ce bine bee Medd cee eta dee eee bese nds 115 Educator EXPENSES ccc pee cee a eiaebddueaendh saw
57. 4972 Tax on Lump Sum Distributions 131 Tax Year 2011 Index Form 5405 First Time Homebuyer Credit 101 140 Form 5695 Residential Energy Credits 126 Form 5884 Work Opportunity Credit 129 Form 5884 A Credits for Affected Midwestern Disaster Area Employers 129 Form 6198 At Risk Limitations 95 105 Form 6251 Alternative Minimum Tax Individual 22 124 Form 6252 Installment Sale Income 99 153 Form 6478 Credit for Alcohol Used as Fuel 129 Form 6765 Credit for Increasing Research Activities 129 Form 6781 Gains and Losses From Section 1256 Con tracts and Straddles 95 Form 8082 Notice of Inconsistent Treatment or Adminis trative Adjustment Request 122 Form 8275 Disclosure Statement 161 Form 8275 R Regulation Disclosure Statement 161 Form 8283 Noncash Charitable Contributions 123 Form 8332 Release of Claim to Exemption for Child of Divorced or Separated Parents 161 Form 8379 Injured Spouse Allocation 161 Form 8396 Mortgage Interest Credit 129 Form 8453 U S Individual Income Tax Transmittal for an IRS e file Return 218 Form 8582 Passive Activity Loss Limitations 95 105 108 Form 8582 CR Passive Activity Credit Limitations 128 Form 8594 Asset Acquisition Statement Under Section 1060 162 Form 8609 Low Income Housing Credit Allocation and Certification 129 Form 8611 Recapture of Low Income Housing Credit 131 Form 8615 Kiddie Tax 131 Form 8633 IRS e file Application
58. Check for state e filing mandates Mandates vary from state to state see Appendix E Ll Check state requirements for business returns E filing requirements vary Tax Year 2011 A 1 Drake Software User s Manual Contact Drake E Notify Drake of changes Inform us of changes to your firm s EFIN phone number address contact person e mail address etc E mail accounting drakesoftware com call 828 349 5900 or make changes online at the Drake Support site Prepare to Offer Banking Options E E O O Choose your bank Complete a bank application at the Drake Support site Decide which disbursement methods to use For example EPS Financial offers e Collect Basic Deluxe and Elite Also the E1 Visa Prepaid Card can be used in conjunction with banks other than EPS Complete other required applications Complete any application or contract that your chosen bank may require in addition to the bank application at the Drake Support site Order check and or card stock Test print check After installing the software test print a check Set bank fees and complete Firm Setup in the software Review Equipment Staff Needs A 2 E E Oo O OoOvo O m Learn about tax law changes Do online research visit and study the IRS Web site and state tax departments sites Learn new phaseout limits Be prepared to explain to your clients why they no longer receive benefits they ve received
59. City Package Tax Type Description Massachusetts Corporation OtherTax1 Unitary OtherTax2 Annual Report S Corporation OtherTax1 Unitary Partnership OtherTax2 Nonresident Composite Michigan Individual OtherTax1 Michigan Business Tax OtherTax2 Homestead Property Tax Credit Home Heating Credit Minnesota Individual OtherTax1 Property Tax Credit Missouri Individual OtherTax1 Kansas City OtherTax2 St Louis Corporation OtherTax1 Kansas City OtherTax2 St Louis S Corporation OtherTax1 Kansas City OtherTax2 St Louis Partnership OtherTax1 Kansas City OtherTax2 St Louis Fiduciary OtherTax1 Kansas City OtherTax2 St Louis New Hampshire Individual OtherTax1 Business Tax OtherTax2 Interest and Dividends Corporation OtherTax1 Business Tax S Corporation OtherTax1 Business Tax Partnership OtherTax1 Business Tax OtherTax2 Interest and Dividends Fiduciary OtherTax1 Business Tax OtherTax2 Interest and Dividends New Jersey S Corporation OtherTax1 Composite Partnership OtherTax1 NJ 1065 OtherTax2 Composite Fiduciary OtherTax1 Composite Tax Year 2011 C 5 Appendix C Keywords Drake Software User s Manual Table C 1 Letter Keywords Other Tax Types for State Packages State or City Package Tax Type Description New York Individual OtherTax1 IT 204 LL OtherTax2 MTA 6 MCTMT Corporation OtherTax1 CT3M 4M Partnership OtherTax1 IT 204 LL New York City Individ
60. Click Email The Compose Message window shows the client s data file attached ese to the message Figure 10 17 mail F Drake 2011 Email Compose Message z i J To Attach Help Exit Attachments 4FE97D71 DI1 support drakesoftware Subject Question about K1P Attachments Add Regarding our phone conversation about data entry on the K1P screen have attached the requested data file Sincerely Danny Dood The Tax Dood Inc OAE e e E O N E messianitite ene Drm gpnetn ren ner Figure 10 17 E mail Compose Message window with data file attached 3 Complete the To and Subject fields required and compose your message 4 Click Send The e mail with the client data file attachment is sent to the recipient You can add other attachments to the e mail using the Add button NOTE or the Attach icon in the Compose Message window For more information see Attaching Other Types of Files on page 255 From the To e mail a client data file from the Home window Home Window Select Help gt E Mail The Inbox window is displayed Click New to open a blank Compose Message window emt 3 Click Add to open the Attachments dialog box Figure 10 18 In the SSN EIN Search text box enter the SSN or EIN of the file to send item 1 in Figure 10 18 ND A 254 Tax Year 2011 Drake Software User s Manual Interactive Support Attaching Other Types of Files
61. Code lt clicking in an overpayment code field and pressing F1 Table 5 12 Overpayment Codes in Drake OP Description Code blank Does not apply overpayment to 2012 refund entirely A Applies the overpayment to the vouchers in order until it is completely applied R Applies overpayment to first voucher and refunds the remainder E Makes the estimate equal to the overpayment O Applies the overpayment to the 2012 estimate but does not print any vouchers 4 Applies the overpayment to all four vouchers equally Underpayment of Estimated Tax By default the software calculates the estimated tax penalty but does not generate Form 2210 unless there is an underpayment and the form is required If Form 2210 is required mark the reason for the requirement in the upper left corner of the 2210 screen Tax Year 2011 135 Estimated Taxes Drake Software User s Manual This default setting can be disabled for all returns in Options Setup or it can be changed for a single return in the 2210 Options section of screen 1 Figure 5 45 2210 Options 2210 Code 2010 Fed tax 2010 State tax Figure 5 45 2210 Options section of screen 1 2210 Codes To print or suppress Form 2210 or Form 2210F for a return select one of the follow ing from the 2210 Code drop list Table 5 13 2210 Codes in Drake 2210 Code Program Action blank Uses the default setting in Setup gt Op
62. Eli gible Small Business Credits Part III was added to the form this year to reflect all the general busi NOTE ness credits reported on Form 3800 and to identify the type of credit being reported General Business Credits GBC or Eligible Small Busi ness Credits ESBC New for 2011 the GBC screen is used for reporting the following types of informa tion e Data for current year credits are reported on forms Drake does not support To enter data for a credit programmed into Drake use the credit s screen for exam ple use the 8820 screen for Form 8820 Orphan Drug Credit e GBC and ESBC carryforwards and carrybacks 126 Tax Year 2011 Drake Software User s Manual Passive Activity Credits Passive Activity Credits The Passive Activity Credit Carryover PACR screen allows you to enter passive activity credit amounts in a central location in the software rather than on individual credit screens This enhancement streamlines data entry and increases the number of passive credit carryforward amounts that can be updated from year to year Entering Credit Carryforward Amounts To enter credit carryforward amounts Screen code 1 Open the PACR screen Figure 5 37 accessible from the first Credits tab PACR Passive Activity Credit Carryover tss I zl st z For z mcl Form Amount Form Amount Figure 5 37 PACR screen 2 After making TSJ and ST selections as appli
63. Enter the SSN or EIN for the return in the Open Client File dialog box Pole dialog box 3 Press Open and then click Yes When prompted you can begin entering data for the new return Customizing the Display Because custom views are saved and displayed according to the logged in preparer each preparer can set his or her own display Changing the custom view in the CSM does not change the custom view in the PCM To change the PCM s custom view select Customize NOTE Display from the right click menu This action opens the Customize Display dialog box This dialog box is also used for the CSM as described in the following steps To customize the CSM display Shortcut Press 1 Click Customize In the Column Layout tab of the Customize Display dialog CTRL D to open the Customize box Available Columns are listed in the left pane and Columns in Current Display dialog View are listed in the right box 230 Tax Year 2011 Drake Software User s Manual Searching Updating and Filtering and Viewing Fa pi Drake 2011 CSM Customize Display x Column Layout The Column Layout tab allows you 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 Status Settings Available Columns Columns in Current View a ID Number a Fi
64. Filename for Bitmap Logo text box or use the Browse button The full path and filename are required To use the simple default graphic enter C Drake11 CF LOGO BMP C indicates the drive letter to which the program is installed Change if necessary Leave blank for no logo Click OK The left margin of a letter can be changed to suit your printing needs To change the left margin of the default letter 1 2 In the Client Communications Editor select Setup gt Letterhead and Margins Enter a number under the Left Margin Adjustment box Figure 2 20 35 Software Setup Naming a Template Press CTRL N to quickly access the Rename Letter dialog box Restoring a Template 36 Drake Software User s Manual Drake 2011 Letterhead and Margins Setup gt Letterhead Logo Setup Use this screen to specify the presence and location of logo and firm information on letters and to adjust the left margin of all letters To choose a logo either type the path and file name or click Browse Letter and Bill Indicators Coordinates I Use Logo on Letters Left most Column for Lago 8 I Use Firm Info on Letters Top most Row for Logo 3 I Use Logo on Bill Left most Column for Firm Info 25 I Use Firm Info on Bill Top most Row for Firm Info 4 Bitmap Path and File Name Path and File Name for Bitmap Logo C Users esutton Pictures grumpy bmp Note A full path and file name are required to print a
65. I Owned jointly ill Consolidated report V Fat aii nA BER Figure 5 58 Select one box to indicate the nature of the account e Section 3 For Part III only This section must be completed only if Owned Jointly IID was selected See Figure 5 58 e Section 4 For Part IV V only This section must be completed only if item IV or V was selected See Figure 5 58 The program generates only those pages of the form that are applicable For example if Owned Jointly III is selected only pages 1 and 3 of the form are printed since page 2 covers only accounts that are owned separately selection II in Figure 5 58 and page 3 covers only jointly owned accounts Page contains taxpayer data Section 4 applies to either signature but no financial interest IV or consolidated report V If IV is selected and a First name is entered NOTE on line 36 the nine digit Account owner ID number from line 35 will be printed as an SSN If V is selected or if IV is selected and line 36 is blank the Account owner ID number will be printed as an EIN Features for Late Filed Returns Due to enhancements made to the program in the spring of 2008 Drake now calcu lates the late filing penalty late payment of tax penalty and interest on late filed 1040 returns You can manually enter interest rates as needed and override certain compo nents such as interest owed that affect system calculations of penalty an
66. If a single macro is to allow data entry in multiple fields use heads down mode and right angle brackets gt to jump to a field Tip Example The macro EF gt 25 gt X gt would open the EF screen EF gt toggle heads down data entry mode to ON enter field 25 25 gt select the box to Suppress Federal State EF and all Bank Products x toggle heads down mode to OFF and save the data and escape the EF screen Tax Year 2011 Drake Software User s Manual Software Setup Table 2 13 Macro Symbols Symbol Action Move cursor back one field If the lt symbol is inserted in front of selected data in a macro the pro gram moves the cursor back one field from the active field before inserting the data If inserted after the data the program inserts the data in the active field then moves the cursor back a field Move cursor forward one field If the gt symbol is inserted in front of the selected data in a macro the program jumps ahead one field from the active field before inserting the data If inserted after the selected data the program inserts the data first and then moves the cursor forward a field Escape If the symbol is inserted after the selected data in a macro the program inserts the selected data saves the data and exits the screen Insert date If D is part of a macro the program enters the current date into the active field Launch heads down data entry mode
67. If the return is considered eligible for e file a letter for an e filed return is generated You can over ride these defaults for the federal and state tax returns and extension applications To override the defaults go to the LTR screen and select EF or Paper for the selected returns Figure 2 25 To indicate one or more state returns select state abbreviations from the drop lists provided In the Figure 2 25 example the letter will be worded as if both the federal and Arizona returns are going to be e filed even if the return is not eligible for e file Override Options Letter Paragraph Override Setup Options Override 4040 M EF J Paper Federal Extension EF J Paper M EF I Paper Customized Supplemental Letter M EF Paper D EF J Paper M EF IT Paper Privacy Policy EF Paper EF J Paper FederalAmended V EF Paper EF J Paper psa M EF JT Paper fia D EF J Paper EF J Paper N _v Engagement Letter JALIL Figure 2 25 Select EF to force a letter to be printed as ifthe return is eligible for e file From Setup gt Options Optional Documents you can select to have the customized supplemental letter engagement letter and privacy policy letter printed with all returns To override the established defaults for a single return go to the return s LTR screen and select Yes or No for the desired letter types In Figure 2 25 the user has selected not to have the engagement letter printed
68. Import 2 Inthe W2 Download dialog box select Taxpayer or Spouse as applicable The W2 Import name and SSN of the selection is displayed below the Taxpayer Spouse drop list Schedule D Import X Drake 2011 W2Download ko a Ea Taxpayer Spouse Taxpayer Mary Cann 111223333 PIN 10203040 Download Progress Figure 5 7 Name and SSN appear in W 2 Download dialog box 3 Enter the client s PIN supplied by the employer In some cases the employer will provide the format for a PIN for NOTE instance if the company uses the last four digits of the employee s SSN but will not provide the PIN itself 4 Click Download and then click Yes to continue 5 When the W2 Download Complete message is displayed click OK The W2 screen for the taxpayer will now contain the downloaded information Purchase W 2 downloads in sets of 15 25 per set Each instance of a downloaded W 2 counts as one against your total even if the same W NOTE 2 is downloaded twice If however the client has W 2s from multiple employers and all W 2s are downloaded in the same session it counts as only one download If the W 2s are downloaded in separate sessions each session counts as one against your total 1099 MISC Screen code 99M Use the 99M screen to enter data from Form 1099 MISC To associate the 99M infor mation with a specific line or form within the return make a selection from the For drop list at the
69. Inbox window click the Address Book button to open the Edit Address Book dialog box 2 Click Add to open the Email Address Book dialog box 3 Enter first name last name and e mail address Click Save 4 Click Done You can also import addresses from a spreadsheet into your Local Address Book Your spreadsheet must have the proper headings before you can run the import To create a file to be imported into the e mail program 1 Using a spreadsheet program such as Microsoft Excel create three columns Last Name First Name and Email Address Figure 10 20 Tax Year 2011 Drake Software User s Manual Interactive Support Import Report Generated Recipient List To te Ce ie YY To A B 1QLast Name FirstName Email Address 2 Sample Ella ellasample net net 3 Rogers Beau beaurogers net net 4 Sample Hugh hughsample net net 5 Duggan Regis regisduggan net net A I SA AT a O ee ae aed Figure 10 20 Row headings must be Last Name First Name and Email Address Enter last names first names and e mail addresses of all clients to be imported Click File gt Save As Browse to the desired location and assign a file name From the Save as type drop list select CSV Comma delimited csv Click Save DnR eh To import the file into your Local Address Book 1 From the Email Inbox window click the Address Book button to open the Edit Address Book dialog box 2
70. Joint Return Tax Year 2011 TS or TSJ Select T if a screen applies to the primary taxpayer S if it applies to the spouse or J if it applies to each spouse equally Default is T e F All data on a screen is automatically carried to the federal return as applica ble Select zero 0 from the F drop list to prevent a screen s data from being car ried to the federal return e ST Code indicates whether the screen data should be used in calculating a spe cific state return If this field is blank the software uses the resident state by default The data is not carried to any state or city if a zero 0 is selected here e City Code indicates the source of the income on city returns Press F1 in a screen field to view all acceptable codes for that field Drake allows you to associate one screen with another such as when an asset on one screen should be associated with a Schedule C For example to associate an asset screen to a C screen complete the For field and the Multi form Code field if appli cable at the top of the asset screen For the For drop list select the form to be associ ated with the open screen as shown in Figure 3 19 For 7 A C E F 2106 4835 AUTO 8829 K1P K1S J Multi form code 2 1 999 1 is assumed if left blank Date Description Acquired Cost Basis em ge PEro e tien ai ne COUO RP nna nahn tnth ne nance ton tan tn F Figure 3 19 In this example t
71. Manual Setting Up a Report Setting Up a Report When planning reports for your office consider beginning with one of Drake s pre defined reports which may already include most of the information you want You can create a new report if none of the predefined reports meet your template needs The steps for these procedures are similar but it may be easier to learn how to create reports by working first from a pre defined report Several tasks some of them optional are involved in creating a report These tasks are listed in Table 12 2 and are described separately in the following sections Table 12 2 Tasks Involved in Creating a Report Task Window Used Assign report title and description Assign columns keywords Report Editor Step 1 Formatting of Reports Assign filters Assign sorting summary order Have program summarize report data Have program use prior year data Assign a report output file name Report Editor Step 2 Filtering of Reports Assigning a Title and Description Tax Year 2011 The Report Title is displayed on the actual report the Report Description is for informational purposes and is displayed in the Report Manager s Sample Report box To assign a new title and description to a report in the Report Manager 1 Select the report to use as a template 2 Click Edit Report The Report Editor Step 1 window is opened Figure 12 2 285 Setting
72. No 1545 0074 For the year Jan 1 Dec 31 2010 or otter tu year beg hiig 2010 e1dhg Label me hstrections Your firstiame and hattal Lastaane Jeff Your social secertty sumber Brown 400 00 1003 on page 14 Use te PS Wel Otherwise phase prit ortpe Presidential Election Camy Lastrame Brown Majohtiet spouse s Trstaame and intial Wanda Sporse s social security r mber 400 00 1009 Home ackiress number and street you kaw a P O bow see page 14 5 Third Test Street Make sure the SSN s above A and on line 6c are correct aign gt Check here if you or your spouse if filing jointly want 3 to go to this fund see page 14 gt O You Ciy ta OF postottice state anc ZIP cock Mot have a breki akiess see page 14 New York NY Checking a box below will not change your tax or refund O Spouse Filing Status Checkonh one bor 3 Exemptions ttmore than Der dependent see page 17 and check bere Single 4 Married filing jointly even if only one had income Head of borsebokl with qaalttyig person See page 15 Mte qtaltifag person k achikibitiotyotr dependent erer th chikfs ame bere Marred hg separate y Ever sporse s SON above andi tell same tere 5 Qualifying widower with dependent child see page 16 Bores checked o 6a and 6b No ofchikires or 6c who Inecwithyor LiT did vot ihe witi c Dependents Depe rch ats pe sockalsecur
73. PDF printer optional Also in the Folder Structure section is the option to add a custom folder in addition to the default folders e Click one of the folders in the tree of folders to indicate where the custom folder should be stored in each client s main folder or in each client s 2011 folder See Figure 13 8 on page 307 and Figure 13 8 on page 307 for exam ples of folders in the file structure The new folder will be inserted one level below the selected folder e Click Add e Enter a custom folder name e Click OK e Mark the Apply this layout check box if you want to insert the new folder into existing and new client files otherwise the new folder will be inserted only into new client files e To change the name of the new folder click Edit To delete the new folder click Remove optional To password protect the DDM add and confirm a password Not all users have access to this feature For more information on passwords see DDM Access Options following 5 Click Save and then click OK NOTE If a custom folder is added it will appear in the specified folders for all new clients in 2011 The DDM Integration Options dialog box shows the location of the DDM on your computer and indicates which version of DDM you are using To view or change this information go to the Drake Home window and select Setup gt Printing gt Document Manager See Figure 13 3 The DDM Integration Optio
74. PIN 1040 only Require Ready for EF indicator on EF screen Requires that the Ready for EF indicator on the EF screen be marked before a return can be selected for e filing Lock client data file after EF accep tance Locks the client s data file once it has been e filed Opening a locked file requires you to acknowledge a warning screen before you can edit the return You can also access a locked file at Tools gt File Maintenance gt Unlock Client Files Print 9325 when eligible for EF Suppress federal EF Prints Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically for every eligible return Prevents e filing of the federal return Print EF status page Generates the EF Status page for any return that is eligible for e file Alert preparer when bank product is not included Alert the preparer via an EF message that a return does not include a bank product To override see Overriding Bank Product Alert on page 218 Activate imperfect return election in data entry Activates Imperfect Return Election check box on EF screen in data entry Allow selection for EF from the Cal culation Results screen Allows preparer to send the currently active return directly from the Calcu lations Results window to the e filing queue The return is then transmit ted automatically the next time you e file returns Enable prompting before aut
75. Preseason Checklist for a convenient list of preseason tasks to consider as you prepare for tax season Prior Year Updates If your firm used Drake last year you can save time by updating prior year returns settings letters and EIN data Before updating you should 1 back up your files and 2 ensure that your program s 2010 data path points to your firm s 2010 data files To check the prior year data path 1 Log in to the program as a user with administrative rights 2 From the Home window select Setup gt Directories Paths 3 Look at the Path for 2010 Data field Figure 4 1 ti et fst sf nag tg TO pag a itp ap Oe INT Paths determined by configuration selected above Admin Override V Path for 2011 Data SDRAKETISDT HS Path for Print File SDRAKE11 PF Shared location for all other shared files EF Firm Pricing Letters CSM etc optional a Help OK Cancel Figure 4 1 Ensure that the Path for 2010 Data field is correct If the correct path is not displayed mark the Admin Override check box to acti vate the field Make the necessary changes and click OK Tax Year 2011 65 Prior Year Updates Drake Software User s Manual Updating Client Files By default the following information is brought forward from the prior year e names and addresses depreciation e birth dates e filing statuses e occupations e dependent names e business names e installment sales e ID numbers You have the opti
76. Report Viewer which allows options for printing and export ing the reports To access reports click Print in the Group Security toolbar The pro But gram displays the Group Security report first To access the Group Preparers report click Exit in the Report Viewer toolbar Once the Group Preparers report is open click Exit again to return to the Group Security dialog box Other Other features available under Setup gt Preparer s are the ability to create a pre Features parer s daily schedule the ability to print a list of preparers and the ability to run a search on preparers To access these features use the following procedures Tax Year 2011 17 Software Setup Schedule aad Print Search Drake Software User s Manual To create a preparer s daily schedule oe P PS From the Drake Home window go to Setup gt Preparer s Select a preparer and click Edit Preparer Click Schedule Mark the Selected day s for scheduling Select in and out times for the selected days Click Apply and then click Save to save the schedule See Scheduler on page 71 for more information on using the Drake Scheduler To print a list of preparers entered into the program 1 APON From the Drake Home window go to Setup gt Preparer s Click Print The Report Viewer displays the current preparer listing Click Print and then click Print again Click Exit to close the Report View
77. S Individual Income Tax Return Arizona 10404 PG U S Individual Income Tax Return California 10404 PG2 U S Individual Income Tax Return Colorado 1040EZ PG ncome Tax for Single and Joint Filers Connecticut E 1040EZ PG2 ncome Tax for Single and Joint Filers District of Columbia 1040NR PG U S Individual Nonresident Income Tax Return Delaware 1040NR PG2 U S Individual Nonresident Income Tax Return Wilmington 1040NR PG3 U S Individual Nonresident Income Tax Return Florida 1040NR PG5 U S Individual Nonresident Income Tax Retum Georgia 1040NR PG4 U S Individual Nonresident Income Tax Return Hawaii 1040SP PG U S Individual Income Tax Return Spanish lowa 1040SP PG2 U S Individual Income Tax Retum Spanish 1040V PG ndividual Payment Voucher Illinois 4 indiana 1040x PG ndividual Amended Income Tax Retum 1040 PG2 ndividual Amended Income Tax Retum tale 1045 PG Application for Tentative Refund Louisiana 1045 PG2 Application for Tentative Refund Massachusetts 1045 PG3 Application for Tentative Refund Maryland 1045 PG4 Application for Tentative Refund Maine 1098_C PG Contributions of Motor Vehicles Boats and Airplanes Michigan 1099G PG Certain Government Payments Detroit 1099R PG Distributions from Pensions Hudson ELOSSA PG Distributions from Pensions Annuities etc Port Huron De elp Search View Print Exit Form categories Form names Form descriptions Figure 11 3 Blank Forms window 264 Tax Year 2011 Drake Softw
78. Setup override fields on screen 1 Be aware of the following information when determining what information is to appear on the return e Because both the firm and ERO information is determined by the return s pre parer a selection in the Preparer drop list will cause both the firm and ERO information to be overridden with the corresponding information associated with the selected preparer 44 Tax Year 2011 Drake Software User s Manual Making Changes on the Fly Overriding Other Preparer Information e If for Preparer or Firm you select NONE Self Prepared Return No Paid Preparer nothing will be printed on the applicable lines on the return For ERO the program uses the information entered on the EF tab in Setup gt Options e Data entered on the Preparer Information Overrides PREP screen overrides the default and the corresponding Return Options selections on screen 1 ERO information is not affected by PREP screen entries For more on the PREP screen see Overriding Other Preparer Information following The Data Entry field shown in Figure 2 22 is for tracking purposes only e A firm or preparer must be entered in Setup gt Firm s or Setup gt Preparer s in order to show up as an option in the override drop lists on screen 1 The PREP screen in data entry allows you to override the following data for a return e Third party designee See Third Party Designee on page 144 e Federal prepa
79. Software User s Manual tracking return data TRAC screen 169 Trades GruntWorx function 314 troubleshooting acknowledgments in e filing 214 check printing 203 204 e file transmissions 212 return selection for e filing 212 TS TSJ field 61 tutorials 244 U unemployment COBRA 132 compensation 114 unemployment compensation 93 unformatted schedules SCH screen 167 unlocking client files 270 Update Manager 261 updates access to 26 automatic 262 installing 261 notification of available 50 updating CSM 232 from the prior year 65 68 NOTE screens from year to year 167 V verification fields see flags verifying SSNs 20 W 2 amounts 21 86 Veriscom ABCvoice files 224 videos 245 viewing see also printing bank decline reasons 194 220 blank forms 264 CSM filters 232 deleted records 234 earned revenue from add on fees 12 EF reports 222 letter keywords Appendix C loan status codes 194 220 processed acknowledgments 209 report keywords Appendix C reports 292 sample letters 37 scheduled appointments 79 tax returns 174 Tax Year 2011 Drake Software User s Manual W W 2 import 88 watermarks 38 39 Windows operating system default printers 38 enabling standard keystrokes 20 using system colors 37 Windows operating system requirements 6 worksheets AUTO 153 carryover 22 detail Ctrl W 57 58 next year depreciation listing 42 sale of home HOME screen 101 sales tax 170 Z ZIP code auto fill
80. Sold Assets To indicate the sale of an asset for depreciation purposes complete the applicable fields in the If sold section of the 4562 screen See Figure 5 54 Group Sales To enter group sales in Drake 1 Open a 4562 screen for the first asset of the group sale 2 Complete the applicable fields for the asset including Date sold and Property type fields and all fields under Group Sale Information Figure 5 54 sod ts z Fl st A pul Group Sale Information Group Sale mimber ee ee Group sales price Group expense of sale Figure 5 54 Screen 4562 fields to complete for the first asset of a group sale 3 Open a 4562 screen for the next asset in the group sale 4 Complete the applicable fields for the asset In the If sold section only the Date sold Property type and Group sale number fields are required 5 Repeat steps 3 and 4 for all assets in the group sale 152 Tax Year 2011 Drake Software User s Manual Auto Expenses Complete the Date sold Property type and Group sale number NOTE fields for all assets in a group sale The Group sales price and Group expense of sale are required for only the first asset listed The sales price and the expenses will be pro rated among the assets based on the basis of the assets and will flow to Form 4797 Sales of Assets Form 4797 If data is entered for Date sold and Property type the asset data flows to Form 4797 Sales of Sales of Assets
81. Tax Year 2011 149 Depreciation Indicating Sec 179 Expensing 150 Drake Software User s Manual To expense QRP under section 179 1 Open screen 4562 and complete the For Description Date Acquired Cost Basis Method and Life fields for the property See Table 5 17 Required Fields on 4562 screen 2 Inthe 179 expense elected this year field enter the amount being elected maxi mum allowed is 250 000 3 From the Type drop list of the Qualified Real Property section located in the lower right corner of the 4562 screen select the property type When the return is calculated the program expenses the amount entered under section 179 and depreciates any remaining cost using the method selected from the Method drop list on screen 4562 Indicate section 179 expensing on the 4562 screen In most cases you do not have to use screen 6 which contains override fields for Form 4562 Part I Election to Expense Section 179 If screen 6 contains a section 179 expense override clear that field and enter the amount on the 4562 screen The entry appears on Form 4562 To expense the entire amount of an asset under section 179 select EXP as the depreci ation method To expense only a portion of the tangible property under section 179 enter all information as if depreciating the full amount then enter the amount to expense in the 179 expense elected this year field Figure 5 53 An amount in this field overrides system
82. The Windows Start and Office buttons are located at the lower left corner of your screen Type F DRAKE 11 NWCLIENT NWCLIENT EXE substituting your server drive letter for F Click OK Windows 7 users Press ENTER you will be able to access the Drake program from any of these workstations Next set up directories and paths This can be done on either the server or a worksta tion and needs to be done only once To set up directories and paths 1 2 3 From the Drake Home window select Setup gt Directories Paths Select 2 Software installed only on Server Setup Directories and Paths Select the appropriate configuration for your office setup below It is not recommended that these __ settings are changed during the season Configuration Choose the appropriate Configuration below Important If necessary consult with your technician or contact Drake Support for assistance These settings should not be changed during the season unless instructed to do so by Drake Support r Network Options 2 Software installed only on Server preferred network setup IV N WClient link installed on workstations 3 Software installed on server and workstations secondary network setup r P Indicate server drive letter for sharing client files N Al To access all other oie Spa senile im Pacing Letters gte Figure 2 3 Select network option 2 Click OK The server only
83. WK3800CO Printed for each current year credit carryover to 2012 includes the credits listed in order of allowed use from Form 3800 instructions original amount of credit original credit allowed year and amount of credit carryback used and carryfoward amount S Corporation Package 1120S As with the Corporation package the S Corporation package s INC and DED screens have been redesigned for 2011 The INC screen includes all items of income reported on Form 11208 page 1 lines 1 through 5 that do not require a separate form or sched ule or additional information As in the past the INC screen also includes fields for the most common items on Schedule K The redesigned DED screen includes all deduction items reported on Form 1120S page 1 lines 7 through 19 that do not require a separate schedule or form Partnership Package 1065 As with the Corporation and S corporation packages the Partnership package s INC and DED screens have been redesigned for 2011 The INC screen includes all items of income reported on Form 1065 page 1 lines through 7 that do not require a sep arate form or schedule or additional information As in the past the INC screen also includes fields for the most common items on Schedule K The redesigned DED screen includes all deduction items reported on Form 1065 page 1 lines 9 through 20 that do not require a separate schedule or form Tax Exempt Package 990 Enhancements to the 990
84. Worksheets All worksheets produced with the return Miscellaneous Various items such as W 2 forms letters overflow statements deprecia tion lists bill summary direct deposit summary notes etc Notes Messages_ Notes and EF messages only State All forms for filing the state tax return Gift tax Form 709 documents if applicable Tree View A tree view directory of all forms worksheets and other documents in a return allows Directory you to view at a glance the components of a return Expand or collapse the tree as necessary for your viewing needs Viewing The preview panel provides a preview of a selected document within the return To Panel preview a document click the document name in the tree view Printing a Return You can print selected forms selected sets of forms or individual forms in a return The instructions in this section refer to Enhanced mode If you are using Basic mode see the Fl Help resource in the program for printing instructions NEW FOR 2Ull Printing To print tax return forms and other documents Forms ina Return 1 Open Enhanced mode for a return The All Forms tab is shown by default 2 Collapse or expand the tree view as needed and select the forms to be printed by marking the check box to the left of each form To print all forms in a set select all of the boxes in the tree view under All Forms NOTE As explained in the procedure that follows you can opt to have Adobe l
85. a partnership Partner Basis 1 a Taal EEE ee ia i t ANSE EAEE eee 2a Gain recognized on contribution of property eee e b Additional capital contribution and other current year increases 1 c Adjusted basis of property contributed eect d Partnership interest acquired other than by cash OF PrOPePty eee ecececsesscseeeseeseenesnesessnssneeneseceneeseneneeneensens 3j Increase for excess depletion AGjUStMENE eee eeeeesecsecseeseseceneneecseseeneensenecneenseneenesnssnsenesnssneenesncsnenenneneenees a Gainfom Section 179 asset disposWion Debt Basis 4 amp 7 A Parinot s share of pattnorstip NSD OS 2 5 ns B Partner s share of partnership liabilities from prior YOM ec eececeeeeecsecsesnessecsesneeneesesecsneesesucensensenecusensenees 6 WR CraaIShEc hI On Soe ee Figure 5 29 Partner Basis fields on Basis Worksheet screen The fields in the Partner Basis or Stock Basis for an S corporation and Debt Basis sections for the current year must be completed manually Data flows directly from the two K1 screens into the Current year NOTE losses and deductions column shown in Figure 5 30 Data entry for this column begins on the first Basis Worksheet screen and continues to the Basis Worksheet continued screen Calculating Loss allocation percentage is calculated by Pree a Taking the total losses and deductions allowed b Dividing them by the total losses and deductions to figure the loss allocation percentage c Multiply
86. additional Proforma Options dialog boxes appear Select additional options and click Pro NOTES cess 1040 1120 1120S 1065 etc to proceed In the Options dialog box you can click Test Print to test print a pro forma or organizer In the Batch Printing dialog box you can click Detail to preview the documents to be printed Preseason letters can also be printed in batches apart from proformas and organizers See Letters on page 274 The Drake Scheduler is used to set up appointments for preparers It has the following new features in 2011 e Ability to e mail individual appointment notifications from the Scheduler Detail Appointment window e Ability to print or e mail multiple appointment notifications using Tools gt Letters e Ability to drag and drop client names in the Scheduler to make setting up appoint ments easier Scheduler Modes Preparer Mode Front Office Mode Security Tax Year 2011 The Scheduler offers two levels of access preparer mode and front office mode Using preparer mode a preparer has full access to his or her calendars and can make appointments manage schedules and share calendars with other preparers Preparer mode is the default setting for Scheduler users and has three calendar types Calendar for current date Weekly Calendar and Preparer Calendars Designed for the receptionist and others who manage appointments but do not prepare tax returns front office mode al
87. an 1116 screen is to be linked with an INT or DIV screen for foreign interest or dividends enter a number into the FTC box of the 1116 screen Enter this same num ber on the INT or DIV screen For more on entering foreign interests and dividends see Foreign Interest and Dividends on page 91 124 Tax Year 2011 Drake Software User s Manual Child and Dependent Care Expenses Credit Required Statements A statement may be required with Form 1116 Use the SCH screen to attach a required statement On the SCH screen select the applicable 1116 item from the Type of Attachment statement number and title drop list If the return receives reject code 0973 on Form 1116 a statement must be entered as statement number 98 99 or 100 on the SCH screen This statement must indicate how the foreign currency was converted into U S dollars For information on adding unformatted statements in Drake see Unformatted Schedules on page 167 Child and Dependent Care Expenses Credit Screen code 2441 Use the 2441 screen accessible from the General tab for Form 2441 Child and Dependent Care Expenses Where to Enter Data Enter data on both the 2441 screen and on screen 2 for each dependent for whom expenses were incurred No Income for Spouse To qualify for the childcare credit parents must have earned income be full time stu dents or be disabled If a spouse does not have income but is disabled or a student then he or she can en
88. and MFC fields to associate the AUTO screen with the correct C screen Applying Auto Expenses to a Form AUTO screens can be applied to Schedules C E and F and Form 4835 Use a sepa rate AUTO screen for each vehicle A WK_ AUTO worksheet is generated for each AUTO screen created To apply an AUTO screen to a specific form select the form type from the For menu Use the multi form code MFC box as necessary see Associating One Screen with Another on page 61 for more on using the For and Multi form code boxes in Drake Tax Year 2011 153 Office in Home Drake Software User s Manual Business Mileage The 2011 standard business mileage deduction rate of 51 cents per mile was increased to 55 5 cents per mile starting July 1 Use the applicable fields on the AUTO screen to enter business miles driven in 2011 Prior Years Mileage The Prior Years Mileage fields allow you to keep a running total of the mileage cov ered by the vehicle since being placed in service The total amount is used to calculate the cumulative business percentage for the life of the vehicle It is also used to calcu late the business cost and sales price when the vehicle is sold Prior year mileage data is updated each year when you update your system IMPORTANT The business mileage fields must be completed to compute busi ness use percentage for depreciation Form 4562 Office in Home Screen code 8829 Enter information for Form 8829 Ex
89. and responsi ble official of the company not required for attorneys CPAs EAs officers of publicly held corporations or banking officials who have been bonded and finger printed within the last two years An established ERO must make changes to its e file application only if the informa tion in its original application has changed Changes should be made online If you plan to e file business returns this year after filing only 1040 IMPORTANT returns in the past you must update your e file application or your e filed returns will be rejected by the IRS To complete or update your e file application 1 Go to wwwirs gov 2 Click the Tax Professionals tab 3 Click e Services for Tax Pros from the menu on the left side of the page 4 Click Login if you ve registered before or click Registration Services if you haven t 5 Follow the directions on your screen To request federal e file program fingerprint cards contact Drake s Education Depart ment at education DrakeSoftware com call Drake at 828 524 8020 or contact the IRS e Help Desk at 866 255 0654 Obtaining an EFIN All tax preparers who plan to e file must have a valid EFIN Once your application is processed the IRS assigns the EFIN If your firm has applied for an EFIN but does not have one yet Drake will assign you a temporary EFIN Your temporary EFIN cannot be used to e file returns but it does allow you to transmit test returns When you rece
90. ange send ane se oat aloe 08 dbase i staal greene Eng Bod E 221 Copying EF Data 2 ccc haa ane aa coheed eh aa he eh E eRe Dde sede dea dag edinedannaeaneas 225 About State Eling ig deed ceded conde ok wea dh ded ee Od PO a wae aad glam nea wee be weed 226 Client Status Managlia aaas aariaa 227 Accessing the CSM i360 lt iis Cad eee Pee ad ei ed eben ded ba wie E E E E ORE AE EE 227 About Chent Statuses o 000 vadaiie boda die dada O4r ad e Baa allen dagen Gd R 227 Setting Statuses souk eee nde en bea ded Ede Dela e beeen Chater eek Rearmed acess odes 229 Adding a Client to the CSM een een nnn een e nents 230 Opening a Return from the CSM 0 een nent beeen nen eees 230 Customizing the Display 01 22 4044 Sin ned ines cede cee eet babs eneieesw neds EEE 230 Searching Updating and Filtering and Viewing 0 e eee eee eens 231 CSM Reports e ere ceed chaos a aie Cond Eee eo e Gens nhs ee ee wend eee dele ea deed ees 233 Exporting CSM Data 0 pa 6 e048 vane aa bled halla eee a A adnan tae aed e 234 Admin only Features 2 0 0 0 eee ene nee n nent eee e eens 234 Resources and Support siscccsccsicewisisnsanacennsnnnadioasaaaanenccastanieninaasetseesenmas 235 Drake Software Manual n n onanan annann 235 Online SUpPOTE essin Peete des dks a E A E R A E R inde A AEA as 236 Software SuppOrt 2 2 esc ceed e E Cheb E deeds E EE EE Re eA 249 Interactive SUpport meresi a hates Heh Na aa as fae dia Mare en Re Ma REA ood 252
91. bain peek bdd sad obadedewbad sare la en 117 Employee Business Expenses 00 ccc eee renren rrene enren teen ene 117 Health Savings Account HSA Deduction 0 00 t eee eens 118 Tax Year 2011 iii Table of Contents Drake Software User s Manual Moving Expenses siccaeeee Ae Oe eee DORE Dee EE MAS RIOR CAG E EE ees 118 Self Employment Adjustments o naana annene ce tne eee ent e nents 119 Penalties orse Hate ERE E eek hb Staten ica arta estes re pce AE Maecenas ed DOS Pee E 120 Alimony Paid iv ocak e 8 a eke SoS e RAE ee EAS es AE Sead teed bi een 2 Roe Bhs 121 TRA Adjustments oprinnen uta Madea bk oe alba ead ie eh oe acne ie A eee 121 Student Loan Interest Deduction 0 tn nee eee ene ne as 121 Education Expenses 24 1 0 6 04 nc ia a Woe alow aa da te dae waded daa ee dh ad Se 121 Domestic Production Activities Deduction 0 000 e eens 121 Other AGjUStMENtS 65 04 ode M aiii ode add de eae edhe bath eel ea aie Md SALAS ea deh 122 Standard and Itemized Deductions 1 0 2 0 e tet teen enna 122 Alternative Minimum Tax ceci eiee ce ee ene e nent nnn E EE 124 Foreign Tax Credit 0 4 sais es ond a AE tide Midd saw kin Saeed Paw nn del Saeed aed en 124 Child and Dependent Care Expenses Credit 0 0 0 cc ccc ect een t nee eees 125 Elderly Disabled Credit s ccc00 300 ches ge ntdee hed eee ohn keene edd Peed de eae eg Rae eee 126 Home Energy Credits 2 c00i4 cede bees wd whan Geant
92. be generated explanations provided e Number of appointments that had conflicts e Number of new appointments generated successfully In addition the report shows 1 which appointments had conflicts along with the new times scheduled and 2 the new times scheduled for all other appointments To undo batch generated appointments go to the Appointment Sched NOTE uler select Batch Appts gt Undo Batch generated Appointments and click Yes The batch generated appointments will be removed from the current year s schedule If an appointment conflicts with another you are asked if you want to save it anyway If Yes the calendar displays a Multiple Appts note as shown in Figure 4 16 Tax Year 2011 Drake Software User s Manual Scheduler Finding Next Available Appointment ra Find Next Appt Finding a Client Record Q Lookup Changing Appointment Details Tax Year 2011 l Figure 4 16 Notification of multiple appointments To view the multiple appointments scheduled double click the Multiple Appts row Appointments are shown in the Open Appointment grid To view appointment details double click an appointment To locate the next available appointment time in the Scheduler 1 From the Appointment Detail dialog box click Find Next Appt Choose a preparer from the Preparer drop list or select Any Preparer Select start and end dates The program searches all times within your date range P
93. been locked 1 From the Home window go to Tools gt File Maintenance gt Unlock Client Files 2 Enter the SSN or EIN of the return 3 Click Continue The file can now be modified in data entry 270 Tax Year 2011 Drake Software User s Manual File Maintenance Deleting Files from the Program Deleting Print Files Deleting Client Files A client file is created when a return is prepared A print file is a temporary file that is created when a return is calculated Print files are used for e filing and are automati cally removed from the system after the designated number of days See Table 1 6 on page 17 to view or change the number of days to store print files To manually delete print files 1 From the Home window select Tools gt File Maintenance gt Delete Print Files and wait for the program to scan the day s files Print files are listed in the Return Selector Select the file to delete To delete all files click Select All Click Delete Click Yes to continue a 2 Click OK to return to the Home window Tip Since print files appear on the EF transmission selection list you may want to delete print files for returns that are not ready for e file To manually delete a client file from the database From the Home window select Tools gt File Maintenance gt Delete Client Files Enter the SSN or EIN of the client file to delete Click Continue Click Yes to continue Click OK Click Exit
94. can be considered a franchise or network if e The preparer accepts returns from other businesses that the preparer does not own e A preparer issues Form 1099 for contract labor at other locations e A preparer contracts with another to provide e filing and banking options e A preparer issues W 2s to a non employee who performs functions as a preparer Tax Year 2011 Drake Software User s Manual Types of Products Your firm is not a franchise or network if it issues W 2s to employees who are under direct control of the firm and collect returns at the other locations Types of Products Traditional bank products include Refund Anticipation Loans RALs and certain non loan products Table 7 3 Your client must understand that RAL checks are loans not actual refunds Explain the loan cost APR and any other disclosures to your cli ent Show your client the bank documents and explain all costs checks deposits and the timing of payments Check client ID to verify identity before offering banking ser vices Table 7 3 Available Bank Products in Drake Tax Year 2011 Bank RALs Non Loan Products Advent RD Refund Deposit Republic RAL ERC Electronic Refund Check ERD Electronic Refund Deposit River City ERC RET Refund Electronic Transfer Direct Deposit Tax Products Group RT Refund Transfer RT Direct EPS Financial e Check Electronic Refund Check e Direct Electronic Refund Deposit For specific details rega
95. changes in capital asset reporting These changes include the introduction of Form 8949 Sales and Other Dispositions of Capital Assets the redesign of Schedule D which now summarizes the data from Form 8949 and the revision of Form 1099 B Proceeds From Broker and Barter Exchange Trans actions The layout of screen 8949 reflects that of the revised Form 1099 B For more information on using this screen see Capital Asset Reporting on page 96 At Risk Limit Worksheets At risk limit worksheets are now available to track the shareholder and partner basis for at risk activities in 2011 Worksheets are produced for each Schedule K 1 for both regular tax and AMT Data for these worksheets is entered on the new 6198 At Risk screens accessible as tabs on the K1P for partners and K1S for shareholders screens In View mode the worksheets are listed as WK_IPRSK and WK_ISRSK For more information on using these new screens to produce the worksheets see Tracking At Risk Basis on page 112 Screens for Form 3800 The IRS has changed Form 3800 for tax year 2011 In Drake the new GBC screen is available for reporting data for Part HI General Business Credits or Eligible Small Business Credits The GBC screen is accessible from the first Credits tab in the Data Entry Menu and as a link from the 3800 screen Data entered on the 3800 screen now overrides certain lines in Part I of Form 3800 which is basically a summary of line 2 of the
96. completed automati Cally These fields are completed automatically These fields are completed automatically These fields are completed automatically PA and NY only Number and amount of check are com pleted automatically preparer must enter the date the check is picked up Bank code admin users only ADMN This field is completed automatically Note that some ADMIN screen fields are automatically filled with data from else where while other fields require direct entries Note also that some fields are admin only and are not visible to users who do not have administrative rights Some data from these screens can be incorporated into Report Man ager and Client Status Manager CSM reports 169 Other Special Features in Data Entry Drake Software User s Manual ADMN Screen Reports Two reports can now be generated directly from the ADMIN screen e Return Preparation Data Consists of data entered by preparers in the Return Preparation Data section of the ADMN screen e ADMIN ONLY Return Data Consists of information generated by the soft ware and displayed in the ADMIN ONLY side of the ADMIN screen The ADMIN ONLY fields can be viewed only by users with administrative rights To generate a report go to the ADMN screen and mark the applicable check box e The Generate Return Preparation Data Report box is located in the Return Preparation Data section of the ADMN screen e The Generate
97. configuration updates Update configurations for firm information macros etc from the prior year L Establish billing amounts Save time later by setting your billable amounts now Help Clients Prepare for Tax Season Prepare proformas and organizers for prior year clients Note that reports organizers pro formas and returns can be stored and e mailed as PDF files L Prepare preseason letters and coupons to send with organizers L Begin preseason scheduling Get a jump start on tax season Schedule clients who are eager to file early L Order mailers from Nelco if necessary Update and Configure Data LJ Choose the backup media type that best suits your needs U Familiarize yourself with the new Update Manager features See Update Manager on page 261 L Update and back up settings Run the update routine see Prior Year Updates on page 65 and make a backup copy of the software setup see Backing Up and Restoring Files on page 266 Take Advantage of Drake Resources e Training Center ETC For tax courses tutorials videos and testing go to DrakeSoft ware com ETC Tax Year 2011 A 3 m Ooooovoo vo Drake Software User s Manual Tutorials The 2011 tutorials can be accessed through the Help menu or from the Drake Support site Training Tools gt Tutorials Drake User s Manual Familiarize yourself with this manual and use it as a resource for lea
98. correct by requiring re entry of federal and state wage and withholding amounts at the bottom of screen W2 Figure 5 4 Wages and Withholding Verification To ensure the accuracy of wages and withholding amounts re enter the amounts from boxes 1 2 16 and 17 of the client s W 2 Federal State1 State 2 If applicable 1 Wages tips 2 Federal tax w h 16 ST wage 47 ST tax 16 ST wage 417 ST tax Figure 5 4 Verification fields for federal and state wages and withholdings An EF message is generated if a verification amount does not match the correspond ing amount entered Amounts must be corrected before the return can be e filed Foreign To indicate a foreign employer on screen W2 enter the city and country in the city Employers field of the employer address and then select Foreign from the State field a dot appears in the field Leave the ZIP code field blank See example in Figure 5 5 CY Employers name address tify state ZIP code 7 PEPE LEPEU x 2 RUE MOUFFETIE Paris France e bd safia tecaraotoddress COD BRITE naan OOP tanho ale ron Figure 5 5 Entering foreign employer information on W2 screen Tax Year 2011 87 Personal Service Income W 2 1099 MISC Drake Software User s Manual Screen code FEC If no W 2 was issued by the foreign employer use the Foreign Employer Compensa tion screen accessible from the Income tab to enter employee employer and income information NOTE For inf
99. displayed 3 Select a return status from the list ad CSM The status is updated in the Status column Tax Year 2011 229 Adding a Client to the CSM Drake Software User s Manual Setting a Status from Data Entry To set the status of a return from within data entry click the CSM button from the ad i Data Entry Menu toolbar to display a status list and then select a return status from es the list The status is automatically updated in the CSM Adding a Client to the CSM If your client has a data file in Drake he or she will have a record in the CSM New client records can be added to the CSM in two ways e From the Home window click Last Year Data gt Update 2010 to 2011 and update the return The client s record goes into the 2011 version of the CSM e Create the return using the File gt Open menu from the Drake Home window Opening a Return from the CSM Returns can be opened or created from the CSM Shortcut Press To open a return from within the CSM highlight a client record from the list and click lial os a Open or double click the record to open in Client Quick View and then click Open entry See Quick View on page 238 The return is opened to the General tab in data entry When you exit the return you are brought back to the CSM To create a return from within the CSM Shortcut Press 1 Click the arrow next to the Open button and select New Client CTRL N to open a A the Open Client 2
100. docx File 10 4 2011 8 53 09 Right click and go to Rroperties to enter Description C Corporation 3155 Cann Mary 3333 Capone Al 1009 Carter Frank 6668 B Carter Scott 6767 6 Carter William 6665 o Tax Be 2007 2008 2009 2010 a 2011 Archive 20101 W Archive 20101 File in selected folder Document pane e MIEF Lan Cainin GN Ll O e E E E EET a a e Figure 13 7 Part of the DDM interface Filing cabinets are organized in standard tree format Click to expand a portion of the tree click to collapse it Or with a folder selected press the or keys on the numbers pad of your keyboard Select a folder to view a list of its files The DDM displays document names types dates modified and descriptions Click column headers to sort by columns Like other Drake windows the DDM has a menu bar and a toolbar If a shortcut key such as F2 exists for a menu item it is listed to the right of the menu item You can also access toolbar selections from the menu bar To view a description of a toolbar button hold the mouse pointer over it Each toolbar button activates a different func tion and different buttons are available at different levels of the DDM For example from the Cabinet level you can add only drawers and cabinets so only these buttons are available from the Folder level you can add folders create files import files scan copy rena
101. e file all tax returns for quarterly and annual reconciliation for Maine income tax withholding Maine mandate Rule 102 requires that any person with a combined tax liability to the state of 100 000 or more for all tax types must remit all Maine tax payments electron ically using the ACH credit or ACH debit method Tax Year 2011 Drake Software User s Manual Maryland Massachu setts Michigan Minnesota Tax Year 2011 Beginning after December 31 2008 paid preparers who have prepared more than 300 qualified returns in the prior taxable year must e file their returns For tax year begin ning after December 31 2009 preparers who filed more than 200 returns in the prior taxable year must e file For any tax year beginning after December 31 2010 paid preparers who prepared more than 100 returns in the prior taxable year must e file Paid preparers must under certain conditions e file all corporate S corporation and partnership returns and corporate extensions Additionally the Commonwealth of Massachusetts requires personal income tax extensions with zero payment or with payments of 5 000 or more to be filed and paid if applicable electronically For tax years beginning on or after January 1 2004 income tax return preparers who completed 200 or more original Massachusetts Forms and 1 NR PY including those e filed during the previous calendar year are required to use electronic means to file all personal incom
102. entry oper ators can also be entered Each time a name is added to Preparer Setup a number is assigned to that name Include data entry operators in Preparer Setup to 1 track data entry Tip information and 2 easily set up Front Office preparers in the Sched uler See Scheduler on page 71 Adding a Information entered here determines what preparer information appears on the tax Preparer returns To add a new preparer in Drake a 1 From the Drake Home window go to Setup gt Preparer s 2 Click Add to activate the bottom half of the Preparer Setup window 3 Enter General Information Fields needed for e filing are indicated by red text Note that a PTIN is required by the IRS To apply for a 4 Enter Login Information A login name is needed for e filing Use of a password PTIN complete i Form W7 P and is optional send to the IRS 5 Ifapplicable click Registration to enter your state registration ID California Maryland New York Oregon and Virginia only Click OK to save 6 Indicate Return Signature Options e PIN Signature Enter the preparer s five digit PIN Signature e Use PIN for 8879 PIN Signature Select to activate the 8879 PIN signature Alternative Electronic Signature Select to display the preparer s name where an electronic signature is required with the preparer s name IMPORTANT The alternative electronic signature is printed on returns that have not
103. example if you chose to stagger by 2 000 with the first computer starting at 01000 the second computer would start at 03000 the third at 05000 and so on In this case each computer can process 2 000 returns before duplicating a DCN Be careful if changing DCNs after tax season begins and returns CAUTI DN have already been transmitted If DCN staggering is done improperly returns might be processed with duplicate DCNs causing e filing rejections Changinga When a return receives an IRS rejection because the same DCN was assigned to more DCN _ than one taxpayer the DCN must be changed before you can re transmit the return To change the DCN of a tax return 1 In data entry for the return press CTRL M and wait while the program assigns a new DCN 2 Click View to go to View mode where you can check Form 8879 to verify that the DCN has been changed View eral Revere Senie gt Keep this form for your records See instructions Declaration Control Number DCN 00 777777 066658 ek coun amnion Declaration Control ae 4 Number DCN Tax Return Information Tax Year Endin ole Dollar 1 Adjusted gross income Form 1040 line 38 Form 10404 line 22 Form 1040EZ line43 2 Total tax Form 1040 line 63 Form 10404 line 37 Form 1040EZ line 10 e ee ee ee ee ee s PONE mite treme tone 5078 aha Sa Eogaanana innnan e annn ain Tapaers rame WILLIAM CARTER S
104. from the DDM 2 to SecureFilePro Files 1 From the Drake Data Entry Menu toolbar click Doc Mgr 2 From the client tree open a client s folder Tax Year 2011 319 SecureFilePro DDM 2 Only Drake Software User s Manual oe From the Document pane select the files to be uploaded Click Portal and select Upload 5 Enter the Portal Username and Portal password you set up with Secure FilePro com Click OK 6 When the Folder List is opened select a folder to receive the uploaded file and click Upload 7 When the Portal Upload Result window is opened click OK gt Downloading To download files from a client Files 1 From the DDM 2 toolbar click Portal gt Download The Client List window is displayed 2 Select a client s name and click Select to open the Folder List 3 From the Folder List select a client s name and click Download The file is downloaded to that client s DDM 2 folder Uploading A public file is one that SecureFilePro makes available to all clients To make a file Public Files available to all clients in SecureFilePro Open DDM 2 and select a file from Document pane Select Portal gt Upload Public Files The Public Folder List is displayed Select a folder from this list to receive the uploaded the document Click Upload When the Portal Upload Result dialog box is opened click OK ee eS CAUTION Any document uploaded to the Public folder is available to all your
