Home

- Drake Support

1. S corporation NaMe Address optional ai GRP caian ndih let ned T ae OV aid a Figure 5 30 Enter 0 in the F text box and select a state from the ST drop list 5 Complete all applicable fields basic information such as ID number and name must be re entered Because the program will not use the entries on this screen for federal purposes it is not necessary to enter the federal amounts However it is necessary to enter all applicable state amounts even if they are identical to the federal amounts entered on the previous screen 6 Click the link for the next page of fields see Figure 5 28 and continue entering state amounts 7 if applicable Complete the For State Use Only fields To enter data for another state return to the first page of the screen press PAGE DOWN and repeat Step 1 through Step 7 above K 1 Exports K 1 data can be exported from an 1120S 1065 or 1041 return in Drake to an individ ual return in Drake To export K 1 data you must first have the following items e An 1120S 1065 or 1041 return completed in Drake e An individual return in Drake for the partner or beneficiary listed in the 1120S 1065 or 1041 return N Once the export is complete any state K 1 amounts if different DTE from the federal must be entered manually See State K 1 Amounts If Different on page 110 To export K 1 data into an individual return 1 Open the 1120S 1065 or
2. Accrued ea Figure 5 13 Form 1116 section of DIV screen Tax Year 2009 95 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 automatically Because the INT DIV screens include the most commonly used Form 1116 fields and because Form 1116 is generated if these fields contain data it may not be necessary to enter anything onto screen 1116 If however a return has a less common foreign income factor such as a carryover you must enter that data on screen 1116 You can associate the DIV and INT screens to an 1116 screen so that the generated Form 1116 incorporates the applicable data from all applicable screens To associate the Foreign Tax Credit information in a DIV or INT screen to an 1116 screen 1 Complete the Form 1116 FTC Information section of the DIV or INT screen See Figure 5 13 2 Enter a number into the FTC field of this section See Figure 5 13 3 Close the INT or DIV screen 4 Open the 1116 screen accessible from the Credits tab to be associated 5 Type the FTC number from Step 2 into the FTC field Figure 5 14 Form 1116 Foreig
3. 191 E filing a Return Drake Software User s Manual Step 3 Transmit Return M p 0 RTANT Never transmit from more than one computer unless the tax soft Shortcut Press CTRL T to open the Transmit Receive dialog box Receiving Acks Only 192 ware is installed on a dedicated server Transmitting and receiv ing from more than one computer can lead to duplicate DCN rejections and can affect your ability to print checks To transmit a return 1 Ensure that the Internet connection is working properly and that the returns to be transmitted have been selected for e filing See Step 2 Prepare the Transmission File on page 190 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 possibly eliminate files from the send queue click Review The Transmit File Editor lists individual returns To remove a return from the queue select it and click Remove 4 Click Send Receive The Report Viewer displays the EF Transmission Record NOTE The EF Transmission Record lists returns that are planned for transmission Because transmittal can be interrupted or a return denied this list is not suitable as a record of transmitted files 5 Click Exit The program immediately logs in to Drake Software and performs the following tasks e Checks for new acknowledgements e Transmits file
4. Click Install and wait for the Installation Complete window to be displayed Installation could take several minutes Click Install and wait for the Installa tion Complete window to be displayed Installation could take several minutes If a previous version of Drake is detected on your system the Update Admin Pre parer and Setup Information window is displayed after installation If you do not want to update now click Skip otherwise click Next Click Finish and Exit to close the Drake 2009 Software Programs window Test returns are installed automatically if installing to a new location If a 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 1 Double click the Drake Software icon on your desktop Pon Preparer Login In the Preparer ID field type ADMIN Field is not case sensitive In the Password field type your serial number located on your packing slip Click Login Preparer ID lt Type Admin Password lt Enter serial number for initial login Click Login Figure 2 1 Logging in as ADMIN The Setup Wizard opens automatically the first time you log in to Drake Tax Year 2009 Running Drake on a Network Drake Software User s Manual Setup Wizard Designed to guide you through the software setup screens the Setup Wizard appears each time the progra
5. Option Description Document Manager Data To store data in a location other than the DDM enter the Path data path here or click Browse to map to a new location Use this scan device By default the DDM chooses a scanner To choose a differ ent scanner select it from the list Turn off scanner interface Activate or disable the DDM s default scanner interface You might have to view the scanner interface window when mak ing ascan especially if options not available in the DDM such as scanner resolution or color are required Build index when DDM starts The DDM index used for searching the DDM occasionally must be rebuilt to ensure proper functionality Mark this box to have the system rebuild the index when the DDM starts Edit Reset list of Common Edit or reset names assigned to commonly scanned docu Documents ment types See Setting Up Common Documents follow ing N Rebuilding the index each time the DDM starts does not interfere with DTE DDM operation If you choose not to rebuild the index automatically you can rebuild the index 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 To set up default descriptions in the DDM 1 Fr
6. RT A NT Do not transmit from more than one computer unless the program is on a dedicated server Transmitting and receiving from more than one computer can affect the ability to print checks correctly To print a check for a bank product 1 From the Home window select EF gt Check Print to open the Bank Product Selection box 2 Choose to print checks or to print the Truth In Lending Agreement TILA disclo sures for non check bank products debit cards direct deposit etc 3 Click Continue The Selection window for checks or TILA shows the items available for printing 4 Select the items to be printed or use Select All or Unselect All 5 Click Continue The Check Print Options dialog box displays the client s name ID number check amount and check number 6 Choose from the available options listed in Table 8 6 Table 8 6 Check Printing Options Check Print 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 Print ALL selected checks start Prints all previously selected checks starting at ing on __ the displayed check number N The first time you print checks you must set up a check range Click DTE Setup Checks to choose a bank and set up the check r
7. Screen code USE Tax Year 2009 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 MFJ before the return is prepared The Consent to Disclosure of Tax Infor mation must be signed and dated by the taxpayers before the return is e filed and the information submitted to a third party Drake offers several options for making these forms available to your clients includ ing printing forms in batches to be signed manually and having clients provide their signatures electronically Both methods are described in the following sections The consent regulations also apply to e Collect products The NOTE PDF 7216 folder contains documents specific to these products these documents can be printed and signed To have these forms signed electronically use the USE and DISC screens in the program 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 then print Clients must sign and date this form manually e Electronic Signatures To obtain electronic