105. gt Process Acks The Process Processing acknowledgments box displays progress This data is copied to the EF database for later access See EF Database on page 219 Ifno new acknowledgments are found Drake asks if you want to review old ones After you read the acknowledgment file an Acknowledgment Report shows the acknowledgment code and batch ID Ack Codes Drake codes are shown in Table 8 1 Re send any return that receives a B ack Table 8 1 Drake Acknowledgment Codes Code Description P Tax return transmitted successfully to Drake Return is being processed T TEST return transmitted successfully to Drake B Bad transmission A B ack received for a return sent in a batch with other returns means NOTE only that return received the B ack the other returns in the transmis sion will still be processed if they each generated a P ack IRS acknowledgment codes are shown in Table 8 2 IRS acknowledgments are usu ally processed within 24 hours Table 8 2 IRS Acknowledgment Codes Code Description A Tax return has been accepted by the IRS Tax return has been rejected by the IRS R D Tax return is a duplicate of a previously filed return or DCN rejected by IRS E Imperfect return see Imperfect Returns on page 215 Tax Year 2011 213 E filing a Return Trouble shooting Acks Staggering 214 DCNs Drake Software User s Manual Bank acknowle
106. if box 2a is selected in Part Il the return cannot be e filed 2848 Form 2848 Power of Attorney and Declaration This form is not e filable of Representative 8275 Form 8275 Disclosure Statement To print Form 8275 R select 8275 R at the top of Form 8275 R Regulation Disclosure Statement the screen 8379 Form 8379 Injured Spouse Allocation By filing Form 8379 the injured spouse may be able to get back his or her share of the joint refund Tax Year 2011 161 Requests Claims and Other Forms Drake Software User s Manual Table 5 22 Statement and Claim Forms Available from Other Forms Tab in Drake Screen Form Notes 8594 Form 8594 Asset Acquisition Statement Under If this form is being amended state the reasons for Section 1060 the change in the field provided 8862 Form 8862 Information to Claim Earned Income To enter data for additional qualifying children Credit After Disallowance press PAGE Down to start a new screen 8862 To claim tax forgiveness for death in a combat zone or as a result of a NOTE terrorist or military action go to the MISC screen and select the applica ble code for Combat Zone Terrorist Military Action Tax Forgive ness Press F1 in that field for more information Other Forms Table 5 23 lists screens for other forms available under the Other Forms tab Table 5 23 Other Forms Available from Other Forms Tab in Drake Screen Form Notes W4 Form W 4 Employee s W
107. in the past Review or learn EIC rules Prepare for EIC due diligence interviews Review staffing needs Set staff software security levels Train your staff Make sure everyone understands his or her duties and is familiar with the soft ware Train your staff through Drake ETC Upgrade computers as needed Ensure that your computers comply with system requirements Test printers and modems to be used with Drake Software Check phone cords and connections to be used during tax season Check scanner Review Drake recommended scanners If necessary purchase a scanner to use with the Drake Document Manager DDM Purchase office supplies These include folders envelopes paper and toner Tax Year 2011 Drake Software User s Manual Install and Set Up Software LJ Review system requirements for installation See System Requirements on page 5 L Install the 2011 Drake Software CD Refer to your shipment letter or see Installation on page 6 L Customize program settings Complete required and optional program settings Check the packing slip to verify your EFIN Enter your new password and account number at Setup gt ERO Keep your packing slip which contains your serial number and account number in a safe place L Perform database updates Update the EIN Database from the prior year m Set up your office s network See Running Drake on a Network on page 8 L Perform
108. information on frequently changing topics such as disaster areas adoption credits and extensions Publications IRS publications Forms and Instructions IRS forms and instructions Internal Revenue Code Various parts of the IRC Treasury Regulations Various sections of the US Treasury regulations Revenue Procedures IRS Revenue Procedure publications Revenue Rulings IRS rulings on various topics Notices The latest IRS notices Announcements The latest IRS announcements History and Bookmarks Pages you ve visited and those you want to return to TheTaxLibrary has various search capabilities e Search the website for specific articles topics forms etc e Search TheTaxBook a series of tax reference books on which this website is based and the TheTaxBook s index e Search the previous year s TheTaxLibrary webpage for that year s information 251 Interactive Support Drake Software User s Manual Broadcast E mails Broadcast e mails announce the latest IRS alerts or software issues They are sent dur ing tax season to your 1040 com e mail address your EFIN 1040 com and during the summer to the address you used when you registered with Drake for your account Access these broadcast e mails through Drake at Help gt E Mail All broadcasts are also posted at the Drake Support site Resources gt Broadcast Center Interactive Support Drake provides interactive support via e mail phone an
109. interest amount is entered in the Annual Interest field the program displays the calculated payment here Payment Type The payment type Select one of two types of payments Fixed Payment or Fixed Principal The default is Fixed Payment Date of First Payment Due date of the first payment This entry is used to determine the dates for subsequent payments Tax Year 2011 Drake Software User s Manual EIN Database To send the schedule to the printer click Print To save it for viewing through Reports gt Report Viewer click Save designate a file name and click Save EIN Database The program stores all EINs and related data in the EIN database for later retrieval Use the Edit EIN Database tool to add edit or delete an employer s information Adding or Editing Employer Information To add or edit an employer s EIN database information 1 From the Home window go to Tools gt Edit EIN Database 2 If editing Enter or select the EIN to edit or begin typing the name of the employer and select it when it appears in the list below 3 Click New if adding or Edit if editing 4 Modify or complete the fields in the Edit EIN Employer Listing dialog box 5 Click Save Deleting Employer Information To delete employer data from the EIN database 1 From the Home window go to Tools gt Edit EIN Database 2 Enter or select the EIN to delete or begin typing the name of the employer and sel
110. is generated See Ministerial Income Allocation on page 122 for more on data entry for clergy Directing Data Entry to Form 2106 To associate the data from a 2106 screen to that of another screen such as the 4562 screen for depreciation select 2106 from the For drop list at the top of the other screen Use the Multi form code field as needed See Associating One Screen with Another on page 61 for more on multi form codes See Screen Help on the 2106 screen for more assistance in directing data entry to Form 2106 N DTE Be sure that either T for taxpayer or S for spouse is selected as applicable on the 2106 screen Health Savings Account HSA Deduction Screen codes Use the 8889 screen accessible from the Adjustments tab to enter HSA data for 8889 HSA Form 8889 Health Savings Accounts Fields 1 coverage indications and 2 HSA contributions for the year of this screen are required in order to e file Form 8889 Qualified HSA Distribution An amount in the Qualified HSA distribution field of the 8889 screen flows to the Other Taxes section of Form 1040 and is marked with a notation of HDHP Form 1099 H Payment amounts from Form 1099 H Health Coverage Tax Credit HCTC Advance Payments can be entered on the 8889 screen Moving Expenses Screen code 3903 Use the 3903 screen accessible from the Adjustments tab to enter data for Form 3903 Moving Expenses Form 3903 Qualification If the
111. it is go to the EF screen in the return In the EF Ready box at the top select X Ready for EF Check to see if the return contains forms that are not e filable Step 3 Transmit Return Shortcut Press CTRL T to open the Transmit Receive dialog box 212 Never transmit from more than one computer unless the software is installed on a dedicated server Calculating from more than one com CAUTION puter can lead to duplicate DCN rejections This can affect the abil ity to print checks and can prevent IRS acks from showing up in your EF database To transmit a return 1 Ensure that the Internet connection is working properly and that the returns are selected for e filing See Step 2 Prepare the Transmission File on page 210 2 From the Home window select EF gt Transmit Receive to open the Transmit Receive dialog box which displays the types of returns to be e filed 3 optional To review and if necessary eliminate files from the send queue click Review The Transmit File Editor lists individual returns To remove a return from the queue select it and click Remove 4 Click Send Receive The Report Viewer displays the EF Transmission Record The EF Transmission Record lists returns that are planned for NOTE transmission Because transmittal can be interrupted or a return denied this list is not suitable as a record of transmitted files 5 Click Exit The program immediately logs in to Dr
112. multiple offices and check the status of each IRS Service Center Support Tax Year 2011 To access your online EF database from within the software 1 2 3 From the Home window click Support If you are already in the EF database click F10 Online DB Enter your EFIN and password and click Log In Go to My Account gt EF Database By default the database displays information for the current tax year To view another tax year select the year from the drop list near the upper right corner of the page Above the tax year drop list is the SSN Lastname Lookup field To find information on a specific return enter the SSN or last name in this field and click Go TIP To see a list of any available checks and outstanding acknowledgments on the opening window of the online EF database every time you open it go to the Options tab click the Manage Summary Counts tab click Edit mark the Display check box and click Update Most of the buttons at the top of the online EF database screen are for viewing and running reports Reports available are listed in Table 8 4 Table 8 4 Reports Available from the Online EF Database Category Description Returns Pending accepted and rejected federal and state returns extensions Bank Products Loan status original and current type of bank product amount depos ited debt code Checks Reports by check status check data and EFIN Fees Preparer and bank fees Summary
113. names dates and any screen or form to which the note refers Figure 5 62 Tax Year 2011 Drake Software User s Manual Other Special Features in Data Entry Notes Date Date Screen Form Note taken by completed Completed by Hold EF Note iy Le a a ee Aen anon tingitana aasia o T 4p Ap ntti PO m let Figure 5 62 NOTE screen fields The maximum number of characters for the Note field is 120 Up to four notes can be entered on a single NOTE screen For additional screens press PAGE DOWN NOTE In the Date Completed field enter the date that the note should be dis continued Delaying In Drake the presence of an EF message prevents a return from being e filed A return E filing cannot be e filed until all EF messages are eliminated The NOTE screen can be used to delay the e filing of a prepared return even if the return is eligible for e file To have a note delay e filing select Hold EF see Figure 5 62 for the note and the note shows up as an EF message When you are ready to e file the return return to the NOTE screen and clear the Hold EF box To have notes appear when a return is opened go to Setup gt Options Tip gt Data Entry tab and select Show notes reminders to preparer when opening a return Notes to be Notes in the top section of the NOTE screen apply for the current year only To have Updated notes included in subsequent updates use the Miscellaneous Notes box at the bottom
114. new cabinet appears in the left pane Repeat these steps as needed to create more cabinets File cabinets cannot be stored inside other file cabinets Each cabinet is N OTE for Level 1 storage Drawers are for Level 2 storage and folders are for Level 3 storage Add drawers to cabinets for file storage The Drake filing system lists these drawers by the first character of the name on the return To add a drawer to a cabinet 1 Highlight the cabinet you want to use 2 Click New Drawer 3 Enter a drawer name in the Input dialog box 4 Click OK The new drawer appears in the left pane Repeat these steps as needed to create more drawers Documents are stored at the folder level When you create a return in Drake and if you ve integrated your DDM with Drake the Drake filing system automatically cre ates the client folder with a subfolder labeled Tax and subfolders for the tax year To create additional folders or subfolders 1 Highlight the drawer or folder that will contain the new folder or subfolder 2 Click New Folder 3 Enter a folder name in the Input dialog box 4 Click OK The new folder appears in the left pane Repeat these steps as needed to create more folders Tax Year 2011 Drake Software User s Manual Drake Document Manager Working With Files in the DDM Printing Returns Importing a File z Scanning a File Tax Year 2011 Once the cabinets drawers and folders are estab
115. of Tax Return Information to franchise network has NOT been signed by the taxpayer and joint taxpayer if applicable Figure 7 2 Check boxes on CONS screen for disclosure to franchise networks Electronic Signatures To obtain electronic consent the taxpayer and spouse if married filing jointly must enter their names and the date onto the CONS screen The Consent to Disclosure of Tax Return Information is generated with the return and includes the name of the franchise or network from Setup gt ERO If your firm uses a franchise or network the CONS screen must be used even if the client refuses to sign the form If the client declines to give consent select the second box in the Paper Con IMPORTANT sent section of the CONS screen See Figure 7 2 A franchise or network EFIN must be entered in Setup gt ERO in order to produce the correct letter from the CONS screen and ensure that consent can be obtained for every return See ERO Setup on page 13 189 Taxpayer Requirements Drake Software User s Manual Taxpayer Requirements For a taxpayer to be eligible for one of the banking options offered the return must be eligible for e file In most cases the taxpayer must be 18 or older If married filing jointly both taxpayers must be 18 or older Check with your banking partner for state specific age requirements Application Forms Both preparer and client must complete all parts of the appropriate applicatio
116. oh oda EEE E Bae eed e Bebe 285 Filter Manager ise ica ete ias o ae8 ewes pare bt Aaa ee He OE AE fans Modal aS eh din od has Maem ed es 289 Report Viewers a c 4 6s geav hadeie che Goad cook Sia ciee deh hee Bob weeh deawene were deers 293 Depreciation List soei pi eee 6 eee Barbee hea ene BRM oS abe ete EEE E EE Bete Rend 293 Fixed Asset Manager crecca sincet tetiere t meat aerial E E sensed derbned EA 294 Client Status Manager CSM Reports 00 cece eee e tenet e teens 296 Haski Totals oon aac pies thas A os a hae Deeg aed al eid oes Ee a eS Gon aa peer ats 296 Suite PN acta bocca wr taaaateceterreariaresentieeeLi nical ome aaraa 297 New to Suite Products in 2012 2 aaaea narena ereere 297 Drake Document Manager 1 0 ee eee n tenet nent eens 297 GruntW ors DDM 2 Only wack ed hohe a OG ad Pb eee wn a ded bas 313 SecureFilePro DDM 2 Only 00 0c cece cece cece cence cence ee ene eeeeeneeeenes 318 Tax Planners cresine cee hea opbher rhonda terete deri deaeenida bedeeds 321 Client Writes Upis sessies eri eae ide dee ea sow had pate acl at POR ee Pele eal sales dal or 325 New Features in Other Packages cccccceeeeseeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeees 327 Entity Packages oa arrea nannies Hanah d a a E Gudene dee diane aided Ginule aie aida aa EA 327 Individual Entity Packages 0 0 ccc ccc cnt teen t ete e nen ne een ee enna 329 Corporation Package 1120 1 knee teen teen teen nee 329 S Corporati
117. on the old asset continues over the remaining life and depreciation for the new asset starts using the 8824 basis for the correct number of years Basis of Primary Residence Screen code HOME 100 Use the HOME screen to accomplish the following tasks Report the sale of a primary residence Enter data to determine the taxpayer s basis in the primary residence and calculate the tax implications of the transaction Allow the program to reduce the maximum exclusion if the taxpayer is eligible for part but not all of the gain exclusion Tax Year 2011 Drake Software User s Manual Sales of Assets Related Worksheets Updating from the Prior Year Schedule D Section 121 Calculation Conversion to Business Use Exclusion for Surviving Spouse First Time Homebuyer Credit Tax Year 2011 e Apply the appropriate treatment for the gain loss on the transaction e Indicate that a surviving spouse is taking the MFJ exclusion for gain on the sale e Enter data to calculate the amount of recapture in a year of sale if the First Time Homebuyer Credit Form 5405 was taken on the home e Enter data for Form 5405 Part III Disposition or Change in Use of Main Home for Which the Credit Was Claimed and Part IV Repayment of Credit Claimed for 2008 or 2009 A Primary Residence Calculations worksheet WK_ 2119 is generated with the return when the HOME screen is used It consists of up to three pages e Worksheet 1
118. order is saved on exit and is auto matically updated in the Customize Display dialog box Figure 9 3 Searching Updating and Filtering and Viewing Searching the CSM To find a return in the CSM click Search or press CTRL F to open the Find Client P Record text box As you type the client name or ID the CSM searches for and high Search Tax Year 2011 lights the matching record Click Close to exit 231 Searching Updating and Filtering and Viewing Drake Software User s Manual Updating the CSM C To incorporate the latest return updates when the CSM is open either click the e Refresh button or press F5 on your keyboard Refresh CSM data is updated automatically through different components of the NOTE application Processes affecting CSM data include data entry changes return printing e filing and check printing functions Filtering Data in the CSM y Filters allow you to control which records are shown in the CSM To select filters Filters 1 From the Home window click CSM Shortcut Press 2 Click Filters The filter list is divided into four sections as shown in Figure 9 4 CTRL L to view the filter list v All Preparers Filter by Current Preparer preparer All Status Types Work in Progress Completed Returns n EF not Sent eria co EF Pending EF Accepted EF Rejected Missing Files v All Return Types All Business Returns Individual 1040 Filter by gt Corporate 1120 return type S Co
119. own user names and passwords students can log in to ETC on their own NOTE The CTEC fields in the Admin and student account sign up pages apply to CA preparers who want to receive CTEC approved credit Admin accounts are created using the Need to sign up section Figure 10 4 Need to sign up It s easy to get started with Drake ETC We ll begin by creating your admin account First are you a Drake customer Yes ONo Figure 10 4 Need to sign up section of ETC Home page Tax Year 2011 239 Online Support Drake Software User s Manual To create an Admin account 1 Ifyou are a Drake customer select Yes and click Submit 2 Enter your EFIN and Drake password from your packing slip and click Submit 3 Inthe Welcome Office Administrator window complete all applicable fields To earn CPE credit for completing ETC courses select Yes from the drop list 4 Click Save Information When the system has saved your data click Next If you are not a Drake customer but are visiting the ETC home page go NOTE to the Need to sign up section select No and click Submit Next fol low the directions on the screen Creating an To create a student account log in to ETC See Logging In following click the ETC Student Administration link and click Add New Student After completing all applicable Account fields click Save Information When creating a Drake ETC student account each student must enter NOTE a
120. package include depreciation calculations for more return types integration of Drake s trial balance import feature and a redesigned Officer Compensation OFF screen for easier data entry Depreciation DEPR screen calculations are now available for 990EZ 990PF and 990T returns To associate a DEPR screen with a particular form type select it from the For drop list at the top of the screen NOTE Neither bonus depreciation nor section 179 expense are calculated for any 990 type returns Normal depreciation schedules will be generated Tax Year 2011 331 Fiduciary Package 1041 Drake Software User s Manual 990 EZ 990 PF 990 T Trial Balance A selection of EZ from the For drop list will cause current year depreciation expense to be printed on Form 990 EZ page 1 line 16 and current year amortization expense to be printed on Form 990 EZ page 1 line 16 A selection of PF from the For drop list will cause current year depreciation expense to be printed on Form 990 PF page 1 line 19 column a and current year amortization expense to be printed on Form 990 PF page 1 line 23 column a Net investment income amount entered on the DEPR screen will be printed on Form 990 PF page 1 line 19 column b and current year amortization expense on Form 990 PF page 1 line 23 column b Adjusted net income amount entered on the DEPR screen will be printed on Form 990 PF page 1 line 19 column c and current year amo
121. process enter the 12 digit PRN as shown in the window of the E1 Card envelope Re enter it for verification purposes Apply for E1 Card As the final step in the E1 Card application process click the Activate Card button The data retrieved allows Drake to know whether the card has been approved If the application is declined or rejected an explanation is displayed in the text box at the bottom of the E1 screen After reviewing the explanation make any required mod ifications to the application and click Activate Card again to reapply Bank Denials A RAL can be declined for a number of reasons such as duplicate SSNs prior RAL debt SSN reported as deceased or MFS return To view a loan status code or bank decline reason 1 From the Home window select EF gt Search EF Database 2 Click the F4 Reject Code Lookup tab 3 Select Loan Status Codes or Bank Decline Reasons to view the corresponding codes in the lower window If you select Bank Decline Reasons specify a bank in the Category list A RAL switches or flips to a non loan product see Table 7 3 if an application is denied 194 Tax Year 2011 Drake Software User s Manual Preparing to Offer Bank Products Preparing to Offer Bank Products To offer bank products you must set up your system with both Drake and the bank of your choice Your firm must also submit an online bank application through Drake each year This application is separate from th
122. put them 31 Form 2210 in the desired order om 6 Form 2210F 7 Schedule A 8 Schedule B 9 Schedule C 10 Schedule C EZ 11 Schedule D 13 Schedule E 14 Schedule E 15 Schedule F 18 Schedule A X Help Instructions Figure 6 10 Sort Form Order dialog box 2 Select a printing set Default is Normal 3 Click and drag the form names to put them in the desired order The document at the top ofthe list if it has been generated with the return will be printed first 4 Click Save To restore the default settings click Reset in the Sort Form Order dialog box Setting Up Drag Drop Ordering Drag and drop ordering is available in Enhanced mode This feature allows you to drag a form in the directory tree to another area of the tree and drop it into the new location To drag a form press and hold the mouse button on the form to be moved and then move the form up or down the tree To drop the form into the new location release the mouse button To activate drag and drop ordering select Setup gt Allow Drag Drop Ordering while in Enhanced mode Other Setup Options The following programs and setup options are also available in both Basic and Enhanced modes e Pricing setup See Pricing Setup on page 29 e Printing setup See Printing Setup on page 38 e Printing sets setup See Printing Setup on page 38 184 Tax Year 2011
123. rate of 4 5 Billing statement format Select among seven formatting options including Billing by time preparing bill based on time spent preparing return multiplied by preparer s hourly rate as defined in Setup gt Preparers Billing by form preparing bill based on forms necessary to complete return by price entered in Setup gt Pricing program prepares a bill summary along with whatever option is selected here unless the Bill Summary option is cleared at Setup gt Options Optional Documents Header on bill Select among options for the header to be printed on the bill Custom Paragraph Choose to have a custom paragraph printed on the bill Select a location and then write the paragraph in the supplied text box States To select options for state returns select the States tab and then select a state abbrevi ation from the drop list When the options are displayed select to activate or disable them as desired and click OK Available options depend on the chosen state For more on specific states see the FAQ screen for each state program 24 Tax Year 2011 Drake Software User s Manual Software Setup E filing Options under the EF tab are described in Table 2 11 Some can be adjusted for an individual return from the EF screen in data entry Table 2 11 Options Setup EF Option Description Auto generate taxpayer s PIN Have the software can assign a randomly generated
124. savings or other account such as an IRA MSA etc e The account is in the taxpayer s name Multiple accounts are not allowed if filing Form 8279 Injured Spouse Allocation NOTE A taxpayer cannot request a refund deposit to an account that is in the name of someone else such as the tax preparer By default the program directs the federal refund to the first account entered on the DD screen If depositing funds into multiple accounts complete the Federal selection field to indicate whether the first account entered should be used for the federal refund Figure 5 48 The default selection is Yes 141 Direct Deposit Drake Software User s Manual Account 1 Deposit selection Federal selection zj Stat Name of financial institution Yes S R smalltown Bank and Trust Repeat account information Figure 5 48 Select No if federal refund is not to go to the account listed To indicate that a refund should be distributed into multiple accounts enter the por tions for each account in the appropriate Federal deposit amount fields on the DD screen Figure 5 49 An amount entered here overrides the calculated refund amount ederal deposit amount State deposit amount Figure 5 49 An amount entered in the Federal deposit amount field overrides the calculated refund amount NOTE Because not all states support multi account direct deposit the State deposi
125. section Setting Up Preparer Security Setting Up This feature establishes security settings for an individual With the Group Security Preparer feature you can assign the same security level to many preparers see Setting Up Security Group Security on page 16 NOTE Only administrative users can set security rights Settings must be established before a preparer can begin working in the software To customize security settings for a preparer a 1 From the Drake Home window go to Setup gt Preparer s 2 bai 2 Select a preparer and click Edit Preparer 3 Select Security gt Custom Security 4 a In the Preparer Security Setup window select a menu and then select the items to which the preparer should be allowed access Items left blank will be inaccessi ble to the preparer 4 f 3 File EF Tools Reports Last V Open Return E Calc Preparer can open D ee and view returns but V View IV Forms Based Data Entry cannot calculate or V Quick Estimator print them ah alm a ame stent lm a Figure 2 5 Security setup 5 Click Save When prompted click OK Click Exit to close Preparer Setup Other options available under the Security button are shown in Table 2 4 Tax Year 2011 15 Software Setup Le RemoveRights Setting Up Group Security Group Security be 2 Add Group 16 NOTE Drake Software User s Manual Table 2 4 Preparer Security Options Secu
126. the return to which the payment data applies item 3 in Figure 5 51 Mark the box of the applicable return type Withdrawal All states require that only one account be designated for direct debit of funds To from Multiple have a state balance due electronically withdrawn from an account other than the Accounts account indicated for federal complete the fields in the Account 2 section of the PMT screen To have a balance due from another state withdrawn from a third account complete Account 3 NOTE Neither the federal nor the state balance due can be paid from more than one account Direct Debit To indicate direct debit of estimate payments only select Estimates Only from the of Estimates Federal selection drop list By default the estimate payment amounts and dates see Figure 5 51 are calculated from the information entered on the ES screen or in the override fields in screen 1 Use the fields on the PMT screen to override that data Third Party Designee To set up a preparer as a third party designee the preparer s PIN must first be entered in Preparer Setup A default third party designee can be set up for all returns You can override the default for a single return as needed 144 Tax Year 2011 Drake Software User s Manual Third Party Designee For All Returns Default To set up the third party designee for all returns go to Setup gt Options gt Optional Items on Return tab and make a selection from the Third part
127. the settings for a returns To change or add print settings on the fly complete the following steps while in Enhanced View mode for a return 1 Select a form from the directory tree 2 Select Setup gt Form Properties from the toolbar 3 Inthe Number of Copies section edit settings and click Save Pricing can also be changed using this option see Pricing for a Single N TES Return on page 46 If using Basic View access this feature by right clicking a form in Basic View and selecting Properties Setting a Print Use this option to view or change the order in which forms are printed Order From the Drake Home window go to Setup gt Printing gt Printer Setup 2 Click Set Form Order at the bottom of the Printer Setup dialog box to open the Sort Form Order window 3 Select a package series and choose a set type Forms are listed with their order number in parentheses to the left Normal Default is the established IRS order 4 To change the sequence in which the forms are printed click and drag form names until the forms are listed in the desired order 40 Tax Year 2011 Drake Software User s Manual Making Changes on the Fly DDM Setup 5 Click Save NOTE To back up the print order and restore it to another machine choose to back up the setup files from Tools gt File Maintenance gt Backup The Drake Document Manager DDM is a stand alone applications that can be inte grated with Drake Sof
128. the shareholder partner or beneficiary listed in the 1120S 1065 or 1041 return To export K 1 data into an individual return 1 Open the 1120S 1065 or 1041 return that contains the data to be exported 2 Click View to calculate the return and open View mode z 3 Click the K1 Export button in the View mode toolbar The Export K1s screen K 1 lists all taxpayer SSNs for exporting All rows are selected by default K1 Export 4 optional Click a row to clear it if you do not wish to export K 1 data to all indi viduals listed 5 Click Export When the Export complete dialog box is displayed click OK The transferred data is highlighted in the K1 screen of each personal return that received the data Once the export is complete any state K 1 amounts if different IMPORTANT from the federal must be entered manually See State K 1 Amounts If Different on page 109 Tracking Drake takes current year basis limitations into account when calculating K 1 amounts Adjusted and tracks the adjusted basis for a K 1 from a pass through entity partnership or S Basis corp The program also limits any losses based on the basis calculation and carries forward to subsequent years the adjusted basis and any disallowed losses When a return with adjusted basis data is calculated the amounts entered on the K1P and K1S screens undergo the basis limitation calculation The limited amounts are then used in at risk and passive loss limitation
129. the system incorporates a sequential identifier by default 5 Click Start to begin the backup process NOTE To back up the entire DDM select Entire DDM in the Backup dialog box before clicking Start Because a backup may take several minutes you can minimize the dialog box and continue working You will be notified when the process is complete at which point you should click Close to return to the DDM Tax Year 2011 299 Drake Document Manager Drake Software User s Manual Estimated Backup Size amp Free Space Restoring Contents Backup As shown in Figure 13 1 on page 299 the application provides Estimated Backup Size and Free Space information for the selected location If there is not enough free space you will be prompted to select another location The Free Space information is not available if backing up to a CD DVD drive so you need to determine the amount of free space by manually checking the available space on the disk To restore backed up contents to the DDM 1 Click the Backup button on the DDM toolbar The Backup dialog box is dis played See Figure 13 1 on page 299 2 Click Restore located in the lower half of the dialog box In DDM 2 click the Restore tab 3 Ifnecessary click the button left of Backup Restore Location to browse to the location of the files you want to restore Click Location in DDM 2 4 From the Select a Backup to Restore drop list click a file to restore 5 Cl
130. the tray to be used as the optional large paper source Select the tray to be used for manual feed Tax Year 2011 39 Software Setup Drake Software User s Manual Printing Sets The Printing Sets feature allows you to print multiple sets of returns for different pur poses To define printing sets 1 From the Drake Home window go to Setup gt Printing gt Printer Setup Sets 2 Click the Sets button to open the Copies Per Set dialog box 3 Select a category from Form Categories Your selection determines which forms are displayed in the grid below 4 Double click a form in the list The default information for that form fills the text boxes above 5 Inthe boxes under each set name enter the number of copies of the form to be printed with each set For example to include three Schedule Cs with the Client set enter 3 under Client Enter the number of copies per set below Valid Copy amounts are 0 9 Form Name Schedule C EF Signature Est 4 Ext Client Preparer Federal K 1 z _ n n ce com Figure 2 21 Example Three copies of Schedule C for client 6 Click Update 7 Click Save and then click OK Repeat this procedure for other forms as needed _ Changing You can make Sets changes on the fly in other words without going to Printer Setup Print Sets On but this will modify settings globally not just for the active return If you change the Fly your Sets settings on the fly you change
131. to Scan Client Files Click Print Click Next if printing a batch of letters Click Continue to scan the client files Click Print New in 2011 you can now print mailing labels to a label printer To print mailing labels 1 2 3 Ensure that label sheets are loaded correctly into the printer From the Home window go to Tools gt Letters gt Mailing Labels Select a label type from the Select Label list Label selections are described in Table 11 3 Items with an asterisk may require filtering of data before printing 275 Letters Drake Software User s Manual Table 11 3 Label Selections Available in Drake Label Description Client addresses Print a batch of client address labels Single client address Print a label for a single client address Birthday addresses Print a batch of address labels for clients whose birthdays fall within a specified range Firm address Print one or more address labels for a firm EF service centers Print address labels for e filing service centers IRS mail to address Print labels for IRS mailing addresses State mail to address Print labels for state mailing addresses User defined Print user defined mailing labels Labels for folders Print labels for folders Prior year clients Print address labels of prior year client addresses 4 Enter the requested information if necessary and then click Next 5 If the Filter Selecti
132. to file and pay as long as your software sup ports Form CT 400 and has been approved by the Tax Department You can pay by ACH debit or ACH credit Online Services account You can file and pay for your clients through your Online Services account without the need for additional software You can pay by ACH debit or ACH credit Penalties now apply to both preparer and client for failure to abide by the mandate New York City instituted a preparer mandate for the first time for tax year 2010 No change has been made to this mandate for tax year 2011 A preparer must e file if he or she both Tax Year 2011 Drake Software User s Manual Ohio Oklahoma Pennsyl vania Tax Year 2011 e Prepared more than 100 original New York City General Corporation Tax or Unincorporated Business Tax documents in calendar year 2011 including tax documents for prior periods e Used tax software to prepare one or more corporation tax documents in 2011 Tax preparers who meet the mandated criteria above cannot opt out of the e filing mandate If a taxpayer wants to opt out he or she must apply for a hardship waiver available at www nyc govw html dof html contact contact_emailefilewaiver shtml Paid tax preparers who filed more than 75 tax returns in any tax year since 2008 must e file state income tax returns Acceptable methods of e filing include the IRS federal and state e file program Ohio I File or Ohio eForms This requirement does n
133. to print the checks Once a printer is selected all other fields are activated N 4 Enter a number in the Check Adjustment Vertical field Each whole number represents a fourth of a line Enter a positive number 1 to move the check down a fourth of a line text will show up higher on the check Enter a negative number 1 to move the check up a fourth of a line text will show up lower Remember to click Update before closing the Edit Printer Settings window If the text is showing up too far to the left or right you may have to adjust the printer itself Consult the user manual for your printer Program Won t Allow Reprinting If trying to reprint a check that was printed before the current date you will get a Reprint Not Allowed message like the one shown in Figure 7 5 Reprint Not Allowed Too Late The Check on this record was originally printed on 02 04 2011 If you have the check listed in YOUR possession you may reprint the check by clicking Ok and then pressing F5 Check Number 00500246 Check Date 02 04 2011 Check Amount 732 50 Figure 7 5 Reprint Not Allowed If this happens click OK and then press F5 You will be asked if you have the prior check in hand A prior check must be physically in your possession in order for you to reprint a check If you have the check select Yes If the check has already cleared there will be a date in the Clear Date field You can not reprint this ch
134. to return to the Home window PAR Ona NOTE If you are not accessing files on a network the deleted files go to the recycle bin Changing Return Types Tax Year 2011 A return can be changed to another file type without your having to create a new file When a return type is changed the following information is transferred e Name address including county and telephone number e Fiscal year e All depreciation data including screens 6 7 8 9 and 10 When a corporate return is converted to an S corp return the balance sheet and Sched ule A information are also transferred IMPORTANT Not all data is transferred Before using Change File Type back up the original file See Backup on page 266 271 File Maintenance Estate and Qualified Heir Returns 272 Drake Software User s Manual To change a return type 1 From the Home window select Tools gt File Maintenance gt Change File Type 2 Enter the SSN or EIN of the file to convert and click Continue 3 Select the new file type Individual Corporate Sub S Corp Fiduciary Part nership Tax Exempt Estate or Heir See Figure 11 8 4 Click Continue 5 When the conversion is complete click OK You can use a single SSN for two return types when a taxpayer requires a Form 1040 and one of the two return types listed below e Form 706 U S Estate and Generation Skipping Transfer Tax Return e Form 706 A U S Additional Estate Tax Re
135. top of the 99M screen If associating it with one of multiple forms enter a Multi Form Code See Associating One Screen with Another on page 61 Passive and Investment Income 1099 DIV etc This section covers interest and dividend income from both domestic and foreign sources To enter rental income data in Drake see Supplemental Income on page 104 To enter foreign earned income see Foreign Earned Income on page 116 Tax Year 2011 89 Passive and Investment Income 1099 DIV etc Drake Software User s Manual Interest and Dividends The INT and DIV screens in Drake reflect the 1099 INT and 1099 DIV forms respectively Data from the INT and DIV screens is carried primarily to Schedule B Interest and Dividends and when applicable to Form 1116 Foreign Tax Credit Income Less In general no Schedule B is required if interest and dividend income does not exceed than 1 500 1 500 Amounts can be entered directly on screen 3 Income Figure 5 8 eT erod S trula MEME bh 7 eniSoref mere gt Interest income NO Schedule B required eeecscseeescseeecessveessssseeesssseeeessseeessseeees INT 8a Tax exempt interest NO Schedule B required Dividend income NO Schedule B required 0 sccssessccssssesessssssseeseeessssveeeseesssseeees DIV 9 10 Taxable refunds BE penton s PGR AAS nana teins ninale ataa aaamen ents anaa yp na RS Pp Figure 5 8 Interest and dividend fields on scre
136. transmit it D acks can be caused by calculating on multiple computers from a NOTE peer to peer network no dedicated server or if DCNs are not suffi ciently staggered See Staggering DCNs following Each computer assigns a Document Control Number DCN to every calculated return Each return created after the first return is assigned a DCN in sequential order starting with 01001 01001 01002 01003 etc If an office is not networked and uses multiple workstations for data entry each workstation must adjust stagger its DCN counter IMPORTANT Stagger the starting DCNs before creating 2011 returns To stagger the DCNs complete the following steps on each workstation 1 2 From the Home window go to Setup gt Firm s Double click the firm or select it and click Edit Firm The bottom half of Firm Setup becomes active Change the DCN Serial Number Figure 8 4 Drake suggests choosing starting DCNs that are at least 2 000 numbers apart Tax Year 2011 Drake Software User s Manual E filing a Return AA O E TN ee an op w A E Federal EIN v 123456789 State ID Number EFIN 12345 DCN Serial Number 05000 Non Paid Prep Figure 8 4 DCN Serial Number field in Firm Setup 4 Click Save to save changes or click Cancel to exit without saving changes Depending on the amount chosen to stagger the numbers each workstation now pro duces DCNs based on a different starting number For
137. with Drake 2011 This resource accessible from the Drake Home window provides links to hundreds of federal and state forms regulations instructions and publications all in PDF format suitable for printing or saving See Tax Library on page 250 for more information on this feature Mailing Labels and Letters Tax Year 2011 Listed below are this year s enhancements to our mailing labels and letter tools Label Printing You can now print search results from Tools gt Letters gt Mailing Labels to a label printer Appointment Reminders A new option in Tools gt Letters gt Letters allows you to send appointment reminders to your clients in either letter or e mail form or both See Chapter 11 Tools for instructions on using this feature Letter Editing It is now easier to navigate the Client Communications Editor and find the section of a letter template you wish to edit With the new Letter Outline tab you can quickly go to any part of a letter template you choose For more on using the Client Communications Editor see Introduction to Letters in Drake on page 32 Contacting Drake Support Drake Software User s Manual Scheduler This year s enhancements to the Drake Scheduler are listed below e Preparer Scheduling You can now specify detailed schedules for specific dates and can enter a range of dates for a particular schedule You can also select to display a preparer s schedule fo
138. within the PCM Restoring Data When restoring data the CSM scans a client file calculates the return searches the EF database and updates the data To restore data from the CSM right click a record and select Restore CSM Data This Client Click OK Removing Duplicates To remove a duplicate entry in the CSM right click a record and select Remove Duplicate Entries Entire Database NOTE Duplicate CSM and PCM entries must be removed from within the CSM they cannot be removed from within the PCM 234 Tax Year 2011 1 0 Resources and Support Drake Software offers a wide range of support resources In addition to our unparal leled telephone support Drake has a variety of online and software help resources to give you 24 hour access to the latest information Si te gustaria hablar con alguien en espanol llame al 828 349 5500 y trataremos de conectarle con uno de nuestros agentes de apoyo que hablan espanol Drake s help resources are available to assist you in making the most of your tax prep aration software and using it successfully We do not however provide tax law advice Support is provided as an aid to tax return completion only Preparers are responsible for knowing tax preparation and for the accuracy of returns filed with the IRS and state tax authorities Drake Software Manual Tax Year 2011 Your Drake Software Users Manual Tax Year 2011 is an electronic document with a comprehensive index for quickly
139. works for most computers Contact Drake Support if you have trouble connecting to Drake 4 Ifapplicable select Advanced Options Transfer my files using Default is HTTPS Most computers transmit using this protocol My machine uses a firewall FTP users only Most machines using trans fer protocols of Regular FTP or WinSock FTP require that this box be selected This option uses a defined port range to transfer files 5 If your firm is a franchise or network complete the Franchise Network Infor mation fields See Franchise Network Requirements on page 190 6 Ifapplicable enter in the Disclosure or Use of Tax Information field the name of the franchise or network to which tax information must be disclosed in order to apply for loan products The field facilitates compliance with IRS Regulation 7216 see Taxpayer Requirements on page 190 7 Click OK 13 Software Setup IMPORTANT Preparer Setup Drake Software User s Manual New to e File Before transmitting live returns your firm must apply to the IRS for an EFIN If you have not yet received an EFIN Drake assigns a temporary one for testing e File and accessing Drake s online customer support resources For more on applying for an EFIN see Obtaining an EFIN on page 208 Preparer setup and security must be completed before a preparer can begin preparing and e filing returns All preparers must be entered in Preparer Setup Data
140. 0 box Enter a report output name in the Report output file name field This name must be fewer than nine characters You will use this name to locate the report in the Report Viewer See Report Viewer on page 293 Creating a New Report When planning reports for your office consider beginning with a pre defined report that already includes most of the information you require Whenever you modify a pre defined report the modified version is saved as a new report in My Reports See Setting Up a Report on page 285 for more information To create a new report not starting with a pre defined report in the Report Manager 1 Click the New Report button at the bottom of the Report Manager window 2 Select one of the following report types e Electronic Filing amp Banking For a report based on the EF database e Tax Return Data For a report based on data entry information Click OK to open the Report Editor Step 1 window 4 Using the instructions in Setting Up a Report on page 285 as a guideline enter the report formatting and filtering information and then click Save a Deleting a Report Only a report in My Reports can be deleted To delete a report select single click the report to delete click Delete Report and then click Yes to confirm the deletion If you have run the report you are asked if you want to delete the report from the Report Viewer Click Yes or No as applicable Filter Manage
141. 009 The 8859 screen in Drake contains TSJ and carryforward fields only 8864 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 8874 Form 8874 New Markets Credit 8881 Form 8881 Credit for Small Employer Pension Plan Startup Costs 8882 Form 8882 Credit for Employer Provided Childcare Facilities and Services 8885 Form 8885 Health Coverage Tax Credit 8896 Form 8896 Low Sulfur Diesel Fuel Production Credit 8907 Form 8907 Nonconventional Source Fuel Credit 129 Unreported Social Security and Medicare Tax Drake Software User s Manual Table 5 8 Other Credits Calculated in Drake Screen Form and Credit 8908 Form 8908 Energy Efficient Home Credit 8909 Form 8909 Energy Efficient Appliance Credit 8910 Form 8910 Alternative Motor Vehicle Credit 8911 Form 8911 Alternative Fuel Vehicle Refueling Property Credit 8912 Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds 8936 Form 8936 Qualified Plug in Electric Drive Motor Vehicle Credit 8941 Form 8941 Small Employer Health Insurance Credit Unreported Social Security and Medicare Tax In Drake use the 4137 8919 screen for Form 4137 Social Security and Medicare Tax on Unreported Tip Income and Form 8919 Uncollected Social Security and Medicare Tax on Wages Additional Tax on Qualified Plans etc Drake s tax software automatically calculates the taxable income from Qualified Tuition Program QTP and Coverdell Educat
142. 1 291 Filter Manager 7 8 Drake Software User s Manual Select Match All Conditions for narrower results or Match Any Condition for broader results as applicable Click Save To edit a search condition select the condition and click Edit Condi NOTE tion Make changes and click OK To delete a search condition select the condition and click Delete When prompted click Yes Available Filters List The Available Filters list in the Filter Manager Figure 12 5 on page 288 can be modified as needed Create new filters edit existing ones or rename filters Creating a Filter Modifying a Filter Renaming a Filter To create a new filter in the Filter Manager PP ey S Click New Filter Enter a unique filter name Click OK Modify the search conditions as needed See Search Conditions on page 290 Click OK The new filter is added to the Available Filters and can be edited To create a filter in the Filter Manager using an existing filter as a template ee Sy gt Select a filter to use as a template Click Copy Filter Enter a unique name for the new filter Click OK Modify the search conditions as needed See Search Conditions on page 290 Click OK The new filter is added to the Available Filters and can be edited To rename a filter in the Filter Manager 2 3 4 Select a filter to use as a template Click Rename Filter Enter a new name for the filter
143. 1 Visa Card Application see The El Screen on page 193 e Collect If you re using EPS Financial as your bank and the taxpayer opts for a check or direct Options deposit not the EI Card take these steps to get approval from EPS 1 Open the ECOL screen 2 Inthe Alternative Disbursement Methods section select either Check or Direct Deposit 3 Enter the taxpayer s banking information Other Required Information A Military Personnel Dependent Identifier section is included on the screens for those banks that offer loan products This section is required and must be completed before a bank product can be requested Tax Year 2011 199 Bank Product Transmission Drake Software User s Manual e Collect Specific Fields Most bank screens also include a field to indicate when the bank application was signed By default the current date is used in this field Enter a different date if neces sary otherwise leave this field blank The ECOL screen has several fields that are specific to that screen only e 7216 Signature box This box must be marked if electronic Consent to Disclo sure and Consent to Use signatures are not present in other words if hard copies of the forms were signed To access the DISC and USE screens for electronic signatures click the applicable link provided in the 7216 Signature section at the top of the ECOL screen e El Visa Card fields A notification method and PRN must be entered i
144. 2011 Form 3800 pdf CADrakeDDM Clients C Carter William 6665 Tax 2011 State Forms pdf C DrakeDDM Clients C Carter William 6665 Tax 2011 State Forms pdf LNA een A a i peat h MAO a hh ttn r e napanis Figure 13 13 Uploading one client at a time to GruntWorx Click Add Files 3 to open the Open dialog box Select a document to upload and click Open Note that the document appears in the GruntWorx Job dialog box 4 Repeat as many times as necessary to include all documents you wish to upload Optional Select to add Populate or Trades to the job 5 When all documents have been added click Submit 6 NOTE Only PDF documents may be uploaded Note the other items on the GruntWorx Job dialog box Token Information Shows you how many tokens each job will cost how many tokens you have available and how many tokens you have used Amounts are adjusted after each job and with each purchase of new tokens from Sup port DrakeSupport com Help Me Choose Open a Help function to answer your questions about Grunt Worx Send email when job is done to Have GruntWorx alert you or anyone of your choosing with an e mail message when the upload or download is complete Enter the e mail address in the field Scan Scan documents directly into the list of documents to be uploaded The scanned document is also saved to the client s GruntWorx folder Remove Remove a document from the l
145. 24 Tax Planner 325 tax returns 174 taxpayer phone number 23 third party designee 23 using the PRNT screen 41 privacy letter 23 private appointments setting up 77 mortgage insurance PMI 107 processing acknowledgments 213 loan checks for bank products 200 proformas 68 71 property disposal of 105 listed 149 on Schedule E 104 qualified Indian reservation 152 rental of personal 107 sale of 107 section 179 expensing 150 type and usage 105 PTIN 14 207 public safety officers 102 publications IRS Drake etc 247 purchasing GruntWorx 314 SecureFileProTM 319 W 2 downloads 89 Q qualified charitable distributions 102 qualified real property section 179 expensing for 149 Quick Estimator 282 QuickBooks imports 273 R railroad benefits 115 RAL Refund Anticipation Loan 191 XV Index Ready for EF indicator 25 real estate 104 108 real property section 179 expensing for 149 receiving acks only 213 recurring appointments setting up 77 referral coupons 23 refunds direct deposit of 141 142 Regulation 7216 Consent to Use and Disclosure of Tax Return Information 13 187 189 reject codes see also acknowledgments due to multiple 2106 forms 117 foreign tax credit 125 looking up 219 220 troubleshooting acks 214 release notes 247 rental real estate with active participation 108 rentals see also Schedule E Supplemental Income and Loss by clergy 122 converted from home use 101 farm 113 repairing index fil
146. 4 Click Save With a password in place users must enter the password in order to open the DDM To change a password repeat the steps described previously In the Add and Confirm text boxes see Figure 13 4 enter the new password and click Save To remove a password go to Setup gt Printing gt Document Manager as described previously Delete the passwords from the Add and Confirm text boxes see Figure 13 3 and click Save To delete select a password and press DELETE NOTE For information on password protecting individual files in the DDM see File Security on page 311 Configuring To set configurations for the DDM the DDM 1 From data entry in Drake click the Doc Mgr button from the toolbar to open the DDM 2 From the DDM toolbar choose Setup gt Options to open the Document Man ager Setup Options dialog box Figure 13 4 on page 305 Options are listed in Table 13 1 3 At the bottom of the Document Manager Setup Options dialog box enter your EFIN and Drake password Tax Year 2011 303 Drake Document Manager Drake Software User s Manual Table 13 1 DDM Setup Options Option Description Document Manager Data Path To store data in a location other than the DDM enter the data path here or click Browse to map to a new location Use this scan device By default the DDM chooses a scanner To choose a differ ent scanner select it from the list Turn off scanner interface The software automatical
147. 4 practice returns 244 printing client labels from 277 screen captures 63 setting CSM statuses from 230 setup options 20 Spanish 21 special features in 165 170 upper mixed case 21 date shown on return 23 43 DCNs Document Control Numbers Vil Index assignment of 12 changing 215 staggering 214 DDM 2 297 321 DDM see Document Manager debit card as electronic payment option 143 debt cancellation 116 deceased taxpayer 84 deductions claiming for depreciation 147 domestic production activities 121 itemizing 122 124 section 179 expensing 149 self employed health insurance 120 tuition and fees 121 deleted files in the CSM 232 deleting see also editing appointments 80 archived returns 186 checks 201 CSM records 234 duplicate entries from the CSM 234 e mail messages 253 employer data 279 files from Drake 271 firm information 13 flags 58 records from CSM display 234 reports from My Reports 289 reports from online EF database 222 rows in grid data entry 56 screens in Drake 55 text from letter templates 35 update files 269 dependent of another 84 dependents child care expenses 125 claiming if married filing separately 85 education credits for 121 EIC information for 137 kiddie tax 131 133 release of claim to exemption Form 8332 161 state related data 86 tuition and fees deductions for 121 depreciation see also depreciation schedules see also section 179 expensing elections 153 in data entry 147 153 of fa
148. 40 and a 709 return no separate Request for extension request is required Form 4868 covers extension requests for both returns Form 709 For more information see Extensions on page 158 To request an extension for Form 709 only complete Form 8892 This form is not available in Drake but can be accessed from the IRS website See IRS instructions for more on submitting a 709 extension request to the IRS Requests Claims and Other Forms The screens described in this section are all available from the Other Forms tab of the Data Entry Menu Most forms listed here are e filable unless otherwise specified and most can be obtained in Drake from Tools gt Blank Forms 160 Tax Year 2011 Drake Software User s Manual Applications and Requests Requests Claims and Other Forms Table 5 21 lists additional screens for application and request forms Table 5 21 Application and Request Forms Available from Other Forms Tab in Drake Screen 970 Form Form 970 Application to Use LIFO Inventory Method Notes Use the SCH screen for required attachments select the appropriate code on that screen 1045 Form 1045 Application for Tentative Refund Press PAGE DOWN to access the NOL screen This form is not e filable See Net Operating Losses on page 155 for more on the NOL screen 4506 Form 4506 Request for Copy of Tax Return To request a transcript of a tax return use Form 4506 T available in Dr
149. 615 Kiddie Tax this button is vis ible only for Individual 1040 returns with qualifying dependents See Export ing Data for Kiddie Tax on page 132 K 1 K1 Export Open the K 1 Export tool This button is visible only for certain business returns Help fi Exit Access Drake online help Exit View mode Viewing Tool Use the arrows and zoom icon Figure 6 1 when viewing in Enhanced mode QOQ Figure 6 1 Click arrows to move through the return click zoom icon to zoom in or out Category Labeled tabs allow you to view sections of the return according to selected categories Tabs For example if you click the EF tab only the documents directly related to e filing are displayed in the tree view ERS Federal Worksheets MESSAGES EFSTATUS 9325 AllForms Sets Miscellaneous de ER Figure 6 2 If the EF tab is selected only the EF specific documents are shown in tree view 176 Tax Year 2011 Drake Software User s Manual Viewing and Printing a Return Category tabs and descriptions are provided in Table 6 2 Table 6 2 Category Tabs and Descriptions Tab Items Shown in Tree View All Forms Every form generated during production of the return Sets Forms as distributed into the printer sets selected in Printer Setup EF All forms for e filing in addition to any EF message pages Federal All forms for filing the federal tax return
150. 64 I Form 4136 Form 8885 Form 5713 l Form 8949 Figure 8 7 Form 8453 section of EF screen When the return is generated Form 8453 shows which forms are to be mailed NOTE For more information on Form 8453 go to Screen Help for the EF screen Tax Year 2011 Drake Software User s Manual EF Database EF Database gt The EF database is a searchable database that displays information about all returns your office has e filed for the current tax year To search the EF database 1 From the Home window click EF gt Search EF Database 2 Enter an SSN EIN or name in the SSN EIN Name To Search For field of the Search EF Database window Figure 8 8 To browse all records leave this field blank SSN EIN To Search For SSN Name 400001001 Taxpayer 400001001 JOHN amp JANE lt DOE Spouse 400002001 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup Figure 8 8 Search EF Database window 3 Click Go To scroll through the records for that taxpayer use the arrows at the bot tom of the screen or press PAGE UP or PAGE DOWN on your keyboard To close the EF database click Exit Database Content General Information Bank Direct Deposit Info Tax Year 2011 The EF database stores data about the return and the associated bank products fees and reject codes Different types of data are stored under tabs See Figure 8 8 The F1 Ge
151. 8 sharing files 19 shipment letters 4 shortcut keys 51 55 Simplified General Rule Worksheet 102 Single Member Limited Liability Company SMLLC 94 Social Security benefits 115 Social Security Numbers applying one number to two returns 272 changing 268 printing on bill 24 test returns 64 verifying 20 soft fonts 39 263 Spanish result letters 47 xvii Index screens 21 special tax treatments 102 splitting a return MFJ to MFS 61 SSN see Social Security Numbers ST field 61 staggering DCNs 214 state see also state programs see also state returns FAQ screens 226 mandates Appendix E registration numbers 14 state programs downloading prior year 247 setup options 24 state returns accessing 63 e filing 226 statutory employees 88 stolen checks 203 storing files in the DDM 308 310 print files 21 student full time 84 loan interest deduction 121 supplemental income 104 110 support see Drake Support suppressing documents on the fly 41 e filing of a return on the fly 216 e filing of returns globally 25 EIC calculations 139 Form 1116 Foreign Tax Credit 92 forms options for 22 system requirements 5 T tax courses ETC 241 Tax Planner 321 325 tax returns see returns taxable distributions 115 refunds 92 TaxLibrary 3 test returns 64 testing e file transmission 209 printing of checks 200 TheTaxLibrary 3 third party designee 144 145 tokens GruntWorx 314 tracking adjusted basis 110 xviii Drake
152. 82 Passive Activity Loss Limitations Available activity types are described in Table 5 3 Table 5 3 Activity Type Selections for K1 E and 4835 screens Activity Type Description A Active rental real estate Activity is a rental real estate activity with active participation Calculation flows to the Rental Real Estate Activities With Active Participation section in Part of Form 8582 and to the WKS 1 worksheet This is the default for screen 4835 B Other passive activity Activity is a passive activity but is not a rental real estate activity Calculation flows to the All Other Passive Activities section in Part of Form 8582 and to the WKS 3 worksheet C Real estate professional Activity is that of a real estate professional and does not flow to Form 8582 D Not a passive activity Activity is not a passive activity Because it is non passive the calculations from this screen do not flow to Form 8582 Option available on screens K1 and E only 108 Tax Year 2011 Drake Software User s Manual Supplemental Income If A or B is selected the activity is considered a currently passive activity because A is rental real estate and B is other passive activity If the General partner box is marked on the K1P screen self employ NOTE ment income is automatically reduced by any amount entered in the Section 179 deduction field The unreimbursed partnership expense flows to a separ