8. Screen code VER Ifthe Social Security or Medicare withholding is incorrect on the W 2 and must be verified use the Verification of W 2 screen accessible from the Miscellaneous tab for documentation If a W 2 has incorrect Social Security or Medicare withholdings a RAL is not allowed until the W 2 is verified with the employer NOTES If after contacting or attempting to contact the employer you sus pect fraud immediately contact Drake the RAL bank if appropriate and the nearest IRS Criminal Investigation office Call the tax fraud hotline at 800 829 0433 W 2 Verification fields activated from Setup gt Options gt Data Entry help ensure that Verification wage and withholding amounts are correct They require that federal and state wages and withholding amounts be re entered at the bottom of screen W2 Figure 5 5 Wages and Withholding Verification To ensure the accuracy of wages and withholding amounts re enter the amounts from boxes 1 2 16 and 17 ofthe client s W 2 Federal State State 2 If applicable 1 Wages tips 2 Federal tax wih 16 ST wage 17 ST tax 16 ST wage 17 STtax Figure 5 5 Verification fields for federal and state wages and withholdings If the verification amounts do not match the amounts entered in the equivalent boxes at the top of the W2 screen an EF message will be generated Amounts must be cor rected before the return can be e filed Foreign To indicate a foreign employer on the W2 screen e
9. Some forms not available in data entry might be available as blank forms Many of these forms along with worksheets and interview sheets are available in Blank Forms If a state prohibits printing blank state forms contact the state revenue office to obtain blank forms Tax Year 2009 Drake Software User s Manual To view or print a blank form in Drake Blank Forms 1 From the Home window go to Tools gt Blank Forms The Blank Forms window displays form categories names and descriptions for each tax package Detroit Flint Highland Park gt Official Name 1040 PG 1040 PG2 10404 PG 10404 PG2 1040EZ PG 1040EZ PG2 1040NR PG 1040NR PG2 1040NR PG3 1O40NREZ PG2 1040PR PG 1040PR PG2 1040PR PG3 1040PR PG4 104055 PG 1040S5 PG2 104055 PG3 104055 PG4 1040V PG G2 v Help Find uS US US 5 Si U u U U U u Planill Planil Individual Income Tax fo Income Tax fo Individual Individual la para la Declaracion de la Contribucion Federal Sobre el tra a para la Declaracion de la Contribucion Federal Sobre el Tr Planilla para la Declaracion de la Contribucion Federal Sobre el Tr a para la Declaracion de la Contribucion Federal Sobre el Tr ndividual ndividual ndividual ndividual ndividual Form E LALELE Individual Corporate Sub Partnership Fiduciary Tax Exempt Estate Income Tax Return Income Tax Return Income Tax Retur
10. lock or make inaccessible to other users selected screens To do so go to Setup gt Options gt Administrative Options tab select Use Customized data entry selection menu and click Customize After loading a menu click a screen s check box to make the screen locked visible or hidden Default is visi ble Examples are shown in Figure 2 11 and described below Locked gt 7 BILL Adjust Client Bill Visible gt V CHK Return Checking Information Hidden gt COMP Tax Year Comparison M ELEC Election Options MV EXT Extensions 4868 amp 2350 eM rn ame eet a Figure 2 11 Locked Visible and Hidden screens Locked Menu items with a shaded check mark are not visible or accessible e Visible Menu items with a black check mark are both visible and accessible Hidden Menu items with no check mark are not visible but can be accessed using the selector field Selections made here do not apply for users with administrative rights Your firm can create drop lists for the Miscellaneous Codes on screen 1 and the Adjustment and Payment description fields on the BILL screen Once you have cre ated a drop list it appears in the selected field In Figure 2 12 a drop list has been cre ated for Miscellaneous Code 1 and Code 2 on screen 1 As shown in the example Code 2 has the user defined referral codes BUSREF business reference and WOM REF word of mouth reference Misc
11. 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 see Figure 13 8 lig w O w 2 Enter a name for this document Or select a Common Name John G Young PDF C PG Common C BMP ETIE Documents C GIF C PNG Social Security Card I Enable Duplex Scanning if available OK Cancel Figure 13 8 In this example PDF is the selected file type 4 Entera 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 8 example Social Security Card is being selected 5 Click OK 314 Tax Year 2009 Drake Software User s Manual Document Manager Compatible Scanners Linking a File a Link File DDM Audit Log Tax Year 2009 To facilitate search and retrieval of DDM files establish a naming TIP convention and use it consistently The Common Documents feature can help you achieve consistency in naming See Setting Up Common Documents on page 310 for more information Drake has reviewed the following scanners and found them compatible with the DDM s 2009 release This list does not represent product endorsement or preference by our company Pricing is subject to change e Canon DR 2050C 600 e Fujitsu FI 6130 900 e HP Scanjet 5590 300 e Xerox DocuMate 5
12. 158 non recaptured 101 of assets screens for entering 99 on Schedule C 98 passive activity 110 using the LOSS screen 157 lost checks 226 lottery winnings 117 macros see also shortcut keys in the Fixed Asset Manager 303 setup 33 symbols used in 33 viewing from data entry 33 mailing labels 280 mandates Appendix E margin adjustments letters 38 marketing kits 249 married filing separately see MFS filing status XV Index maximizing screens 23 maximum minimum fees 33 meals and entertainment 118 medical savings accounts MSAs 117 message pages EF messages 189 MFS filing status claiming dependents 90 ineligibility for child care credit 128 optimization report 4 65 splitting a joint return 65 using Quick Estimator 286 mileage and moving expenses 120 prior year 155 rates 98 military 88 addresses 88 and EIC 141 data required for bank products 221 processing codes 88 related tax forgiveness 162 ministerial income allocation see clergy MOM see Multi Office Manager months in home dependents 90 mouse 55 moving expenses 119 MSG state EF message pages 191 multi form code MFC fields 64 Multi Office Manager MOM 29 201 205 206 multiple EFINs 203 multi screen forms 61 N net operating losses NOLs 157 158 network data paths for a 23 installing Drake ona 11 options 10 peer to peer 194 server only option 11 sharing files on a 21 new features this year 1 5 non loan products 215 non paid preparers
13. Compose Message j e lol x LO D To Attach Help Exit To support drakesoftware com Send Cc Bec Subject Question about data entry Attachments Add f Attachment s Data File 400006665 1040 Regarding my phone call about data entry on the K1P screen have attached the data file requested Sincerely Se OO ia Oe Cee oe ee Figure 10 14 E mail Compose Message window with data file attached a Complete the To and Subject fields as needed and compose your message 4 Click Send The e mail with the client data file attachment is sent to the recipient N You can add other attachments to the e mail using the Add button DTE or the Attach icon in the Compose Message window For more information see Attaching Other Types of Files on page 256 From the To e mail a client data file from the Home window Home Window From the Drake Home window select Help gt E Mail J 2 From the Inbox window click the New button A blank Compose Message win dow is displayed N g i Za 3 Click Add to open the Attachments dialog box Figure 10 15 Drake 2009 Email Attachments E lol xj r Client Data File s VAttachment s OON 400006669 Search r Document Manager File s SSN EIN Browse Drake Software Program File s Browse All other File s Browse Remove Done Figure 10 15 In the Attachments dialog box enter a SSN or EIN and click
14. Depreciation on page 149 Business Mileage The standard business mileage deduction rate for 2009 is 55 cents per mile Enter business miles driven under Part IV Vehicle Information of screen C Loss on Schedule C If Schedule C shows a loss and all investment is not at risk the program produces Form 6198 At Risk Limitations If part of a loss may be disallowed enter the required data on the 6198 screen If the taxpayer does not materially participate the loss could be limited by Form 8582 Passive Activity Loss Limitations This is com puted automatically E filing Schedules C and C EZ Only one Schedule C EZ can be filed per taxpayer Up to eight Schedule C forms can be filed per taxpayer If necessary to allow e filing keep the short form EZ from being generated by selecting the Suppress Schedule C EZ box on screen C 98 Tax Year 2009 Drake Software User s Manual Sales of Assets 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 Table 5 1 Screens for Entering Gains and Losses Screen Screen or Form Name D Schedule D Capital Gains D2 Loss Carryovers and Other Entries not an IRS form 2439 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 4255 Form 4255 Recapture of Investment Credit 4684 Form 4684 Casualties and Thefts 4797
15. LOK Fee MANNE ONI TAX YEAR 2009 Drake Software User s Manual Tax Year 2009 Support DrakeSoftware com 828 524 8020 Drake Software User s Manual Copyright The 2009 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 2009 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 2009 Drake Software User s Manual Table of Contents Table of Contents Introd UCHO Messenia nthe rer rr coer
16. s Description field 315 Document Manager Setting Document Status txt doc xls File File Security 316 Drake Software User s Manual 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 See Figure 13 6 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 10 Audit Log of Activities on Document Consent to Use of Tax Return Information This screen shows the activities that have been performed on this document along with the date time and the person logged into the machine at the time Audit Log For Consentto Use of Tax Return Information Path c DrakeDDM CLIENTS G GREEN DAWN 40000100 Description Consentto Use signed by both taxpayers Re ee ee ee eee ae Figure 13 10 Choosing a document status 3 Click OK Your computer must have Word and Excel installed in order to use the DDM to create new text txt Word doc and Excel xls files To create a new text Word or Excel file 1 From the DDM toolbar click File 2 Inthe menu that is displayed select New lt Text gt File New lt Word gt File or New lt Excel gt File The applicable program is opened when you click a selection Sa
17. 2 Enter the path of the DDM or click Search to find the DDM location If the DDM is found in more than one location you must choose one 3 Select Allow Drake to Set up Document Manager Client Folders recom mended The Drake structure is established in the DDM directory and the DDM button is acti vated in data entry Making Changes on the Fly On the fly changes override program calculations and defaults set by either the program or by the preparer in Setup for a selected return The rest of this chapter focuses on actions you can take while in data entry to override these global settings Suppressing Forcing Documents The PRNT screen allows you to indicate which forms should and should not be gener ated for a return regardless of program calculations and established defaults Suppressing Table 2 16 lists items that can be suppressed using the PRNT screen Items from Being Table 2 16 Items That Can Be Suppressed from the PRNT Screen Generated Item Description 1040EZ Prevents Form 1040EZ from being prepared program prepares either Form 1040 or 1040A instead 1040A and EZ Prevents Forms 1040A and 1040EZ from being prepared program pre pares Form 1040 instead State short form Forces state return to be printed on the state long form WK_PAL Prevents Passive Activity Deduction Worksheet from being prepared This worksheet shows how much if any the taxpayer is taking in passive a
18. CPE Tutorials Tutorials teach the basics of Drake Software through text sound and animation For a list of available tutorials in ETC click Tutorials The Tutorials and Quizzes page displays a connection speed options box and lists Drake tutorials Figure 10 6 Please choose your connection speed Low recommended for dial up users no audio Med recommended for dial up users with audio High recommended for cable dsl with audio larger screen Subject General View Tutorials M ip Appointment Scheduler Launch Tutorial gt Binary Attachments Launch Tutorial i California W 2 CG Launch Tutorial gt Check Print Launch Tutorial ae CO ee St Figure 10 6 Connection speed options and tutorial list Before opening a tutorial select a connection speed Next click Launch Tutorial for the desired tutorial Tutorials do not have to be completed in the order listed Each tutorial has its own quiz Quizzes test your knowledge of the subject and if you re an administrator can help track student progress To access a quiz select Quiz zes from the View drop list Figure 10 6 and click Launch Quiz for the desired quiz Tax Year 2009 245 Online Support 246 Practice Returns Videos Drake Software User s Manual NOTE Tutorials are added throughout the season so check for new tutori als often To view tutorials for Drake CWU select Client Write Up from the Subject
19. Click Download and then click Yes to continue The Progress bar tracks the progress of the download process 5 When the W2 Download Complete message is displayed click OK The W2 screen for the taxpayer will now contain the downloaded information Purchase W 2 downloads in sets of 15 25 per set Each instance NOTE of a downloaded W 2 counts as one against your total even if the same W 2 is downloaded twice If however the client has W 2s from multiple employers and all W 2s are downloaded in the same session it counts as only one download If the W 2s are downloaded in separate sessions each session counts as one against your total 1099 MISC Screen code 99M Use the 99M screen to enter data from Form 1099 MISC To associate the 1099 MISC information with a specific line or form within the return make a selection from the For drop list at the top of the 99M screen If associating it with one of multi ple forms enter a Multi Form Code See Associating One Screen with Another on page 64 for more on using the For and Multi Form Code features Tax Year 2009 93 Passive and Investment Income 1099 DIV etc Drake Software User s Manual 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 106 To enter foreign earned income see Foreign Earned Income
20. Contains fields for all schedules plus sched ule specific fields for Schedules A E J and K SCHC screen Contains fields for Schedule C Initial Tax on Excess Business Holdings e MGR screen Contains schedule specific fields pertaining to managers self dealers disqualified persons etc Form 990 990EZ Schedule A R Form 990PF Form 990T Other Forms miscellaneous States 554 Application for Employer ID Information Return Foreign Corporations 2848 Power of Attorney 5471 Information Return Foreign Corporations PERS Persons Filed on Behalf Return of Certain Excise Taxes SCHA Schedule A 4720 Certain Excise Taxes SCHB Schedule B EVNT Event Schedules SCHE Schedule E SCHC Schedule C SCHF Schedule F Subsidiary Schedule MGR Managers Self dealers Etc SCHG Schedule G Additional Information SCHI Schedule amp Worksheets ia perange iggecauniing Meinoda ae E ER TN AAS E S Rati gada aie ma anda apto Figure 14 3 Form 4720 screens in Drake Listed below are some important 4720 screen details you must know if filling out this form in Drake e Filing Details If the organization is filing the form separately from the main form for tax exempt organizations indicated by marking a box on screen 4720 the preparer s information is shown in the signature section of the generated form e Corrective Action Explanation To attach a corrective action explanation see item B on screen 4720 go to the