153. 8939 Allocation of Increase in Basis for Property Acquired from a Decedent was added to Drake s tax software package when the form became available in Octo ber 2010 Tax Year 2011 Drake Software User s Manual Appendix A Preseason Checklist Efficient preseason planning can reduce or eliminate many problems for tax preparers Take time now to prepare for the months ahead and ensure that your office is ready before the first client arrives The needs of each office vary in the months before tax season but your preparations might include the actions listed here Several refer to the Drake Support site which is located at Support DrakeSoftware com Contact the IRS L New Preparer Regulations All tax return preparers including attorneys CPAs and EAs are required to have a PTIN The initial fee for a PTIN is 64 25 and the renewal fee is 63 Access the online application system through the Tax Professionals tab at www irs gov Drake has pro vided a short tutorial on the PTIN application process Go to Support DrakeSoftware com and from the blue menu box on the left select Resources gt Preparer Regulation In the section head lined Register click the Tutorial link L Apply for Electronic Filer s Identification Number EFIN All new EROs must complete and submit Form 8633 Application to Participate in the IRS e file Program to the IRS in order to receive an EFIN If you are a new ERO and are not a CPA EA a
154. 9 S Proceeds from Real Estate Transactions on the 4797 screen Mark the 1099 S transaction box located near the top of screen 4797 Installment Sales Screen code 4562 Screen code 4797 Screen code 6252 Tax Year 2011 The steps for entering an installment sale vary depending on whether the assets are entered on the 4562 screen If the 4562 screen is not used 1 complete the 4797 screen for the sold asset 2 indicate with a Y on this screen that the sale is also reported on Form 6252 and 3 following the procedure below starting with Step 3 To enter an installment sale using the 4562 screen 1 For the sold asset open screen 4562 and complete the Date sold field This causes the program to stop calculating depreciation 2 Select Property type IN for 1245 property or IS for 1250 property 3 View the return checking to see if there is an amount on Form 4797 line 31 If line 31 contains an amount proceed to Step 4 below If it doesn t proceed to Step 5 Enter the line 31 amount on screen 6252 line 12 Depreciation to recapture gt 5 Complete screen 6252 by entering all other installment sale information Listed below are specific instructions and explanations for completing the separate parts of screen 6252 e Part I lines 1 15 Complete Part I for the year of sale only Part I must also be completed in subsequent years in order to have the gross profit per centage carry through to subs
155. 97 Drake Document Manager Drake Software User s Manual e Access GruntWorx and SecureFilePro See GruntWorx DDM 2 Only on page 313 and SecureFilePro DDM 2 Only on page 318 for more infor mation of these products You can use the DDM to create an organizational file structure for storing electronic documents such as PDF copies of tax returns scanned Forms 8879 and scanned cop ies of driver s licenses Think of the DDM file structure as a virtual filing cabinet with drawers and folders where Level is a cabinet Level 2 a drawer and Level 3 a folder Folders can also have subfolders The documents themselves reside in the folders and subfolders Tip To avoid later restructuring determine the type of file structure you want to use before you begin storing items in the DDM DDM and DDM 2 There are two versions of the DDM this year e DDM Drake s original document management program e DDM 2 A new version of the program includes access to GruntWorx and SecureFilePro The two versions are essentially the same with the primary difference being access to the two additional programs through DDM 2 They also differ in availability how ever DDM 2 is not available to users of pre Windows XP computer systems while users of Windows XP Windows Server 2003 Windows Vista Windows Server 2008 or Windows 7 can choose between the original DDM and the new DDM 2 To choose between the two versions
156. ADMIN ONLY Return Data Report box in the ADMIN ONLY section of the ADMIN screen ADMN screen reports are generated when the return is calculated and appear as TRAC and TRACADM with the federal forms in View mode Sales Tax Worksheet Screen code STAX 170 The software uses data entered into the State amp Local General Sales Tax Deduction Worksheet accessible from the General tab to determine which tax is better to take the state sales tax or the income tax Lines 1 and 4 of this screen are calculated by the software but you can enter overrides as necessary As applicable lines 2 3 and 7 should be completed in order to calculate the maximum deduction More information the STAX screen is available by clicking F1 in the individual fields Tax Year 2011 Return Results This chapter covers calculating viewing and printing returns A return must be calcu lated before it can be viewed printed or e filed Calculate returns as often as needed Calculating a Return To calculate a return from data entry click Calculate By default results are displayed in the Calculation Results window See Figure 6 2 on page 172 Calculate To calculate one or more returns from the Home window without using data entry 1 Click Calculate The Batch Calculation dialog box Figure 6 1 displays up to the last nine returns calculated Each return is indicated by a function F key l za Drake 2011 Calculate
157. Adjusted Basis of Home Sold e Worksheet 2 Gain or Loss Exclusion and Taxable Gain on Sale of Home e Worksheet 3 Reduced Maximum Exclusion These pages are for informational purposes only to allow the basis in the home to be tracked If no date of sale is entered only Worksheet 1 contains data when generated with the return Data entered in the Date home was purchased Basis of Home and Form 5405 fields are included in the Drake update routine These fields are updated as long as there is not a date in the Date home was sold field Once the home is sold there is no need to continue tracking the basis The home sale flows to Schedule D only if the gain on the sale exceeds the exclusion amount If Schedule D is generated both the gain on the home and the Section 121 exclusion if applicable appears on Schedule D The WK_ 2119 is still generated but Schedule D is added to report the taxable gain on the sale The software calculates the section 121 exclusion using the number of days during the last five years that the taxpayer used the home and the number of days the home was owned during the past five years Enter this information under the Reduced Maxi mum Exclusion heading on the HOME screen Ifa home was lived in and then converted entirely to rental or business use and subse quently sold the transaction must be shown on Form 4797 Mark the Carry taxable gain to 4797 box in the Miscellaneous section to have the applicable HOME scre
158. Any discrepancies between the Drake return and the previously prepared return are shown in an EF message Figure 5 61 To compare a Drake return with a previously prepared return 1 Open the return to be compared and go to the CHK screen 2 Enter the information from the previously prepared return regarding income taxes credits deductions banking etc 3 Exit the CHK screen and calculate the return 165 Other Special Features in Data Entry Drake Software User s Manual Comparing Tax Returns Screen code COMP 4 In View mode view the EF message page Figure 5 61 which shows where dis crepancies occurred ELECTRONIC FILING MESSAGES MUST be corrected before electronic filing is allowed Your social security number Name s William amp Amelia Carter 400 00 6665 5152 Info on CHK screen WAGES did not match the return 5153 Info on CHK screen INTEREST did not match the return ntl scallion OTe nanta nn aa celine T ae a O O E E T A treet Figure 5 61 EF message showing that CHK screen amounts do not match those in Drake NOTE If pre prepared data entry was used the CHK screen already contains data The Tax Return Comparison screen is used for comparing a current year tax return with data from the two prior tax years The screen itself has parallel columns of data entry fields one column for the prior year and one for the year before that Ifa return was updated from the prior
159. C 099 R Military ID T N nN ee Figure 13 6 Common document names user has added Military ID 4 Add or edit names as desired 5 To save changes in the original DDM click File gt Save or press CTRL S If using DDM 2 click Save 6 Click File gt Exit and then click OK Whenever you scan a document into the DDM you have the option of selecting one of the descriptions entered as a common document See Scanning a File on page 309 These document names are unavailable when you are scanning for a batch upload See Batch Uploads on page 315 for more information NOTES In the original DDM to reset the common document names list to the default names provided in the program click Reset in the Document Manager Setup Options dialog box The DDM Window The DDM consists of the file structure tree on the left side a list of files in the selected folder on the right and a menu bar and toolbar at the top In addition to the buttons shown in Figure 13 7 DDM 2 features buttons N ITE to activate GruntWorx to activate SecureFilePro and to add a client See Table 13 2 306 Tax Year 2011 Drake Software User s Manual Navigating Searching Tax Year 2011 Drake Document Manager r B Drake Document Manager File Setup Documents Help Enter search text a g CLUENTS a Ba Document Name Type Last Modified Description Archive
160. Click Import 3 From the Import Address Book File window browse to the address book file and double click it or select it and click Open 4 Click OK NOTE To delete an address from the Local Address Book select it and click Delete The Report Generated Recipient List option allows you to run a customized report from your client EF and Scheduler data to generate a list of e mail addresses The keywords selected during the query are then used to create an e mail message Key words inserted into the body of the message are replaced with the client s information You can access Scheduler data to send appointment reminders to NOTE groups of clients To do so select a Scheduler report in Step 3 of the following procedure To create a report generated recipient list 1 From the Drake Home window click Help gt E Mail 2 Click New to open a blank Compose Message window 3 Do either of the following e Click To in the New Message window and click the Create Report Gener ated Recipient List link e Click the arrow next to the To icon and select Report Generated List The Report Manager window is displayed 4 Select a report that includes only those clients who fit the criteria for the e mail list For example to include only those clients who have filed an extension appli cation you would create an Extensions report Tax Year 2011 257 Interactive Support E mail Keywords Alternative 258 Reply Add
161. Click OK The renamed filter is added to the Available Filters and can be edited Viewing a Report from the Report Manager 292 To view a report from the Report Manager 1 Locate and select the report in the report tree Tax Year 2011 Drake Software User s Manual Report Viewer 2 Click View Report If a Basic Search Conditions box appears make any desired changes and click Continue If a previously saved version of the report is detected you are prompted to e Click Yes to re create the report using the most current data e Click No to open the previously saved report If you clicked Yes a Basic Search Condition box might appear Make any desired changes and click Continue 3 Wait for the program to search the records for data matching the report criteria The report is displayed in the Report Viewer Report Viewer All reports in Drake are accessible through the Report Viewer To access the Report Viewer go to the Home window and select Reports gt Report Viewer To view a report select the report to view and click View From this point you can print the report export it or change the font You can also scroll through multiple page reports by using the arrow keys at the top of the viewer To perform a task click the applicable icon NOTE Reports exported to CSV are saved in Drake11 Reports Select a dif ferent location by browsing from the Save CSV file window Depreciation List Tax Year 2011
162. D Duration Pho 4 m r Help New Report Edit Report View Report Exit Figure 12 1 Tree view of Report Manager Only those reports in My Report can be deleted To delete a report select it and click Delete Report or choose Delete Report from the right click menu Drake 2011 Help includes descriptions of all standard reports in the NOTE Report Manager Click the Help icon in the Drake Home window tool bar or from the menu bar select Help gt Drake Software Help and search for Report Descriptions Sample Report Window Before generating a report you can preview the report title and column headers to see how the report will fit on the printed page The report preview is displayed in the Sample Report window at the bottom of the Report Manager See Figure 12 1 Also included is a brief description if available of the selected report To preview a report in the Report Manager click the title of the report to preview As shown in Figure 12 1 the report title and column headings are displayed The display reflects changes as report details are updated The Sample Report box also indicates a report layout of Portrait Landscape or Potentially too wide A layout of Potentially too wide means that some data could be cut off in the printed report due to the number of columns Regardless of width the report can still be viewed in the Report Viewer using scroll bars 284 Tax Year 2011 Drake Software User s
163. Drake Software click Import gt Grunt Worx Populate Job GruntWorx Payment 314 Payment for GruntWorx is through the use of tokens Each use of a GruntWorx prod uct costs one token For instance it costs one token to organize a client s documents using Organize and it costs another token to add Populate for the same client Adding Trades to import brokerage data costs one additional token for every 50 trades To purchase tokens go to Support DrakeSoftware com or click Support from the Home window of Drake s tax software From the blue menu bar on the left side of the Support page select My Account gt GruntWorx The retail price is 5 per token sold in multiples of 10 only with the per token price decreasing for larger purchases See Table 13 3 on page 314 Table 13 3 GruntWorx Tokens and Drake s Discounted Costs Tokens Retail Discount Cost Per Token 10 50 50 00 5 50 250 200 00 4 100 500 350 00 3 50 150 750 487 50 3 25 250 1 250 750 00 3 500 2 500 1 250 00 2 50 Tax Year 2011 Drake Software User s Manual NOTES GruntWorx Process GruntWorx DDM 2 Only Tokens from previous versions of Gruntworx do not work with DDM 2 You must purchase new tokens through Support Drake Software com Tokens expire December 31 of the year following the upcoming tax sea son For example tokens purchased January 2012 expire December 31 2013 Tokens purchased in different
164. Drake Support site offers a wealth of additional resources such as information about webinars trade shows live training sessions update schools Drake s Tax Plan ner the DDM and CWU You can also view helpful publications and download prior year Drake programs prior year release notes and software for converting data files from other tax software programs into Drake Tax Year 2011 Drake Software User s Manual Online Support Drake Software Downloads Prior Year State Programs Release Notes Conversions Publications Marketing Kits Partner Programs Beyond415 Tax Year 2011 The Download Center is available from Resources gt Download Center The Down load Center page displays the software packages and the education and training mate rials available for download Click an item to download it Drake s prior year software packages for state programs 1998 2009 are available for installation e Tax years 2007 and after Use Tools gt Install State Programs in your Drake program Once state programs are installed update them using Tools gt Install Updates for 2007 and 2008 or Tools gt Update Manager for 2009 e Tax years 2003 2006 First download the state tax packages from the Down load Center Tools gt Download Center on the Drake Support site and then install the updates within Drake Software Tools gt Install Updates e Tax years 1998 2002 Go to Resources gt Prior Yea
165. F1 key To access grid data entry from full screen mode press F3 Press F3 again or click Item Detail to return to full screen mode To delete a row in grid data entry select the row and click Delete Row or press CTRL D To save your data upon exit click Save amp Exit or press Esc To exit without saving click Exit or press SHIFT ESC Use your mouse to navigate through grid data entry or use the following keys and key combinations e Press UP ARROW or DOWN ARROW to change rows e Press ENTER TAB or CTRL RIGHT ARROW to move forward one field e Press SHIFT ENTER SHIFT TAB or CTRL LEFT ARROW to move back one field e Press LEFT Arrow and RIGHT ARROW to move the cursor within an input field The Existing Forms List is displayed if more than one instance of a screen has been saved in a return Existing Forms List 2 Dependents Child Care First Name Last Name SSN Relationship Date of Birth 1 Scott weir SON 10072008 2 Jimi wee DAUGHTER 10102002 new New Record ON A A a E E O stein NY Ae A ap a Sapa OS nadir an AH onan Figure 3 9 Existing Forms List To open a screen from the list double click a row or select it and click Open To open a new blank screen select New Record An Existing Forms List does not appear if grid data is the established NOTE default in Options Setup Disable the default from the Data Entry tab in Options Setup Many clients require multiple instanc
166. Fax Cover Letter for Support 6 een een tenet eee e eens 260 TOOLS aerei EE EEEE EERE AERES 261 Update Manager siori sinus made slewing EEEE E O da Lowen de Gia blac ee E E RE 261 Download Fonts sis sie singe 4 Ga aks SE HA EES A eS SRS PEER EEE AES Ocha ed ee need ead eas o 263 Blank FormSus a ionet we keh an Weck add wate oan a Gag Aiea Lede a a eed aeblak 264 Repait Index Files xs enana a ida ean ede Rad GEA SAR Hho dhe GELS GUER TD Shane 265 File MaintenainGe 2 4 04 g0ch 5 64o4 teed HA OE Oe oe hae ed anata Ea Ge ald id aw Slaw Gd dh whoa oh eed 265 Tax Year 2011 v Table of Contents Drake Software User s Manual Letters once geen sigeach pee eee E rie EE AE ie EEEE EEE EAEE EEE eee eee eee eee 274 AMOTIZAtON es 26 0 eared eee ee ae RES ae eed haar eee boo eet Gar beess 278 EIN Database sess agence tea ie dres grate d uere neal eae eae edad Sadie ead Aare neta hae bw gon aed Bg Aaa eo A 279 Install State Programs cereiro eee cece ne tebe bese be eben cueneneeenerenenes 280 Schedulet serant via wacked a Geille gnats ob e hws beak a e a ached ean 280 Forms Based Data Entry 0 0 cc eee nnn nett teen eee n ene 281 Quick Estimator 3 9 5 5 5 205 ssh bee dee hh a PG wb Rb akg geass weed Saa alten nak wlan OOS 282 REPONS wiiactirtsctencuasnndisnunri ei iinticasecaiheaionncnntaniei Eaa 283 Report Manager sce ct geaaia dtia canon a aos ndin E qdetca meee aati o aldara au elo 283 Setting Upa Report jin n5e st lee hide Ohio
167. Form amp Schedule Options NOTES 1120S 1065 and 1041 packages If the option to print K 1 letters is selected in Options Setup you can go to the PRNT screen to suppress the printing of K 1 letters Forcing Table 2 17 lists PRNT screen items that can be forced even if the program calcula Generated tions and established defaults would otherwise not generate them Table 2 17 Items That Can Be Forced from the PRNT Screen Item Schedule A Description Schedule A Itemized Deductions Schedule B Form 4562 Form 6198 Schedule B Interest and Dividend Income Form 4562 Depreciation and Amortization Form 6198 At Risk Limitations Form 6251 Form 6251 Alternative Minimum Tax for Individuals Form 8582 Form 8582 Passive Activity Loss Limitations Summary Individual Diagnostic Summary appears as SUMMARY under Mis cellaneous tab in View mode Compare Tax return comparison compares current year return with returns from the two prior years and appears as COMPARE under Miscella neous tab in View mode See Comparing Data on page 165 for more on creating a tax return comparison in Drake WK_SSB Social Security Benefits Worksheet provided by IRS for Forms 1040 and 1040A allows taxpayer to see if any benefits are taxable Next Year Depreciation List Worksheet showing the depreciation to be carried forward to 2012 Tax Year 2011 Drake Software User s Manual
168. Form W 2 W 2G 1099 R 1099 G 8283 or 2441 that employer s name EIN and corresponding information is automat ically added to the EIN database To update the EIN name database from 2010 66 Tax Year 2011 Drake Software User s Manual Prior Year Updates 1 Inthe 2011 version of the program select Last Year Data gt Build EIN Name from 2010 2 From the Build EIN Database and Name Index dialog box select the indexes to update and click Continue 3 Wait for the program to finish scanning the files This update takes about one minute for every 2 000 client files 4 Click Exit Updating Settings Apply your firm s 2010 software settings to the 2011 program to save preseason prep aration time Once the settings are brought forward for the year they can be individu ally adjusted CAUTION Selecting a previously updated item can cause a loss of current year data To update settings from 2010 1 Inthe 2011 version of the program go to Last Year Data gt Update Settings 2010 to 2011 The Update Settings dialog box is displayed gt Drake 2011 Update Settings 2 Update Settings The application has detected Drake 2010 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 Preparer Information Firm Information Preparer Schedules Macros Col
169. G page needs to be addressed Payments Use the EXT screen to indicate the amount being paid with the extension If a voucher is needed mark the Produce 1040 V for extension box and use the Amount to print on 1040 V override field if the amount differs from the automatically calculated amount Mark the following box see Figure 5 56 if the entire amount of tax is being paid with the extension Amount paid with extension I Produce 1040 V for extension Taxpayer is paying the entire amount of tax due Taxpayer has paper filed the extension and is now ready to file a regular return Form 4868 Application for Automatic Extension of Time to File Non Tig gan AM tit pan ts AGRON nn tg macntaneellon a wee T S a Figure 5 56 Payment related fields on the EXT screen Filing the Before filing the actual return go to the EXT screen and mark the box labeled Tax Return payer has paper filed the extension and is now ready to file a regular return Non Resident Alien Returns Screen code NR Use the NR screen accessible from the Taxes tab to enter data for Form 1040NR U S Nonresident Alien Income Tax Return The 1040NR in Drake consists of three screens Press PAGE UP or PAGE DOWN to move from screen to screen Data from Form 1042 S Foreign Person s U S Source Income Subject NOTE to Withholding should be entered on either the 2555 screen the NR screen or in the Other income field on screen 3 Gift Tax Returns Scre
170. K modem e A backup media source such as a USB drive memory stick floppy disk etc e A document feed scanner Drake supports all TWAIN compliant flat bed and document feed scanners for use with the DDM NOTE If you do not have Windows XP or 7 and want to back up your data on CD you must use your CD burner software not the Drake backup tool to perform the backup Before installing your software close all open programs on your computer Table 2 1 outlines the installation process for the first and subsequent CD shipments Note that both the 2011 software and the DDM are installed by default If you don t want to install the DDM clear the applicable check box in Step 4 Table 2 1 CD Installation Step First CD Shipment Subsequent CDs 1 Insert the 2011 Drake CD into the drive Insert the 2011 Drake CD into the drive Wait for the Drake 2011 Software Pro Wait for the Drake 2011 Software Pro grams window to be opened grams window to be opened 2 Click Install Drake 2011 Tax Software Click Install Drake 2011 Tax Software 3 Accept the Drake Software 2011 Accept the Drake Software 2011 License Agreement Click Next License Agreement Click Next 4 Note that Install 2011 Drake Tax Soft Optional Select Install State Tax Pro ware is selected both this and the DDM are marked by default States are not available on this shipment Click Next grams Click Next Tax Year 2011 Drake Softwa
171. L Q CSM Reports Seven predefined status and financial reports Table 9 2 are available in the CSM Table 9 2 CSM reports Report Title Description CSM Data Report is based solely on the data in the CSM current view Cash Receipts Report lists cash amounts from bank deposits resulting from bank products and client payments from the BILL screen in data entry Cash Receipts Report lists cash amounts received from bank deposits only The Bank Deposits data in this report is pulled from the EF database Cash Receipts Report lists amounts entered on the BILL screen in data entry Client Payments Completed Returns Report lists SSN EINs and client names of returns with a Complete status The program pulls the date completed from the ADMN screen which is automatically set when you select a status of Com plete An administrative user can manually set the completion date by completing the Date complete field on the ADMN screen Problem Returns Report lists returns that have taken longer than a specified number of Old Returns days to complete Problem Returns For this report the CSM scans client files for File Deleted and File Missing Files Not Found statuses Many reports rely on data entry for accuracy To take full advantage of the CSM s reporting features you must use the data entry screens mentioned in Table 9 2 Generating a CSM Report To generate a report from the CSM 1 Se
172. Making Changes on the Fly Overriding Other Setup Options Envelope When areturn is generated Drake prints envelope coversheets if selected for mailing Coversheets with copies of the return to the taxpayer and tax authorities Default settings for enve lope coversheets are set in Setup gt Options Optional Documents tab Use the PRNT screen to override coversheet options for a single return Filing When a return is generated Drake prints federal and state filing instructions Default Instructions settings are established from Setup gt Options Optional Documents tab Use the PRNT screen to override the default and force or suppress the filing instructions Due FEIC due diligence information is entered on screens EIC1 EIC2 EIC3 and EIC4 Diligence First Time Homebuyer Credit Form 5405 due diligence information is entered on Documents screen HBDD The PRNT screen includes options to print EIC and 5405 due dili gence documents with a selected return These options are set globally from the Administrative Options tab in Setup gt Options Dates onthe Use the PRNT screen to override the date shown on the return and the due date shown Return onthe letter and filing instructions These changes cannot be set globally from Setup NEW FOR A default due date for filing is printed on all letters and filing instructions generated with a return You can now override the default by entering 201l an alternate due date in the Due date to print on
173. Menu tab and click the screen name Use the following methods to exit save reset and delete screens in Drake Press ESC to save your changes and exit a screen Press SHIFT ESC to exit a screen without saving your changes U to reset a screen to the last save D to delete a screen If multiple occurrences of a screen exist for example if a record has two 1099s an Existing Forms List is opened Select the screens to delete and then click Delete See Existing Forms List on page 56 You can also use the right click menu to take these actions Managing Screens e e e Press CTRLA e Press CTRL Navigating Fields e e e Tax Year 2011 A blinking cursor and yellow shading indicate an active field Click a field to activate it Following are keyboard only methods of moving from field to field Press TAB to move the cursor forward one field Press SHIFT TAB to move the cursor back one field Press CTRL V or CTRL T to move the cursor up or down one field respectively 55 Data Entry Grid Data Entry Existing Forms List Multiple Instances of a Form 56 Drake Software User s Manual Grid data entry allows you to type information into a spreadsheet environment which can result in faster data entry This feature is available for the Dependents INT DIV 8949 D and 4562 screens Field help is available in grid data entry through the Help button on the bottom of the screen or by pressing the
174. ON optional Specify a day of the week and set a range of times to search If you select a specific day of the week that day must fall within the entered date range 5 Click Find The next available appointment time for the preparer is displayed NOTE Preparers with no set schedules are excluded from the search To view the details of a selected appointment time click Select To find a scheduled appointment see Find Scheduled Appointment on page 80 The Lookup feature allows you to find a client s record and insert the client informa tion into an Appointment Detail dialog box To locate a client record 1 From the Appointment Detail dialog box click Lookup 2 Select the location from which to search 3 Select a client name from the displayed list Clients are listed in alphabetical order by last name or entity name 4 Click OK The list is closed and several fields are filled with client data Content is determined by what was entered on screen 1 in data entry To change the details of an appointment that has already been entered into the Sched uler double click the time slot of the appointment in the Appointment Scheduler When the Appointment Detail dialog box for the selected appointment is opened make any changes necessary Click Save 79 Scheduler Drake Software User s Manual Deleting an To delete an appointment from the Scheduler Appointment 1 Double click the appointment time slot in the Ap
175. OtherT ax1 E Filing Paragraph ST OtherT ax1 Paper Filing Paragraph ST OtherT ax Refund Paragraph ST OtherT ax1 Zero Due Paragraph ST OtherT ax2 Balance Due Paragraph ST OtherT ax2 E Filing Paragraph ST OtherT ax2 Paper Filing Paragraph ST OtherT ax2 Refund Paragraph ST OtherT ax2 Zero Due Paragraph tate Uther Tax Estimate Paragraphs State Other Tax Results FL Sphataeihtlenr Teas Fabs Steetn ai anten aiai di Figure C 7 Examples of OtherTax paragraph keywords Table 1 lists the Other Tax types indicated by specific letter keywords for state and city returns in the Drake tax packages Table C 1 Letter Keywords Other Tax Types for State Packages State or City 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 Individual OtherTax1 LLC Franchise S Corporation OtherTax1 NR Composite OtherTax2 Franchise Partnership OtherTax1 NR Composite OtherTax2 Franchise Fiduciary OtherTax1 NR Composite OtherTax2 Franchise Tax Year 2011 C 3 Appendix C Keywords Drake Software User s Manual Table C 1 Letter Keywords Other Tax Types for State Packages
176. OtherTax1 Franchise and Excise Tax OtherTax2 Interest and Dividends Fiduciary OtherTax2 Interest and Dividends Estate OtherTax1 Estate Tax Texas S Corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Individual OtherTax1 Franchise Corporation OtherTax1 Franchise Fiduciary OtherTax1 Franchise Tax Exempt OtherTax1 Franchise Tax Year 2011 C 7 Appendix C Keywords Drake Software User s Manual This page intentionally left blank C 8 Tax Year 2011 Drake Software User s Manual Appendix D Acronyms amp Abbreviations cA ack ack ACH ACRS AGI AMT ATIN B ack CAF CSM COGS CWU py ack DAN DCN DD DDM DI doc Tax Year 2011 This appendix lists and defines many of the acronyms and abbreviations you may encounter when using Drake tax software Accepted transmission Acknowledgment A report generated by the IRS and by Drake to a transmitter that indicates receipt of transmissions Automated Clearing House A system that administers electronic funds transfers EFTs among participating financial institutions Accelerated Cost Recovery System Adjusted Gross Income Alternative Minimum Tax Adoption Taxpayer Identification Number A tax processing number issued by the IRS as a temporary taxpayer identification number for a child in the domestic adoption process who is not yet eligible for a Social Security Number SSN Bad transmission Cent
177. Part II and in Part II of Form 3800 which is where the credit allowed is calculated Entries in the Current Year Unused Credits Carryback section will help the program more accurately calculate GBC car ryforwards for current year credits that were not allowed For more information on using the 3800 and GBC screens see General Business Credits on page 126 Multi State Apportionment In the past to prepare a multi state return for an entity it was necessary to go into each state package s apportionment screen to enter sales payroll and property factors Drake 2011 features the new APPT screen for state apportionment The APPT screen provides a single location to enter all state apportionment information You can enter up to four states per APPT screen press PAGE DOWN to open a new screen Merchant Card and Other Third Party Income Reporting Form 1099 K Merchant Card and Third Party Network Payments is a new federal form in 2011 The program includes fields for the payment totals on screens C E and F for Schedules C E and F respectively however because the IRS requires that a zero 0 be entered in these fields for 2011 the fields are inactive grayed out 2 Tax Year 2011 Drake Software User s Manual What s New in Drake for 2011 Other Changes to the Tax Program TheTaxLibrary Some other changes you might notice in data entry are listed below The TRAC screen used for return tracking and accessible only t
178. Payments From Qualified Education Pro grams 115 Form 1099 R Distributions From Pensions Annuities Re tirement or Profit Sharing Plans IRAs Insurance Contracts etc 102 Form 1099 S Proceeds from Real Estate Transactions 99 Form 1116 Foreign Tax Credit 91 124 Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 161 Form 2106 Employee Business Expenses 117 Form 2120 Multiple Support Declaration 161 Form 2210 Underpayment of Estimated Tax 135 Form 2350 Application for Extension of Time to File 147 158 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 140 Form 2441 Child and Dependent Care Expenses 125 126 Form 2848 Power of Attorney and Declaration of Repre sentative 14 161 Form 3468 Investment Credit 129 147 Form 3800 General Business Credit 129 Form 3903 Moving Expenses 118 Form 4136 Credit for Federal Tax Paid on Fuels 129 140 Form 4137 Social Security and Medicare Tax on Unre ported Tip Income 130 131 Form 4506 Request for Copy of Tax Return 161 Form 4562 Depreciation and Amortization 22 147 153 Form 4797 Sales of Business Property 99 147 153 Form 4835 Farm Rental Income and Expenses 114 Form 4852 Substitute for Form W 2 or Form 1099 R 102 Form 4868 Application for Automatic Extension 147 158 Form 4952 Investment Interest Expense Deduction 123 Form 4970 Tax on Accumulation Distribution of Trusts 131 Form
179. Sales of Assets use a passive activity number PAN code to tie them together To do so enter a number in the PAN box on screen E and then enter the same number in the PAN box of the applicable 4797 screen PMI To indicate that insurance includes Private Mortgage Insurance PMI mark the check box under item 9 on screen E The program will display PMI on line 9 of the printed Schedule E Figure 5 25 see TT epee n meee ee pe 7 Cleaning and maintenance seaes Es E iead 0 COME oa nennen Ee S HE ons oh ae ee ee ee ce 10 Legal and other professional fees 11 Managementfees 2 2 2 2 eee eee eee een eeee anaes dailies ee aaa a ae Figure 5 25 If the PMI box on line 9 of screen E is marked the program displays a PMI indicator on the Schedule E Operating Screen E now includes a field for entering the carryover of operating expenses This Expenses field is located in the lower right quadrant of the screen An entry in this field flows to Carryover the Rental Limitation on Deductions worksheet WK_E Rental of Enter income from rental on personal property on screen 3 Enter expenses if any on Personal screen 4 in the Expenses from casual rental of personal property field under line Property 36 Do not use screen E Schedule K 1 Screen codes K1 Screens for Schedule K 1 are accessible from the Income tab The program contains KIF KIS three types of K1 screens K1P for partnership income K1S for S corporati
180. See E1 Visa Prepaid Card Program on page 193 for information on disclosure form requirements for the E1 Card NOTES If using ABCvoice go to the ABCV screen in data entry to indicate whether the taxpayer has signed the Consent to Disclosure of Tax Return Information Consent to Disclosure Franchises Networks Screen code CONS Tax Year 2011 The Consent to Disclosure of Tax Return Information to franchises or networks for merly service bureaus is required for a returns not just bank product returns pre pared by firms that are part of a franchise or network The form is similar to the disclosure form for banks described previously and must be signed before the return is e filed Paper Forms Access the form in PDF or Word format from the PDF 7216 folder on the Drake CD Enter the firm and franchise or network name in Word or PDF or print the documents and enter the names manually The taxpayer and spouse if applicable must sign and date the form prior to e filing Next go to screen CONS accessible from the Miscellaneous tab and select the first box in the Paper Consent section Figure 7 2 PO AET oyna cet te gt tes e To fet toe eee et rete eoret ng ete ae g T at amanat again sat i tre tat amet Paper Consent of Disclosure to Franchise Network NM Consentto Disclosure of Tax Return Information to franchise network has been signed by the taxpayer and joint taxpayer if applicable I Consentto Disclosure
181. Select a Comparison option and a Value if required Figure 12 7 r 7 Filter Condition Editor To add a condition first select a keyword from the list below Then select the desired comparison and value r Condition Filter Settings Keyword name AGI 5S Comparison is at least Value 50000 J Ask about this condition each time the filter is used Help OK Cancel Figure 12 7 Comparison is at least and Value 50000 selected for AGI keyword If a value is required the Value field appears A value can be alphabetic or numeric For example if AGI is selected with a comparison of is at least the value must be numeric Do not use commas when entering numbers If Tax payer s Last Name is selected with a comparison of starts with the value must be alphabetic 4 optional To allow a user to modify this condition when running a report select Ask about this Condition each time the Filter is used 5 Click OK The new condition is displayed in the Filter Manager Figure 12 8 Basic Search Conditions for the Selected Filter Return Type is 1040 Edit Additonal Search Conditions for the Selected Filter i Add Condition AGI is at least 50000 Edit Condition Delete Match All Conditions Match Any Condition Figure 12 8 New condition AGI is at least 50000 is displayed 6 optional Repeat the previous steps to add more conditions as needed Tax Year 201
182. States EF Administrative Options r Language Options 1040 package only Menus and data entry screens English T baa T rmimamnahltiennn inthe nt afte M ATEAN Figure 2 9 Tabs in Options Setup Table 2 5 through Table 2 12 describe the options available on each tab in Options Setup Data Entry Options under the Data Entry tab are described in Table 2 5 Options Table 2 5 Options Setup Data Entry Option Description Maximize data entry screens where possible for easier viewing Size data entry screens to show most fields without scrolling Disable sizing of data entry screens Increase the size of the Drake screen to fill your monitor Effective at all monitor resolutions Decrease the size of large Drake screens so they fit on your monitor Effec tive only when monitor resolution is set to 1024x768 or smaller Keep preparer from resizing screens Effective usually for monitor resolu tion set to 800x600 or smaller Tab to ZIP code field skip city state and use ZIP code database Press the TAB key while entering an address in data entry to bypass the City and State fields and go directly to the ZIP field City and State fields are completed automatically based on the ZIP code entered Show notes reminders to preparer when opening a return Show all notes and reminders from the NOTE and PAD screens every time you open a Client file that contains notes or reminders Verify SSN when cre
183. Summary reports by date EFIN preparer and ZIP code plus a sum mary of all returns bank products and preparer fees 221 Online EF Database Drake Software User s Manual Table 8 4 Reports Available from the Online EF Database Category Description Tools 94x reports for Client Write Up users ABCvoice Files client contact information lists see 94x Reports on page 223 Options Configure and manage reports summary counts and check suppression Multi Office Multiple office reports see Multi Office Manager MOM on page 224 Manager MOM To select a report category click one of the report buttons shown in Figure 8 10 Drake Online EF Database SSN Lastname Lookup l Go Returns Bank Products Checks Fees Summary Tools Options MOM j a E xit 2009 E a a a OE Monsen af ii apoena ea ee a oe anafaa tA Ih tte av iin Figure 8 10 Online EF database report categories Viewing a To view a report Report Click a category button to select a report category Figure 8 10 2 Enter a Start Date and End Date The report pulls information from only those returns with records that fall within the date range selected 3 optional for multiple EFIN offices only Select Restrict to Multisite and choose an EFIN to restrict reporting to returns for a particular EFIN 4 Enter any other report criteria desired Criteria differ for each report type 5 C
184. System Requirements on the Tax Courses page to ensure IMPORTANT that your system supports the tax course programs Make sure your speaker volume is turned on in order to hear the audio To open a unit 1 Click Launch Course for the selected unit See Figure 10 6 The unit is opened in a browser window Tax Year 2011 241 Online Support CPE Credits Webinars Registration for Webinars 242 Drake Software User s Manual 2 Use the navigation buttons in the upper right corner to move through the course Use the sound buttons at the bottom of the window to stop pause or re play audio 3 When you finish a unit click Exit to return to the Tax Courses page Completed units can be viewed again at any time Once all course units are completed the Launch Exam button will become available Click it to begin the test Submit your score upon completion of the test Click Tax Law Updates to view any changes in the tax laws since the NOTE tax courses were published Click Tax Form Updates to see copies of 1040 tax forms with the latest changes highlighted Click Tax Desk Ref erence to view Drake s 2011 Desk Reference To earn CPE credits for taking a tax course in Drake ETC you must score 80 or higher on the course exam and submit a course evaluation After completing all units of a course click Launch Exam on the Tax Courses page for that course After passing the exam with a score of 80 or higher click Launch
185. T F O to open the Open Create a New Return dialog box e Key combinations Use key combinations as another way to accomplish tasks without using the mouse They are written as two or more key names connected by a plus sign Press and hold down one key and then press a second key Key combinations are shown to the right of each menu item Figure 3 3 E B Drake 2011 Tax Software EF Tools Reports Last YearData Setup Help Open Create Returns Ctrl O q Calculate Ctrl C Print anp 9 View Ctrl V View Forms Based Data Entry Ctri E Quick Estimator Ctrl Q Exit Logout Preparer Freds Fiduciary 6 Ted s Tax Exempt 7 Figure 3 3 Key combinations Screen Hyperlinks Hyperlinks in data entry allow easier more concise data entry Hyperlinks are avail able in all packages and fall into two categories links and screen tabs Tax Year 2011 51 General Navigation Links Screen Tabs 52 Drake Software User s Manual Use links to move quickly from one screen to a related screen without having to return to the Data Entry Menu The example in Figure 3 4 shows that the Foreign Employ ers Compensation screen the INT and DIV screens and the 1099 G screen can be directly accessed from the Income screen screen 3 Form 1040 Income F E ST zl CITY z Description 7 Taxable scholarships not reported on W 2 F 7 Other income reported on line 7 NOT W 2 Wa geS ereereererereeeerrereee
186. Table 5 8 lists all credit forms not mentioned previously for which Drake provides screens If you need a form for which no screen is available most forms can be found at Tools gt Blank Forms Tax Year 2011 Other Credits Table 5 8 Other Credits Calculated in Drake Screen Form and Credit 4136 Form 4136 Credit for Federal Tax Paid on Fuels 3468 Form 3468 Investment Credit 3800 Form 3800 General Business Credit 5884 Form 5884 Work Opportunity Credit Form 5884 A Credits for Affected Midwestern Disaster Area Employers 6478 Form 6478 Credit for Alcohol Used as Fuel 6765 Form 6765 Credit for Increasing Research Activities 8396 Form 8396 Mortgage Interest Credit 8609 Form 8609 Low Income Housing Credit Allocation and Certification 8801 Form 8801 Credit for Prior Year Minimum Tax Individuals Estates and Trusts 8820 Form 8820 Orphan Drug Credit 8826 Form 8826 Disabled Access Credit 8834 Form 8834 Qualified Electric Vehicle Credit 8835 Form 8835 Renewable Electricity Refined Coal and Indian Coal Production Credit 8839 Form 8839 Qualified Adoption Expenses 8844 Form 8844 Empowerment Zone and Renewal Community Employment Credit 8845 Form 8845 Indian Employment Credit 8846 Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips 8859 Form 8859 D C First Time Homebuyer Credit This credit expired in 2
187. Templates with an asterisk indicate letters that can be generated individually or in batches separately from the tax return See Letters on page 274 Letter Template Result Letter Table 2 14 Letter Templates Available in 2011 Description Provides return results for the filed returns gives info on bank products estimates due dates mailing instructions etc as applicable Contains the same keywords and paragraph tags as the Result Letter but no pre Result Template Extension Letter written letter template is provided Explains that an application for extension has been filed Amended Letter Similar to the result letter but for an amended return Estimate Payment Provides details for making a 2012 estimate payment individual 1040 package Reminder only Scheduled Appointment Informs prior year clients of this year s appointment date and gives instructions for Reminder preparing for the appointment individual 1040 package only Referral Coupon Offers client a discount for referring another client individual 1040 package only Preseason Letter Reminder to 2010 clients that tax season is coming up all applicable packages Post season Letter Customized Supplemental Letter thanking 2011 clients for their business available for all applicable packages Fully customizable template that can be used to create a customer survey package Letter or
188. The Client Communications Editor accessed from Setup gt Letters is where you can Communica read edit re write print and save the letters contained in the program You can also tions Editor add your company letterhead and logo to the letters The right pane of the Editor dis plays the letter template The left pane displays in tree view the applicable para graphs and keywords by category Figure 2 19 Click to expand a category or click to contract it Hover your pointer over a keyword to view its description Keywords gt F Client Information Federal Return Paragraphs 8 Federal Amended Paragraphs Federal Amended Bal Due Paragraph Expanded Federal Amended Refund Paragraph category view Federal Amended Return Paragraph Federal Amended Zero Due Paragraph Federal Estimate Paragraphs Federal Extension Paragraphs Federal Return Results Federal Amended Results Federal Estimates wlth EedatalE tension Recut dhadha naani ain Conditional paragraphs H A Figure 2 19 Category tree left pane of Client Communications Editor While the result letters are designed with keywords inserted to handle most situations additional keywords are available if you want to further customize the letter Tax Year 2011 33 Software Setup Available Letters Drake Software User s Manual Table 2 14 lists all available letter templates All letters can be modified using the Cli ent Communications Editor
189. To create an auto worksheet see Auto Expenses on page 153 To associate a depreciable asset with another screen in Drake see Associ ating One Screen with Another on page 61 Click the Form 4562 link or press CTRL W inside the Depreciation Tip field of a supporting schedule s screen such as Schedule E to access the associated 4562 screen Entering Depreciable Assets Screen code 4562 Use the 4562 screen accessible from the Income tab to enter depreciation data Enter each asset on a separate 4562 screen To open a new screen press PAGE DOWN Tip Grid data entry can be used for the 4562 screen Press F3 to switch to and from grid data See Grid Data Entry on page 56 Required Required fields on the 4562 screen are described in Table 5 17 Fields Table 5 17 Required Fields on 4562 screen Field Description For Used for associating an asset with a form or schedule see Associating One Screen with Another on page 61 Description Description of asset This field supports 42 characters Per IRS regula tions only the first 24 characters are transmitted in e filed returns Addi tional characters are displayed in red on the screen Date Acquired Date the asset was placed in service Cost Basis Depreciable basis of the asset press F1 for further details Method Depreciation method Life Class life press F1 for a recovery period listing If EXP section 179 is selected as the de
190. Up a Report Drake Software User s Manual Drake 2011 Report Editor Step 1 Formatting of Reports Select the category of data and then the data itself When a keyword is highlighted its description will appear below Select that keyword by double clicking or using the select button Once the keywords are selected they can be dragged to create the desired order of columns Below this list is a sample of the the report and the print format Select Title and Description Report title Call List for all Preparers Report description List of appointments for all preparers Select Report Columns Categories Available columns Selected report columns All Categories v Appointment Date a Preparer Name Appointment Type Select gt Appointment Date City Start Time Client Type lt Unselect Taxpayer Name Comments a Taxpayer ID Duration alan Duration nselect fi Email Address Phone Daytime Phone Evening Group Meeting Phone Cell Phone Cell Client Type Phone Daytime Sample Report Landscape Call List for all Preparers Preparer Name Appointment Date Start Time Taxpayer Name Taxpayer ID Duration Pho 4 m r Help c Next gt Save Exit Figure 12 2 Report Editor Step 1 window for formatting reports 3 Revise the Report Title and Report Description as needed The Report Description text box is limited to 70 characters Note that the new data appears in th
191. WU programs can be installed from your Drake Software CD or Drake Support website Support DrakeSoftware com gt Download Center NOTE These products are included with the full Drake program Pay Per Return users must pay an additional fee for CWU This chapter focuses on the DDM and Tax Planner For CWU instruction the Client Write Up Manual is available on the Drake CD and from Support DrakeSoftware com New to Suite Products in 2012 With the 2011 tax program preparers have the option of using two new features with the DDM GruntWorx Provides a platform for organizing client documents and the abil ity to have certain Drake screens populated automatically with no data entry time SecureFilePro Provides a secure file sharing site where your clients can view and download their documents forms and returns Drake Document Manager The DDM is installed with the tax software You can access it by double clicking the ia Doc Mgr icon on your desktop Use the DDM to oc Mar Tax Year 2011 Store your clients documents Scanned documents and copies of your clients returns are stored in electronic cabinets folders and files Back up and Restore Make backup copies of your clients documents to and restore them from a specified location within your system Copy files to CD Copy DDM files directly to a CD Password protect Keep your DDM secure with password protection 2
192. X Problem with the transmission rotu completa E Imperfect return Ack file was not posted to your EF database Run Repair Index in Drake D Drake Software User s Manual Appendix C Keywords Appendix C Keywords Keywords are used in the Reports and Letters programs in Drake Report Keywords Report keywords appear as columns in reports Figure 1 Reports are generated from the Report Manager New Clients As Of 09 09 2010 Taxpayer Name Taxpayer ID Return Type Taxpayer Daytime Phone T Best Call Time lowa amp Spouse Fiingrour 0101000 030 Torii rrr enneth amp Jean Watson 513566120 1040 6169322411 nag a E A michameen all OPU aT aa Figure C 1 Report keywords appear as column headers in reports To view report keywords select Reports gt Report Manager from the Home window and choose to either open a new report or edit an existing report The Select Report Columns section of the Report Editor Step 1 dialog box lists the available and selected keywords for each column category Figure 2 shows the keywords for the Return Results category Select Report Columns Categories Available Columns Selected Report Columns Return Results y AGI Taxpayer Name Alimony Received Select gt Taxpayer ID Alt Min Tax Retum Type Applied lt Unselect ie Daytime Phone Balance Due axpayer Best Call Time Child Care Credit lt lt Unselect All Child T ax Credit Chil
193. Year 2011 295 Client Status Manager CSM Reports Drake Software User s Manual 1 From the Home window select Reports gt Fixed Asset Manager 2 Click Edit Macros to open the Fixed Asset Manager Macros dialog box This box has three drop lists one for type of Report one for Depreciation method and one for Style 3 Select a report type depreciation method and style for each report to be printed under the macro 4 Click Save to save your changes and return to the Fixed Asset Manager dialog box Figure 12 9 on page 295 To run the macro select Auto Code Print as the report type and click Run Report Client Status Manager CSM Reports Hash Totals 296 For information on running CSM reports see Chapter 9 Client Status Manager The Hash Totals report displays the number of forms and schedules generated on a selected return By consulting these totals the data entry operator can be reasonably sure that the correct values have been entered into the fields To generate a report of hash totals 1 From the Home window select Reports gt Hash Totals 2 Enter the SSN or EIN of a return 3 Click Continue The report is displayed in the Report Viewer 4 Click Exit to return to the Home window Tax Year 2011 1 3 Suite Products Drake s suite products can be integrated with the tax software to make your office run more efficiently The Drake Document Manager DDM Tax Planner and Client Write Up C
194. a city tax rates 280 penny rounding 24 pensions self employment 120 Personal Client Manager 26 50 PIN signatures auto generating for taxpayer 25 in data entry 146 147 of preparer 14 PMI private mortgage insurance 107 Populate GruntWorx function 314 Portal SecureFileProTM 318 321 postcards 277 power of attorney 14 147 PPR see Pay Per Return practice returns 64 244 preparer checklist for EIC 138 mode in Scheduler 71 PIN signature 14 schedules 75 81 security settings 15 setup 14 18 pre prepared entry also forms based data entry 281 presidential campaign 84 previously passive activities 108 pricing for a single return 46 maximum minimum fees 30 per item and per form 29 setup 29 printer setup 38 41 printing see also viewing bill summary 22 calculation details 174 carryover worksheets 22 checks 200 201 data entry screens 63 date of signature 23 depreciation schedules 22 documents only when required 25 due diligence info for homebuyer credit 26 EF status page 25 EIC due diligence documents 26 estimate vouchers 134 filing instructions 23 forms in a certain order 183 forms in a return 177 forms only when required 22 labels 277 letters batches 275 Tax Year 2011 Index list of EINs 279 list of firms 13 list of preparers in a firm 18 on the fly 41 options 182 184 organizers and proformas 70 preparer fees withheld 24 printer sets 178 referral coupons 23 return summary 22 sets 40 SSN on bill
195. a course of action for your client e Present a plan to your client Once the plan is approved you present it to your client If requested BPG s professionals can participate in the presentation but this is not required e Implement the plan Although you and your client are responsible for imple menting the plan BPG is available throughout implementation and will continue to be available for follow up In addition to helping you guide your clients BPG can be a significant revenue source for your business because you can charge consulting fees for both your work and the time BPG spends on each case generally four to ten times the number of hours as an accounting firm Tax Year 2011 Drake Software User s Manual Software Support For more information on how BPG works and how you can work with its experts to benefit your clients call 828 488 1950 extension 203 go to DrakeSoftware com or go to DrakeAdvisory com Software Support Several support resources are available from within the Drake program itself Access Frequently Asked Questions searchable help data entry help and broadcast e mails Frequently Asked Questions FAQs Each package in Drake has an FAQ screen accessible from any tab on the Data Entry Menu or by typing FAQ into the selector field and pressing ENTER FAQ screen content varies by state and package Searchable Help 4 All Drake windows except the data entry screens have a clickable Help
196. a er y agan Pe oh apa iiin on anatania Aana a gaat Pee TA Figure 5 16 Screen 8949 fields as columns in Excel worksheet Columns must be in the same order as the fields on screen 8949 When looking at Table 5 2 which shows the field column order note that the column names do not have to match the field names exactly Table 5 2 Spreadsheet Columns for Schedule D Import aa Ae Associated Field on Screen 8949 A TSJ B F C State D City E Date of Sale or Exchange F Date of Acquisition G Proceeds from sale of stocks bonds or other capital assets H Cost or other basis 97 Sales of Assets 98 Spreadsheet Drake Software User s Manual Table 5 2 Spreadsheet Columns for Schedule D Import Associated Field on Screen 8949 Column l Federal tax withheld J Wash sale disallowed Type of gain or loss Description ZIJA Loss not allowed based on amount in box 2 Note To have a check mark appear in this field enter any character into the spreadsheet column Basis not reported Form 1099 B not received Form 8949 Adjustment 1 Code Adjustment 1 Amount Adjustment 1 AMT Form 8949 Adjustment 2 Code Adjustment 2 Amount Adjustment 2 AMT Form 8949 Adjustment 3 Code Adjustment 3 Amount Adjustment 3 AMT AMT Cost Basis lt x s l lt c Alow wi o ul olz2z US Real Property Note To have a check mark appear in this field en
197. ad documents for one client at a time required if using documents that have Uploads been imported or printed to PDF follow these steps 1 From the file tree on the left side of the DDM 2 window select a client and open the folder containing the files to upload Item 1 in Figure 13 13 Documents appear in the Document pane 2 From the DDM 2 toolbar click GruntWorx gt Process Job For clientName to open the GruntWorx Job dialog box 2 316 Tax Year 2011 Drake Software User s Manual GruntWorx DDM 2 Only Tax Year 2011 File Setup Documents Help 2 2 gt 3 D gt PS t R S a 2 X B P gt tb OF Add Client New Folder Backup p File Copy Cut Paste Portal Import LinkFile Scan E mail Drag Off Help Exit Find Document Name Type Last Modified Description SG Certs 040 df Fle _ 12 20 2011 10 19 40 AM a c B Carter William 6665 H E com 0005 g D a g E iy F E Grunt Worx Job For Carter William 6665 E g sg L This will create a Grunt Worx Organize Document Token Information H P 5 Tokens Purchased 150 i Additional Options amp S 6 T Populate Includes Tax Data Import 1 additional token Tokens Used 1 a Trades Includes Sch D Import File 1 additional token Tokens Available 149 per 50 trades pices ae Help Me Choose Tokens Needed 1 E Send email when job is done to Files to submit with job DrakeDDM Clients C Carter William 6665 Tax
198. ake Software User s Manual To enter the amount of COBRA premium assistance received in 2011 NOTE go to screen 5 and enter the amount in the COBRA premium assis tance received in 2011 line of item 60 Exporting Data for Kiddie Tax 8615 Export Exporting Parent Information Importing Parent Information 132 The 8615 Export feature allows exporting of parent data to a child s Form 8615 This process consists of two main steps 1 exporting the data from the parents return and 2 importing the data into the dependent s return To export a taxpayer s information into a Form 8615 for the dependent 1 Go to View mode for the taxpayer s parent s return 2 From the toolbar click the 8615 Export button The Export 8615 dialog box lists the dependent names SSNs and export statuses for the return Figure 5 40 Drake 2011 Export 8615 x 8615 Export Utility This screen gives a list of children that are eligible to be exported Highlight the children and click the EXPORT button to continue First Name Last Name SSN Status O Scott Carter 400005008 Not Exported O Jimi Carter 400006663 Not Exported a ana aaiinmi lt ag RS naaa ana tn nnn nel ee ee ee Figure 5 40 Dependents entered on return 3 Mark the applicable boxes Ifa row is selected the parent s data is exported to that dependent s tax return in Drake 4 Click Export 5 Click OK Click Exit to c
199. ake Software User s Manual loaded with each print job If the printer is turned off however the fonts must be downloaded manually whenever the printer is turned back on To manually download fonts From the Home window go to Tools gt Download Fonts Click Download to open the Download Fonts dialog box Choose a printer from the Printer drop list Click Download As downloading proceeds the font download status is shown ohwhd Click Exit when the download is complete When choosing a printer from the Printer drop list be sure to select the printer that needs the fonts NOTES To set up options for downloading fonts go to Setup gt Printing gt Printer Setup Under the F7 Options tab select an option from the PCL Soft Font Option drop list Blank Forms All forms and worksheets supported by the program are available as blank forms in Tools gt Blank Forms If a state prohibits printing blank state forms contact the state revenue office to obtain them To view or print a blank form in Drake 1 From the Home window go to Tools gt Blank Forms The Blank Forms window Figure 11 3 displays form categories names and descriptions for each package TNN a Individual Corporate SubS Partnership Fiduciary TaxExempt Estate lt Tax packages Proformas Official Name Description A hoa 1040 PG U S Individual Income Tax Return Arkansas 1040 PG2 U
200. ake and performs the following tasks e Checks for new acknowledgments e Transmits files to Drake e Retrieves pending acknowledgments of the transmitted files if available e Checks for Drake e mail if this option is selected see following note Logs out of Drake Transmission notes appear in the Communications box of the Transmit Receive window as transmission progresses When transmission is complete all returns trans mitted through Drake are forwarded to the correct IRS processing center 6 Click Exit to close the Transmit Receive box Tax Year 2011 Drake Software User s Manual E filing a Return To have the system check for Drake e mail during transmission go to Tip Setup gt Options EF tab and select Check for email during EF transmit receive Receiving To check for acknowledgments without transmitting any files to Drake go to Acks Only EF gt Transmit Receive and click Acks Only The program checks for federal and state acknowledgments bank product acknowledgments and check authorizations See Step 4 Process Acknowledgments following for more on acknowledgments Step 4 Process Acknowledgments When Drake receives a transmission it immediately returns a one letter acknowledg ment or ack When the IRS Submission Processing Center receives the return it sends an ack to Drake which you can pick up by logging in to Drake Ack To process acks go to the Home window and select EF
201. ake at Tools gt Blank Forms or call 800 829 1040 8857 Form 8857 Request for Innocent Spouse Relief If question 3 on this screen is answered Yes do not file Form 8857 File Form 8379 instead For question 23 use the SCH screen code 209 to submit information about assets 9465 Form 9465 Installment Agreement Request Form 9465 is e filable if the taxpayer uses direct debit to pay Otherwise this form must be paper filed If e filing a PIN is required indicate Form 9465 and enter prior year AGI on the PIN screen W7 Form W 7 Application for IRS Individual Tax payer Identification Number ITIN This form is not e filable Statements and Claims Table 5 22 lists additional screens for statement and claim forms Table 5 22 Statement and Claim Forms Available from Other Forms Tab in Drake Screen Form Notes 2120 Form 2120 Multiple Support Declaration The rules for multiple support agreements still 8332 Form 8332 Release of Claim to Exemption for apply to claiming an exemption for a qualifying rela Child of Divorced or Separated Parents tive but they no longer apply to claiming an exemp tion for a qualifying child For the definitions of qualifying relative and qualifying child see your tax return instruction booklet 1310 Form 1310 Statement of Person Claiming If anything other than box C is selected in Part of Refund Due a Deceased Taxpayer the screen or