21. ERO If your firm uses a service bureau or franchisor the CONS screen must be used even if the client refuses to sign the form If the client declines to give consent select the second box in the Paper Consent section of NOTES the CONS screen See Figure 8 2 A service bureau or franchisor must be entered in Setup gt ERO in order to produce the correct letter from the CONS screen and ensure that consent is obtained for every return See ERO Setup on page 15 Taxpayer Requirements RAL Application Tax Year 2009 For a taxpayer to be eligible for one of the banking options offered the return must be eligible for e filing 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 Both preparer and client must complete all parts of either the Refund Anticipation Loan RAL Application or the non RAL Agreement whichever is desired If a bank is selected in Setup gt Firm s and a bank product is indicated in the return s BANK screen then the RAL application is included in the forms produced with the return To print a blank form without going through the return go to the Home window and select Tools gt Blank Forms select Federal and choose the application for your bank Note that applications are multiple pages as shown in Table 8 2 Table 8 2 Application Forms for Banking Options Available i
22. For more informa tion see Report Viewer on page 12 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 a new client select New from the Client Type drop list in the middle of the Appointment Detail dialog box E filing Preparation For details regarding preseason tasks for e filing see Chapter 7 E filing 86 Tax Year 2009 5 Return Preparation This chapter focuses on how to prepare a Form 1040 U S Individual Income Tax Return using Drake Software It describes procedures for entering data for and pro ducing a Form 1040 and the supplemental forms schedules and other documents that might be part of a tax return This chapter assumes a basic understanding of data entry in Drake If you are not familiar with Drake data entry please read Chapter 3 Basics before attempting to prepare a tax return in Drake The amounts that appear on a Form 1040 return consist of directly entered data and program calculated data based on the numbers entered by the preparer Screens 1 through 5 of the program provide fields for directly entering data onto the 1040 how ever because many lines on Form 1040 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 cal
23. If you change an SSN or EIN you will be charged for another return Clearing Drake Update Files Use the Clear BBS Files feature in File Maintenance to delete Drake update files after they have been downloaded to the computer To delete update files 1 From the Home window select Tools gt File Maintenance gt Clear BBS Files 2 Click OK 3 When the deletion process is complete click Exit Exporting Data from Drake The exporting tool allows you to transfer client data in Drake and the EF database files to either a text file or a CSV spreadsheet format file You can then import that infor mation into other programs such as Microsoft Word Excel or Access To export data files 1 From the Home window go to Tools gt File Maintenance gt Export Client EF Data The Export Client EF Data box provides several choices Figure 11 10 Drake 2009 Export Client EF Data This will export all EF or Client data to a Text CSV file The text or csv file can be opened using word processor database and or spreadsheet software Click OK to export data or Exit to leave this screen without exporting files Export Client Data Files Export EF Data Files I Export to CSV Comma Separated Values I Include Test Returns Path File name for record layout C DRAKEOS export EFLAYOUT TXT Path File name for export data C DRAKEOS export EF_DBF TXT Figure 11 10 Export Client EF Data dialog box 2 Select to either Exp
24. 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 C 7 These Other Tax types generally refer to tax types other than income tax franchise tax composite tax city income tax etc that are required by certain states and cities UIE ALT at apy ew State Return Results State Amended Results State Estimates State Other Tax Paragraphs ST OtherT ax1 Balance Due Paragraph ST OtherT ax1 E Filing Paragraph ST OtherT ax1 Paper Filing Paragraph ST OtherT 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 Lahti lenin Teas t Err die Figure C 7 Examples of OtherTax paragraph keywords Table C 1 lists the Other Tax types indicated by specific letter keywords for state and city returns in the Drake tax packages Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description Alabama S corporation OtherTax1 Composite OtherTax2 Privilege Tax and Annual Report Partnership OtherTax1 Composite OtherTax2 Privilege Tax and Annual Report Individual OtherTax2 Privilege Tax and Annual Report Fidu
25. Q Leave View Print mode and return to data entry Data Entry z Send selected forms to printer send selected forms to Drake PDF printer includes option to password protect PDF file print the EF message page only tint Tax Year 2009 175 Viewing and Printing a Return Drake Software User s Manual Table 6 1 Enhanced View Print Toolbar Description Set up form properties color and order Access other setup options available in the program Archive Access archiving features including the Drake Document Manager DDM xd Email E mail the return to a selected recipient Refresh Update the viewed return to reflect any changes made by another preparer working in the open return P Basic View Switch to the cascade view used by Drake before 2008 8615 Export Export parent information into child s Form 8615 Kiddie Tax this button is vis ible only for Individual 1040 returns with qualifying dependents See Export ing Data for Kiddie Tax on page 133 0 0 0 K1 Export Open the K 1 Export tool This button is visible only for certain business returns Help Access Drake online help g Exit Exit View Print mode Viewing Tool Use the arrows and zoom icon Figure 6 6 when viewing in Enhanced View Print 0004 Figure 6 6 Click arrows to move through the return click zoom icon to zoom in or out When you click a
26. Report Viewer click Save Table 11 4 Amortization Schedule Fields and Descriptions Amortization Schedule Field Loan Amount Description The original amount of the loan Amortization Periods The number of payments to be made over the life of the loan Example If the loan is for two years and monthly payments are required you would enter 24 2 years 24 months Payments Per Year The number of payments to be made each calendar year 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 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 To send the schedule to the printer click Print To save it for viewing through Reports gt Report Viewer click Save designate a filename and click Save EIN Database The program stores all EINs and related data in the EIN database for lat
27. Tax Planner The Drake Tax Planner helps you assist your clients with planning for financial deci sions Clients can see how events such as the birth of a child a marriage or a new job UE oad will affect their short and long term finances and tax liability The Tax Planner is installed when you install Drake Because each worksheet in the Tax Planner contains typical Excel worksheet functions your computer must have Microsoft Excel 2000 or later installed Opening the Tax Planner To open the Tax Planner from the desktop double click the Tax Planner icon Begin entering data in the blank planner or click Open Planner to open an existing planner To open the Tax Planner from data entry click the Tax Planner icon The program calculates the return opens the Tax Planner and imports the client s current year information You can edit this information once it is in the Tax Planner Clicking New Planner opens a blank planner NOTES See Working in the Tax Planner on page 320 for instructions on steps to take once you ve opened the Tax Planner Tax Planner Window The Tax Planner contains a spreadsheet menu bar the Tax Planner toolbar taxpayer data and and tabs representing setup and specific portions of the 1040 return Client Setup Drake Software Tax Planner TEST O MAPLE 400 00 1005 Contact Information Taxpayer SSN b 400 00 1005 Taxpayer name TEST O MAPLE Taxpayer date of birth 4 15 1988 Taxpayer blind
28. The data path and file name should be displayed in the 1 Import File Name field Figure 5 18 and the transactions displayed in the Schedule D Transaction Information grid below it 1 Import File Name C DRAKEOS FT FILENAME XL5 Bal Figure 5 18 File name includes data path file name and file extension From the Start import at field select the line at which to start the import For example if the Item 1 row in the transaction list is column header information choose to begin import at item 2 Click Next After verifying that the information is correct click Finish Screen D is opened listing all imported transactions If more than one screen D is required an Existing Forms List is shown Double click a row to view the screen Sales of Assets Use screen 4797 to enter non recaptured losses These fields are located in the Part IV Decline in Business Use section of screen 4797 For sold property listed on Form 4797 depreciation sometimes must be recaptured as ordinary income For more on depreciating sold assets in Drake see Depreciating Sold Assets on page 153 1099 S Enter data from Form 1099 S Proceeds from Real Estate Transactions on the 4797 Transactions screen Mark the 1099 S transaction box located near the top of the 4797 Installment Sales To enter an installment sale Screen code 4562 1 Screen code 4797 2 Screen code 6252 3 For the sold asset open screen 4562 and complete the Da
29. W2 Wage and Tax Statement tsir vyiF z 1 Wages tips 2 Fede A b Employer sFeq zero Exclude this W 2 from Federal l Statutory employee wages for Schedule C 2 Statutory employee wages for Schedule C Statutory employee wages for Schedule C Statutory employee wages for Schedule C Statutory employee wages for Schedule C Statutory employee wages for Schedule C Statutory employee wages for Schedule C Statutory employee wages for Schedule C 8 aghu toruan Spain heen and ace e a M aT i taa 1 3 4 5 6 7 Figure 5 7 W 2 in this example is associated with the second 2 Schedule C entered The selected Schedule C will now indicate that the taxpayer was a statutory employee ITIN SSN_ Ifthe client has an Individual Taxpayer Identification Number ITIN on screen 1 and Mismatch on the SSN on the W 2 does not match that ITIN enter the SSN from the W 2 in the W 2 ITIN SSN Override field at the bottom of the W2 screen Press F1 from this field for more on e filing returns with ITIN SSN mismatches Corrected or The W2 screen has check boxes to indicate that a W 2 was altered handwritten non Altered W 2 standard or corrected To indicate that a W 2 was altered or corrected from a previ ous W 2 select the applicable box on the W2 screen Substitute Form 4852 serves as a substitute for Form W 2 W 2c or 1099 R when a taxpayer W 2 1099 R either did not receive one of these fo
30. a preparer has full access to his or her calendars Preparers can make appointments manage schedules and share calendars with other preparers Pre parer mode has three calendar types Selected Date Weekly Calendar and Preparer Calendars Preparer mode is the default setting for Scheduler users Designed for the receptionist and others who manage appointments but do not prepare tax returns Front Office mode allows the user to set up viewing options and manage appointments Users can access only the Preparer Calendars Front office mode is the default setting for users with administrative rights but it must be assigned manu ally 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 Tax Year 2009 Drake Software User s Manual 8 Security NOTE Scheduler 2 Select a preparer and click Edit Preparer 3 Click Security gt Front Office Scheduling Only 4 Click Save Preparer logins and front office mode assignments must be estab lished in Drake before the Scheduler can be used effectively Accessing the Scheduler HE Scheduler Tax Year 2009 From the Home window select Tools gt Scheduler or click the Scheduler icon The Appointment Scheduler has four main sections see Figure 4 11 e A toolbar across the top e lt A calendar overview in the left column e Tabs for selecting calendar types not available for ADMIN
31. amp MARY Help OK Cancel Figure 6 1 Batch Calculation dialog box Tax Year 2009 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 By default results are shown in the Calculation Results window Figure 6 2 NOTE This method can also be used to calculate a single tax return with out opening it Calculation Results When you calculate the results of a return from data entry the Calculation Results window is displayed by default The Calculation Results window consists of a Sum mary tab and a Details tab See Figure 6 2 Calculation Summary The Summary tab shown in Figure 6 2 has four main sections the calculation sum mary EF Messages Return Notes and Fee Type and Amount Also displayed are the DCN and the specific return results such as refund and balance due __Totalmeame TaxableIncome __ TotalTax Refund Balance Due Payment Method Eligible For EF Federal 80 268 0 Receive Check 8 Four divisions of Summary tab ow highlighted item in the list below to fix the problem Results Summary EF
32. and select the 706NA files from the list provided Tax Year 2009 Drake Software User s Manual Appendix A Preseason Checklist Appendix A Preseason Checklist Preseason planning can reduce or eliminate many problems for tax preparers Take time now to prepare for the months ahead and ensure that your office is ready before the first client arrives The needs of each office vary in the months before tax season but your preparations might include the actions listed here Several of the items below refer to the Drake Support site located at Support DrakeSoftware com Contact the IRS L Apply for Electronic Filer s Identification Number EFIN All new EROs must complete and submit Form 8633 Application to Participate in the IRS e file Program to the IRS in order to receive an EFIN If you are a new ERO and are not a CPA EA attorney banking official or officer of a publicly held company you must also submit a fingerprint card LJ Revise Form 8633 as needed Authorized EROs do not have to file Form 8633 unless 1 their firm or filing information has changed since 2008 or 2 they will start e filing business forms this year Revise your Form 8633 at www irs gov after signing up for the IRS e services program L Obtain IRS publications Order publications from the IRS or print them from www irs com Contact the States L Obtain state applications Some states require e file applications and many states now enforce
33. click the Do not show this message again box Your recipient list is complete To view the addresses in the list click the Edit button Figure 10 18 This displays the Edit Report Output dialog box To remove a name from the list select it and click Remove 258 Tax Year 2009 Drake Software User s Manual Interactive Support E mail Keywords Any keywords that were available to the report are now in the Keyword Selector pane of the Compose Message window Figure 10 18 You can double click a key word to add it to the body of the e mail In the Figure 10 18 example the preparer has begun the letter with the greeting Dear lt TAXPAYER NAME gt Drake 2009 Email Compose Message To Report Generated Recipient List Address List All Clients As Of 11 16 2009 Send Subject E Dear lt TAXPAYER NAME gt Thank you for your inquiry Pe eee Se ee ee a N a aww S Figure 10 18 Available keywords for e mail message Click your pointer anywhere within the body of the e mail before double clicking the keyword to have the keyword entered in that location Once keywords are added write or edit the e mail message add a subject line and add any attachments before clicking Send The message is sent to all selected recipients Each recipient will be unable to see the other e mail addresses in the recipient list In other words recipients will be unaware that oth ers are receiving the same e mail NOTES