202. al returns that require them For more information see Overriding the Bill Amount on page 45 The program now includes options to add a custom fee and a financial product assis tance fee Both fees are included in the Forms section of the bill e Custom fee The custom fee is charged on all client returns Use item 0387 in the Pricing Setup window to assign a fee name description and amount e Financial product assistance fee Use this option item 0212 in Pricing Setup to add a charge to all returns that include a bank product This fee is not included on the bill if any of the following are true 29 Software Setup Minimum amp Maximum Fees Use the scroll bar or arrow keys to find forms Drake Software User s Manual The firm state is Arkansas Maryland Maine or New York See Program Help link in Setup gt Options Administrative Options In Setup gt Options Administrative Options the option to charge all tax payers the same fees is marked In Setup gt Pricing the Include on Bill box is not marked for this fee To set minimum and maximum fees to be charged for a return 1 From the Home window go to Setup gt Pricing and select a package from the Form box All forms for that package are displayed in the grid below 2 Scroll down to Forms 0255 and 0256 the minimum and maximum fee settings ae Double click a row and enter the fee Repeat for the other form if desir
203. alog box includes Process button circled To have a certain preparer s name appear on the preseason engage ment and privacy policy letters select a name from the Preparer Over ride drop list 4 Click Process Figure 4 7 to open the Batch Printing dialog box Figure 4 8 Proformas Organizers Forms may be toggled on off for printing purposes Simply choose the appropriate tab scroll through the list of forms and check uncheck the appropriate forms Click Detail to enable disable specific proformas organizers and to review their contents 1040 Organizer 1040 Proforma 1120 Proforma 11205 Proforma 1065 Proforma 1041 Proforma Name Description a COVER Envelope Slip Sheet LETTER Pre Season Letter PRIVACY Privacy Policy Letter E ENGAGE Engagement Letter MIREFERRAL m steal Cou OF EE A then ann E itil Ath ta etme Figure 4 8 Select forms to print from the Batch Printing dialog box 5 Select the individual forms to print 70 Tax Year 2011 Drake Software User s Manual Scheduler Scheduler Scheduler 6 Click Print and then click Print again To print organizers and proformas from the Scheduler go to the Sched uler s Appointment Detail toolbar and click Proforma or Organizer Next follow Step 3 through Step 5 in the procedure described previ ously For more on the Scheduler see Scheduler on page 71 If printing proformas for multiple return types
204. are User s Manual Repair Index Files Click a column 2 Pick a form category default is Federal and tax package default is Individual header to sort forms in ascending 3 Scroll through the form list to locate a form or descending arden 4 Select a form and click View or Print IRS Rev Proc 96 48 requires the Paperwork Reduction Act Notice to be N DTE distributed with federal forms When providing a blank copy of a federal form you must include a copy of the notice Access it from Tools gt Blank Forms gt Federal Under Individual select PAPERWRK PG Repair Index Files An index file is a comprehensive list of data on the client files in Drake Keep index files current by repairing them regularly as part of your general file maintenance rou tine Table 11 1 lists specific instances that could require repair of index files Table 11 1 Situations that Might Require Repairing of Index Files What To Situation h Repair Files were restored using Tools gt File Maintenance gt Restore Name Index A client record was deleted through Tools gt File Maintenance gt Delete Name Index Client Files The EF gt Search EF Database function does not seem to work properly EF Index Records were added to the EIN database EIN Index The Client Status Manager CSM index was updated CSM Index To repair index files Shortcut Press 1 From the Home window go to Tools gt Repair Index Files TAAA 2 Sel
205. arts I II and IV are located on the EIC screen The EIC screen allows preparers to electronically track data related to NOTE IRS due diligence requirements for Form 8867 In the event of a due dil igence audit it provides an electronic record corresponding to the printed Form 8867 To complete Form 8867 for a return go to the EIC screen accessible from the Gen eral tab and mark all required boxes EIC Due Diligence Screens Screen codes EIC1 ElC2 EIC3 EIC4 Because a thorough interview is necessary to ensure that all information is gathered about income deductions credits etc a comprehensive interview process should be part of a tax preparer s office operating procedures This same logic extends to EIC due diligence requirements Since individual tax scenarios change from year to year all clients including returning clients should be interviewed in order to obtain a clear picture for the current year tax return The EIC Due Diligence screens can be used as a tool for retaining the inquiries made of taxpayers to ensure that they meet EIC eligibility requirements Described in Table 5 14 these screens contain interview questions and fields that must be com pleted if required by selections made in Setup regarding EIC Table 5 14 EIC Due Diligence Screens Screen me Screen Name Description Code EIC1 EIC Due Diligence Qualifying Child Screen contains questions pertaining to the age relati
206. ata entry 30 mailing labels 275 margin adjustments letters 35 marketing kits 247 married filing separately see MFS filing status maximizing screens 20 maximum minimum fees 30 meals and entertainment 117 meals subject to DOT rules 94 medical savings accounts MSAs 115 message pages EF messages 210 MFS filing status claiming dependents 85 ineligibility for child care credit 125 splitting a joint return 61 using Quick Estimator 282 mileage and moving expenses 118 xiii Index prior year 154 rates 154 military addresses 84 and EIC 139 data required for bank products 199 processing codes 84 related tax forgiveness 162 Military Spouses Residency Relief Act 94 ministerial income allocation see clergy MOM see Multi Office Manager months in home dependents 85 mouse 51 moving expenses 118 MSG state EF message pages 212 multi form code MFC fields 61 Multi Office Manager MOM 25 221 224 225 multiple EFINs 223 multi screen forms 56 multi state apportionment 2 N net operating losses NOLs 155 156 network installing Drake on a 9 options 8 peer to peer 214 server only option 9 sharing files on a 19 new features this year 1040 package 1 4 other packages 327 332 non loan products 192 non paid preparers 12 non passive activities 108 non profit contributions 103 notary income exempt 94 NOTE screen 166 notepad PAD screen 167 notes pages generated with return 173 release 247 NWClient 8 9 O
207. ate line on Part Il of Schedule E State K 1 In cases where the state K 1 amounts differ from federal K 1 amounts such as when a Am ounts state does not take the federal limits on depreciation indicate the difference in the If Different software so the correct K 1 amounts will flow to the correct federal and state forms By default the program uses the federal K 1 amounts for both federal and state calcu lations If the state K 1 amounts differ from the federal enter the state amounts in the State column fields of a K1 screen Figure 5 27 Amounts from K 1 Federal 4 Ordinary income or loss 2 Rentalreal estate income or loss 3 Other rental income or l0SS 4 Guaranteed payments Sy MDI OSE MACON ING TE E Interest inCcOMe atan de Ade aha as Aien chemin tees anani Figure 5 27 Some of the Federal and State K 1 columns from screen K1S Multiple In some cases an entity will issue Schedule K 1 forms for multiple states requiring States the preparer to enter two or more amounts for the same state K 1 items To enter federal and state K 1 information where multiple state K 1s are issued 1 Enter all information for federal and the first state on the K1 screen Enter data in the State column only if the state amount differs from the federal From the first page of the screen press PAGE DOWN to start a new screen 3 Inthe F tex
208. atermark Print Preparer Set watermark Password Protect can06665 Figure 6 3 Print Selection dialog box for Drake PDF Printer 4 optional The program is set up to password protect the PDF document By default the software uses the first four letters of the client s last name and the last five numbers of the taxpayer s SSN EIN as the password An administrative user can change this default in Setup gt Options Administrative Options To print the PDF document without having to enter the password clear the check mark from the Password Protect box 5 optional To have the program open Adobe once the PDF document is created click Settings and mark Launch Adobe after creating a Drake PDF D Select any other options as desired from the Print Selection dialog box N Click Print to open the Save As dialog box 8 Ifnecessary assign a filename and select a location for the document the default location is the current year folder in the DDM 9 Click Save If you password protected the PDF document the password will be required for any one inside or outside of Drake who tries to open the file Default printer sets are established in Printer Setup see Printing Sets on page 40 Printer Sets but you can override the defaults from Enhanced mode 178 Tax Year 2011 Drake Software User s Manual Quick Printing a Single Form Shortcut Click CTRL Q to print the form in view
209. ating new return Require double entry of SSN or EIN helping eliminate erroneous entries Enable Windows standard keystrokes CTRL X cut CTRL C copy CTRL V paste SHIFT CTRL X autofill amended screen SHIFT CTRL C calculate return SHIFT CTRL V view return Autofill preparer and firm number on new returns Automatically enter the firm number and preparer number where required on data entry screens Magnify data entry Enlarge the active field for easier reading Tax Year 2011 Drake Software User s Manual Software Setup Table 2 5 Options Setup Data Entry Option Description Activate W 2 wage and federal with holding verification fields To ensure accuracy of data entry require wage and withholding amounts be entered twice on the W2 screen Do not restrict minimum font size in 800x600 This is a sizing option for computers using an 800x600 resolution If this option is selected the program will not attempt a font substitution to retain readability Text on screens will shrink to fit as needed Language Options 1040 package only Choose between English and Spanish for menus data entry screens field specific help text and error codes Letter case for data entry Choose between all uppercase letters and mixed case Override field indicator Format override fields in data entry see Override amp Adjustment Fields on page 60 Adjustment fie
210. ation credit the software does not apply this information when calculating the federal return Multiple If education credits are to be filed with one state and tuition and fees deductions with States another select the applicable states from the drop lists in each section of the screen Selecting a When entering education expenses complete either the American Opportunity Credit Type Credit or the Lifetime Learning Credit field as applicable Form 1098 T Enter amounts from Form 1098 T Tuition Payments Statement on the 8863 8917 screen Use screen 3 to enter the amount received from any taxable scholarship that was not reported on a W 2 or 1098 T Domestic Production Activities Deduction Screen code 8903 Use the 8903 screen accessible from the Adjustments tab for Form 8903 Domestic Production Activities Deduction Tax Year 2011 121 Other Adjustments Drake Software User s Manual Entering Data from Multiple 8903 Forms Only one Form 8903 can be attached to a taxpayer s e filed return To e file data from multiple 8903 forms on a return calculate the total for each of the 8903 items and enter the combined totals onto the 8903 screen Other Adjustments Other adjustment related screens in Drake are listed in Table 5 7 These screens are all available from the Adjustments tab Table 5 7 Other Adjustment Screens Available from Adjustments Tab Screen Form or Worksheet Notes CLGY Ministerial Income Allocation See Mi
211. ature to work New in 2011 an appointment on preparer calendar can be changed by dragging and dropping it to another section of the calendar grid For a Group To schedule multiple preparers to meet with a client follow the instructions provided of Preparers in For an Individual previously Instead of selecting only one preparer in Step 4 however you can select up to 50 There is no need to double click a name or to press SHIFT or CTRL while selecting Preparer s Eddie Figure 4 14 Multiple preparers selected for a group meeting To clear a selection click the preparer s name a second time IMPORTANT In order to save the appointment a client name must be entered Batch The batch appointment generator reviews client and recurring appointments from the Appointment previous tax year and creates new appointments in the current year s Scheduler You Generator can set workday and holiday information that will roll forward or backward to an available appointment date This feature is available for users with administrative rights Appoint NOTE ments marked private see For an Individual are excluded from the batch process Tax Year 2011 77 Scheduler a iit 7 Batch Appts Entering Overlapping Appts 78 Drake Software User s Manual To set up appointments using the batch appointment generator 1 From the Appointment Scheduler click the Batch Appts icon and select Gener ate batch ap
212. ault To address If an b AUTI DN address is entered in the To field every return e mailed through View mode will be sent to that address 5 Make any changes to the default message 6 Click Save Your default settings will be applied for all e mailed returns Sending a Return to a Client To send a return to a client from Enhanced mode 1 Open the return 2 Click View or Print to access View mode 3 Select the forms to be included in the e mail In Enhanced mode select forms from the Forms tree in Basic Print mode click a form and choose Select Form from the right click menu 180 Tax Year 2011 Drake Software User s Manual E mailing from View Print About Passwords 4 Click Email to use the default e mail method or click the arrow next to the Email button to choose a method The Password Protect dialog box is opened Figure 6 7 showing the password Figure 6 7 see About Passwords follow ing for more information on passwords Drake 2010 Password Protect PDF Attachment Password Protect PDF Attachment The default password is the the first 4 characters of the client s last name lowercase with no spaces followed by the last 5 digits of the SSN Please select a password for the PDF attachment cart06664 OK Cancel Figure 6 7 Password Protect PDF Attachment dialog box 5 Click OK The e mail message is opened in the desired e mail program with the selected return
213. aunched when the PDF is created This option prevents your having to go to the DDM and manually locate the new PDF for viewing If the main box of a set is selected all sub boxes are automatically selected Tax Year 2011 177 Viewing and Printing a Return Drake Software User s Manual Shortcut Press CTRL P for the Print Selection option Printing to Drake PDF Print Printing 3 Click Print to open the Print Selection dialog box If you click the arrow next to the Print icon select Print Selected Forms 4 optional Select any printing options shown in the Print dialog box 5 Click Print again All of the selected items are printed To print tax return forms and other documents as PDF documents 1 Open Enhanced mode for a return The All Forms tab is shown by default 2 Select the forms to be printed To print all forms in a set select all of the boxes in the tree view under All Forms 3 Click the arrow next to the print icon and select Print Selected Forms to PDF The Print Selection dialog box is displayed with the Drake PDF Printer selected Drake 2010 Print Selection nes Print Dialog Select desired printer Use Properties to further configure printer directly Use Settings to configure Drake specific options Printer Drake PDF Printer Tray Main paper source Settings Number of copies 1 I Print a custom watermark Duplex a I Staple J Print Client Set w
214. ax B 2006 B 2007 B 2008 a 2009 a 2010 2011 Aa wan pn on pry a Bes Figure 13 2 Each drawer contains a client folder Subfolders are titled Tax and 2011 e When you create a return for a new client in Drake you are required to enter the client s name Once a client s name is entered in Drake a client folder is automat ically created in the DDM e The Doc Mgr button in data entry opens the DDM to the client s tax year folder e Files saved in a client s folder can be attached through the Drake e mail program or sent as a PDF attachment to a return 1120 1120S 1065 and 990 packages only see manual supplements for these packages to be published in early 2012 To implement the Drake document file structure 1 From the Home window go to Setup gt Printing gt Document Manager to set the Document Manager Location The default location is the DRAKEDDM folder in the same drive as Drake11 To store your DDM data in another location click Search and click Yes when the program displays the correct location 2 Inthe Folder Structure section select Allow Drake to set up Document Man ager client folders Recommended If this box is not marked specify the loca 301 Drake Document Manager Drake Software User s Manual DDM Access Options 302 tion where the DDM should store any scanned documents or returns printed through the
215. ax returns or amended PA 40 Pennsylvania Personal Income Tax returns for any taxable year shall be e filed in the manner prescribed by Departmental instructions Corporation Returns For tax years starting on or after January 1 2011 paid third party tax preparers who prepare at least 50 PA Corporate Tax Reports RCT 101 are required to e file their clients tax reports during calendar years starting on or after January 1 2012 Once a third party preparer is subject to the e filing mandate the third party preparer will continue to be subject to the mandate regardless of how many PA corporate tax reports he or she prepares during the year A paid tax preparer may be allowed to file a paper report when a taxpayer specifically directs the preparer to do E 5 Rhode Island South Carolina Utah Virginia West Virginia E 6 Wisconsin Drake Software User s Manual so or if the preparer proves that e filing would place undue hardship on the preparer by filing a written request for a waiver Volunteer unpaid preparers people who pro vide only support such as typing employees of a business who prepare tax reports for other employees and officers of the business and fiduciaries who prepare reports for the trusts and estates they serve are not subject to the mandatory e filing requirement Pennsylvania Tax Update 157 08 01 2011 Legislation signed into law on July 1 2008 indicates that Rhode Island requires pro fessiona
216. be set globally from Setup gt Options gt Optional NOTE Items on Return Note that amounts on federal returns must be rounded to the nearest dollar in order to be eligible for e file Forms Based Data Entry Tax Year 2011 Formerly known as pre prepared data entry forms based data entry allows you to enter a previously prepared 1040 return into the tax software To enter a forms based return in Drake 1 From the Home window go to File gt Forms Based Data Entry 2 Enter or select the desired return 3 Click a link to open the screen for a particular line Repeat for other lines 4 Once you ve filled in all return data click Exit to close the form If NONE is selected for Preparer on screen 1 the program applies the same designation for Firm and nothing is shown on the corre sponding lines of the printed return unless corresponding entries are NOTES made on the PREP screen In addition the program will print as the ERO the preparer selected as the Default ERO on the EF tab under Setup gt Options If the Preparer field is left blank the program will use the correspond ing information from Setup gt Preparer s respectively Note that the same toolbar from data entry is available in forms based data entry 281 Quick Estimator Drake Software User s Manual Quick Estimator Use the Quick Estimator to quickly calculate results for an individual 1040 return Do not e file or mail the re
217. been e filed and on returns where the preparer and ERO are different for example if an override field on screen 1 is used To have the alternative electronic signature printed on a return that has been e filed you must re enter this number in the PIN for preparer s alternative e signature field on the PRNT screen for that return 7 Ifapplicable enter the firm s Republic Bank Identification Number RBIN 8 Enter Power of Attorney information necessary for Form 2848 Power of Attor ney and Declaration of Representative 14 Tax Year 2011 Drake Software User s Manual Software Setup Preparer Designation Select the designation under which the preparer is authorized to practice before the IRS CAF Number Enter the preparer s Central Authorization File CAF number assigned by the IRS Jurisdiction Enter the jurisdiction in which the preparer is authorized to practice before the IRS If the preparer is an IRS Enrolled Agent EA enter the EA number here 9 Enter W 7 Acceptance Agent information for the preparer if applicable You are now ready to set up preparer security If you click Save at this point you will be reminded that security rights need to be set before the preparer can access any fea tures in the program If you select to close Preparer Setup now be aware that you will have to return at some point to set the preparer s security rights To proceed go to Step 4 in the following
218. ble 5 19 Screen 4562 Fields to Complete for First Year 8829 Screen 8829 Information or Text to be Entered For Select 8829 Multi form code Enter the instance of Form 8829 to be associated with this 4562 screen See Associating One Screen with Another on page 61 Description Enter a description of the asset Date Acquired Enter the date the home was placed in service Cost Basis Enter the smaller amount the cost basis or the fair market value This amount would normally be entered in Part Ill of the 8829 screen Do not include the cost of the land Business Use Leave this field blank default is 100 Method Federal column Select SL Straight Line Life Federal column Enter the number 39 Land cost Enter the cost of the land only This amount should not be included in Cost Basis above This amount would normally be entered in Part III of the 8829 screen Main Home for 8829 Select this box if the asset was the main home This information is posted to the bottom of Form 8829 when the return is generated Net Operating Losses This section explains how to enter carrybacks and carryforwards of net operating losses NOLs in Drake Carrybacks from Future Years Enter NOL carryback amounts from future years on screen 3 in the NOL field Figure 5 55 This field can also be used to amend the current year amount or to adjust carryback amounts calcu
219. box to be opened before each print job 38 Tax Year 2011 Drake Software User s Manual Software Setup Table 2 15 Printing Setup Tab Field Description F6 Sets Setup Tray Default is Main Paper Source Change the default if you have displays the current a multiple tray printer and will not be printing from the main tray default printer and the differ ent types of sets that can be Duplex Directs printer to print duplex Only forms that are approved for printed see Printing Printer duplex will be printed as duplex Sets on page 178 Duplex all Directs printer to duplex print all forms approved or not Not available for sets to be mailed to the IRS or a state Staple If the printer supports stapling after each print job select this option to turn stapling on Print set Indicates which sets should be available for printing after a return is calculated Watermark Watermarks to be displayed on the Client and Preparer copies text respectively Defaults are Client Copy and Preparer Copy F7 Options PCL soft font Many printers require soft fonts to be downloaded before tax used to set up advanced option forms can be printed Select the desired downloading option printing options not related to EF DE a specific printer Classic print For preparers who prefer Basic View See Viewing a Return mode Enhanced Mode on page 174 Drake s Classic Print mode
220. cable select a screen from the For list to indicate the screen with which the credit carryforward should be associated If the return has multiple screens for the form selected in the For NOTE drop list use the multi form code MFC text box See Associating One Screen with Another on page 61 3 Select a credit form from the Form drop list 4 Enter the carryforward amount for the selected credit When the return is calculated the carryforward amounts flow to lines 3b and 4b and 1b if applicable of Form 8582 CR and to the corresponding worksheets and the allowed credit amounts flow to Part III of Form 3800 NOTE Amounts on lines 3a and 4a credits from Worksheets 3 and 4 flow from the screen K1P K18S etc associated with the PACR screen Worksheets When a carryforward amount is linked from the PACR screen to another screen the 3 and 4 program produces one of two worksheets for the following lines of Form 8582 CR Tax Year 2011 127 Child Tax Credit Drake Software User s Manual e Lines 3a and 3b for low income housing credits for property placed in service after 1989 e Lines 4a and 4b for all other passive activity credits NOTE In View mode these worksheets are WK_CR3 and WK_CR4 Each worksheet shows the name of the activity partnership S corporation etc the associated form the current and prior year credits and the total credits Figure 5 38 shows an example from Worksheet 3 for lines 3a and 3b
221. calculations 179 expense elected this year 179 expense allowed this year 179 expense elected in prior years 179 expense allowed in prior years Bonus depreciation Additional Depr Elections Prior bonus depreciation Safe Harbor z Figure 5 53 On the 4562 screen select EXP 1 to expense entire amount under section 179 Use the 179 Expense fields 2 if expensing only a portion of the amount If the amount must be carried to a listed property make an entry in the Listed Prop Type field in the upper right section of the 4562 screen See Listed Property Type on page 149 For returns being prepared in Drake for the first time the prior section 179 expense must be entered manually for the IMPORTANT depreciation to be calculated correctly In the future the 179 expense allowed in prior years field see Figure 5 53 will be updated based on system calculations If the taxpayer expenses assets using section 179 the program produces a WK_1179L worksheet Section 179 Business Income Limit with the return Tax Year 2011 Drake Software User s Manual Depreciation Investment Credit Codes If an investment credit code is required select the code from the Investment credit code drop list on the 4562 screen Asset amp Department Numbers The Asset number Department number and Asset Category fields on the 4562 screen are for tracking purposes in the Fixed Asset Ma
222. calculations if applicable Because amounts flow from both the K1 and Basis Worksheet screens to determine the amount of basis the taxpayer has for deducting losses from the K 1 it is necessary to enter all basis data on the Basis Worksheet screens These are accessed from either the K1P or K1S screen Tabs are shown in Figure 5 26 on page 108 If you calculate a return with K 1 information but have not entered any NOTE thing on the Basis Worksheet screens the program generates a note advising you to do so 110 Tax Year 2011 Drake Software User s Manual Supplemental Income How the Once it is able to calculate the adjusted basis the program takes steps based on calcu Calculation is ation results Applied e Adjusted Basis More than Zero If the adjusted basis is greater than zero based on current and prior year entries amounts flow to the return and the soft ware tracks and updates the adjusted basis amounts going forward e Adjusted Basis Zero or Less If the adjusted basis is zero or less based on cur rent and prior year entries amounts flow to page 2 of the printed Adjusted Basis Worksheet see Printed Worksheets on page 112 to determine how much loss is allowed in the current year Disallowed amounts are stored and updated to the next year Adjusted The first Basis Worksheet screen contains fields that are necessary to properly calcu Basis Jate adjusted basis Figure 5 29 shows the adjusted basis fields for
223. ck Print NOTE 276 The Mailing Labels tool can also be used to run reports See Chapter 12 Reports Tax Year 2011 Drake Software User s Manual Letters Printing a Drake provides a convenient way to print a mailing or folder label from data entry To Client Label printa single label from data entry From Data Entry 1 Ensure that the label printer is installed properly per the manufacturer s instruc tions and that the label sheet is properly loaded 2 In data entry go to screen 1 of the return 3 Right click on the screen not a field and select Client Labels gt Name Format from the right click menu 4 Select the name format LastName FirstName or FirstName LastName 5 Right click on the screen not a field again and select Client Labels 6 Choose from the following label types e Mailing Label e Folder Label SSN EIN Name or Name only 7 Select the label printer from the Print dialog box 8 Click OK to print the label This option is designed for use with a dedicated label maker such as the DYMO LabelWriter 400 Label Printer Data can be printed on any NOTE label size but DYMO Label Writer labels size 30252 are recom mended because they work well for folder and mailing labels Size 30252 labels are included in the DYMO printer starter kit Envelopes To print addresses on envelopes Ensure that envelopes are loaded properly into the printer From the Home window go to Tools gt Letters gt Env
224. click Go All codes that include the search term are displayed as shown in the example in Figure 5 14 Please input search data publishing Go Results ds a e r a A Son A E a E hates Figure 5 14 Example of a business code search on screen C Select the desired code and click OK or press ENTER Tax Treatment Codes 94 Screen C contains a Special tax treatment code drop list Figure 5 15 Special tax treatment code N Exempt notary income D Meals are subject to the DOT hours of service rules P Paper boy excluded from SE under age 18 R Qualifying income under the Military Spouses Residency Relief Act S Figure 5 15 Special tax treatment code drop list on screen C Tax Year 2011 Drake Software User s Manual Depreciation Sales of Assets Use the Depreciation Detail 4562 screen to enter depreciable assets for Schedule C Note that the Depreciation field on screen C is an adjustment field and that a number entered there is adjusted by calculations from the 4562 screen For more on entering depreciation in Drake see Depreciation on page 147 Loss on Schedule C If Schedule C shows a loss and all investment is not at risk the program produces Form 6198 At Risk Limitations If part of a loss may be disallowed enter the required data on screen 6198 If the taxpayer does not materially participate the loss could be limited by Form 8582 Passive Activity Loss Limitations This is
225. clients Be very careful about which documents you upload Timing Out and Logging Back In You will be timed out logged out of the SecureFilePro website if no activity has occurred for an extended time To log back in to SecureFilePro click Log In link in the lower left corner of the DDM 2 window See Figure 13 16 NOTE Your Portal username and Portal password are required in order to log back in To log out of the system manually click Log Out in the lower left corner of the DDM 2 window See Figure 13 16 System Management Drake issues occasional DDM updates When updates are needed a message appears in the lower left corner of the DDM 2 dialog box Figure 13 16 Click Get Updates to download the latest updates 320 Tax Year 2011 Drake Software User s Manual Tax Planner FF 8 avva zry i Portal Login Logged In Log Out Update Status Updates needed Get Updates C DRAKEDDM CLIENTS Figure 13 16 Get Updates button for downloading DDM 2 updates You can also get updates through the DDM 2 menu bar Click File gt Update Man ager When the DDM Update Manager dialog box is opened click Update Tax Planner The Drake Tax Planner helps you assist your clients with planning for financial deci IB sions Clients can see how events such as the birth of a child a marriage or a new job Velet will affect their short and long term finances and tax liability The Tax Planner i
226. clude reports on new clients preparer call lists and appointments My Reports Reports that you create either by editing one of the pre defined reports or by starting with a blank report are automatically stored in My Reports Other Report Options This category gives you access to the reporting capabilities of the CSM and the Fixed Asset Manager and allows you to compile depreciation lists and hash totals Tax Year 2011 283 Report Manager Drake Software User s Manual As shown in Figure 12 1 the Report Manager uses a standard tree format Click to expand a category list click to collapse the list and hide the reports in the category Drake 2011 Report Manager xs Drake Software Reports The list below contains several standard report options First select a category and then a report A sample of the selected report appears at the bottom of the screen When you have selected the report you wish to run click View Report to continue Click here for a complete list of standard report descriptions Client Reports EF Bank Reports 6 Scheduler Reports amp Client Contact Call List for all Preparers New Client Appointments Preparer Appointments Preparer Call List a My Reports Other Report Options Sample Report List of appointments for all preparers Landscape Call List for all Preparers Preparer Name Appointment Date Start Time Taxpayer Name Taxpayer I
227. codes ADMN ESUM Tax Year 2011 Other Special Features in Data Entry Use the Administrative Tracking ADMN and EF Summary ESUM screens to track the progress of each return The ADMN screen shows at a glance who did the work who reviewed it and how much time was spent on the return It also shows bank product information The ESUM screen provides an e file summary of the return You can also review e filing and bank product information Use the ADMIN screen to track the data shown in Table 5 25 Table 5 25 ADMN and ESUM Screen Information Type of Information Fee and Payments ADMN Description Amounts are updated from prior year First came in interview ADMN Used in timed billing optional feature Preparer Contribution ADMN Used to track which preparers made con tributions to the return preparer entry NOTE Reviewer Contribution ADMN Used to track which preparers reviewed the return preparer entry Approved Copy assemble Client contact Cli ent pickup Date promised Date completed ADMN Prior year bank product data ADMN Data entry stats for the return admin users only ADMN EF transmission data admin users only ESUM Non traditional return types admin users only ESUM Current year bank product data ADMN Used to track the various stages of return completion preparer entry Dates and amounts are retained from prior year fields are
228. colors Colors 1 From the Drake Home window go to Setup gt Colors 2 Under Program Colors choose one of the following options e Use Windows System Colors Program screens inherit the color scheme used by the operating system Use Define e Use Custom Created Colors The Program text color and Program Custom Colors to creole a new Color background color boxes to the right become available Click a box to view the Windows color palette and choose a color 3 Click OK Data Entry To change the color of a specific area in data entry Colors 1 From the Drake Home window go to Setup gt Colors 2 Click a color box in the Data Entry Colors box to open a Windows color palette 3 Select a color and click OK Tax Year 2011 37 Software Setup Drake Software User s Manual 4 Once all color selections are made click OK 5 To restore the original color settings in Setup gt Colors click Restore and then click OK Printing Setup Use the Printer Setup to e Establish the printer to be used with Drake e Integrate the Drake Document Manager DDM with your client files in Drake e Install a Print to PDF option that allows you to create PDF files Even if your office uses the same printer for tax returns and the DDM the DDM is a stand alone tool and requires separate setup from the Drake tax program Your Windows default printer is designated as the Drake default printer NOTES when Drake is installed Yo
229. come line 4835 Form 4835 Other income line 982 Form 982 Total amount of discharged indebtedness excluded from gross income line Foreign Earned Income Enter foreign earned income amounts on the applicable income screen W2 C FEC etc see Foreign Employers on page 87 Foreign earned income is calculated into the total income line of Form 1040 116 Tax Year 2011 Drake Software User s Manual Educator Expenses Excluding Ifthe taxpayer qualifies for the foreign earned income exclusion use the 2555 screen Foreign accessible from the Other Forms tab to complete Form 2555 Foreign Earned Income Income The income amount from this screen flows to the 1040 as a negative number in other words it is subtracted excluded from the total income shown Form 1040 Foreign income must be included in total income via a W 2 Schedule C etc before it is excluded from total income using Form 2555 NOTES The 2555 screen consists of five screens or pages accessible by clicking the links at the top of the screen To create a new second 2555 screen press PAGE DOWN Educator Expenses Screen code 4 Enter educator expenses in the Educator expenses field on screen 4 Employee Business Expenses Screen code 2106 Use the 2106 screen accessible from the General tab to enter data for Form 2106 Employee Business Expenses The 2106 screen expense flows to the Job Expenses and Certain NOTE Miscellaneou
230. computed automatically E filing Schedules C and C EZ Only one Schedule C EZ can be e filed per return but up to eight Schedule C forms can be e filed per taxpayer If necessary to allow e filing keep the short form EZ from being generated by selecting the Suppress Schedule C EZ box on screen C Sales of Assets Screens for entering gains losses and sales of assets are listed in Table 5 1 These screens can all be accessed from the Income tab of the Data Entry Menu Screen 8949 Table 5 1 Screens for Entering Gains and Losses Screen or Form Name Form 8949 Sales and Other Dispositions of Capital Assets This screen also covers Schedule D and Form 1099 B and can be accessed from the selector field by using the 8949 D or 99B code D2 Loss Carryovers and Other Entries not an IRS form 2439 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 4255 Form 4255 Recapture of Investment Credit 4684 Form 4684 Casualties and Thefts 4797 Form 4797 Sales of Business Property 6252 Form 6252 Installment Sale Income 6781 Form 6781 Gains and Losses From Section 1256 Contracts and Straddles 8824 Form 8824 Like Kind Exchanges HOME 99C Worksheet for Sale of Residence not an IRS form Form 1099 C Cancellation of Debt When forms require identical data such as when amounts from the 4684 and 6252 screens must be carried to Form 4797 D
231. d Worksheets return In View mode the worksheets are listed as WK_IPRSK for partnerships and WK_ISRSK for shareholders Two copies of the worksheet are printed for each Schedule K 1 one for regular tax and one for the alternative minimum tax AMT Use the scroll bar in View mode to see both copies To force the software to print the At Risk Limit Worksheets even when NOTE they are not needed mark the check box at the bottom of the 6198 At Risk continued tab Farm Income Entry fields for the following farm related forms are located under the Income tab Screen codes e Schedule F Profit or Loss From Farming can also be used with Form 1065 F J 4835 A Schedule J Income Averaging for Farmers and Fishermen e Form 4835 Farm Rental Income and Expenses Enter crop insurance and disaster payments for Schedule F and Form NOTES 4835 on the Crop Insurance and Disaster Payments CIDP screen The Auto Expense Worksheet AUTO screen can be applied to the F and 4835 screens See Auto Expenses on page 153 Schedule F Profit or Loss From Farming Screen code F Use screen F accessible from the Income tab to enter data for Schedule F Profit or Loss From Farming Tax Year 2011 113 Unemployment Compensation Drake Software User s Manual Screen F Defaults 1099 PATR The program s default accounting method item C is cash Select Accrual if the tax payer s accounting method is not cash The default positio
232. d T ax Credit Additional Dividends Ordinary Total Education Credits Figure C 2 Keywords are listed under available columns To view a keyword description hold the mouse pointer over a selected keyword Figure 3 Select Report Columns Categories Available Return Results Alimony Received Ls Selec Alt Min Tax Adjusted gross income Applied i Child Care Credit lt lt Unselect Child Tax Credit Child Tax Credit Additional Dividends Ordinary Total Education Credits Figure C 3 Place mouse pointer over a selected keyword to see the description For instructions on creating and editing reports see Chapter 12 Reports Tax Year 2011 C 1 Appendix C Keywords Drake Software User s Manual Letter Keywords Letter keywords appear as bracketed phrases within the letter templates of the Client Communications Editor Figure 4 p EASE Caved baby wo mays Bette your pUaiitehr ate you netat re Please bring all tax related materials including W 2s 1099s charitable con year s tax return and two forms of identification We look forward to preparing your return this year If you have any questions please contact us at lt Paid Preparer Phone gt i Sincerely F on ie tee PR a Se EN y a on Figure C 4 Keywords from letter template To view available letter keywords select Setup gt Letters from the Home window and select any template t
233. d fax E mail Program The Drake e mail program allows you to send and receive messages using a 1040 com e mail address Use this program to send questions to Drake Support or to e mail your clients You can also use it as your everyday e mail program To access Drake e mail from the Home window select Help gt E Mail From data entry click the Email icon NOTE E mail addresses for Drake Support are listed in Table 10 5 on page 259 E mail Setup Use the Setup menu to select a method of sending and receiving e mail change your reply to address and display name and suppress notification messages To view the Setup menu select Help gt E mail from the Home window From the Email Inbox dialog box go to the menu bar and select Setup gt Options to open the Email Options dialog box Select from the options listed below and click Save when finished e Sending Method Two methods are available the default method compatible with most Internet Service Providers ISPs and the alternate method to use if the default method does not work for your office e Alternate Reply to Address Select Use Alternate Reply to Address to replace your 1040 com address This address appears as the sender and reply to address on e mail messages you send Display Name Enter the name you want displayed on your e mail messages The program uses your Preparer Login name by default e Notification Message Options Two options are availabl
234. d interest Penalty and Interest Calculation Global Option Tax Year 2011 You can set up the program to calculate penalties and interest for all late filed returns or you can have penalties and interest calculated on a per return on the fly basis To have the program calculate penalties and interest for all late filing clients based on the filing dates 1 From the Home window go to Setup gt Options gt Optional Items on Return 2 Ensure that the Automatically calculate box is marked Figure 5 59 Formats must be entered as For example 1 5 would be entered as 01 50 415 6 30 12 ogop 7 1 9 3013 onoo 10 1 12 31 14 0o00 71 9 3012 ooo 10 1 12 31 13 pogo 1 1 331 15 ooo 10M 12 31 12 00 00 11 3 3114 00 00 47 6 3015 Oooo 1 4 3 31713 00 00 4 1 6 30714 00 00 7 1 9 3015 00 00 4 1 6230 13 00 00 7 1 9 30 14 00 00 1041 12 31 15 00 00 Figure 5 59 Interest and Penalty Calculation section Setup gt Options gt Optional Items on Return 163 Features for Late Filed Returns Drake Software User s Manual 3 Click OK The program will now calculate penalties and interest on all late returns calculated On the Fly The per return option can be used if the global option shown in Figure 5 59 is not Option selected To have the program calculate penalties and interest for a single return 1 2 Open the client s file in Drake and go to the LATE scr
235. d payments for 2012 Estimated tax adjustments e Application of 2011 overpayments to 2012 e Underpayment of estimated tax Estimated Taxes Paid in 2011 Use the ES screen to enter by quarter the 2010 overpayment and the estimated taxes paid in 2011 The program applies the standard estimate payment dates If any of these dates are different enter the correct date in the applicable override field Estimated Taxes Paid in 2011 Federal Date paid Amount paid D510 OR ee IO SLIME E EED Overpayment i from 2010 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Ability to enter varying amounts for uarterly payments Date fields are q W payni override fields Figure 5 42 Entering estimated taxes paid in 2011 Estimated Payments for 2012 Estimated payments for 2012 are shown on the payment vouchers in View mode Make estimated tax payments by debit card or credit card using the N DOTES Drake e Payment Center at www 1040paytax com E mail reminders can also be set up for the taxpayer on this website Tax Year 2011 133 Estimated Taxes Printing Estimate Vouchers ES Code zl Estimate ES Codes Overriding Voucher Amounts Drake Software User s Manual Drake calculates the balance due and generates payment vouchers Form 1040 V but it does not generate estimate vouchers by default To have the program print estimate vouchers you must indicate this manually You can do this in one of two wa
236. d with a paper return will be processed and credited to the taxpayer s account even when the return is not processed You are required to e file all Minnesota individual income tax returns if you are in the business of preparing tax returns and reasonably expect to prepare more than 10 Min nesota income tax returns this year This requirement also applies to preparers located in other states who expect to prepare more than 10 Minnesota individual income tax returns for the current year Do not include in the 10 return threshold returns you pre pare for businesses property tax refund returns amended income tax returns or returns filed with other states Nebraska New Jersey New Mexico E 4 New York New York City Drake Software User s Manual For purposes of this law the business entity as a whole is the preparer If the busi ness employs individuals to prepare returns the total number of returns prepared by all employees in the business count toward the 10 return threshold Likewise if the business operates from multiple locations the total of returns prepared by all locations count toward the threshold Effective Jan 1 2010 any paid preparer who prepares and files more than 25 individ ual income tax returns annually must file the returns electronically After 2006 all practitioners who prepared 25 or more returns are required to e file their clients subsequent returns When a tax practitioner meets or exce
237. de in the report Example If Balance Due is selected only those returns with a balance due will be included Select Any Result to include all results Activity Status of returns to include in the report To include both active and inactive returns select Any Status Type Preparer and Firm Preparer and firm of returns to include in the report To include only those returns handled by a specific preparer or firm in the report select a preparer or firm name as applicable To edit basic search conditions 1 Click Edit in the Basic Search Conditions for the Selected Filter box 2 Select items within the main categories 3 optional To include applicable test sample returns for example Drake returns that begin with 400 00 in the report select Allow Test Sample Returns 4 optional To allow a user to modify conditions when running a report select Ask about the Basic Search Conditions each time the Filter is used 5 Click OK to save the changes to the basic search conditions 290 Tax Year 2011 Drake Software User s Manual Filter Manager Additional You can add as many as 10 additional search conditions Use the Additional Search Search Conditions feature to further specify the types of data to include in the report Conditions To add a new search condition in the Filter Manager 1 Click Add Condition See Figure 12 6 on page 290 2 In the Filter Condition Editor dialog box select a Keyword Name 3
238. dgments listed in Table 8 3 are usually processed within hours of IRS acknowledgments depending on volume Table 8 3 Bank Acknowledgment Codes Code Description Bank Product Accepted Bank product application has been approved Bank Product Declined Bank product application has been declined Check Print Checks are available for printing Prep Fees Deposited Preparer fees have been deposited State acknowledgment codes are not listed here as codes and processing times vary Described below are some troubleshooting steps for commonly received acks B A B ack can occur for several reasons The reason for instance if program updates are missing is included with the acknowledgment If you receive a B ack correct the described problem recalculate the return and re transmit R An R ack indicates that the return has been rejected by the IRS A reject code showing the reason for the rejection is provided Look up reject codes in the EF database see Reject Code Lookup on page 220 address the issue and re transmit Be sure to download and install the latest updates see Update Man ager on page 261 and check your Drake e mail for new tax developments D A D ack occurs if a submitted return is a duplicate of a previously filed SSN or DCN Check the EF database to see if the return has been transmitted more than once If it was accepted previously you do not have to re
239. ding distributions and public safety offic ers To access the Special Tax Treatments screen from the 1099 screen click the Special Tax Treatments link at the top of the screen Use screen 3 for IRA and pension distribution amounts that were not reported on a 1099 R Enter total and taxable portions of these amounts Figure 5 17 ee E S te e er rete ayei ae eee wi 4 vie oe Manaan Aa rtig nning paaa gija abin aa sanaa Tata s pan ghee Figure 5 17 Adjustment fields for IRA and pension distributions screen 3 These amounts are calculated with the corresponding amounts from the 1099 and 8606 screens and carried to the IRA distributions and Pensions and annuities lines of Form 1040 Do not duplicate entries made on the 1099 or 8606 screens Mark the applicable check box on this screen to have the program cal culate the penalty early distribution of the taxable portion of IRA distri NOTES butions line 15b or pensions line 16b entered If a 1099 R was not received for a pension annuity or IRA distribution the return cannot be e filed To file a substitute 1099 R Form 4852 refer to Substitute W 2 1099 R on page 88 Ifa 1099 R distribution should be excluded from income because it was rolled over into another qualified plan indicate this using the Exclude from income drop list on the 1099 screen under the Rollover Information heading see Figure 5 18 Tax Year 2011 Drake Software U
240. displayed only if the Drake Document Man ager DDM is integrated with the software Opening a Return Recently accessed returns can be selected from the Recent Returns list in the Home window Tax Year 2011 To open an existing return in Drake 1 From the Home window click Open New The Open Create a New Return dia log box is displayed Figure 3 7 2 Perform one of the following tasks e Enter the ID number of the return item 1 in Figure 3 7 e Select a return type item 2 in Figure 3 7 Returns are displayed in the grid to the left Click a row to select a return 53 Data Entry Drake Software User s Manual F Drake 2011 Open Create a New Retum O Enter the SSN EIN or the LAST NAME for the return you want to open create If a NAME is entered then the closest match will be displayed and the corresponding SSN EIN will be entered in the SSN EIN field automatically Sorting by PACKAGE is available by selecting the PACKAGE TYPE on the right of this screen SSN CARTER WILLIAM amp AMELI Aiea FREDS FIDUCIARY atin ti tae PARTNERS IN GRIME CLEAN Perre SEA CORP 1 aman CARTER SCOTT PAT S PACKAGING j ESSBEEESS Ainainen TED S TAX EXEMPT mammana Di Last 9 All Clients 1040 1120 11205 1065 1041 990 TOM SMITH nnnnem 0 i0 0 i0 o Figure 3 7 Open Create a New Return dialog box 3 Click OK The Data Entry Menu is opened for the selected return Data Entry
241. dit Report Card Sip teetee o bune parera No Edit RpOatLardeeBishen a DADIE aap ReniaR i a a gt ADEA Figure 10 10 Admin page displays list for student information Click to view a student s Report Card or click Edit to view and edit a student s information Click Save to save it Logging Out To log out of Drake ETC click Log Out You are returned to the ETC login page Tax Year 2011 245 Online Support Drake Software User s Manual Federal State Facts The Federal State facts pages have federal data on IRS drain times and reject codes lists of forms eligible for e file Drake message pages transmission times and state data on e filing tax forms payments and deposits due dates penalties and exten sions You can also access state shipment letters form instructions and update notes As EF packages are approved that information is added to the state pages The pages also include links to the Drake Forums see Drake Forums following and state tax ing authority websites The Professional Tax Solution Home Products Training Support About Us Drake Software Support 2 Vselect a link on this site Year 2010 State California X E file Packages Available Due Dates E file Requirements n Payments and Deposit Fiscal Comments Reciprocal Agreements P t P t e Return Payment Due Dates 1040 04 18 2011 04 18 2011 NIA N A Ponne Q 1120 03 15 2010 03 15 2010 15th day of the 3rd Month af
242. documents attached The client and spouse e mail addresses are automatically shown in the To field if they were entered on screen 1 6 Ifno further changes to the message are needed click Send A client must know the his or her return s password in order to open the return The default format for passwords is the first four letters of the client or entity name followed by the last five numbers of the SSN or EIN See Figure 6 7 for an example An administrative user can change the password format at Setup gt Options Admin istrative Options Drake cannot recover a lost password If you opt to replace a password with a new one in the Password Protect dialog box be sure to write the new password down so you don t forget it Sending Client Files to Drake Support Tax Year 2011 When you send an e mail to Drake Support from View mode the program automati cally sends both the print file and the data file These files allow the Customer Sup port Representative to open the return in data entry When working in Enhanced mode you have the option of including PDF attachments with the e mail To send files to Drake Support from Enhanced mode 1 Go to View mode of the return 2 optional Select any forms to be included as PDF documents in the e mail 3 Click the arrow on the Email button and select Email to Drake Support If you selected any forms in Step 3 the Password Protect dialog box is opened click OK if not changing t
243. e To keep the Report Complete window from opening when compiling a Report Generated Recipient List select the Hide Report Results Message for Report Generated Recipient List To suppress the Open Attachment warning when you open message that con tains an attachment select the Hide Attachment Open Warning check box NOTE Setup options are not available if you access the e mail program from within data entry 252 Tax Year 2011 Drake Software User s Manual Interactive Support Checking for Once you have selected Help gt E mail from the Home window you have three ways E mail to check your Drake e mail select File gt Check Mail from the menu bar click Send Receive or press CTRL M To check only the status of your mailbox click File gt Check Mailbox Status or press CTRL S NOTES Messages are downloaded only once per EFIN If multiple computers are using the same EFIN consider designating one person to down load Drake e mail and forward it accordingly Message Downloaded messages appear in the Inbox double click a message to open it Your Storage mailbox includes a Sent Item box a Drafts box and a Trash box Figure 10 16 F 7 Drake 2011 Email Inbox File Message Folder Setup nm A 2 ew S wi Send Receive N i l Figure 10 16 Sent Items Drafts and Trash boxes Click a box to open it Boxes are described below e Sent Items Messages appear here after they have bee
244. e character Drake password Rebuilding the index each time the DDM starts does not interfere with NOTE DDM operation If you choose not to rebuild the index automatically you can rebuild it by going to File gt Rebuild Search Index Setting Up The Common Documents feature is available to help your office save time while Common maintaining its naming convention Customizable default descriptions allow you to Documents eliminate the step of typing a description by selecting pre established descriptions 304 To set up default descriptions in the DDM 1 From the DDM menu bar click Setup gt Options The Document Manager Options dialog box is opened Figure 13 4 Tax Year 2011 Drake Software User s Manual Drake Document Manager Tax Year 2011 r Document Manager Setup Options Setup Options Use this screen to set configurations for Drake Document Manager Document Manager Data Path DrakeDDM Browse Use this scan device Turn off scanner interface 4 Build index when DDM starts Edit list of Common Documents Edit Common Reset list of Common Documents Reset Secure customer folder names by truncating 9 digit IDs now Sekule EFIN i Drake Password OK Cancel Figure 13 4 Options for commonly scanned documents in Document Manager Setup Options DDM for DDM 2 see Figure 13 5 2 Take one of the following steps If using the original DDM click Edit Common See Fi
245. e Taxpayer or Spouse or Joint Truth in Lending Agreement File extension for text files Tax Year Unverified field Fields flagged as UNVER must be verified before e file is possible File extension for Microsoft Excel files Tax Year 2011 Drake Software User s Manual Appendix E State E filing Mandates Alabama California Connecticut Florida Illinois Tax Year 2011 State e filing mandates for tax year 2011 as collected from state tax authority publica tions are provided below Ifan income tax return preparer prepares 50 or more acceptable original individual income tax returns using tax preparation software in a calendar year then for each subsequent calendar year thereafter all acceptable individual income tax returns pre pared by that income tax preparer must be filed using electronic technology as defined in the Electronic Tax Return Filing Act as codified in Chapter 30 of Title 40 Code of Alabama 1975 A taxpayer can elect to opt out of e filing you need only to file a signed paper original individual income tax return That client s paper return will be included in your total mandate count If an income tax return preparer prepares 25 or more acceptable original corporate or partnership income tax returns using tax preparation software in a calendar year then for that calendar year and for each subsequent calendar year thereafter all acceptable corporate and partnership income tax returns p
246. e delete the second 4797 form for the asset and recalculate the return Like Kind Exchanges Screen code 4562 Screen code 8824 Screen code 4562 If an asset has been traded and requires continued depreciation and there is an increase in basis that must be depreciated you can link like kind exchange information to the appropriate depreciation details To enter an asset as a like kind exchange 1 2 6 Open the 4562 Depreciation Detail screen for the asset that the taxpayer traded or gave up Make an on screen notation to indicate that the asset was traded for example type an A before the description in the Description field Open the 8824 Like Kind Exchanges screen and complete the fields for the like kind exchange Calculate the return In View mode view Form 8824 and note the amount calcu lated for the Basis of like kind property received line Generally this amount becomes the adjusted basis of the new asset unless an additional amount was incurred in obtaining it Open the 4562 screen for the new asset In the Description field make a notation to indicate that the asset was traded such as an A before the description As an example if a Ford 150 is traded for a Chevy Blazer the descriptions on the 4562 screens might be A Ford F150 and A Chevy Blazer This notation makes the traded assets easier to identify Enter any increase in basis as the beginning cost The depreciation
247. e Figure 3 20 MFJ MFS The report is displayed with the MFS_COMP and OH_COMP for Ohio returns Report reports visible in tree mode Select a report for viewing or printing The report appears in the pane to the right of the tree view For more information on View mode see Viewing a Return Enhanced Mode on page 174 NOTE Currently the state report feature is available for Ohio returns only The program saves the MFS data shown in the reports only if you save the split returns If you are not planning to save the MFS versions of the returns but want to show the reports to your client later print the reports now for your client s records 62 Tax Year 2011 Drake Software User s Manual State Returns Screen Captures Calculator Macros If the MFS versions are saved both the completed MFS_ COMP and OH_ COMP reports can be viewed after calculating the return If they are not saved only the Joint column will be completed on these reports Billing for this report is done through Setup gt Pricing use item 350 NOTE For more on setting up pricing in Drake see Pricing Setup on page 29 To suppress the charge for an individual return use the BILL screen See Overriding the Bill Amount on page 45 Screen captures can be taken in data entry and sent to the clipboard a printer or a file To capture a data entry screen 1 Right click any open screen not within a field or text box 2 Select Scr
248. e Figure 5 12 to view the check box as it appears on the DIV screen For more on Form 1116 in Drake see General Business Credits on page 126 Taxable Refunds Screen code 99G Screen code 3 92 Enter state and local taxable refunds for the current year on the 99G screen Form 1099 G Certain Government Payments Taxable refund amounts are calculated and carried to the Taxable refunds line of Form 1040 Because the amount shown on this line can be affected by limitations computed from the Drake worksheets the program allows you to adjust it To adjust the taxable refund amount shown on the 1040 go to screen 3 and enter the amount of prior year state or local refund the taxpayer received in the current year Be Tax Year 2011 Drake Software User s Manual Alimony aware that no calculations are done on the amount entered on screen 3 Use the 99G screen if you want the system to compute the taxable amount A flagged Taxable refund field indicates that the displayed amount was N carried forward from a prior year return To clear the field press F4 if UTES the amount is correct or enter a new amount Screen 99G is also called the Unemployment Compensation screen Alimony If the taxpayer received alimony enter the amount on screen 3 in the Alimony received field Enter paid alimony information on screen 4 Self Employment Income Schedule C Screen code C Screen C Self Employed Income covers Schedule C
249. e Housing Credit Allocation and Certifi cation and 8609 A Annual Statement for Low Income Housing Credit has been redesigned for easier data entry Changes are listed below e Fields that are required for both Forms 8609 and 8609 A are now provided at the top of the screen separate from the form specific fields e Because Form 8609 A is used more frequently the fields that are specifically for this form are now located in the upper half of the screen Fields for the less fre quently used Form 8609 have been moved to the bottom half Tax Year 2011 Drake Software User s Manual Individual Entity Packages Credit for Employer Differential Wage Payments The program now supports Form 8932 Credit for Employer Differential Wage Pay ments for all entity packages These fields are located on screen 8932 accessible from the Credits tab in the Data Entry Menu This screen is also screen 8826 as it also includes fields for Form 8826 Disabled Access Credit Individual Entity Packages The following enhancements have been made to one or more but not all of the entity packages Book Depreciation 1120 1120S and 1065 Book depreciation schedules will now be printed for corporations S corporations and partnerships when e Book depreciation information is entered in the Book column of the 4562 screen e The Carry book accumulated depreciation amp amortization to Schedule L check box is marked on the L screen e The schedule ha
250. e Sample Report box as you type 4 Click Save or proceed to Assigning Columns following The program stores the report with the new title under My Reports Assigning Columns The various columns that make up your report are represented by keywords Select the columns and the order in which they are shown by choosing and ordering the key words Columns are established from the Report Editor Step 1 window Note that the columns currently appearing in the selected report are listed in the Selected Report Columns box on the right See Figure 12 2 To establish the columns shown in a report 1 From the Report Editor Step 1 window select a category from the Categories drop list The available columns for that category are represented by the keywords in the Available Columns field Tip Place the mouse pointer over an Available Columns keyword to dis play a tooltip description of the item 286 Tax Year 2011 Drake Software User s Manual Setting Up a Report 2 From the Available Columns list double click a keyword or single click it and choose Select The keyword column name moves to the Selected Report Col umns field Note that the new information appears in the Sample Report box To remove a keyword from the Selected Report Columns field click it then click Unselect Click Unselect All to clear the field 3 Click Save or proceed to Assigning Filters following to assign report filters The program store