34. e file mandates Contact those states early to apply State data is available on the Federal State Facts page at the Drake Support site L Check state requirements for bank products Check with your state for special applications to offer bank products Contact applicable states that could require different forms L Check for state e filing mandates Mandates vary from state to state see Appendix E LY Check state requirements for business returns E filing requirements vary Contact Drake Q Notify Drake of changes Inform us of changes to your firm s EFIN phone address contact y g person e mail etc E mail accounting drakesoftware com call 828 349 5900 or make changes online at the Drake Support site Prepare to Offer Banking Options L Choose your bank Complete a bank application at the Drake Support site LJ Decide whether to offer the E1 Visa Prepaid Card in conjunction with your chosen bank Tax Year 2009 A 1 Appendix A Preseason Checklist Drake Software User s Manual L 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 U if choosing e Collect Read and understand the process of applying for and using e Collect and decide whether you want to use e Collect Basic or e Collect Elite L Order check and or card stock L Test print check After installing the software
35. on page 64 for more on multi form codes See Screen Help on the 2106 screen for more assistance in directing data entry to Form 2106 Health Savings Account HSA Deduction Screen codes Use the 8889 screen accessible from the Adjustments tab to enter HSA data for 8889 HSA Form 8889 Health Savings Accounts Fields 1 coverage indications and 2 HSA contributions for the year of this screen are required in order to e file Form 8889 Qualified HSA Distribution An amount in the Qualified HSA distribution field of the 8889 screen flows to the Other Taxes section of Form 1040 and is marked with a notation of HDHP Form 1099 H Payment amounts from Form 1099 H Health Coverage Tax Credit HCTC Advance Payments can be entered on the 8889 screen Moving Expenses Screen code 3903 Use the 3903 screen accessible from the Adjustments tab to enter data for Form 3903 Moving Expenses Tax Year 2009 119 Self Employment Adjustments Drake Software User s Manual Form 3903 Qualification Due to time and distance limitation exceptions Drake does not prevent Form 3903 from being calculated even if the taxpayer does not meet the mileage test As the preparer you must determine if the taxpayer qualifies for the moving expense deduc tion See IRS Pub 521 for details Multiple Moves If there are multiple qualifying moves within a single year use a separate 3903 screen for each move Press PAGE DOWN for additional
36. printed on the NOTES page generated with the return Entering a To include a note with a return go to the NOTE screen and enter all relevant informa Note tion in the fields provided The screen includes fields for names dates and any screen or form to which the note refers Figure 5 69 Notes Date Date Screen Form Note taken by completed Completed by Hold EF Note La TE ipi a att innate _ n i e sdam ah aala cE Figure 5 69 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 discontinued 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 filing To have a note delay e filing select Hold EF see Tax Year 2009 167 Other Special Features in Data Entry Drake Software User s Manual Figure 5 69 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 N To have notes appear when a return is opened go to Setup gt UTE Options gt Data Entry tab and select Show notes reminders to preparer when opening a
37. they must e file all tax returns for quarterly and annual reconciliation for Maine income tax withholding Maine mandate Rule 102 requires that for 2008 any person with a combined tax liabil ity to the state of 100 000 or more for all tax types must remit all Maine tax payments electronically using the ACH credit or ACH debit method Effective July 1 2009 applicable to all taxable years 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 beginning 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 corp and partner ship 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 Note Effective February 16 2004 software generated forms that are printed and mailed to the Department of Revenue must contain a 2 D barcode or the return will be sent back to the taxpayer unprocessed For tax years beginning on or after January 1 2004 income tax return preparers who completed 200 or more original Massac
38. traded 103 associating two screens in data entry 64 attachment Form 1118 entity packages 327 attachments DDM files 308 e mail 255 Vil Index Form 3115 entity packages 328 Form 709 160 unformatted schedules 168 audit log DDM 315 auto expenses 155 automated backup of files 272 automatic updates 265 B backup and restore DDM files 306 Drake files 270 bank name database 63 bank products see also banking see also checks applying for 213 217 check register 226 denial of 216 direct deposit of 200 distribution of 215 Drake banking partners 209 eligibility for 213 in data entry 219 loan cancellations 228 non loan 215 opting out of 220 processing checks 223 service bureau 214 settings 28 tracking prior year information 228 transmission of data 223 types of 214 215 withholding fees from 220 banking 209 229 bankruptcy 100 basis in calculating K 1 amounts 112 batch appointment generator 82 batch calculations 171 billing overriding setup options 46 blank forms 268 blindness 88 Bonu Chase bank product 214 business see also business use cancellation of debt 117 codes 97 depreciating home used for 152 expenses 118 mileage 98 use of home for 155 business use viii Drake Software User s Manual converting home to 103 percentage 150 155 C C corporations changing from S corps 276 calculating tax returns 171 174 189 calculations batch 171 global options for 24 pause option for 25 174 cal
39. warning box Buttons for Step 1 and Step 2 appear Figure 11 4 266 Tax Year 2009 Drake Software User s Manual Update Manager a ak Sa Oy YE PN O ent ae AT ctw Te atts peti May tetas of wyi nie mint e iiin fhn ef Updating computers without Internet access Choose this option to copy updates from another Step 1 Create Update List computer to this one A portable data drive floppy disk USB drive etc must be in the computer Step 2 GaiWadamerrombnve Choose this option if you are reading a portable data drive brought from a computer that needs updates Help Update Profile Figure 11 4 Option 1 steps 1 and 2 4 Click Create Update List Step 1 5 Browse to the location of the media storage device and click Save The program saves a new file PATCHLIST TXT to that location NOTE The PATCHLIST TXT file contains information regarding the current update status of the computer 6 When prompted click OK Click OK again 7 Remove the storage device from the computer once the created file has been saved The file PATCHLIST TXT which lists the updates currently installed on the computer is now saved on the media storage device Loading the To load the updates complete these steps using the computer designated to supply the Updates updates the one with Internet access 1 Connect the media storage device to the computer 2 From the Home window select Tools gt Update Manager 3 Un
40. 1041 return that contains the data to be exported 2 Click View to calculate the return and open View Print mode Tax Year 2009 111 Supplemental Income Drake Software User s Manual 0 0 3 Click the K1 Export button in the View Print mode toolbar The Export K1s x0 screen lists all taxpayer SSNs for exporting All rows are selected by default K1 Export sie 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 Tracking New in 2009 Drake takes current year basis limitations into account when calculating Adjusted K 1 amounts and tracks the adjusted basis for a K 1 from a pass through entity part Basis nership or S 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 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 Bas