251. e User s Manual order of in printing 183 properties of 182 forms based data entry 281 forums 246 frequently asked questions see FAQs front office mode in Scheduler 71 full time student 84 G gains capital 96 grid data entry 56 group sales 152 group security settings 16 GruntWorx 313 318 H heads down data entry about 69 macro for 31 toggling to basic data entry 69 health insurance COBRA 132 self employed 120 health savings accounts HSAs 115 home residence conversion to business use 101 credit for first time buyers 140 depreciation of 155 energy credits 126 months in 85 office 154 sale of 100 using the HOME screen 100 Home window in Drake 49 Housing and Economic Recovery Act 140 HSA funding distributions 102 identity theft 84 imperfect returns 25 215 importing see also exporting files into the DDM 309 Kiddie Tax data 132 QuickBooks data 273 Schedule D data 96 income exempt notary 94 index file repair 265 indirect expenses on Schedule E 106 inheritance 96 Tax Year 2011 Drake Software User s Manual installing DDM 297 Drake tax software 5 10 updates 261 Integrated File and Pay 143 interest and dividends 90 92 and penalty for late filed returns 163 rates manually entering 164 IRA adjustments 121 contributions 103 converting to Roth 103 income not reported on 1099 R 102 penalty computations 104 IRS Regulation 7216 Consent to Use and Disclosure of Tax Return Inf
252. e application discussed in Application Forms on page 190 Banking Application To offer a banking option through Drake you must submit a banking application annually Drake transmits the application to your selected bank for review Bank infor mation is managed using the Enterprise Office Manager EOM Multi offices must sign in with the Master EFIN and complete the IMPORTANT required settings before the sub offices can log in and access the EOM information Click Help on the EOM website to view the EOM tutorial or download Tip the EOM manual These resources provide information on managing your accounts applications sub offices fee overrides and other options available through the EOM Applying for In the procedure that follows note that completing bank applications for single office a Bank sites is slightly different from the procedure for multi office sites To access and complete a banking application 1 Access the EOM website in one of two ways e On the Drake Support website Support DrakeSoftware com select My Account gt Bank Application e Go directly to the EOM website eom 1040 com 2 Enter your EFIN and Drake password and click Sign In If you are a single office site and this is your first visit select Account NOTE Information from the menu complete the Company Information fields and click Save before proceeding It s a good idea to review this information each time you log in to the EOM 3 mu
253. e bank product 198 Tax Year 2011 Drake Software User s Manual Using Bank Screens in Data Entry Tax preparation fees Override tax preparation fees to be WITHHELD 25 Figure 7 4 Overriding the Tax preparation fees from the bank screen Opting Out If the taxpayer wants a bank product but the spouse doesn t complete the Opt Out section of the bank screen This section is present on the screens for those banks that offer RALs N OTE Remember if either the taxpayer or spouse chooses to opt out of the loan that person s name will not be printed on the check Security Information The Security Information section ECOL and E1 screens only contains questions intended for the preparer s clients to answer The taxpayer and spouse will need to be able to answer these same questions if they want to log in to the EPS Financial website espfinancial net and set up an online account Additional Disbursement Methods Each Drake bank partner offers more than one disbursement method or product offer ing and those selections are reflected on the various bank screens If a taxpayer wishes to have the proceeds of the bank product deposited into an account rather than distributed as a check or card enter the banking information in the proper section of the bank screen Note that the RTN Account number and Type of account must be entered twice for verification For information on the E1 card and filling out the E
254. e bottom of the DD screen 142 Tax Year 2011 Drake Software User s Manual Electronic Payment Options Electronic Payment Options Electronic payments can be made by credit card debit card or electronic funds with drawal direct debit Pay Balance Due with Credit or Debit Card Using the EPAY Screen Screen codes EPAY or IFP Drake offers two options for paying a balance due with a credit or debit card Master Card Visa American Express or Discover e Integrated File and Pay IFP The preparer enters the taxpayer s credit card information and has the payment authorized prior to e filing the return Once the e filed return is accepted by the IRS the debit or credit card is charged e Drake e Payment Center Taxpayers can use the Drake e Payment Center located at www 1040paytax com to pay a balance due by debit or credit card after the return has been filed Use the EPAY screen accessible from the Miscellaneous tab to pay a balance due with IFP Use this screen after the return is completed but before e filing it In order to use IFP the taxpayer s first and last name SSN full address phone number including area code and e mail address must be entered on screen 1 IMPORTANT A return must be e filed and accepted within 21 days of card authorization in order to complete the payment transaction If a return is not accepted or is rejected within 21 days the authori zation is in eff
255. e deans nh ON wh OO eee Bhd ane dae db OS 146 Depreciation eis cece aie ces Soest a wo ES ead acs eee a aaa a dae dole a dae Ged Sd alone eas 147 Auto Expenses aicec5 go sees BOs seen boa Geese eka ASS Cen OG Hees BIS ce eee eee es 153 Office in HOMEC 2 gee och erpe Pew be kde a hw ee OE Pe CA EE Ee eae aw eh es O 154 Net Operating Losses a s 0 be trees pekte r Heh et aE oey eda a obo ned es nek etd 4 155 Election Options s sxc as nee wees ai eie Peach e Meek in fon badd Saw on da eee ad Parada as 157 Special RetumMis ss 4 chs cee chad ceed E Gos de BO hob Benen here ees Bev awae Ree 157 Requests Claims and Other Forms 0 0 ccc eee ete nent eens 160 Features for Late Filed Returns 0 0 0 n enn e teen e eens 163 Other Special Features in Data Entry 2 0 cnet tenn eens 165 Return RESUMS seis cprsatswss be ececendacirantannstibniatncancetennsneennieiieenntateeeaRts 171 Calculating a Retin se pereeseir tacuedevenewen toad Spd bas CGE Cee eA Ga e eh ate eh eed 171 Calcilation ResultSi si i 5 ci0 4 4 deh edhanwlied ddan tab E keh ode a Ada iraa a E bid a E 172 Viewing and Printing a Return 0 nett n teen teen ene 174 E mailing from View Print 0 0 enn net e teen eens 180 Setting Up View Print Options 0 0 0 0 eet ented teen enn ene 182 Archive Manager corinccstere retiren peke dr bebi eat bees eeebd caveat enda pede Reseed s 185 iv Tax Year 2011 Drake Software User s Manual Table of Contents Ba
256. e directory tree For more on unformatted schedules see Unformatted Sched ules on page 167 Special Returns This section explains how to complete the following return types in Drake e Form 1040X Amended U S Individual Income Tax Return e Extension Applications Form 4868 Application for Automatic Extension of Time To File U S Indi vidual Income Tax Return Form 2350 Application for Extension of Time To File U S Income Tax Return For U S Citizens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment Form 1040NR U S Nonresident Alien Income Tax Return e Form 709 United States Gift and Generation Skipping Transfer Tax Return Amended returns cannot be e filed An electronic signature is required NOTE for all other returns and applications for extensions See Signing the Return on page 146 for more on electronic signatures Amended Returns Screen code X Tax Year 2011 A return must be established in Drake before the amended version can be created If the original return was created using a different program you must create the return in Drake and enter basic taxpayer information filing status address etc before amend ing the return Make sure you have a backup copy of a return before you change any NOTE data You can create both a PDF copy and a backup client file in the DDM if you archive the return See Archive Manager on page 185 To create an am
257. e following page shows an overview of the e filing process for most Drake preparers Included are definitions of acknowledgment codes acks Tax Year 2011 B 1 PROCESS E FILING FEDERAL RETURNS Drake compe Address the Test eee identified issue _ transmission aum successful T Review return to If NOT accepted a ensure that it is B R D or X ack oO ready to e file T ack x Drake Pick up amp process i L transmission Transmitting P T or B ack gt oe P ack successful g acknowledgments ACCEPTED Wait for IRS ack Mark ready for EF gt Transmit return A ack or ack l d l Drake Acknowledgement Codes ME eceive Transmit Transmit return transmitted gt if P ack Receive ack g P Processing Wait for IRS ack return acknowledgment to IRS T Test transmission successful Q Ready to e file B Bad transmission rejected by Drake Install updates and try again d IRS Acknowledgement Codes A Accepted by IRS R Rejected by IRS see reject codes op oO pocewe Transmit arr D Duplicate return is a duplicate of a previously filed return or DCN Rejected by IRS transmitted gt acknowledgment Lai E filing process
258. e import file created from QuickBooks or click the button to the right of the text box and browse to the QuickBooks file The file extension is txt Drake searches the local hard drive for the import file In step 2 enter a Client ID Number SSN or EIN i bl Drake 2011 QuickBooks Import Step 2 tS Client ID Number Enter the SSN EIN for the Client This number will be used in Drake Software to reference the tax return 1 Import File Name C Per1 0406 txt 2 Client ID Number 400000000 lt Back Next gt Cancel Figure 11 9 Step 2 Enter SSN or EIN The program searches for a Drake file with the same EIN SSN e Ifno Drake file is found you are prompted to choose a Business Type Make your selection from the drop list Figure 11 10 and click Next 273 Letters Drake Software User s Manual Cae Galore a Business Type Select the type of business from the list below 1 Import File Name C Per10406 txt 2 Client ID Number 400000000 3 Business Type Corporation 1120 S Corporation 11205 Partnership 1065 Tax Exempt 990 Sole Proprietor 1040 Figure 11 10 Step 3 Choose one of the business types listed e Ifa Drake file is found you re asked to confirm the business type Click Yes to proceed 6 Click Finish to import the QuickBooks file into the Drake file After importing the QuickBooks files enter Inventory amounts and details for Other Deduction
259. e indication and 2 HSA contributions for the IMPORTANT year of the 8889 screen are required if Form 8889 is to be e filed with the return Gambling Income amp Loss Screen code W2G Use the W2G screen accessible from the General tab to enter gambling income and loss information from Form W2 G Data from the W2G screen is carried to line 21 and line 22 if applicable of Form 1040 The W2G screen has check boxes for Lottery Winnings and Elec NOTE tronic Games of Skill Not all states tax the gambling winnings from lotteries and electronic games Select boxes as applicable but first press F1 in a field to access further information on each item Other gambling winnings can be entered in the Gambling winnings field near the bottom of screen 3 Cancellation of Debt Screen code 99C Use the 99C screen accessible from the Income tab to enter data from Form 1099 C Cancellation of Debt From the For drop list at the top of the 99C screen select 1040 to indicate a non business debt Select one of the other available choices as applica ble to indicate a business debt The selections along with the line on the tax return where the cancelled debt amount flows are shown in Table 5 5 Table 5 5 Cancellation of Debt For Where Flows on Tax Return Field Item 1040 Form 1040 Other income line C Schedule C Other income line E Schedule E Rents received line F Schedule F Other in
260. e mail messages you have several options for storing e mail addresses in an address book To access these options open the Compose Message window and click To Address books are shown the Address Book drop list F Drake 2011 Email Address Books ee oS Address Book Drake Software Support Address Book ki Drake Software Support Address Book Drake Software Client Address Book Local Address Book Genera ETICE General Support General Sales i Lan nathatanmn j Figure 10 19 Address Book drop list The Drake Software Support Address Book displays general federal and state sup port addresses at Drake To insert an address into the To field of your message dou ble click an e mail address and click OK If a client s e mail address is entered on screen 1 of the return 1040 package only it can be accessed from the Drake Software Client Address Book To fill this address book for the first time you ll need to repair the index files first see Repair Index Files on page 265 Next return to the e mail program click New click To and then select Drake Software Client Address Book Choose an address from the left pane and click Add to add it to the recipient list on the right To finish click Done The Local Address Book can be filled with e mail addresses of your choice Option not available when accessing the e mail program from data entry To add an address 1 From the Email
261. e page select Webinars gt Available Webinars Tax Year 2011 Drake Software User s Manual Online Support Attending Webinars CPE Credits Tax Year 2011 4 From the Available Webinars list click Register for the webinar you wish to attend See Figure 10 7 Available Webinars goto My Webinars a5 1 09 21 2011 11 00 a m EST e Filing 94X Series Tax Returns details 4 09 20 2011 2 00 p m EST Obtaining and Understanding Your Client s IR 09 21 2011 2 00 p m EST Dependents and Relationships details eA 09 22 2011 4 00 p m EST Itemized Deductions details i 09 27 2011 4 00 p m EST Filing Statuses details 10 04 2011 2 00 p m EST Investment Income details 19 00 Register 10 06 2011 4 00 p m EST Investment Income details A 19 00 Register A mhe anan nani eS OT Tee Aine ngpn nen ttnecettetti a Sa ramen sedapenpinbbe Annona CPE Details Z 19 00Registe 0 00 Register 19 00 Register 19 00 Register 19 00 Register SA pb pt pt ot A y Figure 10 7 Signing up for webinars on the ETC webpage 5 Complete the information requested on the Webinar Registration window Note that a unique e mail address one not already used by someone else must be pro vided 6 Click the blue Register button 7 Complete the credit card information on the Webinar Payment window and click Submit After your registration is processed you will receive e A confirmation e mail message containing details of t
262. e tax returns unless the taxpayer specifically directs on the paper form that filing be on paper The threshold is reduced to 100 returns for tax years beginning on or after January 1 2005 The preparer must continue using electronic means to file returns in all subsequent years unless the preparer completed no more than 25 original individual income tax returns during the previous calendar year Note Effective February 16 2004 software generated forms that are printed and mailed to the Department of Revenue must contain a 2 D barcode or the return will be sent back to the taxpayer unprocessed Tax preparers who prepare 200 or more personal income tax returns are required to e file all eligible forms that are supported by their software Software developers pro ducing software for professional tax preparers must support e file for all Michigan income tax forms that are included in the tax preparation software package Developers producing MBT tax preparation software and computer generated forms must support e file for all eligible Michigan forms that are included in their software package All eligible MBT returns prepared using tax preparation software or com puter generated forms must be e filed Treasury will not process computer generated paper returns that are eligible to be e filed A notice will be mailed to the taxpayer indicating that their return was not filed in the proper form and content and must be e filed Payment receive
263. e taxpayer s PIN and the ERO s Practitioner PIN The PIN entered must match either the PIN of the Default ERO IMPORTANT selected on the EF tab under Setup gt Options or the PIN of the preparer specified in the Preparer override field on screen 1 Signature A PIN signature date is required at the top of the PIN screen If no date is entered an Date FF message is generated and the return cannot be e filed Obtaining Ideally the client signs Form 8879 in your office If the client is not available to sign Client PIN you can e mail Form 8879 as a PDF file to the client and have the client sign the form Signatures and return it to you The taxpayer can select his or her own PIN any five digit number except 00000 On the PIN screen have your client enter his or her PIN and then indicate either Tax payer entered or Spouse entered If the client is not available and you enter the PIN signatures leave the check boxes blank The taxpayer can elect to use the PIN generated by the software To NOTE turn off the option to generate PINs go to Setup gt Options gt EF tab and clear the check mark from Auto generate taxpayer s PIN 1040 Only option Direct Debit If there will be a direct debit from the client s bank account to make a tax payment Consent selecting Direct Debit Consent on the PIN screen indicates that the taxpayer autho rizes funds to be electronically withdrawn from his or her account PIN Signatures for Forms Oth
264. each return 22 Tax Year 2011 Drake Software User s Manual Software Setup Table 2 8 Options Setup Optional Documents Option Federal filing instructions Description Displays detailed federal filing information including the date to file form to be filed address to file and payment amount The instructions are listed as FILEINST PG in View mode Activated by default Clear to disable or use the PRNT screen to activate or disable on a single return State filing instructions Displays detailed state filing information including the date to file form to be filed address to file and payment amount The instructions are listed as STINST PG ST refers to the state abbreviation for example OHINST PG for Ohio instructions Activated by default Clear to disable or use the PRNT screen to activate or disable on a single return Envelope Sheet address drop lists Choose the size of the envelope on which to print the addresses of the tax payer the IRS Service Center the state tax department and the city tax office Estimated payment coversheet Select this option for 1040 and 1041 returns with quarterly taxes An IRS Ser vice Center must be selected and this item marked to activate this option Letter Options all packages Select the result letter templates to be used for each package Include privacy letter with returns Select this option to print the privacy disclo
265. eason a return is ineligible for e file Identified issues must be corrected for a return to be eligible for e file e Accessing full messages Some messages do not fit in the Description row To view a full message right click a row and select View Full Text Of EF Message e Accessing message links If an EF message is blue double clicking it opens the data entry screen that contains the error If applicable the field that caused the EF message is activated If you double click an EF message in black text a window with the full NOTE EF message is displayed Only messages in blue text link to screens within the return EF messages appear as red MESSAGES in View mode For more information on viewing and eliminating EF messages see E filing a Return on page 209 The Return Notes section see Figure 6 2 displays informational notes about the return These provide details about the return but they do not require that changes be made and they do not prevent e filing They appear as NOTES in View mode The Fee Type and Amount columns see Figure 6 2 list the preparation fees and when bank products are present the bank fees and the net amount of any refund check or the total of all fees charged if the return has a balance due To have the fee type and amount displayed here the option must be selected from Setup gt Options Cal culation amp View Print Fee breakdowns appear on the RAL_INFO page in View mode when bank produc
266. eck Contact your RAL bank for additional assistance Misfeeds and Paper Jams 204 If a check is damaged and rendered unusable during printing write VOID on the face of the check and reprint it See Reprinting Checks on page 202 If you acci dentally print a check on something other than the check stock such as a blank sheet of paper reprint it and guarantee that the original check will not be cashed If the check is still usable you can reload and reprint it In the Check Print Options dialog box the check number displayed should match the number on the next check to be printed If it doesn t see Resetting Check Numbers on page 203 Use a voided check return list available as VOID_CK PG in Tools gt NOTE Blank Forms to track all bank checks voided in the office Retain a copy of the form as a record In addition send a copy to the RAL bank along with the corresponding voided checks Tax Year 2011 Drake Software User s Manual Cancellations Tracking and Post Season Procedures Cancellations Tracking and Post Season Procedures Cancelling a Loan Cancellation procedures vary by bank Check with your bank for the correct proce dures for cancelling a loan request and determine if the following instructions apply A loan cannot be cancelled if a debit card is used A cancellation IMPORTANT is not processed if the direct deposit from the IRS or state has already occurred Tracking Prior Year In
267. ect Expenses 106 Drake Software User s Manual property as a member of a qualified joint venture that is reporting rental income not subject to self employment tax These fields are new in 2011 and reflect IRS changes If multi dwelling unit and taxpayer occupies part enter occupied by taxpayel eee To use Tax Court method to allocate interest and taxes check box and enter number of days omod Eno a oe E I This is your main home or second home Figure 5 23 Item 2 of screen E Other property usage fields are e If multi dwelling unit Ifthe taxpayer lives in one unit of a multi dwelling property while renting out the others enter the percentage occupied by the tax payer An entry here causes the software to take indirect expenses into account when calculating the return see Direct and Indirect Expenses following e To use Tax Court Mark the applicable check box see Figure 5 23 and enter the number of days owned in the text box next to it If the text box is left blank the program uses 365 as the default e This is your main home or second home Select this box if the property is the taxpayer s main or second home If personal use is indicated and this box is marked mortgage interest is carried to Schedule A NOTES The program uses the percentages entered when calculating the busi ness percentage of expenses and taking deductions The remaining percentage of taxes entered is ca
268. ect cancelled Reauthorization would be required On the EPAY screen indicate the form being e filed 1040 or 4868 extension and click the Authorize Credit Card button You will be directed to a website where you can enter the taxpayer s credit card information and authorize a hold on the card To have the client letter to refer to the payment method used enter the credit card type and the last four digits of the credit card number in Optional Letter Information sec tion of the EPAY screen The client letter will then reference the amount that will be charged to the credit card and the card s last four digits N OTE A website www integratedfileandpay com status is available for check ing payment statuses See the EPAY screen help for more details Electronic Funds Withdrawal Direct Debit Screen code PMT Program Defaults and Overrides Tax Year 2011 Use the PMT screen accessible from the General tab to indicate that the balance due funds are to be electronically withdrawn direct debited from the taxpayer s account By default the program indicates that the entire balance due the Amount You Owe section of Form 1040 is to be electronically withdrawn on the return due date unless otherwise indicated using the override fields for each account entered See Federal override fields in Figure 5 51 If the return is e filed on or before April 17 the 143 Third Party Designee Drake Software User s Manual
269. ect it when it appears in the list below 3 Click Delete 4 Click Yes when prompted to confirm the deletion 5 Click Exit to close the EIN Employer Database dialog box Printing a List of EINs To print a list of EINs from the EIN database 1 From the Home window go to Tools gt Edit EIN Database Print 2 Click Print The Print EIN Employer Listing dialog box displays sorting options 3 Select to sort the list by EIN Company Name City State or Zip Code z 4 Click OK A preview of the list is displayed in the Report Viewer a 5 Click Print to open the Print Drake Report dialog box 6 Click Print Export EIN data to another program if desired From the Report Viewer NOTE click the down arrow on the Export icon and select a format If you click the Export icon not the arrow the program automatically exports the data into Excel Tax Year 2011 279 Install State Programs Drake Software User s Manual Install State Programs Use Install State Programs to install or repair state program files This can be done by accessing the Internet the latest CD or any drive location that has the needed pro gram files For networked offices sharing information all users must close Drake before installing state programs To install state programs 1 From the Home window select Tools gt Install State Programs The Install State Programs dialog box is displayed 2 Choose to install state programs from a drive or fr
270. ect the index files to repair To repair all types of index files click Repair All aero 3 Click Continue 4 Click OK If Name Index was selected select a Name Index Option first 5 When the file repair is completed click Exit to return to the Home window NOTE Repairing the name index takes about a minute for every 2 000 names File Maintenance The File Maintenance menu provides access to the following functions e Backing up and restoring files including copying data and configuration files to other computers or for use as backups e Importing exporting changing deleting unlocking and password protecting files Tax Year 2011 265 File Maintenance Drake Software User s Manual Backing Up and Restoring Files Use the Backup and Restore tools to prevent loss of client data or to move client files to another machine Files backed up to other locations can be used to restore lost data If multiple machines are used for tax preparation in one office files can be moved to other computers and uploaded to a single machine to create a master file NOTE Back up your files often and store them at an off site location Backup To back up your files from the hard drive 1 From the Drake Home window select Tools gt File Maintenance gt Backup 2 Click Select a backup location and browse to the file storage location 3 Click OK to return to the Backup window Figure 11 4 Drake 2011 Backup Back Up Files Enter a
271. ed 4 Click Update and then click Save NOTE If incorrect charges are generated on bills check the minimum and maximum fees to see if the settings are affecting the totals Macros Setup Using Macros Creating New Macros To view a list of macros in data entry press CTRL SHIFT M 30 A macro is a combination of keys that allow you to accomplish tasks faster Edit exist ing macros or create new ones to meet your office s needs Also called shortcut keys macros are already available in the program for example CTRL V opens View mode You can also use macros for data that is used often by your office For example if many of your local clients use Small Town Bank you can arrange for the program to enter Small Town Bank every time you press a shortcut key combination To insert macro data place the cursor in the field and press the applicable shortcut key macro combination To view available macros press CTRL SHIFT M from within a field To insert macro data from the list select a macro and click Execute or double click the row The Data Entry Macros window is closed automatically To set up your own macros in Drake 1 From the Drake Home window go to Setup gt Macros The Setup Macros dialog box shows the shortcut keys and their associated tasks 2 Edit the Data column for a macro listed All tasks listed can be edited Symbols for non character shortcuts are listed in Table 2 13 3 Click OK
272. ed by name return type status date the return was started or completed date of last change trans Tax Year 2011 Drake Software User s Manual General Navigation mission date acknowledgment code or date and phone number To sort records click a column header NOTE The PCM operates much the same as the CSM For specific instruc tions on using these tools see Chapter 9 Client Status Manager Activating To activate the PCM for logged in preparers an administrative user must go to Setup the PCM gt Options Administrative Options and select the Enable logged in preparer s Per sonal Client Manager box located under Main Dialog Options General Navigation Both the mouse and the keyboard can be used for navigating within the software Left button mouse Move the pointer over an item and click the left mouse button to select that item When this manual instructs you to click or double click an item on the screen use the left button on the mouse e Right button mouse While in data entry right click the mouse anywhere on the screen to display a menu of common program functions Right click a specific field to undo cut copy paste delete or view help for that field e Shortcut keys keyboard Use shortcut keys to accomplish tasks without using the mouse Press ALT to display the underlined shortcut key and press the desired shortcut key For example from the Home window you can press AL
273. ed in Setup gt Firm s To set up pricing 1 From the Home window go to Setup gt Pricing 2 Select a package from the Form box of the Pricing Setup window All forms for that package are displayed in the grid below View items by category by clicking the tabs at the top of the grid Figure 2 15 ste SOE ened E A E 3 otitis to ee een Se pentan LO nett Pages Category Per Item Charges F Include on Bill Update All Forms Worksheets Statements PerltemCharges Miscellaneous Number Form Name Form Description Bey eT ween errms Staten FT city Figure 2 15 Tabs allow you to view categories of documents that can be priced 3 Select a form in the grid and press ENTER or double click the form 4 optional Edit the Form Description This description is printed on the client bill if Include on Bill is selected Do not edit the form name 5 Enter pricing information in the Per Item and Per Form fields e When a Per Item entry is not applicable for a form the field is unavailable e If Per Item pricing is allowed the price entered will apply to all instances of the selected form that are printed for a return To view all items for which per item pricing is allowed click the Per Item Charges tab see Figure 2 15 6 Click Update and then click Save Repeat these steps for each form or set pricing for only the most commonly used forms You can price other forms from within the individu
274. eds the thresh old for prepared or filed returns in any year that practitioner will be required to e file all New Jersey Resident Income Tax Returns in subsequent years Preparers who prepared more than 25 individual income tax returns in the previous fil ing season are required to file all returns using electronic means Electronic means includes e filing or submitting printed returns with 2D barcodes The two separate e file mandates that applied to personal income tax and business taxes were combined into one mandate e New five document threshold The single e file mandate applies to tax preparers who prepare more than five tax documents A preparer must e file all individual income tax fiduciary and partnership returns including Form IT 204 LL and individual income tax and partnership extensions if the preparer files five tax documents The tax document threshold was previously 100 documents When determining the five document threshold you must count all New York State personal income partnership fiduciary sales and corporation tax documents that you prepared in calendar year 2011 e Estimated corporation tax payments online As of December 1 2011 tax prepar ers subject to the mandate who prepare corporation tax estimated tax payments Form CT 400 for clients must file and make corporation tax estimated tax pay ments electronically File and pay by using either of these methods Software You can use software
275. ee ees venewlaerined Gebteehs 126 General Business Credits in 0 50a donee boa ue een me eee dhe Clea ase ity A Aa we ERE eS 126 Passive Activity Credits 0 0 0 tenet tenn teen teen nee 127 Child Vax Credit cack ccc aeciaii oa ice ye oat ie galt ard a AE sh ow E AS denen 128 Retirement Savings Contributions Credit 0 00 n nee eens 128 Other Credits ohio bard tee beeen ad athe da adobe Ghee sonido ward Gaus Bai tee 129 Unreported Social Security and Medicare Tax 0 cece een nett 130 Additional Tax on Qualified Plans etc nananana ee en ene n tent n ene 130 Household Employment Taxes 00 eee nee nent ent eee ene 131 Other Taxes 2 040034 ebb ckle eid eel bebe eho hbaeel E nE wie berate peee 131 Estimated Taxes so ersa ruige ea ie ae gk te rare Uhl eee Ed fale lee Rew 2 ech dies Ree a da ea 133 Earned Income Credit EIC eiry ache sche oc Sees a wis Per RS Shee a oc ak wo ao och ede aan 137 Additional Child Tax Credit and Combat Pay 0 c ccc cnet eee ene 139 Other Payments 2 424rn03 ce e nak sobs eid Besar cis E beer eehe eer ee cebtned 140 First Time Homebuyer Credit 0 0 n nnn n ene eens 140 Direct Deposits seiso ninnas dreta ha E Seas Hegde Rage BEG eed agian GUS Gawd eden 141 Electronic Payment Options ss eei soa kee aid eta nag a e ghd ce WAC ae ew bls aed awed A Gee de dba 143 Third Party Designee 0 en enn n etn teen teen nee 144 Signing the Returiicy 2 de0 0 5 4 4 dao od dow e
276. een accessible from the Taxes tab Mark the Calculate penalties and interest on this return box Figure 5 60 Complete the Date return was filed text box Figure 5 60 If this field is blank the program uses the Date balance paid entry from the 2210 screen by default Late Filing Interest and Penalty I Suppress calculation of penalties and interest on this return Do not carry P amp I to 1040V filing instructions or letter Failure to fle penally z Failure to pay penalty mies 22 Dake reken was a Due date of return Date balance paid if different h ahtaan an thoes Aiii natn pintaa nna snin AOE Figure 5 60 The LATE screen accessible from the Taxes tab Other LATE You can also use the LATE screen to override these additional default settings Screen Features Interest Rates Including calculated amounts elsewhere By default the calculated amounts are incorporated into the payment voucher filing instructions and result letter for the return To override this default go to the LATE screen and mark the Do not carry P amp I box Figure 5 60 Suppressing calculation on the fly If the option to calculate penalties and interest for all late returns is selected in Setup gt Options and you want to sup press the calculation for a single return mark the Suppress box at the top of the LATE screen Figure 5 60 for that return Due date of return An entry here override
277. een Shot The program offers three choices for screen captures e To File Save the screen as a bitmap bmp file to a location you select e To Printer Open the Print dialog box and print an image of the screen e To Clipboard Copy an image of the screen to your clipboard in order to paste it into another program such as Microsoft Outlook 3 Save print or copy the image as directed according to your selection A calculator feature is available in every numeric field in data entry To access it press F10 from within a field Once results are calculated press F1 to insert those results into the field When the calculator is active the NUM LOCK status is activated NUM LOCK is disabled when the calculator is closed Macros are shortcuts that enable you to enter frequently used data entry items with minimal keystrokes This feature is described in detail in the Macros Setup section of Chapter 2 Installation amp Setup Heads Down Data Entry Heads down data entry provides an efficient method of data entry when working from a proforma interview sheet Information on this method is provided in the Heads down Data Entry section of Chapter 4 Preseason Preparation State Returns Tax Year 2011 When a return is prepared Drake automatically generates state returns based on data entered for the federal return Calculation is based on the state entered on screen 1 for resident state and on the state cod
278. een are check boxes to indicate that a W 2 was altered Altered W 2 handwritten non standard or corrected Select the applicable box to indicate that a W 2 has been changed ITIN on Ifa the taxpayer has an ITIN for screen 1 the taxpayer s TIN for Form W 2 must be Screen 1 entered in the field at the bottom of screen W2 The program does not automatically use the ITIN entered on screen 1 and a return with an ITIN cannot be e filed unless this field on screen W2 is completed Substitute Form 4852 serves as a substitute for Form W 2 Form W 2c or Form 1099 R when a W 2 1099 R taxpayer either did not receive one of these forms or an employer issued an incorrect one Form 4852 is not generally filed before April 15 Screen code 4852 Use the 4852 screen accessible from the Other Forms tab to fill out Form 4852 NOTE The generated Form 4852 uses data entered on the corresponding W2 or 1099 screen for Form 1099 R W 2 Import If your client is an employee of a company that uses W 2 eXpress that client s W 2 can be downloaded directly into Drake See the Drake Support site My Account gt 88 Tax Year 2011 Drake Software User s Manual Passive and Investment Income 1099 DIV etc W 2 Block Purchase for information on purchasing W 2 downloads and a list of companies that supply employee W 2s using this service To import W 2 information aN 1 From the Data Entry Menu of the client s return click Import gt W2 Import
279. efault format open the template and select Setup gt Restore Original Letter Tax Year 2011 Drake Software User s Manual Software Setup Viewing The preview feature allows you to open View mode and view a sample letter for one Letters for of four return categories Sample Return Letter for e filed return with balance due e Letter for paper filed return with balance due e Letter for e filed return with refund e Letter for paper filed return with refund To access the preview feature click the Preview button in the toolbar of the Client Communications Editor Bringing To replace a current year template with a prior year one Forward a Template 1 From the Client Communications Editor click Open and select the template to replace Go to Setup gt Update Prior Year Letter and click OK Select the drive of the Drake program that contains the prior year letter Select a prior year letter Click Continue When prompted click Yes oe UOUN Be sure to read through the replacement letter to ensure that the information is current Color Setup Use the Color Setup feature to tailor Drake screens to meet your firm s preferences If you used Drake last year consider customizing colors to make your Tip 2011 program look different from your 2010 program If you must open the 2010 program during tax season customized colors will help you avoid entering data into the old program by mistake Program To customize program
280. elopes Select filtering and sorting options from the Envelopes Filter Selection box If you need a more complex filter click Edit Filters See Filter Manager on page 7 Click Next Modify the Basic Search Conditions as needed and then click Continue For more on Basic Search Conditions see Search Conditions on page 8 In the Envelopes dialog box update the envelope formatting as needed Click Help for more on individual fields Click Finish Set printer options in the Print dialog box as needed and then click Print Not all printers are capable of printing envelopes Verify that your NOTE printer has this capability before using this function in the program Postcards Always test print an envelope before printing an entire batch Before printing ensure that the postcards are loaded properly into the printer To print addresses on postcards Tax Year 2011 277 Amortization o Amortization 278 Calculate Drake Software User s Manual From the Home window go to Tools gt Letters gt Postcards Select filtering and sorting options from the Postcard Filter Selection box Ifa more complex filter is needed click Edit Filters See Filter Manager on page 7 Click Next Modify the Basic Search Conditions as needed and click Continue For more on basic search conditions see Search Conditions on page 8 From the Postcards dialog box update the postcard formatting as needed
281. en information flow to the 4797 For two years after the death of a taxpayer a spouse is permitted to take the MFJ exclusion for gain on the sale of a principal residence assuming the normal require ments for the exclusion are met To indicate that the surviving spouse is taking the exclusion mark the Recently widowed taxpayer eligible for MFJ exclusion box in the Miscellaneous section of the HOME screen If the First Time Homebuyer Credit was taken for the residence in 2008 or 2009 and there has been a disposition or change in the use of the residence or the credit is now being repaid complete the applicable fields in the Form 5405 Repayment Informa tion section of the HOME screen 101 Retirement Income Drake Software User s Manual Retirement Income 1099 R Items Not Reported on 1099 R Substitute 1099 R Rollover of Pensions Annuities 102 Use the 1099 8606 and ROTH screens to enter most retirement income data Screens 3 and 4 include fields for entering retirement data directly into the generated 1040 Amounts entered in these fields are combined with any corresponding calculations from the 1099 8606 and ROTH screens Use the 1099 screen to enter data including distribution amounts from Form 1099 R The 1099 screen consists of two screens 1099 R and Special Tax Treatments The Special Tax Treatments screen has fields for the Simplified General Rule Worksheet qualified charitable distributions HSA fun
282. en 1 Third party designee Select the third party designee to print on the main form of the return Tax Year 2011 23 Software Setup Drake Software User s Manual Table 2 9 Options Setup Optional Items on Return Option Rounding amounts Description Select Dollar or Penny rounding Dollar rounding is required for e filing Penny rounding prints penny amounts on all forms Interest and Penalty Calculation Calculate penalties and interest on returns filed after the due date based on interest rates entered For more information see Penalty and Interest Calcu lation on page 163 Billing Options under the Billing options tab are described in Table 2 10 Option Print taxpayer s SSN on the bill Table 2 10 Options Setup Billing Description Select this option to print the taxpayer s SSN on the bill Show preparer fees withheld from bank product Select this option to print the RAL application fees withheld from the RAL amount on the bill Print taxpayer s phone number on the bill Select this option to have the taxpayer s phone number entered on screen 1 printed on the bill Print taxpayer s e mail address on the bill Select this option to have the taxpayer s e mail address entered on screen 1 printed on the bill Sales Tax Enter the sales tax percent to add to each bill Number must be greater than 1 For example 4 5 would represent a sales tax
283. en 3 The Income screen amounts are calculated directly into Form 1040 Any interest or dividend income entered on the INT or DIV screens is combined with the screen 3 amounts when the return is calculated Do not duplicate entries Schedule B Interest and Ordinary Dividends Schedule B is required if taxable interest or ordinary dividends exceed 1 500 Use the INT and DIV screens to report interest and dividend income that exceeds this amount Amounts are generated on Schedule B and calculated into Form 1040 Reporting Certain portions of ordinary dividends domestic dividends not taxable by a state and Portions Of ordinary dividends that are U S Government dividends can be expressed on the DIV Dividends screen as either amounts or percentages Figure 5 9 Amount Percent Percent of lines 1 and 2 that are nominee dividends and capital gains Dividends included in Box 1a that are NOT taxable on the state fene or Dividends included in Box 1a that are U S Government dividends 3 or a ay a a she mmnem AENT rr n ra Figure 5 9 Enter portions of ordinary line la dividends as amounts or as percentages of the total Schedule B Some taxpayers with bank or other financial accounts in foreign countries must file Part Ill Schedule B regardless of the income amount This data along with other Schedule B data is entered in the Schedule B Part III section of the INT screen Figure 5 10 NEW FOR This section has a new fie
284. en code 709 Form 709 U S Gift Tax Return consists of several parts and schedules all located on the 709 menu accessible from the Taxes tab Tax Year 2011 159 Requests Claims and Other Forms Drake Software User s Manual m Drake 2011 Data Entry 400006665 Carter William T eeue 333 i Calculate View Print Split X General 1 General Information A Computation of Taxable Gifts B Gifts from Prior Periods ATT Attached Statement ELEC Election Options for 709 e E a E T PE a A ont Figure 5 57 Menu for Form 709 Gift Tax Click an item to open it or type its code into the selector field and press ENTER NOTE Forms 709 and 8892 cannot be e filed They must be paper filed Pricing for To set up pricing for Form 709 go to the Home window and select Setup gt Pricing Form 709 By default the pricing list is for individual 1040 package forms From the State City drop list select GF Gift Tax 709 to display a list of the gift tax forms Dou ble click a form name to adjust the pricing Attached If Form 709 requires an attachment for example if an election option requires the Statements amounts in question to be identified use the ATT screen on the 709 menu 709 Election The ELEC screen Election Options for 709 provides a series of check boxes for Options electing certain optional ways of treating some income and exclusion amounts Extension Ifa six month extension is being requested for a 10
285. ended return in Drake 1 Open the return to be amended 2 From the Other Forms tab click 1040X Amended Return 3 To have the program autofill the 1040X screen with data from the original return click Yes To leave the fields blank click No 4 Enter all applicable data in the 1040X screen 5 Revise any other sections of the original return as needed The 1040X screen contains the following sections 157 Special Returns Extensions Screen code EXT E filing an Extension 158 Drake Software User s Manual e Amounts as on ORIGINAL return These amounts can be autofilled by the program A manual entry in any of these fields overrides program calculations for the original return e Part I Exemptions These numbers can be autofilled by the program A man ual entry in any of these fields overrides program calculations for the original return e Amounts and information for the AMENDED return These fields must be completed manually as applicable e Part II Presidential Election Campaign If the taxpayer or spouse did not want 3 to go to the Presidential Election Campaign Fund but does now mark the appropriate box e Part III Explanation of Changes Type an explanation of the changes in this text box Any additional changes in income will be incorporated into the amended return Attach a copy of the original return to the printed 1040X before mailing the amended return to the IRS To ap
286. ens that article Matches to your keywords are highlighted Be sure to click the How to Search the KB tab for more instructions on setting up article searches Use the new Search Within feature Figure 10 2 to narrow a search to specific areas within specific databases and find pertinent articles more quickly For example to get 237 Online Support 238 Browsing the KB Navigation Icons Drake Software User s Manual information on reporting depreciation for a federal 1040 return in Drake s tax soft ware you might take the following steps 1 Type depreciation into the Search text box Figure 10 2 Search for articles Search depreciation Click to Search Search using All Words X Search within Drake Software KB 4 Federal Returns x egories All Sub cat 1065 Partnership 1120 Corporate 1120S Sub S Corporate 706 Estate 709 Gift Tax 990 Tax Exem p e TO amers w Latest Articles Hot Topics 4 2011 09 19 Broadcast Not a 1040 com Preparer Website a Flow To Tables Detailed Drg r tutte mem atten a T NNE aana T T st Rete sack nem Sa cae at ll ein ame at Figure 10 2 Narrow your search with Search Within N From the Search using drop list make a selection See Table 10 2 for the list of selections From the Select within drop list select Drake Software KB From the new drop list that appears below select Federal Re
287. ent are sent to the recipient Other file types can be attached to an e mail message from the Attachments dialog box in the Drake e mail program See Step 3 of prior procedure and Figure 10 18 e To attach a file from the DDM use the Document Manager File s section of the Attachments dialog box Enter SSN EIN Click Browse to open the Add Attachment window Select the file to attach and click Open File is shown in the Attachment s pane of the Attachments dialog box Click Done e To attach a Drake program file click Browse for Drake Software Program File s See Figure 10 18 Locate the file in the Attach File window and then double click it or select the file and click Open The file is shown in the Attachment s pane of the Attachments dialog box Click Done e To attach a file other than the types described above click Browse for All other File s see Figure 10 18 Locate the file in the Attach File window 255 Interactive Support Removing an Attached File Address Books Support Address Book Client Address Book Local Address Book th Om L Aee Bock Importing Addresses 256 Drake Software User s Manual and then double click it or select the file and click Open The file is shown in the Attachment s pane of the Attachments dialog box Click Done To remove an attached file select it in the Attachment s list see Figure 10 18 and select Remove from the right click menu When composing
288. eous Info tab contains general return information about the Misc Info taxpayer the firm and fees distribution Reject Code The F4 Reject Code Lookup tab is a search tool for accessing and understanding Lookup IRS reject codes To look up an IRS reject code for a federal return 1 ON 5 From the Drake Home window select EF gt Search EF Database and click the F4 Reject Code Lookup tab Figure 8 9 Select a federal return type 1040 1120 1120S 1065 or 1041 Enter the reject code in the Reject Code field Click Go The IRS explanation of the code is displayed in the lower box Figure 8 9 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup C 1041 Category 1120 11205 Loan Status Codes FED X C 1065 C Bank Decline Reasons C IRAL Reject Codes Reject Code Print 1040 FED Reject Code 50 Statement Record The only valid entry in a Required Statement Record field is a Statement Reference i e STMbnn For Required Statement Records Line 02 must be blank Line 03 must be present and must contain significant data For Required Statement Records any Statement Record number STMbnn occurring within a tax return must have a corresponding Statement Record te thant 2 a aap leon ere aa a ar y e tM on sani Figure 8 9 Looking up 1040 reject code on Reject Code Lookup tab optional Click Print to print the code explana
289. ependent of another is a full time student wants to donate to the Presidential Campaign Fund or is blind NOTES If the taxpayer was a victim of identity theft enter his or her IRS assigned PIN in the Identity Protection PIN field on the MISC screen Entering Residency Information The Mailing Address section of screen 1 includes fields for both domestic and for eign addresses NEW FOR To indicate a stateside military address mark the Stateside military address box on screen 1 Enter combat and special processing code 701l information on the MISC screen accessible by clicking the Combat Zone link on screen 1 State and Ifthe resident state differs from the state in the mailing address select the appropriate Local Data state code from the Resident state drop list on screen 1 The Resident city field is activated if a city return is required If the taxpayer is a part year PY resident of the state in the mailing address select PY from the Resident state drop list To suppress a state return from being calculated select 0 from the Resident state drop list Tip Press CTRL SHIFT S in the Resident city or School dist to search for options for those fields Indicating a Deceased Taxpayer If the primary taxpayer is deceased 1 Enter the date of death in the taxpayer s Date of death field on screen 1 2 Type the surviving spouse s name in the In care of field under Mailing Address NOTE If there is a name in the In care
290. eport s date range by typing start and end dates in the Value fields 6 Click Continue The report is displayed in the Report Viewer See Report Viewer on page 12 for more information on the Report Viewer Once you are in the Report Viewer you can print or export the report output The New Client List report does not pull data from other areas of NOTE Drake It pulls data only from the Scheduler itself To designate a client as anew client select New from the Client Type drop list in the middle of the Appointment Detail dialog box E filing Preparation For details regarding preseason tasks for e filing see Chapter 8 E filing Tax Year 2011 81 E filing Preparation Drake Software User s Manual This page intentionally left blank 82 Tax Year 2011 5 Return Preparation This chapter focuses on using Drake to produce Form 1040 and the supplemental forms schedules and other documents that might be part of a tax return It assumes a basic understanding of Drake data entry If you are not familiar with Drake data entry please read Chapter 3 Basics before attempting to prepare a tax return in Drake Screens 1 through 5 of the program provide fields for directly entering data onto the 1040 Because many lines on the form require calculations from other forms and schedules some of the fields in screens 3 4 and 5 are treated as overrides or adjust ments to program calculations from elsewhere in t
291. equent years As an alternative and only if the current year is not the year of sale Tip you can enter the gross profit percentage on the 6252 screen Use a whole number not the decimal equivalent For example enter 62 as 62 notas 62 e Part II line 19 and Receipt category section Complete the Part II fields for the year of sale and for any year in which a payment or debt must be treated as a payment on installment options To generate Part II of Form 6252 enter payments received in current and prior years in the Receipt category section located on the right hand side of screen 6252 e Part III Related Party Sale Income Complete the Part III section if a the sale was made to a related party and b the income is not from the final payment in the current tax year 99 Sales of Assets Drake Software User s Manual e Unrecaptured Section 1250 Gain If unrecaptured 1250 gain is present enter the gain amount on screen 6252 just above the Part III heading The taxable amount is calculated on the WK_ 1250 worksheet and is carried to Schedule D line 19 based on these calculations 6 View the return See line 31 of Form 4797 for the recapture amount if any In rare cases two 4797 forms are created in a return If this happens the return may not be eligible for e file f recapture is necessary the NOTE two 4797 forms cannot be avoided and the return must be paper filed If there is no recaptur
292. equired for installing the software and subsequent updates If you installed Drake Software from a CD the number was included on your packing slip with the CD shipment System Requirements To run Drake Software your computer operating system must be Windows 2000 or later and must meet or exceed the following system requirements Tax Year 2011 Installation Installation Using Windows Vista A system administrator or user with OS access must install your tax software Drake Software User s Manual Windows 2000 NT XP ME Vista 7 Windows NT users must have Service Pack 4 0 or higher available from www microsoft com e Windows 2000 amp XP 300 MHz processor or higher 128 MB of RAM e Windows Vista amp Windows 7 800 MHz processor or higher 512 MB of RAM Support for Super VGA graphics e All Windows Operating Systems CD Drive 100 MB of available hard drive space plus 7 MB for each state program Internet Explorer 6 0 Internet access HP compatible laser printer strongly recommended TWAIN compliant scan ner Internet service is required for immediate updates NOTE To take full advantage of the software s features you must have If using Windows Vista or later you may need to upgrade your Adobe Acrobat Reader to version 8 0 or later Version 9 0 may be required if using the 64 bit version of Windows 7 e lt A Hewlett Packard HP compatible laser printer e High speed Internet access or a 56
293. er Click Exit again to close the Preparer Setup dialog box See Report Viewer on page 293 for more on using the Drake Report Viewer To search for preparers entered into the program 1 2 3 4 From the Drake Home window go to Setup gt Preparer s Click Search Enter preparer information in the Find Preparer Record box As you type the software locates and highlights the record Click Close Click Exit to close the Preparer Setup dialog box Pay Per Return Setup PPR Clients Only For information on setting up PPR see Drake Software User 5 Manual Supplement Pay Per Return PPR available on your Drake CD and on the Drake Support site at http Support DrakeSoftware com Training Tools gt Manuals Directories and Paths Setup 18 Directory and path settings which manage the locations for data access and storage must be configured before you begin using the program To enter your settings select Setup gt Directories Paths from the Home window Information on screens is pro vided in the following sections Directory and path settings should not be changed during tax season CAUTI DN For details on setting network configurations see Running Drake on a Network on page 8 For assistance contact your office IT profes sional or Drake Support Tax Year 2011 Drake Software User s Manual Software Setup Sharing Files You can share just the Drake client files among your network s co
294. er return type balance due preparer name client status and the starting and completion dates for each return The CSM can be used for searching viewing organizing and printing data The logged in preparer can see his or her CSM data upon login using NOTE the Personal Client Manager PCM Much of this chapter applies to the PCM as well as the CSM see notes throughout these pages Accessing the CSM aS CSM Choose one of the following methods to open the CSM From the Drake Home window click the CSM icon in the toolbar e From the Drake Home window select Reports gt Client Status Manager e Press CTRL L on your keyboard You cannot access the CSM from data entry but you can change the client s status To do so click the CSM icon in the data entry toolbar and select a new status About Client Statuses Tax Year 2011 The CSM categorizes clients by status A client status is the stage of a return in the return preparation cycle The CSM s predefined client statuses can be set automati cally as the return progresses through the cycle see Figure 9 1 or manually as needed You can also define new statuses 227 About Client Statuses Drake Software User s Manual Enter new client s Begin entering tax Transmit e file Receive ack of Print copies of tax information return in Drake return accepted return return for client i i i i New Client In Progress EF Pending EF Accepted P
295. er than the 1040 By default Form 8879 is printed with Form 1040 If an electronic signature form is to be printed with any of the following other forms indicate this by selecting the applica ble box in the Select Form section of the PIN screen 146 Tax Year 2011 Drake Software User s Manual Depreciation e Form 4868 Application for Automatic Extension of Time to File U S Individual Income Tax Return with payment e Form 2350 Application for Extension of Time to File U S Income Tax Return e Form 9465 Installment Agreement Request e Form 56 Notice Concerning Fiduciary Relationship Note that the electronic signature form is required with Form 4868 only if making a payment For Forms 4868 and 2350 the program produces Form 8878 IRS e file Sig nature Authorization for Form 4868 or Form 2350 N DTE Prior year AGI amounts are required to e file Forms 2350 9465 and 56 Enter this data in the Prior year AGI section of the PIN screen Special Conditions Power of Ifthe return is being signed by someone with Power of Attorney for the taxpayer indi Attorney cate this information on the MISC screen and enter the name of the person signing Because Form 2848 is not e filable a transmittal Form 8453 is produced with the paper document indicator marked for Form 2848 MPORTANT Form 2848 itself is not printed automatically it must be completed on the 2848 screen in order to be generated with the return Taxpayer Ifthe taxpaye
296. erereererreeerereeerrreerosa I Householdincome J Prisoner income 8a Interest income NO Schedule B required ncnsecceeensea 8b Tax exempt interest NO Schedule B required 9 Dividend income NO Schedule B required 10 Taxable refunds a gn ee OCALA S Sembee pie mate RON AA an mast nettle A sia 10 Figure 3 4 Links from the Income screen to associated screens Federal to state links serve as shortcuts to related state screens For example the state links on screen 2441 Child amp Dependent Care Expenses are to those state screens for child and dependent care expenses State links are located in a State Information section at the upper right corner of a screen Figure 3 5 Saen Heie fatal State Information AR LA NY EIC NY 272 PA PAOD OT iadaa A OO N Figure 3 5 Example of a State Information section for federal to state links In the past returns with multiple instances of the same form such as partnership returns that had numerous partners required extra steps to organize the forms Screen tabs eliminate the intermediate steps previously required In Drake s 1040 package the K1P K1S and K1F screens contain tabs to associate the K 1 screens Schedule K 1 now requires two screens in Drake and to associate the two sections of the basis worksheet with a particular K 1 issued to the taxpayer r Drake 2011 Data Entry 400006665 Carter William amp Amel
297. eritance If VARIOUS the program treats the item as a long term gain Proceeds from sale Enter the sale amount If only the gain amount is avail able enter the gain amount and leave the Cost or other basis field blank Cost or other basis Enter the cost or basis If only the loss amount is available enter the loss amount and leave Sales Price blank Type of gain or loss From the dates entered Drake determines if an item is long term or short term If no specific dates select S or L to force short term or long term Description Although this field in Drake supports 32 characters only the first 15 are e filed By default the first 15 characters are displayed in black text on the screen additional characters are displayed in red Basis not reported If the asset being entered is not being taken from a Form 1099 B indicate why by selecting an option from the drop list Adjustments Up to three adjustments per screen are permitted For each adjustment select the applicable code from the drop list and enter the amount of adjustment and AMT adjustment if applicable to the gain or loss AMT Several AMT telated fields are included on screen D The Capital Gains and Losses worksheet D_AMT will use the same number as the regular Schedule D unless entries are made in the AMT Adjustment to gain or loss and AMT Cost Basis fields on screen D Tax Year 2011 Drake Software User s Manual Sales of As
298. ers program generates various types of client letters from engagement letters to the return s cover letter In some cases letter content is automatically based on data from the tax return For example if a return with a federal balance due has been e filed and the client has opted to mail a check to the IRS the accompanying result letter will state the balance due amount provide the e filing information and give instruc tions for mailing the check Because so much of the letters program is automatic you may not have to edit the let ter templates at all If you do need to make changes Drake has provided numerous options for doing so Before making changes please continue reading this introduction to ensure that you understand how the templates and the Client Communications Editor are structured To view a list of Rich Text Format RTF keyboard shortcuts for letters NOTE select Help gt Drake Software Help from the Home window In the Table of Contents under Setup gt Letters click RTF Guidelines Parts ofa A letter in the Client Communications Editor accessed from Setup gt Letters con Letter tains three categories of letter elements keywords text and conditional paragraphs lt Current Date gt lt Taxpayer Name and Address gt iti Text lt Greeting Title and Last Name gt Conditional Text Paragraph lt Federal Electronic Filing Paragraph gt Enclosed is your lt Current Tax Year gt Form 1040 U S Individ