41. 1045 select Calculate 1045 page 2 ONLY at the top of the NOL screen To indicate that the taxpayer elects to carry a NOL forward and not back go to the NOL screen and select Election to carry forward ONLY When the return is gener ated it includes an EF_NOTE stating that the taxpayer is electing under Section 172 b 3 to relinquish the entire carryback period Use the NOL screen to enter data for figuring Alternative Minimum Tax NOL When the return is generated the AMT_NOL worksheet shows the current year AMT NOL Election Options The ELEC screen has check boxes to indicate elections from the IRS code If any boxes on this screen are marked a note listing the elections is generated with the return To attach an additional statement detailing an election go to the SCH screen and select E Election Explanation for the type of schedule Both the list of elections and any designated election explanations are visible as ELECTION pages in the View Print mode directory tree For more on unformatted schedules see Unformatted Schedules on page 168 Special Returns 158 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 Citi
42. 13 Suite Products e Collect and the E1 Visa Prepaid Card New this year Drake is offering e Collect a unique option to traditional RAL banking partners and the E1 Card an additional disbursement method that can be used with or without a contract with a traditional RAL banking partner Detailed information on these new offerings is provided in Chapter 8 Banking Batch Printing of Engagement Letters In 2008 Drake added a standard engagement letter to the letters program but that let ter could be generated only when calculating a return Now you can generate this let ter separately from the return You can also include an engagement letter in clients pre season organizers For more information see Chapter 4 Preseason Preparation and Chapter 11 Tools 1040 Package Enhancements The following new features are specific to the individual 1040 package in 2009 e Penalty and Interest Calculations This feature added to the 2008 program in spring of 2009 allows you to calculate penalties and interest automatically for late filed returns You can set up this option globally or have the calculation done on a per return basis See Features for Late Filed Returns on page 163 e Schedule D for AMT The program now calculates capital gains and losses to track capital loss carryovers for AMT purposes AMT specific fields have now been added to both Schedule D screens screens D and D2 Tax Yea
43. 14 non passive activities 110 non profit contributions 105 NOTE screen 167 notepad PAD screen 168 notes pages generated with return 173 preparer Home window 55 release 249 NWClient 10 11 xvi Drake Software User s Manual O office in home 155 Ohio city tax rates 285 online EF database 201 205 opening see also accessing see also activating see also creating Drake tax software 9 53 password protected files in the DDM 316 returns from the CSM 233 returns in Drake 58 screens for additional dependents 89 test returns 68 the DDM 308 the EF return selector 190 the Report Manager 291 the Scheduler 77 the Tax Planner 318 optional documents with return 26 items on return 27 options setup 23 32 order of forms 183 organizers 72 76 overflow statements 24 overlapping appointments in Scheduler 83 overpayments 136 override fields 24 63 overriding bill amounts 47 EF options 196 letters setup 49 setup options 45 51 P PAD screen preparer notepad 168 paper document indicators 198 paper jams 228 parsonage allowance 124 see also clergy partner programs 249 passive activities 110 activity loss limitations 110 activity numbers PANs 109 income 94 127 password protecting client files 275 DDM files 316 e mails with PDFs 181 online EF database reports 204 pause option for calculations 25 174 Tax Year 2009 Drake Software User s Manual Pay Per Return PPR purchasing 21 setup 20 21 payment
44. 249 Tax Year 2009 Drake Software User s Manual W 2 information 93 drag drop ordering 184 Drake Document Manager see Document Manager Drake PDF password protection 178 printing to 175 Drake Software CD installation process 8 contact information 260 online forums 248 partner programs 249 shipment letters 5 Drake Support 239 261 Drake Tax Planner see Tax Planner due diligence screens for EIC 140 for First Time Homebuyer Credit 143 E EA see enrolled agents Earned Income Credit EIC advance payments 132 blocking EIC calculations 141 due diligence 140 in data entry 139 142 interview questions 29 preparer checklist 140 editing see also adding and deleting firms 14 letter templates 37 printer settings 41 44 education credits 123 expenses 122 student loan interest deduction 122 educator expenses 118 EF see also e filing database 199 201 messages 173 online database 201 status letter 279 status page 28 e filing acknowledgments 193 194 checking e mail while 29 combining steps for 29 delaying 167 eliminating EF messages 189 extensions 159 196 fees 218 identification numbers see EFINs Tax Year 2009 Index imperfect returns 195 installment agreement requests 161 mandates Appendix E marking Ready for EF 196 messages 173 online database 201 override options 196 overview Appendix B PIN signature for 148 process 187 207 requirements for first year e filers 15 returns with inelig
45. 4972 Form 4972 Tax on Lump Sum Distributions 8611 Form 8611 Recapture of Low Income Housing Credit 8615 Form 8615 Kiddie Tax 8814 Form 8814 Parents Election to Report Child s Income If both parents are deceased go to the MISC screen and select Both parents deceased in the Dependent filer special situation section N To enter the amount of COBRA premium assistance received in DTE 2009 go to screen 5 Credits Other Taxes Payments and enter the amount in the last line of item 60 Exporting Data for Kiddie Tax 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 8615Expot 2 importing the data into the dependent s return Exporting To export a taxpayer s information into a Form 8615 for the dependent ETER an ati 1 Open the taxpayer s parent s return in Drake 2 Click View or Print to open View Print mode If the Calculation Results window is displayed due to Setup gt Options selections click Continue 3 From the View Print toolbar click the 8615 Export button The Export 8615 dialog box lists the dependent names SSNs and export statuses for the return Figure 5 44 Drake 2009 Export 8615 8615 Export Utility This screen gives a list of children that are eligible to be exported Highlight the children and click the EXPORT button to continue __ FistName LastN
46. 59 Group Sales To enter group sales in Drake Tax Year 2009 153 Depreciation Drake Software User s Manual 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 59 Group Sale Information Group sale number Group sales price Group expense Of Sale eccseccsecsneeesseete Figure 5 59 Screen 4562 fields to complete for the first asset of a group sale a Open a 4562 screen for the next asset in the group sale 4 Complete the applicable fields for the asset In the If sold section only the Date sold Property type and Group sale number fields are required 5 Repeat steps 3 and 4 for all assets in the group sale N Complete the Date sold Property type and Group sale number UTE fields for all assets in a group sale The Group sales price and Group 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 oe Of Sales of Assets If only the Date sold field contains data nothing flows to Form 4797 ssets For a Section 1250 property an entry in the Form 4797 line 26d depreciation field flows to that line of For
47. 94x Report Download ABC Voice Files and Generate Contact List If you use Drake s Client Write Up to e file 940 941 and 944 reports and returns the online EF database allows you to run reports on those clients To run a report ee eS From the online EF database toolbar click Tools Click Run 94x Report and choose the Tax Period End Date Enter the EIN or leave the text box blank to include all 94x returns in the report Remove a check mark to exclude 940s 941s or 944s From the Status drop list choose one of the following status options e Include all returns in report e A Include only returns with A accepted acks e P Include only returns with P pending acks e R Include only returns with R rejected acks e S This status not active for these reports Click Submit Tax Year 2009 Drake Software User s Manual Online EF Database ABC Voice Also on the Tools tab the option to Download ABC Voice File applies only to prepar Files ers using the ABC Voice File tool For more information call Versicom at 937 438 3700 Contact Lists To build lists containing contact information on your clients From the online EF database toolbar click Tools Click Generate Contact List Enter report criteria by selecting or clearing the check boxes To further restrict the results enter start and end dates to search Click Run Report optional To export the report into an Excel fil