299. es 2 Inthe Password Protect Client Data Files dialog box Figure 11 7 enter the SSN or EIN of the client file to password protect F 5 Drake 2011 Password Protect Client Data Files This will password protect a single taxpayer return The password you choose MUST be eight characters or less It may be any combination of letters and numbers Enter the client s SSN EIN then enter and confirm the desired password Enter the primary taxpayer SSN EIN Enter password Confirm password Help Continue Exit E Figure 11 7 Enter the SSN and then enter the eight character password twice 3 Enter an eight character password in the Enter Password field Passwords are case sensitive and can consist of any combination of letters and numbers Enter the password in the next field to confirm it Click Continue Click Yes to confirm that you want to password protect the file Click Exit NOJA Ifan SSN or EIN is already associated with a password the Current Password field Figure 11 7 is activated Once you ve entered the correct password you can change or remove it using the bottom two text boxes on the screen Unlocking Client Files If files are automatically locked upon e file acceptance they can be viewed but not changed after e filing The option to lock files automatically is available in Options Setup see E filing on page 1 To unlock a client file that has
300. es 262 B backup and restore DDM files 298 Index Drake files 266 bank name database 60 bank products see also banking see also checks applying for 190 check register 202 denial of 194 direct deposit of 219 distribution of 192 Drake banking partners 187 eligibility for 190 in data entry 198 loan cancellations 205 non loan 192 opting out of 199 processing checks 200 service bureau 190 settings 25 tracking prior year information 205 transmission of data 200 types of 191 192 withholding fees from 198 banking 187 205 bankruptcy 96 basis in calculating K 1 amounts 110 batch appointment generator 77 calculations 171 letter printing 274 275 uploads GruntWorx 315 billing overriding setup options 43 blank forms 264 blindness 84 bonds purchased with refund 142 Briggs court case 123 business see also business use cancellation of debt 116 codes 94 depreciating home used for 151 expenses 117 mileage 154 use of home for 154 business use converting home to 101 percentage 148 154 C C corporations changing from S corps 271 calculating tax returns 171 174 209 calculations vi Drake Software User s Manual batch 171 global options for 21 pause option for 21 calculator 63 calendars in Scheduler 74 cancellation of debt 116 of loans bank products 205 capital gains and losses see also Schedule D Capital Gains and Losses carryovers from prior years 97 carryback of net operating losses 155 car
301. es 265 report cards ETC 245 reports appointment 80 creating 285 CSM 233 deleting 289 depreciation list 293 filters 287 292 hash totals 296 in Drake 283 296 keywords Appendix C Multi Office Manager MOM 224 Tax Planner 325 reprinting checks 202 Republic Bank 191 requirements e filing see e filing EIC due diligence 138 for bank product eligibility 190 service bureau 190 system for running Drake software 5 resetting check stock 203 restoring see also backup and restore files archived returns 185 client files 266 267 color settings 38 CSM data 234 DDM files 300 default color palette basic view print 183 xvi Drake Software User s Manual letter templates 36 print order settings 41 statuses in the CSM 229 Tax Planner data 325 RET Refund Electronic Transfer 191 retirement income 102 104 return options 44 returns amending 157 archiving 185 186 calculating 171 174 209 comparing data between 165 creating 53 e filing process 207 226 e mailing to Drake 254 entity packages 990 1120 1120S 1065 327 332 estate 706 272 332 extensions 158 fiduciary 1041 48 114 filing late 163 gift 709 159 indicators on 43 late filed 163 non resident 159 NOTES pages 173 opening 53 230 Pay Per Return PPR 18 practice 64 244 preparation of 83 170 pre prepared entry 281 printing 174 requesting copies from IRS 161 splitting 61 state 63 217 218 statuses of 227 storing information in DDM 297 312
302. es indicated on other forms W 2 Schedule C 1099 Schedule B etc 63 Practice Returns and Test Returns Drake Software User s Manual Click the States tab in data entry to view a list of states Click any state from the list or enter the two letter state code in the selector field to access the Data Entry Menu for that state It is not necessary to return to the States tab to enter a new state code Access city screens by entering a city code into the selector field Another option is to open a state menu and then click the Cities tab if available Cities are listed with their two letter codes Practice Returns and Test Returns 64 Practice returns and test returns are available on the Drake Support site and on the software CD Practice returns help new Drake Software clients become more familiar with how data is entered in Drake The SSNs for these returns begin with 400 00 and consist of various forms and schedules to show how different tax scenarios are prepared in Drake Test returns can be used to test e filing The SSNs for the test returns run from 500 00 1001 through 500 00 1008 For more information on how practice returns can help you see Practice Returns on page 244 Tax Year 2011 4 Preseason Preparation This chapter provides instructions for bringing forward prior year information print ing proformas or organizers for clients mailing preseason materials and setting up schedules See Appendix A
303. es of forms such as Form W 2 In most cases press PAGE DOWN to open a new screen and enter data for a second form Some forms have more than one page or screen If you are in a multiple screen form use the links provided to go to the next page If no links are provided press PAGE DOWN to move to the second page of the screen Press CTRL PAGE DOWN to open a new instance of the form Each time a new screen is produced Drake indicates the record number on the status bar of the screen The number of records is also shown on the Data Entry Menu Tax Year 2011 Drake Software User s Manual Data Entry le pat TF Over 18 anda student T7 Childlivedv 3 Over 18 and disabled I Child did NG General Income Adjustments Cr I Not eligible for Child Tax Credit I Other depe PE f 1 Name andAddress I NotU S citizen or resident alien gt Dependents 2 come 4 Adjustments Record 2 of 2 Press Page Down for New Screen A An anna EDs ns Ses a ae Figure 3 10 Multiple instances of a screen are shown in status bar and Data Entry Menu Detail Use detail worksheets to enter up to 30 items for a numeric field Totals are calculated Worksheet automatically To use a detail worksheet 1 Select the numeric field to which the worksheet will apply 2 Double click the field or press CTRL W to open a Detail Worksheet Detail Worksheet Sort Options F1 Description Ascending F2 Description Descending F3 AmountAscend
304. estoring an Archived Return When you restore an archive you replace the open version of a return with an archived version Drake recommends that you preserve the existing client data before restoring an older version of a return A built in prompt will suggest that you archive the latest version of a return before restoring an older version To restore an archive 1 From View mode of the return select Archive gt Archive Manager 2 Click the row of the archive to restore Restore Tax Year 2011 185 Archive Manager Drake Software User s Manual 4 Click Restore A program prompt suggests that you create a new archive of the current version of the return before restoring the older version e To create a new archive click Yes The Archive Client Return dialog box is opened so you can name and save the new archive e To proceed without creating a new archive click No A final warning is dis played click OK to proceed When the archive has been created click OK Deleting an Return from the Archive Manager To delete an archive of a return from the Archive Manager vo Delete 4 1 From View mode of the return select Archive gt Archive Manager Click the row of the archive to delete Click Delete You are prompted to confirm the deletion Click Yes to delete the file from the archive Once deleted the previously archived file cannot be recovered 186 Tax Year 2011 l Banking For tax year
305. f less than 1 500 or the INT screen if 1 500 or more Foreign Interest and Dividends Use the INT and DIV screens to report interest and dividend income from foreign accounts and trusts As applicable this data flows to Form 1116 Foreign Tax Credit The following Form 1116 capabilities are included on the INT and DIV screens e A section for foreign tax credit information e Ability to associate information from an INT or DIV screen to an 1116 screen e Ability to suppress Form 1116 if it is not required for the return e Ability to open the 1116 screen in the program via a Form 1116 link Foreign Tax The INT and DIV screens include a section for Form 1116 FTC information Credit Data Figure 5 12 shows this section as it appears on the DIV screen Form 1116 FTC Information LT ROC E E 1 Bkeewentitnte trom S J 1116 NOT required Form 1116 7 Foreign country ad Type of income x Date paid or accrued i Acma Fic Figure 5 12 Form 1116 section of DIV screen Tax Year 2011 91 Taxable Refunds Associating Data with the 1116 Screen Screen code 1116 Suppressing Form 1116 Drake Software User s Manual Data entered here does not have to be re entered on the 1116 screen In fact if amounts are entered on both screens the program combines the two amounts and prints the total on the return If data is entered in this section of the DIV or INT screen Form 1116 is generated au
306. f using the El Card For more information on these fields see The E1 Screen on page 193 If using e Collect you do not need to complete the E1 screen all required fields are provided on the ECOL screen Bank Product Transmission Several transmissions occur when you e file the tax return with bank information using Drake e Drake transmits the tax return to the IRS and the appropriate bank e The IRS sends an acknowledgment ack to Drake If the return has been accepted Drake transmits this information to the bank e The bank sends an acknowledgment back to Drake e Ifthe bank approves a RAL it sends a Check Print Authorization or Debit Card Authorization acknowledgment This acknowledgment allows you to print the check e Ifthe bank declines a RAL it flips the RAL to a non loan product If the non loan product is approved the bank sends an acceptance ack The bank also posts a Fees to ACH Automated Clearing House acknowledgment when applicable to inform preparers that their fees have been distributed to their direct deposit account It is normally posted on the Thursday of the following week if the return is sent by noon Thursday Your system picks up any new bank acks whenever you initiate a connection transmit or receive from EF gt Transmit Receive with Drake Processing the Check The following process is necessary for firms that print checks in house If your firm does not pr
307. finding the information you want You can save the manual to your desktop or print your own copy It is available from three locations e Drake Home window Select Help gt Drake Software Online Manual e Software CD The latest version of the manual is shipped with each CD e Support website Select Training Tools gt Manuals To purchase a printed copy of the manual 25 plus tax and shipping go to Sup port DrakeSoftware com Training Tools gt Manuals If you use a printed copy be aware that it must be updated manu ally throughout tax season Addenda pages are included on each MPORTANT Drake CD Because Drake continually updates the online manual throughout the season your best bet for always having the most current version is to use the online manual 235 Online Support Drake Software User s Manual Online Support Drake s Support website Support DrakeSoftware com offers a wealth of resources that are available 24 hours a day In addition to current tax information it provides the online support options discussed here A reliable Internet connection is necessary to take full advantage of Drake s online resources Knowledge Base The Knowledge Base KB is a searchable database of articles submitted by clients programmers the IRS and state revenue departments covering most of the topics that generate support questions There are more than 1 800 articles covering such topics as Drake s tax and C
308. for the client In the 1120S 1065 and 1041 packages you can print K 1 letters for a NOTE return by entering the signing information on the LTR screen This is necessary only if the global option to print K 1 letters is not selected in Options Setup Overriding EF Setup 48 The EF screen in data entry allows you to suppress federal and state e filing on a per return basis The program default in Setup gt Options EF is that all eligible forms will be e filed For more information on the EF screen see EF Override Options in Data Entry on page 216 Tax Year 2011 3 Basics To open the 2011 program double click the Drake 2011 icon on your desktop The LJ Login window displays the Preparer Login box Figure 3 1 update information system and drive information and the current date Logging In and Out Log in using the Preparer Login box on the Drake Login window Figure 3 1 Enter a Preparer ID and Password if one has been designated and click Login to open the Drake Home window see Figure 3 2 on page 50 Preparer Login Preparer ID Password Figure 3 1 Preparer Login box on Drake login window If logging in for the first time after installation enter ADMIN not IMPORTANT case sensitive for Preparer ID For Password enter the serial number from your packing slip To log out without closing the program click File gt Logout Preparer from the Home window To close the program click Exit then Ye
309. formation Formerly part of the TRAC screen the ADMN screen in data entry displays prior year bank product information including RAL and federal refund deposits and pre parer fees for federal returns Data must be entered manually the first year these fields are used Post Season Procedures Required post season procedures vary from bank to bank Refer to your bank s operat ing procedures to determine the proper method of storing or returning taxpayer bank applications and the proper handling of excess check stock If your office is closing for any extended period between April and October notify Drake and your bank so the bank can print any late checks if the service is available Tax Year 2011 205 Cancellations Tracking and Post Season Procedures Drake Software User s Manual This page intentionally left blank 206 Tax Year 2011 8 E filing This chapter provides an overview of the e filing process and outlines procedures for Setting up an e filing account Testing your e filing system E filing federal and state tax returns Reading acknowledgment codes Using the EF and online EF databases Drake tax software incorporates IRS regulations where feasible to ensure that returns are e filed correctly however as a tax preparer you should be well versed in the IRS rules and processes Before tax season begins all tax preparers should Read relevant IRS publications IRS Pubs 1345 and 1346 have information on the p
310. g The E1 Visa Prepaid Card is issued by The Bancorp Bank pursuant to a license from U S A Inc It can be used wherever debit cards are accepted The Bancorp Bank Member FDIC M P RTANT Obtaining Your Card The USA PATRIOT Act is a federal law that requires all financial institutions to obtain verify and record information that identifies each person who opens a Card Account What this means for you When you open a Card Account we will ask for your name address date of birth and other informa tion that will allow us to reasonably identify you We may also ask to see your driver s license or other identifying documents at any time The E1 Screen Use the E1 screen to apply for the E1 Visa Prepaid Card This screen is accessible only via a link from certain bank screens The link is visible once you have indicated in Firm Setup that your firm has been approved by EPS Financial to participate in the El Card program 7216 Signature Tax Year 2011 Signatures for consent and disclosure of tax return information are required only if the El Card is being used with a bank other than EPS Financial All 7216 forms must be signed by the taxpayer and spouse if applicable before applying for the E1 Card If the paper option has been used to obtain the taxpayer signatures mark the box pro vided on the E1 screen To have the required forms signed electronically click the links provided on the screen If using the E1 Card in conj
311. g or attempting to contact the employer you suspect NOTES fraud immediately contact the nearest IRS Criminal Investigation office or call the IRS s tax fraud hotline at 800 829 0433 2D Barcode For W 2 forms with a 2D barcodes W 2 and K 1 data can be scanned into Drake Scanning 1040 package only Open the program to the client s Data Entry Menu not the W2 or K1 screen to scan the barcode the scanned information appears on the applicable screen For example if a W 2 is scanned a W2 screen is opened that contains the data from the W 2 Guidelines for scanning are provided below e When scanning the information the program opens a new screen containing the information It does not overwrite previously entered data on a W2 or K1 screen e The IRS issues guidelines for the 2D barcode If the software producing the bar code follows these guidelines the screen will be correctly populated in Drake If not you will need to visually verify that the data that was scanned e For Form W 2 the 2D barcode picks up only what is on the W 2 In the case of multiple city withholding which is on a separate schedule that does not fit on the W 2 the extra information must be typed in after the barcode is scanned e Any barcode scanner can be used but Drake recommends the Honeywell Metro logic MS1690 Focus W 2 Verification fields activated from Setup gt Options gt Data Entry help ensure that Verification wage and withholding amounts are
312. g 2944 5 han Te een Pate nnn pion Figure 5 31 Screen 3 fields for Social Security benefit amounts These figures are combined with any Social Security or equivalent benefit amounts from the SSA screen calculated and displayed on the Social security benefits line of Form 1040 To enter data from the federal RRB 1099R form use the RRB screen This screen reflects the federal form Other Income The Other income fields on screen 3 are available for reporting taxable income not reported elsewhere on the return Amounts entered here are produced on line 21 of Form 1040 and descriptions are listed in a statement Several screens are available in Drake for entering other types of income as described in the following sections Taxable Distributions 1099 Q Medical amp Health Savings Accounts Tax Year 2011 If the amount on Form 1099 Q Payments From Qualified Education Programs exceeds the amount of education expenses compute the taxable amount of the distri butions and enter it on screen 5329 Part II line 5 and on screen 3 line 21 Enter distributions from Medical Savings Accounts MSAs on the 8853 screen Form 8853 Archer MSAs and Long Term Care Insurance Contracts Enter distributions from Health Savings Accounts HSAs on the 8889 screen Form 8889 Health Sav ings Accounts HSAs Taxable amounts from these screens flow to Form 1040 115 Other Income Drake Software User s Manual Lines 1 coverag
313. g order Tax Year 2011 261 Update Manager Drake Software User s Manual r 2011 Drake Tax Software Version P2 1 3 2011 0 re Drake Update Manager Use this screen to keep your software up to date If you wish to install state programs use the Tools gt Install State Programs menu Manual Updates Automatic Updates Auto Updates is currently turned off Get Updates Auto Update Settings Click on an item below for information about updates currently installed 1040 amp Program 1120 1120 5 1065 1041 990 706 Git States TaxPlanner Description Update No Released Figure 11 1 Update Manager dialog box 2 Click Get Updates and wait while the program checks for updates e Ifno updates are found click Exit to return to the Update Manager dialog box e Ifupdates are found you will be prompted to install them Proceed to Step 3 3 Click Yes and then click Yes again to close the software The program contacts the server and displays a list of updates to be installed 4 Click Install When installation is complete click Exit to return to the Drake login window Viewing When updates are installed manually the program creates an installation log showing Release the file name release date and number of the update To view a release note double Notes click the desired row in the Update Manager dialog box Figure 11 1 Notes are dis played in the Report Viewer whe
314. ge Device To copy EF information from a data storage device to a computer 1 From the Home window select EF gt Copy EF Returns from Disk 2 Inthe Copy EF Return from Disk dialog box select the drive to copy files from 3 Click Copy Files 4 Click OK to copy each file Click Exit to close About State E filing Most states accept e filed returns and some require it or have regulations that deter mine at what point a tax professional can or must begin e filing Mandates don t apply to taxpayers e filing their own returns Some states with mandates have their own application process for EROs and tax preparers who offer bank products These processes and the rules and regulations pertaining to e filing vary from state to state The state FAQ screens in data entry includes links to state e filing information Infor mation on individual state requirements are available at Support DrakeSoftware com and in Appendix E State E filing Mandates 226 Tax Year 2011 9 Client Status Manager Use the Client Status Manager CSM for tracking workflow within an office With a glance the CSM can show you the status of every return in the various stages of com pletion when a return was begun when it was completed who worked on it and the current filing status and payment status to name of few of many available statuses The CSM can display various other types of data including client name ID number and client name and phone numb
315. ge whether or not the screen has been opened for the Tax Year 2011 Drake Software User s Manual Data Entry return In the above example an EF message would be created even if no Sched ule C was present in the new return In effect this type of global flagging would force the data entry operator to open screen C even if only to clear the flag To prevent flagged fields from being overlooked all new return flags cause the corre sponding screen and tab names to appear as the color of the field flag Figure 3 14 default is green Once the field has been verified the highlighted tab and screen names go back to their original colors General income Adjustments Credits Credit Cc Self Employed Income F Farm Co Op Income J Farmers Income Averaging 4835 Farm Rental Income 6198 Amount Not at Risk L 8582 Mogifiad AGI Workshast sient Figure 3 14 Screen C under the Income tab has a flagged field Flagging To flag one or more fields in all returns Fields Globally 1 From the Home window select Setup gt Options Administrative Options tab 2 Select Use Customized Flagged Fields on all Returns 3 Click Flag to open a dialog box with buttons for all Drake packages Figure 3 15 Drake 2011 Flag Fields For Review EES F A 1120 Corporate 1120S Sub S 1065 Partnership 1041 Fiduciary 990 Tax Exempt 706 Estate Exit Figure 3 15 Flag Fields for Review dialog box
316. gs If the Automatically calculate box is marked the program applies the rates to all late filed returns If it is not marked the program applies the rates only if the LATE screen is used for a return NOTES If an interest rate is entered for a quarter that has received or will receive an automatic update the entry overrides the updated rate Updated rates are not visible in Setup gt Options all rates appear as 00 00 unless a new rate is entered The LATE screen has the following fields for overriding penalty and interest amounts that would otherwise be calculated by the program e Failure to file penalty Enter a penalty amount for failing to file on time e Failure to pay penalty Enter the penalty amount for failing to pay e Interest Enter the amount of interest incurred Other Special Features in Data Entry Special features are available to help tax preparers compare and review information more effectively include all required details on a return and track a return s progress Comparing Data Cross checking Drake Calculations Screen code CHK Tax Year 2011 In Drake you can compare data between two versions of the same tax return You can also produce a tax return comparison worksheet that shows data for a client s returns for the current year and the two prior years The Checking Information screen allows you to cross check Drake calculations with amounts from a previously prepared return
317. gure 13 4 A txt file lists the default common document names If using DDM 2 click the Common Documents Show Hide button See Figure 13 5 The common document names are shown in a small window of the dialog box r E Document Manager Options Document Manager Data Path ADRAKEDDM Use this scan device x Browse Tum off scanner interface T Common Documents list W 2 Social Security Card Driver s License Birth Certificate 1098 a 1099 DIV 1099 G 1095 INT 1099 MISC 1099 R Document Status list Secure customer folder names by truncating 9 digit IDs now Account 6902 EFIN ds8276 Password eeeee Figure 13 5 Options for commonly scanned documents in Document Manager Options DDM 2 for original DDM see Figure 13 4 3 Inthe example in Figure 13 6 the user has added Military ID to the default list in DDM2 305 Drake Document Manager Drake Software User s Manual Original DDM DDM 2 pre i a ee ee ed egrs a a me T A free r COMMON Notepad Common Documents list Show Hide File Edit Format View Hel ba Se eee W 2 Social Security Card Driver s License Birth Certificate 1098 Add Common Document Names 1099 DIV 1099 G 1099 INT 1099 MISC 1099 R Miitary ID Social Security Card Driver s License va Birth Certificate Document Status list Show Hide 1098 Oe ee Oe etna mtntans aat ajnana nah es 1099 prIv 1099 G 1099 INT 1099 MIS
318. han one W 2 or 1099 R form print two per page Carryover worksheet Produce any carryover worksheets associated with the return Print Page 2 of Schedule K 1 Produce page 2 of Schedule K 1 for Forms 1120S 1065 and 1041 Form 8879 bank account options Select options for printing client s bank routing and account numbers on Form 8879 1040A EZ suppress Automatically suppress Form 1040A or 1040EZ Form 1045 page 2 NOL Automatically produce Form 1045 page 2 if the return has NOL Select to Turn On ___list if greater than Produce lists of these items W 2 W 2G 1099 M 1099 R dividends interest K 1 when the selected number in the drop list is exceeded NOTE Many of these settings can be adjusted on a per return basis See Making Changes on the Fly on page 41 Optional Options under the Optional Documents tab are described in Table 2 8 Documents Table 2 8 Options Setup Optional Documents Option Description Folder coversheet This option generates a folder cover sheet containing the taxpayers names and the name address and phone number of the preparer s firm Prior year s comparison form Select this option to produce a comparison sheet containing data from the cur rent and prior year returns Return summary Select this option to produce a return summary with every return prepared Bill summary Select this option to produce a summary of the taxpayer s bill with
319. he 4562 screen is to be associated with the second Schedule C created in the return Ifa return has multiple instances of the selected form enter the instance of the form in the Multi form code field For example if there are two Schedule Cs and you want to associate an asset with the second Schedule C created in the return you would enter a multi form code of 2 See Figure 3 19 For Schedule E each E screen in other words each property entered NOTE has a separate multi form code Because up to three properties are printed on a Schedule E the MFC number for a Schedule E should refer to a screen not the instance of the form When you split a joint return in Drake the program calculates three returns one for married filing jointly MFJ and two for married filing separately MFS Before splitting a joint return ensure that data on all screens clearly applies to either the taxpayer T or spouse S Also check to make sure Ready for EF is not marked on the EF screen If this box is marked all three returns will be marked eligible for e file See EF Override Options in Data Entry on page 216 To split a joint return 1 Open the return 2 Choose one of the following options 61 Data Entry Drake Software User s Manual r e To compare returns for two individuals who lived together for the entire year 8 click the Split button or press CTRL S To compare returns for two individuals who did not l
320. he following sections describe actions that cause the data in cells to change Entering To make a direct entry in a cell click the cell and enter an amount Use this same pro Data cess to override the amount in a calculated cell You can also copy cut and paste amounts in a Tax Planner cell using typical Windows procedures for copying cutting and pasting data Tax Year 2011 323 Tax Planner Drake Software User s Manual Using In some cases a worksheet is available for additional data entry Worksheets e The Detailed Worksheet is similar to the CTRL W worksheet in data entry To attach a detailed worksheet select the desired cell and press CTRL W Use the Detailed Worksheet dialog box to add edit and remove items for the cell P i Drake Tax Planner Detailed Worksheet ik m Enter the description and amount for the item Click Add to place this item in the list below Item Description Amount I R U Kurious 1725 Add S Description Edit Remove Exit Figure 13 18 Adding items to a Detailed Worksheet dialog box For example to add an item enter a description and an amount and click Add Once all items are entered click Exit The total is shown on a blue background Figure 13 19 Income Items 2009 Wages Nontaxable combat pay axable interest Nontaxable interest Dividends Qualified dividends axable refunds Alimony Business income Schedule C Capital gain loss
321. he password The Compose Message window is opened showing the attached files in the Attachment s list Figure 6 8 181 Setting Up View Print Options Drake Software User s Manual Drake 2010 Email Compose Message bm 8 To Attah Help Exit To support drakesoftware com Attachment s NI 2010 Tax Return Documents PDF Send ce Print File 400001002 1040 Bee Data File 400001002 1040 Subject 2010 Tax Return Information Attachments Add ee ee ee eee oe n Figure 6 8 Attachments shown in Attachments s list of the Compose Message dialog box 4 Click the To button shown in Figure 6 8 and double click an e mail address from the Drake Software Support Address Book Click OK 5 Click Send NOTE You have the option of attaching additional files See Attaching Other Types of Files on page 255 IMPORTANT If you changed the password for e mailing a PDF document Drake Support will need that password in order to open the file Setting Up View Print Options In addition to setting up options for form properties colors and printing order you can access other utilities within Drake using the Setup feature Setting Form Properties The Form Properties setup function allows you to enter the form description pricing information and numbers of copies to print for a form within a return To access this feature in Enhanced mode select a document and clic
322. he program Taxpayer Demographics Screen code 1 Use screen 1 Demographics accessible from the General tab to enter data for the top section ofa Form 1040 including the taxpayer s name mailing address and filing status Screen 1 also has fields to indicate contact information and other relevant details of the return Selecting a Filing Status Select a filing status from the Filing Status drop list at the top of screen 1 Press F1 in the Filing Status field to view explanations for the available codes Entering Taxpayer Information Tax Year 2011 Enter the name date of birth occupation and contact information phone numbers and e mail address for the taxpayer and spouse if applicable Note that not all fields in the Spouse column are activated if the filing status is something other than Mar ried Filing Jointly fields that are activated should be completed e File specifications require that no more than 35 characters of a taxpayer s name be transmitted on a tax return In Drake names of more than 35 characters taxpayer and 83 Exemptions Drake Software User s Manual spouse named combined are automatically shortened and a note is generated If after the name is shortened it is still too long you will be directed in an EF message to shorten the name manually on screen 1 Press F1 in a Name field on screen 1 for fur ther instructions Below the E mail text msg field indicate if a taxpayer is a d
323. he required fields on the applicable screen are completed the Consent to Use of Tax Return Information will be generated with the return NOTE See E1 Visa Prepaid Card Program on page 193 for information on consent form requirements for the E1 Card Consent to Disclosure of Tax Return Information The Consent to Disclosure of Tax Return Information contains banking option infor mation and explains the IRS Regulation 7216 requirement to the taxpayer It must be signed before the return is e filed e Paper Forms Paper forms can be accessed by several means The software generates the disclosure form as part of the return The wording of the form reflects the banking option your firm has selected This form can be signed with other signature documents prior to e filing Go to the PDF 7216 folder on the Drake CD and open either the PDF or Word version of the form Be sure to print the correct form for your firm s selected bank Enter your firm s name at the top of the form before printing it Screen code Electronic Signatures To obtain electronic consent the taxpayer and spouse DISC if married filing jointly must enter his or her name and the date onto the DISC 188 Tax Year 2011 Drake Software User s Manual Tax Preparer Requirements screen in Drake Once the required fields on the applicable screen are completed the Consent to Disclosure of Tax Return Information will be generated with the return
324. he upcoming webinar and a link you must click in order to join the webinar e Acalendar reminder you can save to your Microsoft Outlook e mail account e Reminder e mail one day before the event and one hour before the event To join the webinar click the link provided in the confirmation e mail and follow the included instructions To earn CPE credits attendees must respond to a series of polls conducted during the webinar attendees must respond to at least 75 percent of the polls to be eligible for the credits and complete a short evaluation after the event Webinar attendees will receive an e mail notification when the CPE credits are made available usually within 48 hours After receiving the notification e mail follow these steps to complete the CPE process 1 From the menu bar on the left side of the ETC Welcome page go to Webinars gt My Webinars A list of completed webinars is displayed 2 Click Evaluation on the line of the webinar you completed Complete the short evaluation and click Submit 4 When the certificates are posted 24 48 hours after submission of the evaluation return to My Webinars On the line of the webinar completed click Print CPE 9 More information on hardware and software requirements registration pricing refunds CPE details and other webinar related topics are available on the Available Webinars and My Webinars windows 243 Online Support 244 Tutorials Practice Returns
325. her portfolio losses f Netlosses under Section 1231 g Netlosses under Section 1256 J g Netshort term capital losses not portfolio eee g Netlong term capital losses not portfolio eects tid g Losses to Form 4797 line 10 e d a ae Figure 5 30 Some of the fields for shareholder s prior year unallowed losses Basis Worksheet screen Basis worksheets are generated when the return is calculated A worksheet actually consists of two pages page 1 shows the adjusted basis calculations page 2 shows the losses and deductions calculations You can force page 2 to be printed even if it does not contain data To do so mark the Force page 2 box at the bottom of the Basis Work sheet continued screen The following basis information will be updated to the next year s software e Adjusted basis amount at the end of the year e Amounts in the Disallowed Losses column of the printed Adjusted Basis Work sheet page 2 New in 2011 At Risk Limit Worksheets can help track shareholder and partner basis for at risk activities Worksheets are produced for each Schedule K 1 for both regular tax and AMT Use the 6198 At Risk tabs on K1P and KIS screens to enter data for these worksheets Tabs are shown in Figure 5 26 on page 108 The top half of the 6198 At Risk tab has the following groups of fields e Part I Profit Loss from the Activity If the basis w
326. hese forms available to your clients includ ing printing forms in batches and having clients provide their signatures electronically These methods are described in the following sections Consent to Use of Tax Return Information The Consent to Use of Tax Return Information explains the IRS Regulation 7216 requirement to the taxpayer It must be signed before the return is prepared e Paper Forms To generate paper forms go to the PDF 7216 folder on the Drake CD and open either the PDF or Word version of the form Enter your firm s name at the top before printing the form Clients must sign and date this form manually Forms are also available at Tools gt Blank Forms Screen code USE Electronic Signatures To obtain electronic consent the taxpayer and spouse if married filing jointly must enter their names and the date onto the USE screen See Figure 7 1 By signing below you including each of you if there is more than one taxpayer authorize us to use the information you provided to us during the preparation of your 2010 tax return to determine whether to present you with the opportunity to apply for these products and services Electronic signature s Name of taxpayer must be entered by the taxpayer Date William Carter 02 20 2011 Name of joint taxpayer must be entered by the taxpayer Date amelia Carter 02 20 2011 Figure 7 1 Names and the date as entered by clients on the USE screen Once t
327. ia 400006666 1065K1 1 12 1065 K1 13 20 Basis Worksheet Basis Worksheet continued 6198AtRisk 6198AtRisk continued A Schedule K 1 for 1065 ts ft Je st W zc z Passive Activity No f 12 3456789 Partnership ID number Partnership name Partners in Grime onr aff ntennaatensast a ape ma A gh gh NINN AAAS Bee T E ay Figure 3 6 Tabs on the K1P screen for an individual 1040 return Tax Year 2011 Drake Software User s Manual Creating and Opening Returns Creating and Opening Returns When you enter an ID number SSN or EIN the software searches both current and prior year files If it finds a client record in the prior year files only you are given the opportunity to update the record from the previous year into this year s program See Updating Client Files on page 66 to perform an update Creating a Return Open Create To create a return in Drake From the Home window click Open New In the Open Create a New Return box enter the client s ID number Click OK Click Yes when asked if you want to create a new return In the New Return dialog box select the return type and enter a client name PAR ONs Click OK Data entry screen 1 for the new return is displayed You may be required to verify the ID number for a new return Verifica NOTES tion is required for all Pay Per Return PPR clients The Name Entry section is
328. ick Start to begin the restore process If you see a No Backups were found at message you may have NOTE selected an incorrect location to fill the Select a Backup to Restore Updating the drop list Check your information and try again You will be notified when the process is complete at which point you should click Close to return to the DDM DDM The DDM Update Manager allows you to check for download and install DDM updates in a few simple steps The DDM must be open in order to access the DDM Update Manager To get and install DDM updates 1 From the DDM menu bar select Setup gt Options to open the Setup Options dia log box 2 Enter your EFIN and Drake Password and click OK DDM 2 only you will also be asked to enter your account number This is the same account number entered at Setup gt ERO Enter the requested information and click Save 3 From the DDM menu bar select File gt Update Manager The DDM Update Manager dialog box is displayed 4 Click Update to initiate the connection to Drake and check for needed updates 5 Once the program has located any available updates click Get Updates The DDM is closed while updates are downloaded It is reopened once the download is complete If an error or unexpected occurrence keeps you from installing found N TES updates contact Drake Support at 828 524 8020 for assistance 300 In DDM 2 once your information is entered Step 2 above
329. icon or but ton for accessing the Drake Help System a searchable Drake encyclopedia ne arranged in books and an index The Help System answers many of the most com monly asked questions about the software When you access the Help System it is opened for the window you are in For exam ple if you are in pricing setup Setup gt Pricing and click Help you are shown the Help information for pricing setup To print a topic click the Print icon in the toolbar If you encounter an error accessing the Help System run NOTE F Drake11 Help FixHelp exe on each workstation Replace F with your server drive letter Access Help System items by using the Contents Index and Search tabs Contents Cadex Search 5 Contents Index Type in the keyword to find Type in the keyword to find organizers List Topics Select Topic to display Blank Foms Figure 10 12 Contents Index and Search tabs 2 IRS amp Social Security 1 Contacting Drake Sup EF Contents Arranged in a Table of Contents style the Contents tab Figure 10 12 lists all available Help topics Topics are organized into books which contain the Help files for a specific topic Double click a book to see a list of topics contained in that book To see the Help screen for a topic click the topic Index The Index tab Figure 10 12 allows you to access the Help index by keyword As you type a keyword into
330. ida vit LOST_CK PG This document must be completed signed by both the taxpayer and the ERO and faxed according to your bank s instructions The bank s fax num bers are listed at the bottom of this form Troubleshooting Check Printing Listed below are some common issues that preparers encounter when printing checks Please read the following information before contacting Drake Software Support Checks Aren t Being Printed There are many reasons that a check is not being printed Before contacting Drake Support please review the following questions to ensure that the necessary conditions for printing checks have been met e Is the correct printer selected Go to Setup gt Printing gt Printer Setup and look in the Checks section of the F5 General Setup tab e Are you using the same computer from which the return was transmitted e Have you received the bank acceptance acknowledgment for this taxpayer e Has the correct SSN been entered if reprinting e Have you entered the range of checks you received from your RAL bank Text Won t Line Up If the text is not lining up correctly on the check you may have to modify the adjust ment settings for the printer To adjust these settings Tax Year 2011 203 Troubleshooting Check Printing Drake Software User s Manual 1 From the Home window go to Setup gt Printing gt Printer Setup Select the F8 Edit Printer Settings tab 3 Select the printer being used
331. ided throughout the season for those who use a printed ver sion of the manual These pages are provided on the CD and on the Drake Support site This appendix is a guide to the addenda pages added to the Drake Software User 5 Manual Tax Year 2011 during filing season 2012 This appendix is updated regularly throughout tax season To ensure that you always have the most up to date version of the manual we recommend using the online manual available from the NOTE Drake Home window and on the Drake Support site If you use a PDF of the manual copied to your desktop we recommend periodically replacing your PDF copy with the updated online manual While Table provides a record of the changes made to the manual throughout the season the instructions are for printed manual users only Table F 1 Addenda Pages for 2011 New Replaces Explanation Page Page Tax Year 2011 F 1 This page intentionally left blank Drake Software User s Manual Tax Year 2011 Drake Software User s Manual Index Symbols adjustment fields 60 override fields 60 A ABCvoice files 224 acknowledgments acks Fees to ACH 200 codes for 213 214 e filing overview Appendix B notification of 50 processing 213 activating automatic program updates 262 error message beeps 21 flags 58 heads down data entry 69 imperfect return election 25 macros 30 prompting for check print transmission 25 state return options 24 W
332. ield To close a help window click the X in the upper right corner or press ESC Screen help provides information about an open screen in data entry To access screen help click the Screen Help button at the upper right corner of the screen Figure 10 14 this button may not be visible for all Windows 7 users press CTRL ALT or select Screen Help from the right click menu 1 p em 2 ay K Wages tips 2 Federal tax w h State Information 57550 l 1550 IN NJ PA 3 SocSecwages 4 SocSecwh 57550 3568 WMagicare wages saicmMledicare tax annama nat a Figure 10 14 Screen Help button for W2 screen In most cases a window similar to the field help window Figure 10 13 displays the screen help Some screen helps include links to form instructions and TheTaxLibrary See Tax Library following TheTaxLibrary is an independent tool for advanced research by tax professionals For the 2011 season a subscription to TheTaxLibrary is included with your software From the Home window of Drake click the Tax Research button or select Help gt Tax Research to go to the TheTaxLibrary website Figure 10 15 on page 251 Tax Year 2011 Drake Software User s Manual Software Support Tax Year 2011 TH IBRA RY Send Feedback Subscription Management Logout Search All Select Search Libraries 1040 amp Small Business All States Update Service Publications Form
333. ill be used as a display name on all e mails Click Save Work one on one with a Drake customer service representative CSR to resolve soft ware issues CSRs are trained year round on Drake Software topics such as connec tions conversions networking and other customer service needs To reach any department call 828 524 8020 or fax 828 349 5718 Additional phone numbers and contact information are provided in Table 10 5 Table 10 5 Contacting Drake Support Department Contact Accounting Accounting DrakeSoftware com Education Education DrakeSoftware com E filing EF DrakeSoftware com Support General Support DrakeSoftware com 828 524 8020 Support State specific XXstate DrakeSoftware com Replace XX with state abbrevi ation Examples nystate DrakeSoftware com for New York dcstate DrakeSoftware com for Washington DC Conversions Support DrakeSoftware com 828 349 5546 Client Write Up Client wu DrakeSoftware com 828 349 5547 Get answers to software questions using the fax cover letter provided on the following page Drake replies to faxes with faxes not phone calls 259 Fax Cover Letter for Support Drake Software User s Manual Fax Cover Letter for Support Name Company Name EFIN Phone number Fax Number To department or individual Computer Operating System select one U Windows 2000 OU Windows Vista UL Windows NT U Windows ME U WindowsXP U Windo
334. ime an action occurs to a file the DDM makes note of it in an audit log An action includes importing linking exporting copying moving opening and renam ing The audit log records the action the date the action was taken and the user who performed the action It also shows the document name and path and has a field for entering a document description To access the DDM Audit Log select a file from the DDM document list and choose Properties from the right click menu or click F9 If desired enter a description of the document in the Audit Log s Description field You can choose a status for any document in your filing system The status will be listed in the Status column in the DDM window To change the status of a document 1 Select a document from the DDM document list and choose Properties from the right click menu or click a document and press F9 The Audit Log is displayed 2 From the Status drop list choose Final Review or Draft Figure 13 11 F a bl Drake Document Manager Audit Log _ Audit Log of Activities on Document Archive This screen shows the activities that have been performed on this document along with the date time and the person logged into the machine at the time Audit Log For Archive Status X Path CADRAKEDDM CLIENTS C Carter William 6665 Te4201 1yArchive 20101102 rere Final Description Right click and go to Properties to enter Description Draft Actions
335. in the EF selection report Tax Year 2011 Software Setup Admin Options Drake Software User s Manual To access the Administrative Options tab a user must have administrative rights Options under the Administrative Options tab are described in Table 2 12 Table 2 12 Options Setup Administrative Options Option Use customized data entry selection menu Description Click Customize and then select the package and package type to cus tomize Click Load Menu When the data entry screen is opened click uncheck items to disable them in the Data Entry Menu Click Save The selected unchecked items will not be visible or accessible to any user other than those with administrative rights Customize user defined data entry fields Create option lists for the Miscellaneous Codes fields on screen 1 and the Adjustments and Payments fields on the BILL screen For step by step instructions on this feature see Customized Drop Lists on page 27 Use customized flagged fields on all returns Apply current year Admin flag set tings when updating from prior year Print due diligence documents Require applicable due diligence screens to be completed Enable logged in preparer s Per sonal Client Manager Display program update availability to Bank Products State laws regard ing fees Charge ALL taxpayers the same fees PDF Password Options Select this box click Flag and select a package
336. indow select Tools gt File Maintenance gt Backup Click Automatic at the bottom of the Backup dialog box shown in Figure 11 4 The Automatic Backup Settings dialog box is displayed Figure 11 5 Drake 2011 Automatic Backup Settings x Automatic Backup Settings These settings affect the automatic backup program Please select a time and location to back up your files as well as which file types you would like to back up I Activate Automatic Backups Backup Operation Select Files to Back Up Select time to perform r Client Files 1040 1120 automatic backup 11205 1065 etc 1 00 AM J Select backup type Setup Files Pricing Setup All files Information Files Select a backup location System Files CSM EF CA Database IRS Bank and Scheduler Files This will not change the location of manually backed up files Free space on disk is 33 7GB Help Save Cancel Figure 11 5 Automatic Backup Settings dialog box 267 File Maintenance Drake Software User s Manual 3 Place a check mark in the Activate Automatic Backups box 4 Inthe Backup Operation box choose a time type and location for your backup e Time Select a time from the Select time to perform automatic backup drop list e Type Selecta type from the Select backup type drop list Choose All Files for a full backup choose Only changed files for an incremental backup e Location Click the backu
337. ined by configuration selected above Admin Override M Path for 2011 Data DRAKET1 DT H Path for 2010 Data DRAKETO DT NHS Path for Print File c drake11 pf Shared location for all other shared files EF Firm Pricing Letters CSM etc optional FADRAKE11 Figure 2 8 Sharing all files c Click OK Once a shared drive letter is set do not change it during tax season CAUTION unless Drake Support instructs you to do so Changing a drive letter during tax season can cause problems in file storage and e file pro cessing Tax Year 2011 19 Software Setup Options Setup Options Setup is not required for completing or e filing tax returns Drake Software User s Manual The tax software is shipped with the most common preferences set as the defaults Use Options Setup accessible by clicking Setup gt Options from the Home window to view or change the defaults for the various options available Options are categorized into tabs as shown in Figure 2 9 Only administrative users have the Administrative Options tab Data Entry Billing iM Customize data entry functionality by indicating your preferences below Data Entry Calculation amp View Print Form amp Schedule Options Optional Documents Optional Items on Return Select to Turn On 7 Size data entry screens to show most fields without scrolling TIPO PNE enseon nsstmams e a tt
338. ing 04 Capitalize and Amortize Intangible Drilling and Development i eas aa ioe 05 Capitalize and Amortize Mining Development Costs Other cost basis or amount 06 Capitalize and Amortize Mining Exploration Costs a 07 Include Commodity Credit Loan in Income sec 77a 08 Carryback Casualty Loss sec 165i 09 Treat Charitable Contributions as Paid During Tax 10 Amortize Bond Premium on Taxable Bonds sec 171 c Ls 11 Capitalize Taxes and Carrying Charges sec 266 12 Reduce Research and Development Credit sec 280C c 3 14 Apportion Basis to Stock Rights section 307 b 2 15 Defer Crop Insurance Proceeds and Federal Disaster Explanation ot s denn iat AE al Soda SI Sk a Se ATEA eee oe eo T2 OAN O eli nn nti ct Figure 14 1 Election drop list for 1120 package lists elections available to corporations Tax Year 2011 327 Entity Packages Help Resources 8609 Screen 328 Drake Software User s Manual Make an additional elections or indicate an additional instance of the same election on anew ELEC screen To open a new screen press PAGE DOWN from the existing ELEC screen Once an election is made it appears as a statement on the generated return Statements are referenced as STM ELXX where XX is the Drake assigned number of the elec tion To prevent unnecessary data entry Drake has provided two helpful resources for the ELEC screen e Scree
339. ing 278 updating from prior year 66 EITC see Earned Income Credit election options 157 160 electronic funds withdrawal see direct debit games of skill 116 payment options 143 return originator see ERO e mail address books 256 broadcast 252 checking during EF transmission 25 Form 9325 to taxpayer 25 in View Print 180 notification of new 50 program in Drake 252 259 sending a client file return to Drake 254 to Drake Support 4 employee business expenses 117 employer information in EIN database 279 employers foreign 87 who use Talx W 2 eXpress 88 engagment letters 23 enhanced view print mode 174 180 enrolled agents 15 envelopes 23 43 277 ERC Electronic Refund Check 191 ERD Electronic Refund Deposit 191 ERO Electronic Return Originator applying for status 208 overriding defaults 44 setting the default 25 setup 13 14 208 error messages audible notification of 21 estate returns 272 332 Estimated 133 estimated payment coversheet 23 estimated tax adjustments ETA screen 134 Index applying overpayments to 135 codes in Drake 134 direct debit of 144 paid in 2008 133 payment reminders 274 payments for 2009 133 penalties 137 underpayment of 135 vouchers for 134 estimating 1040 results Quick Estimator 282 ETC see e Training Center e Training Center ETC 239 245 exempt notary income 94 exemptions see dependents existing forms list 56 expenses direct and indirect on Schedule E 106 exporting
340. ing F4 Amount Descending Tite Schedule C Line 8 ADVERTISING gt Description Amount RADIO TELEVIS ION NEWSPAPER Figure 3 11 Detail worksheet with data entered 3 Enter or edit the worksheet Title 4 Enter a Description and Amount for each item Do not skip lines As needed use F1 F2 F3 and F4 to sort items in the list See Figure 3 11 5 Press Esc Drake saves your work and displays the total in data entry Note that the field is shaded to indicate a worksheet is present Default is red Tax Year 2011 57 Data Entry 58 Field Flags Global Flags Drake Software User s Manual Part Il Expenses S AiNGISINg a AA 9 Car and truck expenses AUTO 10 Commissions and fees 1 Comat Figure 3 12 Shaded worksheet field Detail worksheets are produced as overflow statements but are not e filed with the return To print a description on a statement without a corresponding dollar NOTES amount enter a slash in front of the description If you press CTRL W or double click in a Depreciation field the pro gram opens the associated 4562 Depreciation screen with the For and Multi Form Code boxes completed See Associating One Screen with Another on page 61 Use field flags to set certain fields apart for review Flagged fields are shaded default is green and must be manually verified cleared prior to e filing To flag a field click the field t
341. ing the loss allocation percentage by each category of loss applicable to the return Once these calculations are complete e The product flows to the Allowed Losses and Deductions in Current Year col umn of the adjusted basis worksheet generated when the return is calculated Tax Year 2011 111 Supplemental Income Prior Year Unallowed Losses Printed Worksheets TIP Updating to Next Year Tracking At Risk Basis 112 Drake Software User s Manual e The difference between the total losses and deductions and the allowed losses and deductions flows to the Disallowed Losses and Deductions in Current Year col umn of the adjusted basis worksheet generated when the return is calculated Enter prior year unallowed losses in the Prior year carryover losses and deductions column which spans the Basis Worksheet screen see Figure 5 30 and Basis Work sheet continued screens The program automatically updates prior year unallowed losses entered in the 2010 program Prior year Current year Allowable carryover losses and losses and losses and deductions deductions in deductions current year Losses and Deductions a d 10 a Ordinary losses from trade or DUSINESS eee eeceeceeceeceeeeeeees oOo b Netlosses from rental real estate activities O D c Netlosses from other rental activities 22221111 11111522211111 o d Net short term capii MoO n d Netlong term capital losses _ e Ot
342. ing these requirements but it cannot replace the knowledge a preparer applies to each taxpayer s situation EIC and Combat Pay You can override the amount of combat pay from the W 2 that is included in the EIC calculation You can also select to include combat pay in the calculation of EIC Screen code 8812 To modify how combat pay is calculated for EIC open the return and click Add Child Tax Credit Combat Pay under the first Credits tab Enter a Combat pay amount to override the W 2 amount To force combat pay to be included in calculating EIC select Include combat pay in EIC calculation Combat pay entered on the W2 screen Box 12 with a code of Q NOTE nontaxable combat pay is automatically accounted for in the pro gram calculation If you enter a combat pay amount on the 8812 screen this amount overrides the W2 amount Blocking EIC Calculations In some cases a taxpayer may not be eligible for EIC even though the information on the tax return indicates otherwise To block the program from calculating EIC type No into the EIC Blocker on the EIC screen Additional Child Tax Credit and Combat Pay The 8812 screen contains override fields for the following items e Combat pay that is applicable to Additional Child Tax Credit and EIC e Total earned income for Form 8812 Additional Child Tax Credit The program automatically calculates the amount for earned income If Form 8812 applies the program makes the ca
343. int options 179 E mailing from View Print Drake Software User s Manual 3 optional Select any printing options shown in the Print Selection dialog box 4 Click Print again E mailing from View Print You can e mail tax returns directly from both Basic and Enhanced modes Before e mailing returns this way set up View Print e mail preferences Setting Up Preferences Use E mail Setup in View Print to indicate the e mail method you want to use and specify default settings IMPORTANT Even though you must open a specific return to indicate your set tings those settings will apply for all e mailed returns The steps below are optional you may not need to make any changes if you are happy with the program defaults To set up your e mail program for sending returns 1 Go to View mode of any return gt 2 Click the arrow on the Email button and select E Mail Setup 3 In the Email Setup dialog box select your preferred e mail program the e mail program you normally use or the Drake program from the Select Email Method drop list This default will be applied whenever you click the Email button not the arrow next to it Email 4 To include a default Ce or Bee address one to which all e mailed returns will be sent type the address in the applicable field under Email Default Settings If entering multiple addresses use a semicolon as a separator between addresses It is not recommended that you enter a def
344. int the checks post the bank acceptance acks to the EF database so your database will always reflect the most current client status Testing Check Print 200 Before printing checks you might want to run a test print to ensure that checks will be printed correctly One test check for each bank is loaded into Drake when you test Tax Year 2011 Drake Software User s Manual Processing the Check print a check the program uses the test check matching the bank that is set up for Firm 1 in Setup gt Firm s To print the test check 1 Ensure that paper for printing has been loaded into the printer Drake recom mends using a blank sheet of paper 2 From the Home window select EF gt Check Print If no checks are ready a mes sage prompts you to reprint any previous checks Click Yes 3 At the bottom of the Reprint Checks dialog box click Test 4 Click Print in the Print dialog box Printing Checks for Bank Products Tax Year 2011 Before you print checks e Be aware that the appropriate IRS and bank acknowledgments must be received before you can print checks e Make sure the computer for EF transmissions has the correct date e Make sure the check number on the computer matches the check number on the next available physical check Do not transmit from more than one computer unless the program is CAUTI ON on a dedicated server Transmitting and receiving from more than one computer can affect your abil
345. ints NPA on the appropriate line of Schedule E For more on selecting activity types see Activity Types on page 108 e Address and Type of Property Enter the property address in the fields pro vided and select the property type from the options below those fields If Other type a brief 20 characters or fewer description of the property type e Some investment is NOT at risk Mark this box if portions of the real estate investment are not at risk To enter data for computing deductible profit or loss from at risk activities click the Form 6198 link to open the 6198 screen for Form 6198 At Risk Limitations When you exit the 6198 screen the program returns you to screen E e Property was 100 disposed of in 2011 Mark this box if the property was sold or otherwise disposed of in the current tax year e Property is an SMLLC Mark this box is the property is a Single Member Limited Liability Company state use only If the property was 100 disposed of and a 4562 screen has been N OTE completed the software automatically determines if the disposal was at an overall loss or gain and prepares Form 8582 Passive Activity Loss Limitations and its worksheets accordingly Property Item 2 of screen E contains fields for indicating how much of a property was used for Usage fair rental and personal purposes and a check box to indicate that a taxpayer owned a Tax Year 2011 105 Supplemental Income Direct and Indir
346. ion Savings Account ESA distribu tions The calculated amount flows to the following places in the tax return e Form 1040 line 21 Other income e Form 5329 Additional Taxes on Qualified Plans including IRAs and Other Tax Favored Accounts line 5 Distributions included in income from Coverdell ESAs and QTPs Enter qualified education expenses and contributions to and distributions from a QTP or ESA in the QTP ESA Taxable Distributions section of screen 5329 Figure 5 39 QTP ESA Taxable Distributions Adjusted qualified education expenses for 2011 Gross distribution from Qualified Tuition Program QTPY CAPE an ee IE a ee ee ee ee Portion of QTP distribution that is earnings Basis in Coverdell ESAas of December 31 2010 Education account type gt 20M CE IO NG ESA e Figure 5 39 QTP ESA Taxable Distributions section of screen 5329 The program uses information entered in these fields to calculate the taxable portion of distributions and to generate the calculated amounts on the return Table 5 9 shows which fields are required in order to ensure correct calculations 130 Tax Year 2011 Drake Software User s Manual Household Employment Taxes Table 5 9 Required Information for Accurate Calculation of Distribution Income To Calculate Income from an ESA Distribution Adjusted qualified education expenses 2011 To Calculate Income from a QTP Distribution Adjus
347. ion under Calendar tab in Scheduler Setup N Click a color to open the Color dialog box for that color o Select a new color 4 Click OK When you change a color note that the Use custom colors button is marked automatically To reset the Scheduler to use the default colors click Use application default colors Printing and Exporting Preparer Schedules Drake allows you to print or export to an Excel file preparer schedules for a speci fied time range for a specific date or week Schedules are printed or exported for all preparers N DTE To print or export a schedule for a specified preparer see Creating Appointment Reports on page 80 Printing The Print feature prints the appointments for the selected date shown under the Cur rent Calendar Date In the Appointment Scheduler click the Print icon select the starting and ending times and click OK Results are displayed in the Report Viewer from which you can print or export the data N DTE If the Weekly Calendar tab is selected the Report Viewer displays all appointments for the week of the current date Exporting The Export feature sends the data for the selected tab to an Excel spreadsheet To export schedule data directly from the Appointment Scheduler click Export select Tax Year 2011 75 Scheduler Drake Software User s Manual the starting and ending times and click OK Results are displayed as a printable spreadsheet Scheduling Appointments
348. ion unsuccessful Go to Setup gt ERO and add or correct NOTE your ERO information as needed and re transmit If transmission is still unsuccessful make sure your Internet connection is working properly You can save time and mouse clicks by combining the previous seven steps into one From the Home window go to Setup gt Options Tip EF tab In the Session Options section select Combine EF Steps Select Transmit Post Acks You can still view the reports by going to Reports gt Reports Viewer from the Home window E filing a Return The e filing process can be said to consist of up to five main steps starting with return calculation and ending with the processing of loan checks for bank products Step 1 Calculate the Return Calculate the return to determine if it is ready to be e filed See Calculating a Return on page 171 for instructions on calculating returns in Drake Drake generates an EF status document and if necessary EF message pages shown in the Figure 8 1 directory tree and described in the following list Tax Year 2011 209 E filing a Return Drake Software User s Manual All Forms Sets EF 3 E Federal cee Figure 8 1 EF related documents include EF messages and an EF status page e EFSTATUS The EF status page shows which federal and state returns will be transmitted and which returns have been suppressed and will not be transmitted It also states whether any federal EF message
349. ist of available practice returns Figure 10 9 Practice Returns Individual Practice Return 1 View Return View Solution Individual Practice Return 2 View Return View Solution Individual Practice Return 3 View Return View Solution Individual Practice Return 4 View Return View Solution eee Ratum oe ee PP se ewe View ar 3 f Figure 10 9 List of practice returns on the Practice Returns page Click View Return to view the basic return scenario in a PDF file Open Drake s tax software and prepare the return according to the scenario Once you ve calculated the return go back to the Practice Returns page and click View Solution to compare your return to the solution return Drake ETC offers 10 basic and intermediate practice returns for the 1040 package and one practice return each for the 1120 1120S and 1065 packages To practice e filing and working with bank products scroll to EF Banking and click View Return Fol low the instructions located in the PDF file Tax Year 2011 Drake Software User s Manual Online Support Tutorials and practice returns are also available outside of ETC To see the tutorials or to work on the practice returns without signing on to NOTE ETC go to the Support website and click either Training Tools gt Prac tice Returns or Training Tools gt Tutorials Practice returns are also available on your Drake CD Videos Drake ETC offers online videos covering such subjects as basic administrati
350. ist of files to upload 317 SecureFilePro DDM 2 Only Drake Software User s Manual Job Status The amount of time it takes to upload documents can range from a few minutes to sev eral hours depending on the number of documents you re uploading To check on the progress of the upload click GruntWorx gt Check Job Status on the DDM 2 toolbar The GruntWorx Status dialog box is displayed Figure 13 14 r eee E GruntWorx Status sl Token Infomation Oanmiscs Tokens Purchased 150 Tokens Used 0 Refresh Tokens Available 149 Ext Do not show downloaded jobs Date Sent Date Downloaded Product Tokens LJ ID Client Name 88 Carter William 6665 1279 201 Not Downloaded ORGANIZE 1 162 Carter William 6665 1278 201 Not Downloaded ORGANIZE 1 Right click on downloaded jobs to download again Figure 13 14 Checking on status of uploaded job In the Status column of the GruntWorx Status dialog box one of these three statuses is listed e Pending The upload to GruntWorx is still in progress e Completed The upload to GruntWorx is complete but you have yet to down load the completed job back to your computer e Downloaded The job has been downloaded to your computer and the job is complete When the Status is Completed select a job to download mark the check box on the left of the client s name and click Download Note that in the upper left corner of the Grun
351. isted below and shown in Figure 2 6 are available by default If preparer data is brought forward from last year preparers with any of these security levels are automatically added to the appropriate group e Admin Users with administrative rights group cannot be deleted e Front Office Front Office rights Scheduler access only e Full Users with full access to everything except administrative features Choose one of the following options e To adda group click Add Group Under Security Group General Informa tion Figure 2 6 enter a Group ID and a Group Description e To add preparers to an existing group double click the group row near the top of the Group Security dialog box Tax Year 2011 Drake Software User s Manual Software Setup pil Ege tn arf AMIS tt nei feat a ans VSAM ANAL ae an TIME es tate pene gt Group ID Description Admin Group can access everything including special Admin only sections FRONT OFFICE Front Office used for non preparers FULL Full access to everything except special Admin only sections Security Group General Information Group ID MAIN OFFICE Group Description Data entry operators who work in the main office Security Settings Assign Preparers File EF Tools Reports LastYearData Setup Help Custom Preparer Security z da Retum Click the menu items to apply security A checkmark indicates J Print access is allowed Remove the J View checkmark t
352. ithholding Allowance Cer tificate 56 Form 56 Notice Concerning Fiduciary Relationship PIN and prior year AGI required enter this data and indicate Form 56 on the PIN screen 982 Form 982 Reduction of Tax Attributes Due to Dis charge of Indebtedness 8815 Form 8815 Exclusion of Interest from Series EE and U S Savings Bonds Issued After 1989 8822 Form 8822 Change of Address This form is not e filable 8866 Form 8866 Interest Computation Under the Look Back Method 9022 Form 90 22 1 Report of Foreign Accounts See Report of Foreign Accounts following Report of Form 90 22 1 consists of four sections Foreign Accounts Section 1 Filer Information Complete once for each filer reporting a foreign account Use a separate 9022 screen for each account If necessary select either T or S at the top of the screen to indicate which filer should report the account default is T Once a filer s data is entered on a 9022 screen this section can be left blank in subsequent 9022 screens for that filer e Section 2 For Parts II HI IV V Complete this section for each 9022 screen used Choose one of the boxes at the top of this section to indicate the nature of the account Options are shown in Figure 5 58 162 Tax Year 2011 Drake Software User s Manual Features for Late Filed Returns arn l Owned separately Il I Signature but no financial interest IV
353. ity to print checks correctly To print a check for a bank product 1 From the Home window select EF gt Check Print to open the Bank Product Selection box 2 Choose to print checks or to print the Truth In Lending Agreement TILA disclo sures for non check bank products such as debit cards and direct deposit 3 Click Continue The Selection window for checks or TILA shows the items available for printing 4 Select the items to be printed or use Select All or Unselect All 5 Click Continue The Check Print Options dialog box displays the client s name ID number check amount and check number 6 Choose from the available options listed in Table 7 5 Table 7 5 Check Printing Options Option Description Print this check on ___ Prints the check on the displayed check number Delete this Client s check Deletes the check from the system The check will not be displayed for printing again Skip this Client s check for now Excludes the check from the current print job 201 Processing the Check Drake Software User s Manual Table 7 5 Check Printing Options Description Print ALL selected checks start ing on ___ Prints all previously selected checks starting at the displayed check number The first time you print checks you must set up a check range IMPORTANT Click Setup Checks to choose a bank and set up the check range You can also use Setup Checks to change the chec
354. ive together for the entire year click the down arrow next to the Split button and select a category of MFS filing status At this point if there is a Schedule A on the return and you have not specified on screen A whether to force itemized or standard deduction NOTE you are prompted to select Itemize Standard or Optimize before pro ceeding If you select Optimize the program will determine which is the best treatment of the Schedule A deductions Results are displayed in the Return Selector Figure 3 20 The MFJ MFS Report button allows you to view a Filing Status Optimization Report for a selected return See About the MFJ MFS Report on page 62 SSN EIN Date Time Name FedRefund State Refund Type _ Status m 400004505 _ 10 07 14 12 04 SPLITT TOM SPLIT RETURN _ 297 0H 1501 PER Mca C 400004546 10 07 14 12 04 SPLITT LOLA SPLIT RETURN 284 OH 665 PER Msg C 400004505 10 07 14 12 05 SPLITT TOM amp LOLA 29 OH 2576 PER Msg Filing JOINTLY will save 200 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 Returmfs First then Click Save and View Help MFJ MFS Repo Print Save Select All UnSelect All Exit Figure 3 20 Results for split return 3 Select files and then click MFJ MFS Report Print or Save as applicable 4 Click Exit About the To view the MFJ MFS report click the MFJ MFS Report button Se
355. ive your EFIN forward a copy of the 8633 response letter from the IRS to accounting DrakeSoftware com so we can update your Drake customer account 208 Tax Year 2011 Drake Software User s Manual E filing a Return Testing Transmission Once you have an EFIN Drake strongly recommends that you run an initial transmis sion test to become familiar with the e filing process and ensure that your system is working properly Open a test return and calculate it before testing transmission NOTE Your account number must be entered in ERO Setup in order to trans mit returns See ERO Setup on page 13 To test system transmission Shortcut CTRL S 1 From the Home window select EF gt Select Returns for EF 2 From the EF Return Selector select the test returns to transmit Select only the returns in the 400 00 or 500 00 series provided in the CAUTI DN software All other returns are processed as actual live tax returns and can result in a charge of filing fraudulent returns Click Continue The Report Viewer displays the selected returns Click Exit to close the Report Viewer Shortcut CTRL T From the Home window select EF gt Transmit Receive Click Send Receive in the Transmit Receive dialog box that is opened O E When the process is complete return to the Home window and select EF gt Process Acks to view acknowledgments An IRS acknowledgment of T indicates a successful test transmission Transmiss
356. k number if necessary 7 Click Continue and then click Print Immediately after the checks are printed your system should initiate the process to transmit the check register to Drake When the bank receives the check register pre parer fees are usually deposited on the next business day The check register must be transmitted to Drake before you can IMPORTANT receive fees from the bank Drake recommends running EF gt Transmit Receive after printing large batches of checks Reprinting Checks To reprint a check 1 From the Home window select EF gt Check Print e Ifno new checks are ready for printing you are prompted to reprint checks Click Yes to open the Reprint Checks dialog box e Ifnew checks are ready the Select Checks dialog box is displayed Click Exit and then click Yes to open the Reprint Checks dialog box 2 Type an SSN and press TAB or click ENTER The Reprint Checks dialog box dis plays any previous taxpayer and check information 3 Click Print The program automatically voids the prior check number NOTE You must write VOID on the face of the check that is no longer valid Follow your bank s guidelines for disposition of voided checks Check Register To access a detailed register of checks printed by your office 1 From the Home window select EF gt Check Register 2 Select the Starting Date Ending Date and EFIN Firm Name 3 Click Continue The Report Viewer displays the check n
357. k Setup gt Form Properties Setting Form Colors Colors can be customized in both Basic and Enhanced modes Enhanced The Form Color Background Color and Text Data Color can each be changed in Mode Enhanced mode Drake default colors for these three items as shown in Figure 6 9 are black white and red respectively 182 Tax Year 2011 Drake Software User s Manual Setting Up View Print Options Fom Department of the Treasury Internal Revenue Service 4 Form Color 1040A U S Individual Income Tax Return Black Label Your first name and initial Last name Ei Background See page 15 Color White ST O KARLS Use the If a joint return spouse s first name and initia Last name IRS label Otherwise Home address number and street If you have a P O box se Text Data please print 842 WEEPING WILLOW LN Color Red sl City town or post office state and ZIP code If you have a F D a E ES TS ee ee ew rT Figure 6 9 Customizable colors in Enhanced mode To change colors in Enhanced mode select Setup gt Form Colors In the View Mode Color Selection dialog box click a color After selecting a basic or custom color from the color palette click OK To revert to the Drake default colors click Reset in the View Mode Color Selection dialog box Basic Mode Because Basic mode uses the multi color cascade of forms it offers more opportunity for color configuration on the screen In addition to cha
358. k or money order payable to the U S Treasury and write your Social Security number and lt Current Tax Year gt Form 1040 on the check or money order If you want to review credit card and other payment options available call 800 2PAYTAX or 888 PAY 1040 lt End Paragraph gt Figure 2 17 Conditional paragraph Paragraph Many conditional paragraphs are nested within larger ones Different nesting levels Nesting are indicated by different colors In Figure 2 18 the Federal No Dir Debit Paper Paragraph from Figure 2 17 is nested inside the Federal Balance Due Paragraph The green and purple text show where each paragraph begins and ends lt Federal Balance Due Paragraph gt Your federal return reflects a balance due of lt Federal Balance Due gt lt Federal No Dir Debit Paper Paragraph gt Include your payment and Form 1040 V with your return For faster processing and to prevent errors make your check or money order payable to the U S Treasury and write your Social Security number and lt Current Tax Year gt Form 1040 on the check or money order If you want to review credit card and other payment options available call 800 2PAYTAX or 888 PAY 1040 lt End Paragraph gt lt End Paragraph gt Figure 2 18 Nested Conditional Paragraph In this example the Federal No Dir Debit Paper Paragraph is generated only if the Federal Balance Due Paragraph is generated and only if applicable for a return Client
359. ken Infomation Purchased Available Client Leonidas King 6545 Test Company 9876 150 Used 1 149 V Add Populate Option T Add Trades Job Tyre ORGANIZE POPULATE Figure 13 12 GruntWorx Batch Upload dialog box 315 GruntWorx DDM 2 Only Drake Software User s Manual 4 From the file tree on the left select the client s file 5 Optional Select one of the GruntWorx options Duplex If your scanner has this feature both sides of a document will be scanned Add Populate The Populate feature imports information from certain docu ments into Drake Software See GruntWorx DDM 2 Only on page 313 Add Trades The Trades feature takes information from certain documents and puts it into a spreadsheet for importing into Drake Software See Grunt Worx DDM 2 Only on page 313 NOTE Select these options prior to scanning recommended 6 Click Scan When the scan is complete the client s name will appear in the Client pane See Figure 13 12 on page 315 7 Select another client load the documents into the scanner and click Scan Optional To find another client s folder type the name into the Find Next field 9 When the documents for all clients have been scanned click Upload All a NOTE To remove a client s documents from the list to upload select the client from the Client pane and click Remove Single Client To uplo
360. l tax preparers who prepared more than 100 individual Rhode Island returns in the previous season to e file their clients individual both resident and non resident state income tax returns Preparers filing 100 or more returns of any package individual S corporation part nership etc must submit them electronically The mandate is separate for each pack age For example preparers e filing 100 individual returns are not required to e file 1120 returns unless the number of 1120 returns exceeds 99 All returns should be e filed if possible Tax preparers who file 101 or more income tax returns in a filing period are required to e file all such returns Ifa preparer or multiple preparers affiliated with the same establishment prepared 101 or more returns in the prior calendar year they must submit all Utah individual tax returns electronically Effective January 1 2012 paid preparers who prepare 50 or more returns in a tax year must file all eligible returns electronically using e File If a return is not eligible for e File it may be filed on paper The Tax Commissioner has the authority to waive the requirements to e file if that requirement would cause an undue hardship for the tax preparer The tax preparer must request the waiver Form 8454 P in writing and clearly demonstrate the nature of the undue hardship Hardship waiver requests will be responded to within 45 days of receipt Taxpayers may elect not to have their
361. lated from the LOSS screen Screen code 3 Tax Year 2011 155 Net Operating Losses Drake Software User s Manual Net railroad Social S ctiniy equivalent Tier 1 benefits receives Tor DUT 0a Note Program will figure taxable portion of 2011 SS benefits 214 Other l Form 8615 investmentincome 21 income I Form 8615 investmentincome 21 l Form 8615 investmentincome 21 Real estate tax recovery Personal property rental income Gambling winnings Alaska Permanent Fund Figure 5 55 NOL carryback field on screen 3 An amount entered here flows to the Other income line of Form 1040 Click the LOSS link as needed to access the LOSS screen Carryforwards from Prior Years Screen code Use the LOSS screen to enter NOL carryforward amounts from prior years Enter LOSS amounts for each year using the Amount available from carryforward Used prior to 2010 and Used in 2010 columns on this screen Never add a LOSS screen for a current year NOL The program carries forward any current year NOL and displays the carryforward on the WK_CARRY worksheet The results of your data entry are reflected on NOTES the wk_NoL worksheet To have the program calculate whether there is a NOL for the current year go to the NOL screen and select Calculate 1045 page 2 ONLY See NOL Carryovers on Form 1045 following NOL Carryovers on Form 1045 Screen c
362. lations from the screens listed above Be aware that the SEHI and screen 4 fields are overrides Do not duplicate entries SEHID The top half of the SEHI screen incorporates the Self Employed Health Insurance Worksheet Deduction Worksheet WK_SEHID in Drake from the 1040 instructions If entering an override on screen 4 type the deduction allowed not the total premium paid To have the software calculate the WK_SEHID leave the screen 4 field blank and enter the total insurance premium paid on the C or F screen as applicable Self employed health insurance deduction information is entered on the NOTE same screen as self employed pension SEP information This screen can be accessed using either the SEHI or SEP screen code Self Employment Pensions Screen code SEP SEP screen data flows to the WK_SEP worksheet for Self Employed Rate and Deduction To have the program calculate the maximum SEP contribution enter the plan contribution rate as a decimal on the SEP screen Adjustments to SEP SIMPLE and Qualified Plans Self employed health insurance deduction information entered on the SEHI or SEP screen will be adjusted by any entries made in the SEP and or SIMPLE and KEOGH contribution fields on screen 4 Penalties This section of the manual covers penalties on withdrawals Penalties on estimated taxes are covered in Estimated Tax Penalty on page 137 Early Withdrawal Penalty If the taxpayer is subject to the penalty fo
363. lculations and generates the form Use the Addi tional Child Tax Credit section on the 8812 screen only if you must override the cal culation for total earned income See EIC and Combat Pay on page 139 Tax Year 2011 139 Other Payments Drake Software User s Manual Other Payments Use the following screens to enter other payments from credits Table 5 15 Other Payments from Credits Screen Name of Form 2439 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 4136 Form 4136 Credit for Federal Tax Paid on Fuels 8801 Form 8801 Credit for Prior Year Minimum Tax Individuals Estates and Trusts 8885 Form 8885 Health Coverage Tax Credit These amounts flow to the Payments from line of Form 1040 Use the Other payments field on screen 5 to force an amount to flow to NOTE the Payments from line of Form 1040 Be aware that no documenta tion justifying the forced amount is included with the return by default First Time Homebuyer Credit Screen code 5405 The Housing and Economic Recovery Act of 2008 gave certain first time homebuyers a temporary refundable tax credit This credit was extended for homebuyers who entered into a binding contract before May 1 2010 to purchase the home before July 1 2010 and who closed on their home by September 30 2010 On a 2011 tax return only certain members of the uniformed service or Foreign Service and employees of the intelligence c
364. ld for indicating whether or not the taxpayer is required to file Form TD F 90 22 1 Report of Foreign Bank and Alii Financial Accounts If the Schedule B Part III section is being com pleted a selection from this drop list is required 90 Tax Year 2011 Drake Software User s Manual Passive and Investment Income 1099 DIV etc Schedule B Part Ill Foreign Account Questions Enter on the first 1099 INT onl z Foreign bank account Xj Required to file Form TD F 90 22 1 z Foreign trust Foreign country ad Figure 5 10 Schedule B Part III fields on INT screen The Foreign bank account and Foreign trust items must be NOTE answered Both are Yes No questions If either is left blank a NOTES page will be generated State The State specific information section has a drop list to designate Massachusetts specific Oklahoma or Tennessee for bank interest a field for state identification numbers for Information Michigan Minnesota New Hampshire and Rhode Island returns a field for entering the amount of state tax withheld and choices for Illinois returns Figure 5 11 State specific information zl Bank inierast n ID number for use by MI MN NH amp RI Sale H SE ON OS 200 I 2 eS eee zl IL Schedule M interest source description Figure 5 11 State specific fields on INT screen 1099 OID Enter interest from Form 1099 OID Original Issue Discount on either screen 3 Interest income field i
365. ld indicator Format adjustment fields in data entry see Override amp Adjustment Fields on page 60 Calc amp Options under the Calculation amp View Print tab are described in Table 2 6 View Print Options Table 2 6 Options Setup Calculation amp View Print Option Description Autocalculate tax return when exiting data entry Returns are automatically calculated every time you exit the return Display client fee on Calculation screen Allows the fees charged for return preparation to appear on the Cal culation Results screen Print only one overflow statement per page Each overflow statement is printed on a separate piece of paper Go directly to form when accessing View or data entry mode Go from a data entry screen to the corresponding form in View mode when you go to View mode When the Data Entry button is clicked in View mode the program returns to the data entry screen Audible notification of calculation error messages When calculating a return the program produces a beep to indicate an error message Layout for depreciation schedule Select Portrait to produce the depreciation schedule vertically using 8 5 x 11 paper select Landscape to produce it horizontally Pause option for calculation Choose the circumstances under which the Calculation Results win dow appears allowing a review of calculation results before proceed ing to View mode Nu
366. lect Reports 2 Select a report from the Select Reports drop list in the CSM Reports dialog box and enter the requested data Reports Tax Year 2011 233 Exporting CSM Data Drake Software User s Manual 3 Click Report The report data is displayed in the Report Viewer You can now print the report export it into another program or customize the display For information on using the Report Viewer see Report Viewer on page 293 To access the CSM Reports dialog box from the Home window select NOTE Reports gt Report Manager Next under Other Report Options dou ble click Client Status Manager Reports Exporting CSM Data a To export CSM data into Notepad or CSV format suitable for Microsoft Excel and Microsoft Access click Export in the CSM toolbar A worksheet of the data is Export opened automatically Admin only Features Users with administrative rights can delete records from the CSM display restore CSM data and remove duplicate entries Deleting a Record from the CSM Display When a record is deleted from the CSM display it is no longer visible in the CSM It still exists in the software however To delete a record from the CSM display right click the record and select Delete CSM Record This Client To view a deleted record click Filters gt Display Deleted CSM Records NOTE To delete a client file from Drake see Deleting Files from the Program on page 271 A record cannot be deleted from
367. les for three years E 1 E 2 Indiana Kansas Kentucky Louisiana Maine Drake Software User s Manual Paid preparers who file 100 or more Indiana individual income tax returns must file those returns electronically To help tax practitioners more easily comply with the e filing mandate the Department accepted part year full year nonresident and recipro cal state nonresident income tax returns via 2D barcode or paper format for the 2009 filing season Beginning with the 2010 filing season all IT 40PNR and IT 40RNR returns must be e filed Also a paid preparer s client may refuse to allow his or her income tax return to be e filed In order for the preparer to avoid being penalized for not e filing the tax return a completed Form IN OPT must be signed by the client and the paid preparer must keep this form on file for five years A penalty of 50 for each return not filed in an electronic format with a maximum penalty of 25 000 per calendar year will be imposed on a professional preparer beginning with the 2011 filing season The requirement applies to any paid preparer who prepares 50 or more Kansas indi vidual income tax returns during any calendar year The requirement is based on the number of individual income tax returns including resident nonresident and part year returns filed by the tax preparer in a calendar year The combined total of the returns prepared by all employees at all of the tax preparer s loca
368. letter and filing instructions field on the PRNT screen Return By default the program displays certain indicators such as Hurricane Katrina on Indicators applicable returns Use the PRNT screen to force certain indicators to be displayed If a return qualifies for special treatment due to a disaster the NOTE required literal should be entered in the Disaster designation field An entry here will be printed at the top of the main federal form and will be included in the transmission file for e filed returns Billing The following global setup options are set from Setup gt Options Billing and can be Format changed on the fly by using the BILL screen in data entry Table 2 18 Billing Options That Can Be Changed on the Fly Option Choices Billing Statement Format Total only Forms and total Forms prices and total Bill by time Charge per form Custom Paragraph None Top of bill Bottom of bill For more on the BILL screen see Overriding the Bill Amount on page 45 NOTE Write the custom paragraph for the bill in the Custom Paragraph field at Setup gt Options Billing Tax Year 2011 43 Making Changes on the Fly Drake Software User s Manual Penalty amp The following global setup options are for penalty and interest calculations on late Interest filed returns These are set from Setup gt Options Optional Items on Return and Calculations can be changed from within a return Table 2 19 Penal
369. lick Run Report Click the Print and Export icons respectively to print a report or export it in spread sheet format suitable for Microsoft Excel and Microsoft Access Saving To save a set of report criteria for future use Report Criteria 1 Click a category button to select a report category Figure 8 10 2 Enter the report criteria 3 Type a report name in the Save Report As field 4 Click Save In the future when you want to view reports that meet those criteria select the report name and click Load Deleting When you are ready to delete a saved report select the Options tab and click Man Reports aged Saved Reports Reports are displayed in columns on the Report Administra tion page Select a report and click Delete Sort reports by clicking column headers 222 Tax Year 2011 Drake Software User s Manual Online EF Database Using the Database for Multiple EFINs If your company has multiple EFINs you can provide different levels of access to the online EF database for different EFINs Hierarchies are now built and maintained through the Enterprise Office NEW FOR Manager EOM For more information on using the EOM see Bank 70l ing Application on page 221 A separate manual and video tutorial are also available on the opening window of the EOM website https eom 1040 com click Help Setting Security Levels Tools 94x Reports Tax Year 2011 Security settings allow you to password protec
370. lient Write Up software changes in state and federal tax laws tax return troubleshooting bank products tax law research and other topics related to your tax practice To access the KB go to the Drake Support site and select Resources gt Knowledge Bases From the list displayed click the KB you want to view Drake Software Sup port or Client Write Up When you open a KB the Search tab for that KB is dis played Figure 10 1 Search Browse FAQ How to Search the KB Category List Search Click to Search Advanced Search Search for articles Search using All Words X Search within All Knowledgebase s Latest Articles Hot Topics 4 2011 09 19 Broadcast Ni ustomers with a 1040 com Preparer Website u Flow To Tables Detailed Drake10 a How To Contact Drake Support 5 2011 09 12 Broadcast Extension to File or Pay Ta 5 How To Contact CWU Support CWU Disaster Areas Reason 22 During Updating CWU How To Contact CWU Support CWU a How can use more than one EFIN at the same location Ce oy Bee Dae z 2011 09 13 Broadcast Republic Pre Approval is Of a Removing Entries From the EF Return Selector 5 990 Schedule B Amounts Entered on Screen B bf 5 09 01 11 IRS Newswire Tax Relief to Victims of Hi a File Associations How to Change What Program 4 09 01 11 IRS Newswire IRS Gives One Week Filii Preparers Were Affected by Hurricane Irene
371. ling Status 3 Select gt Client Name Extension SS Type Bill Adjustment Description 1 Preparer Bill Adjustment Amount 1 Select All gt gt status Bill Adjustment Description 2 Started Bill Adjustment Amount 2 lt Remove Completed Bill Adjustment Description 3 Last Change Bill Adjustment Amount 3 Changed By Bill Payment Description 1 lt lt Remove Al Refund Bill Payment Date 1 BalDue j Bill Payment Amount 1 Reset Total Bill Bill Payment Description 2 l Bank Deposits Bill Payment Date 2 v Client Payments Figure 9 3 Column Layout tab e To add a column select an item in the left pane and click Select to move it to the right pane To add all items click Select All e To remove a column select an item in the right pane and click Remove to move it to the left pane To remove all items click Remove All e To change the column order drag items up or down the list in the right pane To reset columns to the default view click Reset 2 Click OK to save your changes Other Ways to Customize the Display Other ways to customize the column display are listed below Sort Click a column header to sort records in ascending or descending order Adjust widths Drag the edge of a column to the desired width Size to fit Double click a column header s right border Change column order Click and hold a column header drag it left or right and release to reposition the column This new
372. lished in the DDM you can begin adding files The DDM supports many file types and allows you to import or scan files into the DDM or link to a file outside of the DDM Once added to a folder files are listed in the right pane of the DDM window NOTE Files can be added to the DDM from the toolbar or through the DDM s Documents gt Add Document menu When you print a completed tax form or tax return from Drake to a PDF printer you are in essence creating an electronic copy of the form or return rather than print ing the form or return on paper You can send this copy of the form or return directly to the DDM For details see Printing to Drake PDF on page 178 You can import a file located elsewhere in your computer or network into the client s file in the DDM A PDF copy or scanned image for another application or program can be imported into Drake without requiring you to recreate the file To import a file into the DDM 1 Select the folder where the document will be stored 2 From the toolbar click Import 3 Browse to and select the desired document 4 Click Save The DDM copies the document into the selected folder Scan documents into the DDM using a flat bed or document feeder scanner A flat bed scanner scans one page at a time creating a separate PDF for each page A docu ment feeder scanner scans multiple pages and makes one document of many pages For use in GruntWorx a document feeder scan
373. lit the return to see if filing separately would be ae more beneficial than filing jointly use the TSJ drop list on screen 2 to assign the dependent information to the correct person See Figure 5 3 in the following section Tax Year 2011 85 Personal Service Income W 2 1099 MISC Drake Software User s Manual A TSJ code should also be selected if the state has an MFS Married Filing Separate combined option The program default is T Belongs to the Primary Taxpayer Entering State Data for a Dependent Select a state from the State drop list Figure 5 3 to specify which state should receive the dependent data This selection helps ensure that dependent credit informa tion flows to the correct state return This information is necessary in some situations for example if the parents of the dependent are MFS and reside in different states TSJ State Zi State codes Figure 5 3 Fields for TSJ State and State codes Enter a state code disabled adopted etc as applicable To view all state codes click inside the State codes field and press F1 Double click a displayed code to select it Additional Dependent Information Screen 2 contains fields for other dependent related data Information on the below listed fields is provided elsewhere in this document e Childcare Expense Information See Child and Dependent Care Expenses Credit on page 125 e Education Expense Information See Education E
374. llows you to view at a glance the planned daily schedules of selected Daily preparers including the times they are scheduled to be in the office Schedules Tax Year 2011 73 Scheduler Drake Software User s Manual To establish a preparer s daily schedule in the Scheduler ae 1 Click Setup The Scheduler Setup dialog box is displayed so 2 Select a preparer from the Open Setup Schedule for drop list The Setup Sched ule dialog box Figure 4 10 is opened for the selected preparer r A Drake 2011 Setup Schedule aplenty Preparer Schedule Setup Select a day s then the times When the schedule has been set for the selected day s click Apply to save the information to the schedule grid below Continue to set schedule day and time combinations Click Save to save aplenty s schedule and exit the screen Standard Schedule Detail Schedule Set up Times Select day s l Mon Tues Wed Thus Fri Sat I Sun a Es EOR R a ot Joe Jor gt oe J Apply Standard Schedule Day In Out In Out Tuesday Wednesday Thursday Friday Saturday Sunday Help Clear All Save Cancel Figure 4 10 Setup Scheduler dialog box for a preparer Under the Standard Schedule tab mark one or more boxes to select days This activates the In and Out drop lists in the top half of the dialog box 4 Select the in and out
375. logo Leave blank for no logo Left Margin Adjustment Enter a value to increase the left margin for all letters Note Values are in inches For example Enter 2 to adjust the margin by two inches Enter 1 to adjust by 1 10th of an inch If 0 is entered the program will use the default margin of 1 5 inches Help OK Exit Figure 2 20 Left Margin Adjustment feature Values are in inches An entry of 1 for example adjusts the margin one inch to the right and an entry of 1 5 adjusts it an inch and a half Values can also be entered in increments of one tenth of an inch For example an entry of 1 adjusts the margin one tenth of an inch to the right see example in Figure 2 20 3 Click OK The appearance of the margin in the letter template will not change however when a letter is generated with a return you ll be able to see the margin change both in View mode and on the printed letter NOTE An entry of 0 applies the default margins Drake does not accept neg ative numbers or numbers with two decimal values such as 1 25 Each template has a default name see Table 2 14 on page 34 To assign a new name 1 From the Client Communications Editor click Open and select a letter template 2 Click Setup gt Rename Letter 3 Enter a new name in the Rename Letter dialog box and click OK The new name is displayed in the Client Communications Editor title bar To restore a template to its original d
376. lose the Export 8615 dialog box The parent information is now ready to be imported into the dependent s return After the 8615 data has been exported from the parent return you will be prompted to import the data the next time you open or when you create the dependent return To import parent data into a dependent return 1 From the Home window click Open New 2 Enter or select the dependent s SSN and click OK You are asked if you want to import the return data 3 Click Yes The return is opened to the General tab of the Data Entry Menu When you open the 8615 screen you will see that the parent information has been entered into all of the applicable fields as shown in the Figure 5 41 example Tax Year 2011 Drake Software User s Manual Estimated Taxes Drake 2011 Data Entry 400005008 Carter Scott Screen Help Form 8615 Tax Computation for Certain Children with Investment Income Parent s First Name Last Name Parent s SSN Estimate State Information Parents filing status j2 z m Paranta barahin MEOE ea E E A 96765 P PA kA 1175 Parents tax computed using either Schedule D or J Paren s net capital gain Farnet cyercalie ch ddim ee Mian pennies wy nome n a TT i TD eet Ot CTO ll Figure 5 41 Parent information has been imported into dependent s 8615 screen Estimated Taxes This section focuses on the following information in Drake Estimated taxes paid in 2011 e Estimate
377. lowing options are available from the Tax Planner Options button Options Send to DDM e Send to DDM Select Options gt Send to DDM to save the open file as a PDF file to a selected DDM client folder A WS Case Options e Case Options Select Options gt Case Options to choose the number of cases or years to view and print Click Set selection as default to set a number as a default setting J Directories and Paths Directories and Paths Select Options gt Directories and Paths to select a path for the Tax Planner to use as its source for Drake data current path is dis played Enter a New path if necessary Files are saved to the specified location Working in the Tax Planner To begin working in the Tax Planner 1 Open the Planner using one of the methods described in Opening the Tax Plan ner on page 321 Tax data automatically fills the planner for the current year 2 Inthe Case Selector select the number of years or cases to use If you have already selected a default number the Case Selector does not appear Click OK 4 Begin entering or changing data to reflect the changes being planned or consid ered by the client See Entering Data on page 323 Note that the data in subse quent years adjusts to your entries 5 Click Save Planner gt Save or Save Planner gt Save As and select a name and location for the file Files are saved as DTP files unless you specify otherwise o T
378. lows if applicable e Option B Other passive activity Form 8582 line 3 All Other Passive Activities Tax Year 2011 93 Self Employment Income Schedule C Drake Software User s Manual Rental Real Estate Income on Schedule C e Option D Not a passive activity Default does not flow to Form 8582 The program default is option D Not a passive activity Select D or leave this field blank if this is not a passive activity Select option B to indicate a passive activity NOTE This drop list does not contain an option A or an option C Rental real estate income is not generally included in net earnings from self employ ment subject to self employment tax and is generally subject to the passive loss limita tion rules Options A and C refer only to rental real estate income from a qualified joint venture If you select option B and the income is rental real estate income from a joint qualified venture you must mark the Statutory employee OR qualified joint venture rental real estate activity box on screen C to ensure that the program calculates the limits as required by tax law You can select this box after choosing option A or C but it is not necessary the program automatically calculates the applicable limits for those selec tions Business Codes Press CTRL SHIFT S to search codes To locate a specific business code place the cursor in the Business Code box field B and press CTRL SHIFT S Enter a search term and
379. lows the user to set up viewing options and manage appointments In front office mode a user can access only the Preparer Calendars Front office mode is the default setting for users with administrative rights but it must be assigned manually to other personnel To assign front office mode to an employee 1 Log in to Drake as an administrative user and go to Setup gt Preparer s 2 Select a preparer and click Edit Preparer 3 Click Security gt Front Office Scheduling Only 4 Click Save 71 Scheduler Drake Software User s Manual M p RT ANT Preparer logins and front office mode assignments must be estab lished in Drake before the Scheduler can be used effectively Accessing the Scheduler From the Home window select Tools gt Scheduler or click the Scheduler icon The saa Appointment Scheduler has four main sections see Figure 4 9 Scheduler e A toolbar across the top e A calendar overview in the left column e Tabs for selecting calendar types not available for ADMIN login e The schedule grid which shows scheduled appointments for each calendar type Figure 4 9 shows the Appointment Scheduler window in preparer mode 4 Jime Name Comments Sun Mon Tue Wed Thu_Fri_ Sal 25 26 27 28 29 30 1 2 3 4 6 8 9 ab 11 13 15 16 17 18 20 22 23 24 25 27 2 30 31 Sun Mon Wed Thu Fri Sat I 2 3 5 6 7 8 3 10 12 13 14 15 16 17 19 20 21 22 23 24 26 27 28 29 1 2 4 5 6 7 8 9 Z Today 9 30 2011
380. ls for these states 1 From the Home window go to Tools gt City Tax Rates and select a state The City Tax Rate Editor for the selected state is displayed Tax Year 2011 Drake Software User s Manual Forms Based Data Entry 2 Select a city or municipality from the drop list The city s details automatically fill the text boxes which you can edit as needed 3 Click Update to save any changes 4 Click OK About PA The PA editor is designed for local city forms not including Philadelphia and Pitts Cities burgh tax forms The default address from the database is the Zero Due address listed on Pennsylva nia s Municipal Tax Information website Balance Due and Refund addresses can be obtained from this site or from the paper form if provided by the municipality If penny rounding is required for a specific municipality select Allow penny round ing in the PA City Tax Rate Editor This feature which allows penny rounded amounts to be printed on the form requires that amounts on the federal screens be entered with pennies in order to be accurate To allow penny rounding on a Pennsylvania return in data entry 1 Enter the desired amount in data entry rounding to the penny example 810 33 2 Press CTRL F The CTRL F action forces the program to allow penny rounding for that field only and for that return only Otherwise the program automatically rounds all numbers entered Penny rounding can
381. lti office sites only Follow the instructions on the Recommended First Steps page that is displayed clicking one of the gray boxes to complete each step When finished mark the I ve completed all relevant steps check box and click Continue This page is not displayed for single office sites 4 Select Bank Application from the menu of the EOM home page A Bank Appli cation drop list appears 5 Select a bank from the drop list The application for that bank is displayed 6 Complete the application If you re unable to complete the application in a single sitting or if you want to come back and review the application later before sub mitting it you can click Save and Finish Later Tax Year 2011 195 Preparing to Offer Bank Products Checking Status T Drake Software User s Manual Click Submit Completed Application Once you have submitted the application Drake forwards it to the appropriate bank To import your banking information directly from your Drake bank appli cation see Firm Setup on page 12 If offering e Collect or the E1 Card program go to epsfinancial net to N DTES access and download additional information Program participants must complete compliance training through the EPS website Republic Bank also requires compliance training through its website republicrefund com To check the status of your application log in to the EOM website and select Bank Application Application fr
382. ly uses the default scanner s set tings To change those settings click this box and when the scanner control box is opened make changes to the color dpi size or shape options Build index when DDM starts The DDM index used for searching the DDM occasionally must be rebuilt to ensure proper functionality Mark this box to have the system rebuild the index when the DDM starts Not available in DDM 2 Edit reset list Common Documents Edit or reset names assigned to commonly scanned docu ment types For more information see Setting Up Common Documents following Document Status list DDM 2 only Click Show Hide to see the status of documents in the DDM 2 You can add statuses here then to apply them to the doc ument Right click the document and select Status from the menu The status appears on the right side of the document pane of the dialog box Secure customer folder names Client files used to be stored in the DDM based on the cli ent s nine digit ID number SSN or EIN These files are now stored based on the client s last name and the last four digits of the ID For instance documents for William Carter SSN 400006665 are now stored in a folder named Carter 6665 Older files in your DDM might still be stored using the nine digit tag To truncate all IDs to match the new sys tem click Secure IDs Account EFIN Password Enter your Drake account number your EFIN and your fiv
383. m 8606 is not required but you want to generate it anyway go to the 8606 screen and select Print Form 8606 even if not needed Converting To report the transfer of an amount from a traditional IRA to a Roth IRA enter the toa Roth IRA amount on the ROTH screen Figure 5 19 Form 8606 Nondeductible IRA Contributions IRA Basis amp Nontaxable IRA Distributions TSJ z ST z Part II Conversions from Traditional IRAs to ROTH IRAs 16 Amount of your traditional IRA converted to a Roth IRA 47 IRAbasis before conversion en Lae Lea agin agian Fometars 5 PN T n Figure 5 19 ROTH screen field for amount to be transferred to a Roth IRA This amount is carried to the appropriate line of Form 8606 Tax Year 2011 103 Supplemental Income Drake Software User s Manual IRA Penalty Computations IRA penalties are calculated using data entered on the 5329 screen Form 5329 Addi tional Taxes on Qualified Plans Including IRAs and Other Tax Favored Accounts Carrying It might not be necessary to enter data directly onto the 5329 screen If a distribution 1099 R Data code of 1 Early premature distribution no known exception has been entered as to Form 5329 Dist code box 7 of the 1099 screen you can force the distribution amount from a 1099 R to flow to Form 5329 and have the taxable amount of the distribution subject to the 10 penalty To do so go to the desired 1099 screen and select the applicable box under Addi
384. mber of days to store print files Select to store print files from 1 to 9 days or to have them removed the return is selected for e filing If a return is needed after the print file is removed recalculate the return to re create the print file Print sort options for Interest Dividends Choose how items entered on the INT and DIV screens are sorted when printed on Schedule B alphabetically numerically or not at all Tax Year 2011 21 Software Setup Drake Software User s Manual Form amp Options under the Form amp Schedule Options tab are described in Table 2 7 Schedule Table 2 7 Options Setup Form amp Schedule Option Print Schedule A only when required Description Produce Schedule A only when taxpayer qualifies to itemize Print Schedule B only when required Produce Schedule B only when taxpayer has enough interest income to require filing Schedule B Print Form 4562 only when required Produce Form 4562 Depreciation and Amortization only when the tax return requires it Print Form 6251 only when required Produce Form 6251 Alternative Minimum Tax only when the tax return requires it Next year depreciation schedule Select this option to produce a depreciation schedule for next year in addition to the one for this year W 2 1099 R forms Produce and display in View mode all W 2 forms with the return Print two W 2 1099 Rs per page If return has more t
385. me delete drag send e mail and link to other files To find a cabinet drawer or folder in the DDM enter part of the name in the Find text box and click Find The file location is highlighted in the tree Figure 13 8 Capone Al 1009 le B Carter Frank 6669 ie Figure 13 8 Click Find to locate files that match a search term 307 Drake Document Manager Drake Software User s Manual To find the next instance of the search term click Find again Repeat as needed until you find the you are looking for Building A File Structure DDM Cabinets New Cabinet DDM Drawers New Drawer DDM Folders New Folder 308 If building your own file structure map it out by hand before creating it in the DDM More cabinets drawers and folders can be added to a Drake integrated file structure As a level is created an icon representing that level appears in the DDM s left pane Cabinets are the top level of the filing structure The Drake filing system creates a Cli ents cabinet but you can separate clients by return types and have an Individual and a Business cabinet instead Regardless of the structure you choose cabinets are required for storing drawers and folders To create a cabinet in the DDM 1 Click New Cabinet 2 Enter a cabinet name in the Input dialog box 3 Click OK The
386. mileage is under 50 and the Mileage test does not apply to this move box is marked on screen 3903 Form 3903 will not be generated As the preparer you must determine if the taxpayer qualifies for the moving expense deduction See IRS Pub 521 for details 118 Tax Year 2011 Drake Software User s Manual Self Employment Adjustments Multiple Moves If there are multiple qualifying moves within a single year use a separate 3903 screen for each move Press PAGE DOWN for additional screens Self Employment Adjustments Table 5 6 lists screens in Drake for entering adjustments to self employment income Table 5 6 Self Employment Adjustment Screens Screen Purpose SE Self Employment Adjustment Schedule SE SEHI SE Health Insurance Self Employed Health Insurance Deduction 4 Adjustments Adjustments to SE SEP SIMPLE and Qualified Plans Screen codes The SE and SEHI screens are located under the Adjustments tab Screen 4 is located SE SEHI under the General tab Self Employment Tax Schedule SE Schedule SE is required if net earnings from self employment exceed 400 108 28 for church employees If these conditions are not met the program does not produce Schedule SE with the return To force Schedule SE to be printed select the Force Schedule SE box on the SE screen Data from Schedules C and F along with any self employment income from partner ships flow to Schedule SE of the return All other self employment i
387. mount of the refund or balance due and provides instructions for mailing the return if paper fil ing The program uses Result Letter 1 as the default To change the default letter for a return go to the LTR screen and select a new letter from the Letter drop list In addition to other result letter templates you can have the program generate a result letter in Spanish Figure 2 24 an extension letter or an amended return letter instead of the program default letter LTR Custom Paragraph for the Letter Letter fm z This selection overrides any entry in Setup Trane Individual Result Letter 01 Default Personalizg Individual Result Template Individual Result Template Individual Result Template Custom pa Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template eee ee wo 10 Individual Result Spanish A 11 Individual Extension 12 Individual Amended Alltel has atten nm A auan RN ae ee a OE al Figure 2 24 Selecting the Spanish letter as the default letter for a return LTR screen To change the default letter for all returns go to the Optional Doc NOTE uments tab in Setup gt Options and select a template from the applicable package in the Result Letter section of the dialog box Customized The default greeting for all letters is set in Letters Setup To override the greeting for a Greeting retu
388. mputers or you can on a Network share the client files plus all of the other Drake files recommended To share files 1 From a workstation not the server go to the Drake Home window and select Setup gt Directories Paths 2 To share just the client files a For item 3b mark the This is a workstation box and then choose a drive for sharing client files In Figure 2 7 the user has selected the F drive b Click OK Configuration Choose the appropriate configuration below Important If necessary consult with your technician or contact Drake Support for assistance These settings should not be changed during the season unless instructed to do so by Drake Support r Network Options t E NW Client link installed on workstations 3 Software installed on server and workstations secondary network setup To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin Override section below Figure 2 7 Example of selected shared drive 3 optional but recommended To share all other Drake files Setup EF configura tions letters and acknowledgments a In the Paths section at the bottom of the Directories and Paths Setup win dow select Admin Override See Figure 2 8 b Choose a Shared drive letter for all other shared files In Figure 2 8 the user has chosen to share all the files on the F drive Paths determ
389. n Ifa drive letter is not displayed in Step 5 the software has determined that there is not enough space on the drive Initial Login To open and log in to Drake for the first time APON Preparer Login 1 Double click the Drake Software 2011 icon on your desktop In the Preparer ID field of the Login window type ADMIN not case sensitive In the Password field type your serial number printed on your packing slip Click Login Preparer ID ADMIN Serial Number Figure 2 1 Logging in as ADMIN The Setup Assistant opens automatically the first time you log in to Drake Tax Year 2011 Running Drake on a Network Drake Software User s Manual Setup Assistant Designed to guide you through the software setup screens the Setup Assistant appears each time the program is opened until all required setup items are completed A green check mark see Figure 2 2 indicates that a setup item is complete Welcome to the Drake Software Setup Assistant Use the Required for E filing Setup section to enter setup information for firms preparers and e tiling Each setup screen is designed to allow for minimal data entry in order to start using the software The checkboxes will let you know if you if you have the minimum required fields for a successful e filing To further customize the software to your needs use the Optional Setup section V Do not show Setup Assistant at program startup Required for E filing Setup
390. n click the record s ID number e To export the report into a spreadsheet click the Excel icon You are asked whether you want to open or save the file Click Open or Save as desired If you click Open you will have another opportunity to save it from within Excel All data for the given report criteria is saved not just the data shown on the current page Once the report is exported and saved as a worksheet access it from either Excel or Access Copying EF Data Firms with multiple computers but no network might have to copy data from com puter to computer using a disc USB flash drive or other memory storage device For firms that use a network copying EF data from one computer IMPORTANT to another is not recommended Copying to Another Location To copy EF data from a computer to a memory storage device 1 From the Home window select EF gt Copy EF Returns to Disk and select the returns to copy Click Select All or Unselect All as needed Tip Click column headers to sort in ascending or descending order 2 Click Continue Select the output drive from the Select Drive drop list 4 Click Copy Files Figure 8 12 9 Tax Year 2011 225 About State E filing Drake Software User s Manual tengnt egret oat FS tay FOTO I anen git ten pret pee te Select Drive D CD ROM Drive Drake1 O4E xport x Ce ts Figure 8 12 Copying files to CD 5 Click OK after files are copied Copying From a Stora
391. n 1 is not eligible for the child and dependent care credit Carryover from Prior Year For a carryover of dependent care credit from the prior year enter the amounts and create a statement listing the circumstances and amounts Use statement number 108 on the SCH screen For more information on adding an unformatted statement in Drake see Unformatted Schedules on page 167 Elderly Disabled Credit Screen code R Use screen R accessible from the first Credits tab for Schedule R Credit for the Eld erly or the Disabled Tip If the credit does not show up in the calculated return make sure the taxpayer s AGI is not too high to qualify for the credit Home Energy Credits Screen code 5695 Use the 5695 screen accessible from the first Credits tab for Form 5695 Residential Energy Credits To learn more about the federal tax credits for energy efficiency and the products that qualify visit the U S Department of Energy s website A link to this site is available on the 5695 screen General Business Credits The screen used to fill out Form 3800 General Business Credit has been changed in Drake Software for tax year 2011 due to the IRS s redesign of the form The 3800 screen now consists mostly of override fields for passive activity credits see Passive Activity Credits following data should be entered here only to override the pro gram s calculated amounts from Form 3800 Part III General Business Credits or
392. n also use the Lookup feature to access data for a client see Finding a Client Record on page 79 NOTES If you replace data in an auto filled field in the Scheduler this informa tion is not overwritten in the client record in Drake 3 Assign the appointment to a preparer by selecting a name under Preparer s To clear a selection click the name a second time 76 Tax Year 2011 Drake Software User s Manual Scheduler 4 optional Override selections made in Scheduler Setup by selecting or clearing the Add Reminder Private Appointment or Recurring Appointment boxes at the bottom of the Appointment Detail dialog box e If Add Reminder is marked the preparer will receive automatic alerts regarding the appointment when logged in e Ifan appointment is marked private the assigned preparer will be the only one allowed access to that appointment data e Ifan appointment is marked recurring you must provide information about the frequency Daily Weekly or Monthly and the end date of the recurring appointment The dialog box will expand to offer options 5 Click Save The appointment will now be displayed on the schedule grid For a recurring appointment you can edit a single occurrence or the series You can also make a group meeting recurring To e mail an appointment reminder to the client click the Email Notifi NOTES cation button An e mail must be displayed in the Email field in order for this fe
393. n for material participation item E is that the taxpayer materi ally participated in the current year If the taxpayer did not materially participate select Did NOT materially participate option The default position for investments in Part II Expenses is that all investments are at risk If this is not true for your client select Some investment is NOT at risk Enter the distribution amount from Form 1099 PATR Taxable Distributions Received from Cooperatives in the Co op total distributions field on screen F Form 4835 Farm Rental Income and Expenses Screen code 4835 Use screen 4835 to enter data for Form 4835 Farm Rental Income and Expenses Note that this form is for individual 1040 returns only estates and trusts must file Schedule E Part I to report rental income and expenses from crop and livestock shares Farm Asset Depreciation Use screen 4562 Depreciation Detail to create depreciation schedules for Schedule F and Form 4835 From the For drop list on screen 4562 select either F or 4835 as applicable For more on entering depreciation data see Depreciation on page 147 Unemployment Compensation 114 Unemployment compensation amounts should be entered as applicable in the fields described in Table 5 4 Table 5 4 Entering Unemployment Compensation in Drake Unemployment Where to Enter in Drake Compensation Information from 1099 G Screen 99G Fields As applicable Any prio
394. n form Form names vary by bank Ifa bank is selected in Setup gt Firm s and a bank product is indicated in the return s bank screen the appropriate application is included in the forms produced with the return Blank application forms for Advent EPS River City and Tax Products Group are available at Tools gt Blank Forms Select the Federal tab and then choose the desired application Note that applications are multiple pages as shown in Table 7 2 Table 7 2 Application Forms for Banking Options Available in Drake Bank Application Form Advent AD_APPL PG through AD_APPL PG4 4 pages EPS EPS_APP PG through EPS_APP PG8 8 pages River City RCB_APPL PG through RCB_APPL PG5 5 pages Tax Products Group TPG_APPL PG through TPG_APPL PG5 5 pages Banks typically have specific minimum and maximum refund requirements For more information consult the bank application Do not confuse the applications listed above with the bank application NOTE that an ERO must fill out online for Drake For more on the Drake bank application see Preparing to Offer Bank Products on page 195 Franchise Network Requirements 190 If your firm collects tax returns for e filing from outside companies or individuals it might be considered part of franchise or network formerly a service bureau Fran chises and networks can be required to provide additional information when applying for banking services A preparer or firm
395. n level help document Open the screen level help to access an elections document PDF for the package This document lists all available elections the general text that will be printed on the statement and the fields that must be com pleted on the ELEC screen for each election e Field level help As with other screens the ELEC screen features field level help for each field press F1 in a field to access the field level help For each field the field level help indicates which elections require an entry on that field For example the help for the Other costs basis or amount field indicates what data should be entered for which elections r B Drake Software Data Entry Help b Other Costs Basis or Amount direct entry Enter other amount necessary for providing complete information for the election selected If no information is required then leave blank The description field is used on the following election statements for this package SIM Use 02 Amount Capitalized 03 Amount Capitalized 04 Amount Capitalized os Amount Capitalized 06 Amount Capitalized 12 Amount of credit reductions ne smn atta tadinda ndd aa h a lta tn A Af A ann d mn h amma ean th mn UII ml one nd aa thm aani Figure 14 2 Field help indicates data to be entered for specific elections Note that this field does not need to be completed for all available elections The 8609 screen for Form 8609 Low Incom
396. n sent e Drafts If you attempt to close a message before sending it you are prompted to save a draft of the message in your Drafts folder to be completed later To accept click Yes To discard the message click No Trash Deleted messages are stored in Trash To permanently delete a message select it from Trash and click Delete Messages deleted from Trash cannot be recovered Basic E mail To compose a new message click New Enter an address in the To field a subject in Tasks the Subject field required and a message in the text box at the bottom optional To reply to a message click the message and then click Reply or with the message open click Reply The original message is included in the reply message To forward a message click the message and then click Forward or with the mes sage open click Forward To send a message click Send To delete a message click the message and click Delete or with the message open click Delete Deleted messages go to the Trash box Tax Year 2011 253 Interactive Support Drake Software User s Manual Attaching When contacting Drake Support with an issue you might be asked to send via e mail Files a client s data file a return DDM file Drake Software program file or other kind of file Entire folders cannot be attached From Data To e mail a client data file directly from data entry Entry 1 In Drake open the return you want to transmit a 2
397. n the DDM document list or select multiple files using the SHIFT or CTRL keys and click Email Your default e mail program is opened with the Email document added as an attachment Activate drag and drop navigation which allows files to be dragged and a dropped from one location on the computer into the DDM You can also drag Drag and drop files within the DMDM Use your mouse to drag the selected file to the new location Tax Year 2011 Drake Software User s Manual GruntWorx DDM 2 Only Table 13 2 Other DDM File Tasks Task Description Access Help Hele Exit the DDM a GW wW GruntWorx X DDM 2 only Access GruntWorx and options to Check Job Status Process Multiple Jobs and Process Jobs for clientName X Portal DDM 2 only Access SecureFilePro and options to Upload Download and Upload Public Files 2 1O Add Client DDM 2 only Add clients to DDM without going through Drake Software GruntWorx DDM 2 Only Use GruntWorx to organize your clients supporting documents in a single book marked PDF file and You can also import data from standard federal tax forms directly into Drake s tax software GruntWorx Products Tax Year 2011 There are three GruntWorx products Organize Populate and Trades Organize With Organize you scan or import all documents from one client send the documents to GruntWorx and
398. nager see Fixed Asset Man ager on page 294 and can be used in reports NEW FOR Land Cost Depreciating Amortization Select asset categories from the new Asset Category drop list in order 701l to group items by asset category in the Fixed Asset Manager Use the Land cost field to enter cost basis of the land An amount entered here should not be included in the cost basis of the asset For example if the purchase price including the land was 100 000 and the cost of the land was 10 000 you would enter 10 000 for Land cost field and 90 000 for Cost Basis at the top of the screen Home Used for Business If a 4562 screen is to be associated with a Form 8829 Business Use of Home select 8829 from the For drop list at the top of the screen If the home was the taxpayer s main home mark Main home for Form 8829 in the Other Information section on the left side of the 4562 screen Enter amortization codes in the Amortization code section field on the 4562 screen under Amortization Information To allow the extra 5 000 deduction in the first year of amortization select Elect additional first year deduction State specific Depreciation Information All States FL KY and PA Tax Year 2011 For state specific depreciation information complete the applicable fields under State Specific Information section near the bottom of the left column ensuring that all state rules and guidelines are followed Note that Sta
399. ncome e Filing 94X Forms and Obtaining and Understanding Your Client s IRS Account Informa tion More webinars are added each month Panelists are available to answer your questions CPE credits are available no test required Report Card Track students progress in the tutorials and in the tax courses includ ing dates of completion quiz results and CPE credits earned Administration Available only when logged in with an Admin account this section allows you to create student accounts and view student report cards we When a course unit tutorial practice return or video has been viewed a green check mark replaces the red X next to the completed item See Figure 10 6 Tax Courses ETC offers basic return preparation courses for forms 1040 1120 1120S and 1065 An intermediate 1040 course is also available Courses consist of units that must be completed in order For a list of available courses and units click Tax Courses The Tax Courses page displays the units of the Basic Tax Course Figure 10 6 Tax Year 2010 Tax Year z Course Basic Tax Course z Introduction Launch Course Vw Unit 1 Filing Status Launch Course Vv Unit2 Dependents Launch Course x Unit3 Exemptions and Standard Deductions a ett Me yp A E P MORON 00 cafe E O O a i Figure 10 6 Units of the Basic Tax Course To view units for a different tax year or course select an option from the Tax Year and Course drop lists Click
400. ncome should be entered directly on the SE screen Short or Depending upon the employment terms the taxpayer must complete a short Schedule Long SE S page 1 or long Schedule SE page 2 Schedule SE Drake determines the form required and processes it accordingly To force the long form select a Force Schedule SE box in the bottom section of the SE screen Taxpayer Spouse Force Schedule SE page 2 instead Of Page t aaa a p Forca SOHO CRM GS SSE U0 ba primed a E E Figure 5 33 Override SE printing for taxpayer left box or spouse right box Church Code church income as C or P on screen W2 Select the correct code from the Spe Income cial tax treatment drop list at the top of the screen Any income entered in the Wages of church employee field of the SE screen will be added to the W 2 amount For more information on entering data for clergy see Clergy Expenses on page 118 and Ministerial Income Allocation on page 122 Tax Year 2011 119 Penalties Drake Software User s Manual SE Health Insurance Deduction Enter insurance deductions for a self employed taxpayer in one of four places e Screen C or screen F Family Health Coverage field e SEHI screen line 1 An entry here overrides system calculations from screen C or F an entry might be required on line 4 to effect correct system calculations e Screen 4 Self employed health insurance deduction field An entry here over rides system calcu
401. ner is recommended NOTE See Compatible Scanners following for scanners that have been reviewed and found to be compatible with the 2011 DDM release When you scan a document using the DDM the program automatically locates and uses your system s default scanner A Scanner Cannot be Located message implies that the scanner is not TWAIN compliant or has been improperly installed To scan a document into the DDM 1 Select the folder where the file will be stored 2 From the toolbar click Scan and select Use Scanner Bed or Use Document Feeder 3 From the Input dialog box select a file type Figure 13 9 309 Drake Document Manager Drake Software User s Manual Compatible Scanners Linking a File 310 TIP NOTE A g Input Enter a name for this document Or select a Common Name wiliam Carter PDF C JPG Common C BMP C TIF Documents C GIF C PNG Enable Duplex Scanning if available OK Cancel Figure 13 9 In this example PDF is the selected file type 4 Enter a filename If a default name has been assigned for a commonly scanned document select it from the Common Documents drop list In the Figure 13 9 example Social Security Card is being selected 5 Click OK To ease search and retrieval of DDM files use a consistent naming convention The Common Documents feature can help you to do this See Setting Up Common Documents on page 304
402. neral Information tab displays basic taxpayer information along with e IRS acknowledgments Federal code and date transmission date filing status and refund amount or balance due are displayed in the left column This data is from the federal accepted record otherwise the most recent transmission record for the client file is displayed State acknowledgments Under State the middle column displays the state code and date filing status and refund amount or balance due This data is from the federal accepted record otherwise the most recent transmission record for the client file is displayed e Reject Codes On the right side of the window are fields for the reject code form ID form number and sequence number Double click a reject code to jump to the F4 Reject Code Lookup tab See Reject Code Lookup on page 220 The F2 Bank Direct Deposit tab contains detailed data about any bank products e Bank information is located on the left side of the window e Direct deposit information involving bank loans is located on the right side of the window This information includes amounts paid to the bank amounts paid to the preparer and the dates of the payments 219 EF Database Drake Software User s Manual Account information be found at the bottom of the window For the federal state and loan status an account type and number are displayed for each type of direct deposit Fees The F3 Fees Miscellan
403. ng in Once a banking option is selected and saved you can access it from data entry In the Data Entry Electronic Filing and Banking section of the General tab click the bank s name Electronic Filing and Banking USE Consent to Use of Tax Return Info DISC Consentto Disclosure of Tax Return Info DD Direct Deposit Form 8888 PMT Electronic Funds Withdrawal PIN 8879 8878 e file Signature EF EF Selections Figure 7 3 Electronic Filing and Banking section of General tab in data entry Taxpayer Application Complete an application agreement for every taxpayer applying for one of the bank ing options available see Taxpayer Requirements on page 190 Some banks Tax Year 2011 197 Using Bank Screens in Data Entry Drake Software User s Manual require original applications to be mailed on a weekly basis Consult your bank for requirements Check and Card Stock Obtain all check and card stock from your bank All stock must be verified and secured upon receipt Read and retain all information included with the checks or cards Using Bank Screens in Data Entry The Drake program has a separate screen for each of Drake s banking partners While the bank screens have certain fields in common each bank screen is unique Become familiar with the screen for the bank you are using Use the available help resources to ensure that all required information is entered for each taxpayer with bank products Described here are the field
404. nging the form background and text data colors you can customize the following items in Basic mode e View Mode View mode only e Print Mode Print mode only e EF message page e Notes page To change the colors shown in the cascade of forms in Basic mode 1 Select Setup gt Color Configuration The View Print Mode Color Configura tion dialog box displays the default colors for Basic mode 2 Click a color box and select a new color from the Color palette You can also click Define Custom Colors to create any desired color 3 Click OK The corresponding color box changes to the color you selected To restore the default color palette click Restore Colors NOTE If the form background or text data colors are changed in one mode the changes apply in both Enhanced and Basic modes Setting Form Order To change the order in which the documents of a return are printed 1 In Enhanced mode elect Setup gt Form Order to open the Sort Form Order dia log box Figure 6 10 Tax Year 2011 183 Setting Up View Print Options Drake Software User s Manual 1040 Series Federal x Save Normal Default Client Set C K1 Set C EF Signature Set Preparer Set Cancel C Estimate Extension Set C Federal Set Copy 209 Messages Page a D 300 Notes Page Reset C 289 EF Status QO 97 Form 1040 Exit 1 Engagement Ltr C 2 Form 1040 3 Form 10404 a n beng Click and drag the form names to
405. nications Editor click Open and select a package and letter to edit The pane on the right displays the selected template e To edit the letter contents add edit or delete text as you would in a program like Microsoft Word From the toolbar specify font properties typeface bold italic underlined and alignment and copy cut and paste e To add a keyword or conditional paragraph to the letter place your cursor where you want the new item to go and then locate and double click a key word or paragraph from the pane on the left To delete a keyword or condi tional paragraph select it in the letter template and press DELETE Click Save The Client Communications Editor does not allow you to save any letter in which text within angle brackets in other words the names of keywords or conditional paragraphs has been changed Arrange to have your firm s information and logo generated on client bills and letters To set up your letterhead 1 2 3 5 In the Client Communications Editor go to Setup gt Letterhead and Margins Select options from the Letter Bill Indicators section Designate Coordinates In the right column number settings indicate the position of the firm information and logo Settings for the default graphic are e Left most column for logo 8 e Top most row for logo 3 Left most column for firm info 25 e Top most row for firm Info 4 Enter the path to the graphic in the Path
406. nisterial Income Allocation following 8082 Form 8082 Notice of Inconsis tent Treatment or Administra tive Adjustment Request MFS Community Property Allocation Use for MFS in a community property state 8873 Form 8873 Extraterritorial Income Exclusion Ministerial Income Allocation Use the CLGY screen for taxpayers with housing allowance in the form of a parson age or rental or a parsonage allowance from the church generally reported on the W 2 box 14 The CLGY screen allows the following items to be calculated e Percentage of tax free income to be applied to Schedule C expenses marked with business code 813000 e Percentage of tax free income to be applied to Form 2106 expenses The Pastor Carry 2106 amount to CLGY worksheet check box must be marked on screen 2106 e Appropriate self employment income to flow to the Schedule SE Rental Ifthe church provides a rental or parsonage allowance but no parsonage enter the Parsonage Parsonage or rental allowance and the Actual expenses for parsonage If a separate Allowance Utility allowance is provided enter the amount with the amount of Actual expenses for utilities Finally enter the Fair Rental Value of the housing used Parsonage Ifa parsonage is provided enter its Fair Rental Value If a separate Utility allowance is provided enter the amount with the amount of Actual expenses for utilities Standard and Itemized Deductions Based on its calcula
407. nking sesca EEEE E 187 Tax Preparer Requirements n n nannan unnur 187 Taxpayer Reguir mients sers popari enn aid E Cea eed eke ew O ale EE E E Sean 190 Franchise Network Requirements 1 0 0 0 c ccc e tenet n teen ene 190 Types of Products eccrine renee ses ndi Reaeet aaa bbs eek ohare aeee ee cabieeds 191 Distribution Methods jin Saha scree a Ae belgesel dere eRe a tae le bat ae a ae E REE oe fo ele dot 192 The El Screen is eerste eG Wa eh OS ead oO HOS EONS A OM ga eda eee A eee 193 Bank Denials a 5 gst giaee ae de ob rii aod lee Bg a RV Sap E eaten daa Fe gg GR etc etd ent ied O 194 Preparing to Offer Bank Products nnna nnn c tnt e nent een e eens 195 Using Bank Screens in Data Entry 0 een e nen e teen ene nee 198 Bank Product Transmission 0 0 cette teen teen ene n nee 200 Processing the Check sis adckew nce hadh ade 28 dba dda bank a ea wate al ek beds bad 200 Troubleshooting Check Printing nnana cee eee nnn ene e eens 203 Cancellations Tracking and Post Season Procedures 0 0 0c cece ee een e eens 205 BPN EE E E E E E E eee 207 Preparing to E File ner cecesiete sc agyes e E E E EEE EEE EEE EEEE EEEE E E EE E EEE 208 E filing a Retur 3 cc8a e64 4 erpen i e E E E E E E EE E E EA 209 EF Override Options in Data Entry 20 cette teen eens 216 EF Databases s Sicckesleg Chee otek CARRERE TARE ees AOR ee RS Magee Pea de Pea od eh cage 219 Online EF Database susie eed rarai combed
408. nner Print Planner Options GOTo Client Setup X Close Planner Client Setup Drake Software Tax Planner TEST O MAPLE 400 00 1005 Sl Contact Information Taxpayer SSN i 400 00 1005 Taxpayer name TEST O MAPLE Taxpayer date of birth 4 15 1988 Taxpayer blind Spouse name Spouse date of birth Spouse blind 7842 WEEPING WILLOW LN AUDUBON NJ 08106 7842 201 555 1111 Multi Year Next gt gt Notes 3 E M 4 gt Client Setup Demographics Summary Income Adjustments Itemized Deductions Credits 4 lt 0 gt Figure 13 17 Menu bar item 1 toolbar item 2 data and tabs item 3 Some cells are read only and cannot be changed others can be edited Unshaded white cells are active and can be edited The Client Setup Figure 13 17 tab has cells for taxpayer demographic data and planning preferences The other tabs correspond to sections of the 1040 The Sum mary tab displays a summary of the information in the other tabs NOTE Summary tab cells do not accept direct entry If you click a Summary tab cell the program jumps to the cell of the corresponding tab Certain tabs are hidden by default For example the Schedule C tab is not initially vis ible but appears when the Schedule C cell is double clicked from the Income tab Hid den worksheets can also be accessed from the Go To list on the toolbar To move through the tabs click Next or Back on each
409. ns dialog box also has admin only fields for establish ing changing or removing the password required to open the DDM To establish a password for opening the DDM 1 2 From the Home window go to Setup gt Printing gt Document Manager Enter a password in the top text box of the DDM Password section Figure 13 3 Passwords are case sensitive Re enter the password in the bottom text box to confirm it Tax Year 2011 Drake Software User s Manual Drake Document Manager l Drake 2011 Drake Document Manager Integration Options Drake Document Manager Integration Options Use this screen to indicate where Drake Tax Software will access the document manager apply a password and customize the default folder layout Access Options Document Manager Location DrakeDDM Search Use DDM C Use DDM2 Add Password for DDM Startup ADMIN ONLY Confirm Password Folder Structure Allow Drake to set up Document Manager client folders Recommended TEST JOHN 6789 A Add To customize the structure created by Drake select an Edit existing folder and click Add This will insert a new Remove default folder one level below the selected folder I Apply this layout to existing document manager client folders now lf this box is unchecked layout changes will only apply to new client folders Help Save Cancel Figure 13 3 Adding a password to DDM
410. nsion the applicable box 4868 or 2350 must be selected on the EF screen in order for the program to transmit it Sending State Returns With the transition to Modernized e File MeF the concept of piggyback returns will no longer apply State returns will still go through IRS for most states but not as part of the federal return as with piggyback returns in the past Due to this change in concept and the fact that most Drake returns will be sent via the MeF system this year there is no longer an option for piggyback returns When piggyback is required by a state for example Arkansas non resident returns Drake Software will make sure the return goes as piggyback if it cannot be sent through the MeF system An ERO does not need to take any action to ensure the state return is sent the correct way Tax Year 2011 217 EF Override Options in Data Entry Drake Software User s Manual Suppressing Returns from Being E filed By default all eligible returns are transmitted unless you indicate otherwise on the EF screen To suppress one state or city return while e filing others select the states or cities you want to e file from the Select the states cities to e file drop lists The selected states will be e filed but no other state returns will be transmitted even if those other returns are eligible If nothing is selected from the Select the states cities to e file drop NOTE lists or no check mark is placed in the D
411. nt data To generate a Scheduler report 1 Open the Scheduler and click Reports The Report Manager is opened 2 Expand the Schedule Reports and Client Contact menus to show the four types eS of reports that can be generated These are listed in Table 4 2 80 Tax Year 2011 Drake Software User s Manual E filing Preparation Table 4 2 Scheduler Report Types Scheduler Report Call List for all Preparers Description Lists the appointments scheduled for all preparers data types include appointment time and date client name client SSN duration of appointment client phone cell phone new client indicator preparer s name and cli ent s e mail address New Client Appointments Lists new clients entered for a selected preparer data types include client name client SSN and client phone and e mail address Preparer Appointments Lists the appointments for all preparers Data types include appointment time client name client SSN dura tion of appointment client phone and new client indica tor and e mail address Preparer Call List Lists the appointments for a preparer select a preparer name from the drop list Data types include appointment time and date client name SSN and client phone and e mail address o Click on a report type to select it 4 Click View Report You will be asked if you want to create the report again using current data click Yes to do so 5 Set the r
412. nts To print organizers or proformas for selected clients 1 From the Home window click Last Year Data and select either Organizers or Proformas 2 Do one of the following tasks See Filter Manager on page 289 for more on using filters Enter the client s SSN or EIN and press Add Client Repeat for additional cli ents and then click Next and wait for the program to scan the client files Click Next and select filtering and sorting options as desired Click Next again and modify filtering criteria from the Basic Search Conditions dialog box Click Continue and wait for the program to scan the client files 3 When the Options dialog box is opened Figure 4 7 select the desired options NOTE Drake 2011 Individual 1040 Organizer Options oa Proforma Organizer Options Please select the desired options from the list below You will be allowed to select specific forms for printing after the Proformas Organizers have been prepared Click Process 1040 to continue Additonal Proforma Organizer Options C Print Organizer even if printed before Just those returns that were calculated in 2010 Print Sch amp always Print INT always Print DIV always Include Sch D Blank Form Include Form 4684 Blank Form Include HOME Worksheet Blank Form Preparer Override Help Select All Unselect All q Process 1040 b Cancel m OoOoooooo Figure 4 7 Options di
413. nue ex Coine Figure 6 2 Calculation Results window 172 Tax Year 2011 Drake Software User s Manual Calculation Results EF Messages Return Notes Fee Type Amount The Summary shows total income taxable income total tax refund amount balance due payment method and e filing eligibility If the return is eligible for e file a green check mark is displayed If a portion of the return is ineligible for e file a red X is dis played and a message appears in EF Messages Figure 6 3 Summary Details Totalincome Taxable Income __TotalTax Refund Balance Due Payment Method _ Eligible For EF Federal 77 777 51 777 6 929 0 1 097 Check or CC rs NCD400 71 777 61 777 3 912 0 3135 Check or Ct rs Return is ineligible for e filing EF messages are displayed Double click on any highlighted item in the list below to fix the problem Package Code Description right click for full description Federal 5443 The asset s with the bad date has been ignored for the Federal 123 Form W 2 The following fields must be significant Name of Reporting Federal 5350 PIN signature is required for all returns to be e filed A PIN has Phd nr a a E nc Sa A AO gf ncn g OOS Fe alee ALON 2A nay E T saith Figure 6 3 Return in this example is ineligible for e file The EF Messages section lists e filing message codes and descriptions by package EF messages pinpoint the r
414. o NOT send any states check box the program sends all eligible state returns Overriding Bank Product Alert Under the EF tab of Setup gt Options is an option to alert the preparer via an EF mes sage if no bank screen for a bank product has been completed for a return There are two ways to eliminate this EF message complete a bank screen for the return or if the taxpayer is ineligible for a bank product go to the EF screen and mark the Return not eligible for a bank product check box located under Additional Options Paper Filing Forms and Supporting Documentation Form 8453 218 A return can be e filed even if it contains certain forms that must be paper filed The IRS requires that Form 8453 U S Individual Income Tax Transmittal for an IRS e file Return be e filed in lieu of these required paper documents and that these required documents be mailed Form 8453 must indicate which forms are being mailed sepa rately To produce Form 8453 for the paper documents to be mailed 1 Open the return and go to the EF screen accessible from the General tab 2 Select the appropriate forms in the Form 8453 Paper Document Indicators box Figure 8 7 Form 8453 Paper Document Indicators T l Form 8283 Select all paper document indicators that apply For Form 1098 C Form 8332 more information on the paper document indicators l Form 3115 l Form 8858 click the Screen Help button at the top of the screen I Form 3468 Form 88
415. o activate it and then press F2 You can also do this by right clicking in the field and selecting Flag For Review The field is displayed with a shaded background Figure 3 13 2210 Options 2210 Code z 2010 Fedtax E 2010 State tax 10788 Figure 3 13 Flagged fields are shaded Default is green When a return with flagged fields is calculated an EF message is generated It must be removed in other words all flagged fields must be cleared before the return can be e filed To clear a flagged field place the cursor in the field and press F4 To clear all flagged fields on an open screen press CTRL SHIFT SPACE To clear all flagged fields in the open return go to the Data Entry Menu and press CTRL SHIFT SPACE A user with administrative rights can designate certain fields to be flagged in all returns When flags are set globally they apply to all returns Global flags can be for screens or for new returns e Screens The presence of an unverified flag produces an EF message page only if the screen exists for the return For example if the Employer ID field on screen C is flagged an EF message for the unverified field is produced only if a Schedule C is present on the return and the Employer ID field has not been ver ified If there is no Schedule C no verification is required e New Returns When a field is flagged for all new returns an unverified flag produces an EF message pa
416. o disallow access Forms Based Data Entry Quick Estimator o pA UES m apahata PO E tenia apaamdjinpapmnninnni aant e an NY Figure 2 6 Security Group General Information section of Group Security dialog box 4 Under Security Settings click the menu category and mark the boxes represent ing the features to which the group should have access Accessible features can not be edited for the Full or Admin groups Click Check All to mark all boxes shown in all menu categories 5 Under the Assign Preparers tab select the preparers to be assigned to the group To select a preparer double click a name or click the name and click Select Selected preparers are listed in the Preparers in Security Group column 6 Click Save NOTE You do not have to assign preparers when creating a group Assign preparers at any time by returning to the Group Security dialog box To edit group settings or members select a group name and click Edit Group To delete a group select a group name and click Delete Group Note that a group must be empty must contain no preparers in order to be deleted Group You can use the Group Security feature to view and print the following types of data Security Reports Group Security List of group security settings for each group Groups are listed in order of creation with default groups first e Group Preparers List of all groups and their assigned preparers Q Reports are shown in the
417. o users with administrative privileges has been divided into the Administrative Tracking ADMN screen and the E file Summary ESUM screen The ADMN screen is for tracking return preparation and banking data and the ESUM screen provides an e file summary Both screens are available from the Miscellaneous tab in data entry The ESUM screen is also accessible as a hyperlink from the ADMN screen If a taxpayer has a foreign address that address should now be entered on screen 1 rather than on MISC screen A taxpayer s military address should still be entered on screen 1 but the military processing code and other combat zone information including date entered into combat zone should now be entered on the MISC screen The AUTO screen rather than the C screen is now used for Schedule C Part IV Information on Your Vehicle Associate an AUTO screen with a Schedule C by using the For and Multi form code features on the AUTO screen The 4562 screen now has an Asset Category field that enables grouping of assets by category in the Fixed Asset Manager If a refund is due a taxpayer you now have the option of hiding either partially or completely the taxpayer s bank account number on Form 8879 IRS e File Signature Authorization These options are available on the Form amp Schedule Options tab in Setup gt Options TheTaxLibrary is an independent tool for advanced research by tax professionals A subscription to TheTaxLibrary is included
418. o view The tree view of the Client Communications Editor lists the keyword categories Click to view specific keywords within a category In the example in Figure 5 the Pre parer Firm and Revenue category has been expanded Client Information Miscellaneous Prep Firm and Revenue Firm E mail Address Firm Name Paid Preparer Fax Paid Preparer Name Paid Preparer Phone Figure C 5 Prep Firm and Revenue keywords To view a keyword description hold the mouse pointer over a selected keyword Figure 6 Client Information Miscellaneous Prep Firm and Revenue Firm E mail Address a Firm Name Paid Preparer Fax Figure C 6 Place mouse pointer over a selected keyword to see the description Instructions for adding and editing report columns are provided in Introduction to Letters in Drake on page 32 C 2 Tax Year 2011 Drake Software User s Manual Appendix C Keywords OtherTax Keywords in Letters The result letters in the Client Communications Editor include keywords for other tax types for state and city returns as shown in the example in Figure 7 These Other Tax types generally refer to tax types other than income tax franchise tax composite tax etc that are required by certain states and cities Ch ELT at Spy ew State Return Results State Amended Results State Estimates State Other Tax Paragraphs ST OtherT ax1 Balance Due Paragraph ST
419. ode NOL Form 1045 Application for Tentative Refund includes Schedule A NOL and Sched ule B NOL Carryover Use the NOL screen accessible from the Other Forms tab to enter amounts for these schedules into Drake The Schedule A fields are override fields Entries override system cal NOTES culations for Schedule A To calculate only page 2 of Form 1045 select Calculate 1045 page 2 ONLY at the top of the NOL screen NOL To indicate that the taxpayer elects to carry a NOL forward and not back go to the Carryforward NOL screen and select Election to carry forward ONLY When the return is gener Only ated it includes an EF NOTE stating that the taxpayer is electing under Section 172 b 3 to relinquish the entire carryback period Figuring Use the right hand column of the NOL screen to enter data for figuring Alternative AMT NOL Minimum Tax NOL When the return is generated the AMT NOL worksheet shows the current year AMT NOL 156 Tax Year 2011 Drake Software User s Manual Election Options Election Options The ELEC screen has check boxes to indicate elections from the IRS code If any boxes on this screen are marked a note listing the elections is generated with the return To attach an additional statement detailing an election go to the SCH screen and select E Election Explanation for the type of schedule Both the list of elections and any designated election explanations are visible as ELECTION pages in the View mod
420. of Client Write Up topics FAQ View articles we believe to be most pertinent These change frequently so check back often Glossary View a list of relevant tax and Drake Software terms How to Search View detailed instructions on how to use the KB search features to quickly the KB find relevant articles Category List View all categories of topics in the Drake and CWU Knowledge Bases To search for a topic or article in the KB 1 Under the Search tab Figure 10 1 enter a keyword in the Search field 2 optional Direct your search by selecting options from the Search Using and Search Within drop lists Search Using options are described in Table 10 2 Table 10 2 Options in KB Search Using Drop List See item 2 in Figure 10 1 Search Option Description All Words Searches for articles containing all search terms entered Any Word Searches for articles containing any one of the search terms Boolean Allows connector words to be used in conjunction with keywords to aid in searching Use and not and or Exact Phrase Searches for articles containing the exact phrase entered Natural Language Allows you to enter a sentence in the Search field The KB pulls out matches to any words in the sentence 3 Click Click to Search Related articles appear in order of relevance with the most relevant first Click a title to open the article If only one article meets the search criteria the KB op
421. of Contents RTP CMC TO essa ibaa 1 What s New in Drake for 2011 0 0 0 nee e nnn e teen e eens 1 Contacting Drake Support 2 0 2eiiceewe sen hwa bie severe eoewk biker eh Fiabe hei aawa E AETA 4 Installation amp Setup yiisisica issn ccd ons ssnnns caesar 5 System Requirements 0 cc cece eee ene teen een e teen teen en eeenenens 5 Tis tal lations epee ics See e ea E e eee gna AOE E Ray E E Low Ek oan ae ace Ra eg Belek het ele ome R 6 Running Drake on a Network 2 0 0 ee een n tenn ee eee n ene 8 Software SCwup so eect e s he hdd ace bale oR ba MeN wee Es ee E T Ou Seach deed oles 11 Making Changes on the Fly o n nannan anaana 41 ESS orsoni Eea aena aa EEEE EEEE 49 Logging In and Outre saccade catch eee a a oa a AE E EENE 49 The Home Window nnana annann nanea eee een eben nent nent enna 49 General Navigation ot eenaa a a a a aod eR ea a A 51 Creating and Opening Returns 0 0 een t been en eben eens 53 Data Enty sese 226 cde Saba eeda deed elawens chee Eos chee OI Hoek eh eee neha eek noha ene 54 Slate RUTIS eoi sce deems ae a Se Mean de Manes gee tie aed AE inden at E E da dee eae hanes 63 Practice Returns and Test Returns 0 cette ene n enn eas 64 Preseason Preparati Nh svseeiccascssccevissnnsicsconssnnnddiannavencceveseeiineniiaasdcccssencness 65 Prior Year Updates cos hed ena ea ae edad ie ead Bie ach eh ache Ota nKaed Geena 65 Organizers and Proformas 2 0 annaua annene 68 Scheduler 2
422. of an upcoming appointment can also be selected on the fly from Appointment Detail Open Setup Schedule for Set up a preparer s general daily schedule in out times ZIP code autofill for city and state information Activate the ZIP code autofill feature which automat ically displays a client s city and state information once the ZIP code has been entered Private appointment Mark all future appointments as private Private appointment details are not visible to other preparers or to users with administrative rights You can also select this option on the fly when setting up a pre parer s appointment Customer name autofill Establish how client names are displayed in the cal endar view Email Notification Set tings Enter the words you want to appear in the subject line of your e mail notifications Calendars Preparers in View Select which preparer schedules are visible by default Calendar view start time Select the time to be displayed when the calendar is opened Default calendar tab displayed at login Select which calendar type will be displayed at login This choice not available to users with administra tive rights Calendars in my view Select which calendars will be in your default view This choice not available to users with administra tive rights Colors Select screen colors for the calendar Establishing The Scheduler a
423. of field all correspondence generated by the program letters bills etc will be addressed to that person Exemptions Screen code 2 Use screen 2 Dependents accessible from the General tab to complete the Exemptions section of Form 1040 Use a separate screen for each dependent press ing PAGE DOWN to open each new screen Data is saved automatically upon exiting a screen The number of active Dependents screens is shown on the Data Entry Menu 84 Tax Year 2011 Drake Software User s Manual Exemptions General income Adjustments Cr 1 Name andAddress 2 Dependents 4 3 Income enfin wana LUSIGP OME aien unn Figure 5 1 Number of Dependents screens that contain data At the top of screen 2 enter the required data including the dependent s full date of birth at the top of screen 2 A dependent s age is displayed once a birth date is entered Figure 5 2 State Information Dependent Information Use lt F3 gt to switch to grid mode npr sa Dependent Last name Months Date of first name M if different Suffix SSN Relationship in home birth Olivia M 400 00 1001 DAUGHTER v wv 12 12 2009 Childcare Expense Information Form 2441 R z TA oo Age determined by 4ge 2 Qualifying childcare expenses incurred and paid in 2011 date of birth as of 12 31 2011 Portion of qualifying expenses provided by employe ee eeeeeeeeeeeeeee SS mm nah Se SiS A Mien ah Shi
424. of the screen Preparer Notepad Screen code PAD The Preparer Notepad PAD screen accessible from the General tab offers an area for keeping more extensive notes and other pertinent return information The contents of this screen are brought forward each year when the return is updated You can also access the PAD screen in the following ways e By pressing CTRL SHIFT N e By right clicking anywhere on a screen and selecting Preparer Notepad Press PAGE DOWN for additional PAD screens Unformatted Schedules Screen code SCH The SCH screen accessible from the Miscellaneous tab and via links from certain screens is available for adding statements and explanations not supported elsewhere in the return Some not all unformatted schedules can be e filed SCH screen amounts do not flow to any other form or schedule Tax Year 2011 167 Other Special Features in Data Entry Drake Software User s Manual Optional Attachments 168 For required attachments select the attachment information title and statement num ber from the Type of attachment statement number and title drop list on the SCH screen For optional attachments use the Title and Statement number fields below the explanation pane If an attachment is optional select the applicable category from the Type of attach ment statement number and title drop list Categories are described in Table 5 24 Table 5 24 Attachment Types and How They Appear in View mode
425. om the Internet If a selected location has state files available the files are displayed in the States Available panel If the States Available panel stays empty select another location Select the location of the state installation files Install State s from this Drive FADRAKE1 0 C Install State s from the Internet Figure 11 12 Install state programs from computer CD or Internet o Choose the states to be installed 4 Click Install The progress bar identifies the states being retrieved and installed Tip Check for updates after installing state programs to ensure that you have the most up to date information Repairing State Program Files Scheduler If the state program files on your computer or server are more recent than the state program files most recently installed the current files will not be replaced If you must overwrite the current state files contact Drake Support or click the Help button of the Install State Programs dialog box for more information The Scheduler tool is used for scheduling and maintaining client appointments For information on using this tool see Scheduler on page 8 Tax Rates for Ohio and Pennsylvania Cities 280 Use the City Tax Rate Editor to edit and add tax rates credits and addresses to be used when creating city returns for the states of Ohio and Pennsylvania Always verify tax rates as they are subject to change To view and edit city tax detai
426. om the menu The Application Status appears in the box at the top of the page CAUTION Making changes to an application and resubmitting it can change its status Application statuses are listed below A Accepted B Accepted post acceptance changes rejected C Accepted post acceptance changes pending D Declined Call the selected bank to resolve any issues E Accepted awaiting bank account information G Approved pending state registration I Incomplete N Needs compliance P Pending R Rejected available for correction and resubmission S Suspended contact the bank W Withdrawn Most status updates are available within hours of submitting the application Once your application has been approved contact the bank to order check stock and com plete any additional agreements Banking Options 196 Setting Up Banking Options Once you have chosen your banking solution activate your selection in Drake data entry so the correct screens are accessible from the General tab 1 From the Home window select Setup gt Firm s 2 Double click the firm or select a row and click Edit Firm Under Banking Information select your chosen banking option and enter addi tional information as necessary Options are described in Table 7 4 on page 197 Tax Year 2011 Drake Software User s Manual Preparing to Offer Bank Products 4 Click Save Table 7 4 Options under Banking Information in Set
427. omatic transmission of Check Print Records E mail 9325 Notice to Taxpayer automatic from Drake Processing Center Default ERO Allows program to notify you before it transmits the Check Print Records Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically is automatically e mailed to taxpayer when return is accepted E mail address must be present on screen 1 Choose a preparer number Paid Preparer or None to indicate the ERO name that should appear on return documents This choice can be overrid den on screen 1 and the PREP screen in data entry Check for e mail during EF transmit receive The program checks for e mail received every time you transmit returns or pick up acknowledgments Combine EF steps Select Transmit Post Acks Combines all e filing steps Click OK or press Esc on selected returns to e file pick up any new acknowledgments and process the acknowledgments in one step Transmit return data to Drake for multi office web reports Sends Client Status Manager CSM data sent automatically to the Multi Office Manager MOM during the EF process State EF Suppresses e filing of all state returns or select states to suppress while other state returns remain eligible EF Selection Report Options Customize EF selection reports by specifying which columns such as SSN EIN client name refund balance due etc should be included
428. ommunity may claim the credit Use the 5405 screen accessible from the Credits tab to enter data for Parts I and II of Form 5405 First Time Homebuyer Credit Use the HOME screen to complete Parts HI and IV see Basis of Primary Residence on page 100 Due Diligence for First Time Homebuyer Credit Your office can require that a due diligence screen be completed for taxpayers who claim the First Time Homebuyer Credit To apply this requirement a user with admin istrative rights must go to the Administrative Options tab in Options Setup and select Require applicable due diligence screens to be completed located under the Due Diligence section If this requirement is set and the due diligence screen is not com pleted on an applicable return the program generates an EF message upon calculation and the return cannot be e filed until the screen is completed Also from Setup gt Options gt Administrative Options tab an adminis NOTE trator can set the global option to print all EIC and Form 5405 due dili gence documents Screen code To access due diligence questions for the First Time Homebuyer Credit go to screen HBED HBDD You can access this screen from first Credits tab or by pressing PAGE DOWN from screen 5405 140 Tax Year 2011 Drake Software User s Manual Direct Deposit Direct Deposit Screen codes DD 8888 Use the DD screen accessible from the General tab to indicate that a refund is to be deposited directl
429. on Tax Year 2011 107 Supplemental Income Drake Software User s Manual income and K1F for fiduciary income Enter information directly into a K1 screen or export K 1 information from a pass through entity into an individual return NEW FOR The K1P and K1S screens now include 6198 At Risk tabs for tracking pi partner or shareholder basis for as risk activities For more information on using these tabs see Tracking At Risk Basis on page 112 Accessing Two screens are used to complete the lines on a Schedule K 1 see Figure 5 26 From K 1 Data the Data Entry Menu the first page of the selected K1 screen is displayed Fields Basis Worksheet Basis Worksheet continued 6198 At Risk 6198 At Risk continued Schedule K 1 for 1065 TS z F E ST sds Passive Activity No Partnership ID number 12 3456789 Partnership name Partners in Grime Address optional aa nin me a ia iaa AOA e mon anton nn O ey or a anne Figure 5 26 In this example the program is opened to the first page of the K1P screen Click the applicable link to open the screen containing the fields to complete In Figure 5 26 you would click 1065 K1 13 20 to complete lines 13 through 20 Activity The K1 E and 4835 screens feature an Activity Type drop list for designating an Types activity as passive or non passive A selection from this list controls what income data if any goes to Form 85
430. on ship and residency tests for up to three qualifying children EIC2 EIC Due Diligence Income Screen contains questions concerning the taxpayer s reported earned income including income earned from a legitimate business EIC3 EIC Due Diligence Head of Household Screen contains questions pertaining to the tests for mar riage qualifying person and cost of keeping up a home for Head of Household filing status EIC4 EIC Due Diligence Additional Notes Screen contains space to record data about other inquiries made in verifying the taxpayer s information 138 Tax Year 2011 Drake Software User s Manual Additional Child Tax Credit and Combat Pay These screens are supplemental to the required EIC Preparer Checklist EIC screen In Options Setup Administrative Options tab you can select the option to require that the screens be filled out You can also select to view or not view these forms in View mode See Options Setup on page 20 See Screen Help FAQs and online help for further information and links to IRS doc uments and other resources relating to EIC EIC due diligence requirements must be customized for each client based on the taxpayer s scenario The complexity of the law surround ing EIC prevents due diligence requirements from being standardized NOTE so a tax preparer must have a thorough understanding of EIC law in order to comply with these requirements Software can help provide guidance on fulfill
431. on set ting up the software and entering ERO firm and preparer information e filing reports working with the CWU DDM and Drake Tax Planner and data entry com pleting various schedules and forms in the 1040 1120 1120S and 1065 packages To access videos in ETC e Click Videos from the ETC sidebar menu e Choose a tax year and course from the Tax Year and Course drop lists e Click Launch Video Drake also offers videos CDs and DVDs of our annual Update NOTE Schools To order from the Support website go to Training Tools gt Videos If you re logged in to ETC return to the main Support website by clicking Log in to Support in the upper right corner of the window Report Card Click Report Card from an ETC screen to view training progress test and quiz results and CPE credits earned for a selected year To re print a CPE certificate scroll down to the CPE Credits section and click Print for the desired certificate Admin The Administration page is available only for users logged in as Admin To access this ETC page click Administration Displayed are a list of students buttons for add ing and searching student records and a drop list for displaying Active Students Inactive Students or All Students Figure 10 10 Actie Students TX F cis 5 P LastName FirstName UserName Password admin Report Card ibne anaphore ete bene tte ethene No Edit Report Card 8 heru eee ethene bee tennnne Yes E
432. on Package 11208 sca de Wa genie eae c ela ewe ha dwlenbonee E Baka 331 Partnership Package 1065 0 0 ee ee ene eben nent ete e eens 331 Tax Exempt Package 990 0 ccc ccc ee eee een tenet en ene EEEE eE 331 Fiduciary Package 1041 0 een teen eee e nent n enna 332 Estate Package 706 32 se scans each Pewee ce E ede ee Rees ROR 332 Appendix A Preseason ChechkliSt ccccccceeeeseeeeeeeeeeeseeeeeeseneeeeeeeeeees A 1 Appendix B E filing OVervieW ccceceeeeeeseeeeeeeeeeeeeeeeeeeeeeaeeeeeeeeees B 1 Appendix C KG Y WORKS wits cccscsisesscistncnedceecassizcciniaciniiaraeaweeseternccensssncarened C 1 Appendix D Acronyms amp Abbreviations cccccccssseceeseesseeeeeeeeeeeees D 1 Appendix E State E filing Mandates ccccceeeseeeeeeeeeeeeeeeeeeeeeeeees E 1 Appendix F Addenda Pages for 2011 ccseeceeeeeeseeeeeeseeeeeeeeeeeeeeees F 1 MACEK a sodas acess seeccet a E V vi Tax Year 2011 1 Introduction Welcome to the Drake Software User s Manual for the 2011 tax year The Drake Team has been hard at work in 2011 to help ensure that your firm has a successful reward ing filing season in 2012 Before getting started in the software please read this intro duction which includes information on how to use your manual and describes the software s new features for tax year 2011 The electronic Drake Software User 5 Manual has been developed for Drake clients to
433. on ate BAAD nage tal A Den Sit Mayet SR Me IP tne Soman Son ron etl oaa Belina an an elt P NEA Pel om E emt nih lin feta th thane an atin Figure 5 2 Calculated age is displayed once birth date is entered Figure 5 2 shows the default screen 2 Grid data entry can also be Tip used for entering dependent information To switch to grid data entry mode press F3 See Grid Data Entry on page 56 for more information Entering Dependent Last Names By default the primary taxpayer s last name is used for all dependents Complete the Last Name field on screen 2 only if the dependent s last is different Selecting Months in Home By default the program calculates the return as if a dependent lived with the taxpayer for the entire year Complete the Months in Home field on screen 2 only if a depen dent did not live with the taxpayer for all 12 months If 00 is selected for a son or daughter the dependent is classified as one who did not live with the taxpayer due to divorce or separation If selected for another type of dependent parent grandchild etc the program applies the Other Dependent clas sification regardless of the relationship To override these classifications select the applicable boxes in the Additional Information section at the bottom the screen See Additional Dependent Information Claiming a Dependent for Split Returns T Taxpayer If taxpayers are married and want to sp
434. on dialog box is opened Set desired filters and click Next See Filter Manager on page 7 for more on filtering Select any Basic Search Options and click Continue For more on search conditions see Search Condi tions on page 8 Recommended 6 Position the mailing labels as needed Options are described below labels are three across and ten down Avery 5160 or 8160 Print to a label printer Select to print to a label printer new in 2011 Number of copies of this label Number of labels to be printed For exam ple if you enter a 5 five labels will be printed This option is available only when printing a single label Position of the first available label Position of first label on the available sheet If the first label is missing you can enter 2 to have printing begin in the position of the second label Vertical adjustments Enter a positive number Each number refers to a row If you enter a 2 printing will begin two rows into the label Horizontal adjustments Enter a positive number Each number refers to a column If you enter a 2 printing will begin two columns into the label Name format From the drop list select the name format to use Include or Resident statement Mark to have or Resident added to the client name This option is available only when printing labels in batches 7 Click Finish after the program has scanned the files 8 Cli
435. on of selecting other data to bring forward when you update client files as explained in the following sections To ensure that files are updated according to your clients needs NOTE update returns individually as you meet with your clients Drake does not recommend updating all returns in a package at once Update To update an individual return Returns Individ ually 1 Open a return in Drake 2011 If the return has not been updated yet an Individual Update Options dialog box will list all options for updating 2 optional Select additional items to update Click Select All to choose all items 3 Click Update 1040 Once updated the return is shown in the Data Entry Menu Update To update all returns in a package not recommended Returns Globally 1 From the Home window select Last Year Data gt Update 2010 to 2011 2 Click Next 3 Select filters optional and then click Continue The Update Options dialog box is displayed 4 optional Select additional items to bring forward 5 Click Update 1040 All returns are updated according to selections in the Update Options box i AUTI DN Once returns have been updated the updates cannot be reversed To avoid oversights update each return individually Once the program has updated the returns it displays a report listing the updated returns Click Exit to close the Report Viewer Building the EIN Name Index Each time an employer is entered on a screen for a
436. ores the number in the EIN database Alternative Minimum Tax Screen code 6251 Use the 6251 screen accessible from the Taxes tab to enter information for Form 6251 Alternative Minimum Tax Forcing Form 6251 Although Form 6251 amounts are computed on all returns the form itself is generated with a return only when required You can force this form to be generated for a single return or you can force it to be generated with all returns Fora Single To force Form 6251 for a single return go to the PRNT screen of the return and select Return the Print 6251 box in the Items to Print section of the screen For All To have the program print Form 6251 for all returns go to Setup gt Options gt Forms Returns amp Schedule Options and clear the Print Form 6251 only when required check box Foreign Tax Credit If the amount of foreign tax credit FTC is less than 300 600 for MFJ and no Form 1116 is required you can enter this amount directly into the Foreign Tax Credit field on screen 5 See Figure 5 35 Other Taxes Sc iRRTATaCon mwrepoted RRIAGD Cone eee 60 Excess Golden Parachute payments A natal ENN SE e nn a Aamei ln 60 satt a Se P TA p r ra Figure 5 35 Use screen 5 to enter FTC if totals are less than 300 600 for MFJ For greater amounts use the FTC sections of the INT and DIV screens to enter data regarding foreign interests and dividends respectively or use the 1116 screen FTC Code If
437. orksheet was used the amount entered there for Gain from Section 179 asset disposition will flow to line 2b of Form 6198 If that worksheet was not used then this field on the 6198 Tax Year 2011 Drake Software User s Manual Farm Income At Risk tab must be used If data is entered in both places then the amount on the 6198 At Risk tab will be used e Part I II Simplified Detailed Computations If the Part III Detailed Com putation fields located in the following section on the screen are used then the program uses Part III to calculate the amount at risk for these fields If amounts are entered in this section only then Part II is used e Part III Detailed Computation Use this section to complete lines 15 16 and 18 of Form 6198 If data is entered here the program uses Part III to calculate the amount at risk for these fields The lower portion of the screen has fields for entering prior year carryover and cur rent year losses and deductions Use these fields for the following types of amounts e Prior year losses that were not deductible due to the at risk limitations e Current year amounts to override either a the equivalent fields on other K1 screens or b the at risk calculation NOTE Most of the entries on the 6198 At Risk tabs are used for calculating Form 6198 line 4 Other deductions and losses At Risk Limit When applicable the program produces At Risk Limit Worksheets with the calculate
438. orm or per item 4 Choose to Apply to this return or Apply to all returns Applying to all returns changes the pricing file globally in other words for all returns 5 Change number of copies if desired and then click Save You must calculate the return before you can view your changes on the bill Overriding Letters Setup 46 Letters options and defaults can be set from both Setup gt Options Optional Docu ments and Setup gt Letters Use the LTR screen accessible from the Other Forms tab to override global options on a per return basis The LTR screen allows you to make the following changes to the letters in a return e Have a result letter other than the default printed with the return e Enter a personalized letter greeting e Add a custom paragraph Tax Year 2011 Drake Software User s Manual Making Changes on the Fly In addition it provides the following options e Force print a letter for a paper filed return or extension application even if the return application is eligible for e file e Force print a letter for an e filed return or extension application even if the return application is ineligible for e file e Force or suppress a customized supplemental letter engagement letter or pri vacy policy letter Default The result letter is the standard letter that is printed with a return It tells the client that Result Letter the return has been prepared from the information provided states the a
439. ormation 13 187 189 itemized deductions 122 K K 1 see Schedule K 1 KB Knowledge Base 236 key combinations 51 55 keyboard 51 keywords Appendix C Kiddie Tax 131 133 Knowledge Base KB 236 L labels 275 language Spanish 21 late filed returns 163 165 letterhead for bills and letters 35 letters about 32 34 available templates 34 batch 274 277 bringing forward from last year 37 Client Communications Editor 32 customized supplemental 23 default templates 23 due date to print on 43 editing a template 35 engagement 23 envelopes 277 estimate payment reminders 274 K 1 1120S 1065 1041 only 23 34 42 keywords Appendix C letterhead 35 mailing labels 275 margins adjusting 35 overrides LTR screen 46 Tax Year 2011 Index overriding due date shown on 43 printing 275 privacy 23 restoring 36 setup 34 viewing 37 lifetime learning credit 121 like kind exchanges 100 listed property types 149 live payroll see Client Write Up loans see bank products logging in as ADMIN 7 to Drake 7 49 to ETC 240 to online EF database 221 logging out of Drake 49 long term care insurance 115 losses capital gains and 96 net operating NOLs 155 156 non recaptured 99 of assets screens for entering 95 on Schedule C 95 passive activity 108 using the LOSS screen 156 lost checks 203 lottery winnings 116 macros see also shortcut keys in the Fixed Asset Manager 295 setup 30 symbols used in 31 viewing from d
440. ormation on the foreign income exclusion Form 2555 see Excluding Foreign Income on page 117 Statutory Because all statutory employees must file Schedule C for expenses related to W 2 Employees income both a W2 screen and a C screen must be created for a statutory employee To indicate a statutory employee on Schedule C Screen code C 1 Create a C screen in data entry for the statutory employee Screen code W2 2 Open a W2 screen for the employee and select Stat employee line 13 3 From the Special tax treatment list Figure 5 6 elect the associated Schedule C Drake 2011 Data Entry 111223333 Cann Mary W2 Wage and Tax Statement 1 Wages tips 2 Federal tax w h ts F Special tax treatment I I b Employers Federal ID Number 1 Statutory employee wages for Schedule C 2 Statutory employee wages for Schedule C 3 Statutory employee wages for Schedule C 4 5 1 2 3 4 c Employers name address city state ZIP c Statutory employee wages for Schedule C face of Spades Landscaping Statutory employee wages for Schedule C 5 Saadaan aiman miat ann i En AER TUDOR SID loye Wages for ie f EnGa Figure 5 6 W 2 in this example is associated with the second 2 Schedule C entered The earnings amount from screen W2 flows to Schedule C line 1c Any entry in the equivalent field on screen C flows to line Schedule C line 1c as an adjustment Corrected or Near the bottom of the W2 scr
441. ors ERO Screen Document Manager Letterhead Reports Client Status Manager Custom Statuses only Setup gt Options Pricing Federal Pricing State City Letters _ Form Print Order Federal Email Data Help Continue Exit Figure 4 2 Update Settings dialog box 2 Select the drive that stores the prior year data to bring forward 3 Select the setting categories to bring forward All items except for previously updated items are selected by default Tax Year 2011 67 Organizers and Proformas Drake Software User s Manual Click the plus sign in front of an item to expand it and view or select sub items If you select an item with sub items all sub items are selected by NOTES default If updating Pricing setup you will be prompted to enter a percentage increase to apply per item per form or both and the option to round to the nearest dollar 4 Click Continue and then Confirm the selections to start the update process 5 Click Exit when the status for each item is displayed as Completed Organizers and Proformas Available for the 1040 package organizers help clients prepare for their tax appoint ments Many organizer sheets feature two column layouts with one column contain ing prior year data and the other intended for current year data Figure 4 3 Wages tips other compensation
442. ort type See Table 12 4 for available report types Select a tracking format Options are e Federal Tracks federal depreciation methods e State Tracks state depreciation methods e Alternative Tracks alternative depreciation methods e Book Tracks depreciation using book method Select a sorting option from the drop list on the right Choose to print a Full Schedule to sort By Department or to sort by Form Schedule Click Run Report In the Asset Manager Client Selection dialog box create a report for one or more specific clients or create a filtered report based on all clients e One or more clients Enter SSN EIN in the blank field and click Add Cli ent Repeat for all desired clients then click Next e Filtered report Click Next to open the Asset Manager Filter Selection dialog box Select a filter or sort option then click Next to open the Basic Search Conditions dialog box Edit settings as desired see Search Condi tions on page 290 and click Continue Select an option for displaying the depreciation list e Print to Printer Send the list to the printer When the Print dialog box is opened click Print e Export to File Save the report as a CSV file To open the saved file go to your Drake11 Reports folder Click OK Using Fixed Asset Manager Macros Use the Fixed Asset Manager macros to run a set of standard reports at one time To set up a macro in the Fixed Asset Manager Tax
443. oss carrybacks controlled group tax bracket amounts tax payment information and certain credits Form 5472 screens Two Data Entry Menu selections are now used to access fields for completing Form 5472 Information Return of a 25 Foreign Owned U S Corporation or a Foreign Corporation Engaged in a U S Trade or Business 5472 screen For Parts I III IV V and VI once this screen is opened acc