48. A final warning is dis played click OK to proceed 4 When the archive has been created click OK 186 Tax Year 2009 r 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 a tax return Reading acknowledgment codes Preparing and processing loan checks for bank products Drake tax software incorporates IRS regulations where feasible to ensure that returns are e filed correctly however as a tax preparer you should be well versed in the IRS rules and processes Before tax season begins all tax preparers should Consult IRS Publications 1345 and 1346 for information on the processes laws regulations and specifications for e filing income tax returns Know the applicable e filing and banking requirements Consult bank handbooks and brochures regarding bank products NOTE A detailed flow chart showing the e filing process as it occurs for most tax preparers is included in Appendix B Preparing to E File In order to e file tax returns your firm or office must be an Electronic Return Origina tor ERO and have an Electronic Filing Identification Number EFIN ERO and EFIN information must be entered in Setup gt ERO before a return can be transmitted Tax Year 2009 187 Preparing to E File Drake Software User s Manual Applying for ERO Status The IRS accepts ERO applications throughout the year Be
49. Advanced The Advanced Backup dialog box lists all files of the selected type Filter or sort files as needed using the date and type fil ters on the right side of the Advanced Backup window N The files listed on Advanced Backup contain only the file types DTE selected For example if the Client Files group is not selected no client files 1040 1120 1120S 1065 1041 or 990 are displayed 6 Click Backup Files are backed up to a folder at the root of the selected drive or subdirectory In the 2009 Drake program the folder name always starts with DS2009 and is followed by the eight digit date MMDDYYYY format a hyphen and the number of the backup for the day For example the second backup file of January 28 2010 would be titled DS200901282010 02 Restore Use the Restore tool to copy data files from a media storage device to a computer Use this feature along with the Backup tool to transfer files from one computer to another or to restore lost files Tax Year 2009 271 File Maintenance Drake Software User s Manual To restore Drake files Rw From the Home window select Tools gt File Maintenance gt Restore Click the Location to restore files from button and browse to the desired loca tion Once you have made a selection the Select folder to restore from drop list displays all of the subdirectories created during backup Folder directories are dis played in the format described previously Choose to Rest
50. Appts 2 Select a location from the Use last year s appointments found on drive drop list 3 Select a Begin Date and an End Date 4 Select the days that should be available for appointments for this year 5 Under Dates Not Available for Appointments click Add to add any holidays or other days on which appointments should not be scheduled 82 Tax Year 2009 Drake Software User s Manual Scheduler Dates Not Available for Appointments Create a list of holiday and other dates in which your office will be closed Add Date Day of Week Holiday Other January 18 2010 Monday MLK Day February 15 2010 Monday Presidents Day Delete Figure 4 16 Example of dates entered that are not available for appointments To edit or delete an entered date select the date and click Edit or Delete 6 Select your preference for Appointment Date Criteria Your preference applies when a rolled forward appointment falls on a non workday or holiday You can also select to keep the day of the week for example if a client wants a Monday appointment each year or the date for example if a client wants to meet on the first day of a month 7 Click OK to begin the batch appointment process The program creates appointments as defined by your specifications and preferences Next it displays the Scheduler Batch Created Appointments report which dis plays the following information Summary of appointments that could not b
51. Archive Manager orse c55 ued es eke hs YES ch AS te A ek wd ee Re 2 oe es 185 Efi G naaa 187 Preparing to E File amp 6 iauccwd i dae bd iiiaae aaa a a a aa i aE EE aD ee Oaada 187 E fhiling a Reti necete er eia Eie E E E EREA E EEE EEE AE EE NE wes 189 EF Override Options in Data Entry 2 0 eee eee 196 EF Database 0 ccm cs mE ehMac eS Aen be Rede Sh Uke Vee E Galle Cae EE OEE Raine Shee 199 Online EF Database 2 3 2635 eect era nel eeese che mein ae sel pela seis eebaet E 201 Copy EF Data serenos tiipii a EEEE we bale ed Ake ed Ahad OEE P a A nn oe eee ae 206 About State Filing eres ek nena feta eee es AOE LAS Ss Vdd See ha ged hee ed Roe es 207 De IN sursei n 209 Aboute Collect s 246 64 244 beddwdedeedin dod dacad eda asad Gadaeet dened E O ee gaa wu 209 About the E1 Visa Prepaid Card Program 0 eect ene n een eens 210 Using Banking Options in Drake 0 0 cee e ne teen t nee e nee 211 Preparing to Offer Bank Products 0 0 ttt e nent een e eens 216 Using Bank Screens in Data Entry 6 eect nnn teen e eens 219 Using e Collect and E1 Card Screens in Data Entry 0 0 ccc cc eee eens 221 Bank Product Transmission 0 0 0 teen ett t eet e teen eee 223 Processing the Check vane soret eiie Oa Wh ODER Rd a render eae a aoe a 223 Troubleshooting Check Printing 2 2 0 cece eee nen enn ene eens 226 Cancellations Tracking and Post Season Procedures 0 0 06 c cece cece eee nenes 228 Client Sta
52. Click Print to open the Print Selection dialog box If you click the arrow next to CTRL P for the aa Print Selection the Print icon select Print Selected Forms option 4 optional Select any printing options shown in the Print dialog box 5 Click Print again All of the selected items are printed Printing to New in 2009 when you print files using Drake PDF you are given the option of pass Drake PDF word protecting the document To print tax return forms and other documents as PDF documents 1 Open Enhanced View Print 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 my The Print Selection dialog box is displayed with the Drake PDF Printer selected Print Drake 2009 Print Selection Print Dialog GDI Graphical Device Interface Mode is used mainly for INKJET DESKJET OFFICEJET and PDF printers PROPERTIES is only available in GDI mode Printer Properties Tray Main Paper Source v Number of Copies j Duplex L I Print Client Set Watermark Staple E Print Preparer Set Watermark GDI Iv Password Protect D Figure 6 8 Print Selection dialog box for Drake PDF Printer 4 optional To password protect the PDF document mark the Password Protect box The software uses the first four let
53. DCN Imperfect Returns Tax Year 2009 have already been transmitted If DCN staggering is done improperly returns might be processed with duplicate DCNs causing e filing rejections When a return receives an IRS rejection because the same DCN was assigned to more 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 view Form 8879 to verify that the DCN has been changed eral Revene Senie gt Keep this form for your records See instructions Declaration Control Number DCN 00 777777 066658 edie OAN CR Declaration Control bs Number DCN Tapaers rame WILLIAM CARTER Spouse s rame Tax Return Information Tax Year Endin 1 Adjusted gross income Form 1040 line 38 Form 1040A line 22 Form 1040EZ line 43 2 Total tax Form 1040 line 63 Form 10404 line 37 Form 1040EZ line 10 s 6 eee ee ee ee d te N Sn 50 a peor Nd T a a TEE tenon abe om Figure 7 5 DCN on Form 8879 in View mode Once the DCN has been changed the return can be re transmitted The IRS conditionally accepts imperfect returns if either of the following events occur when a return is filed e A dependent s SSN or name on Schedule EIC does not match the SSN or name i
54. Des ignee section See Figure 5 57 If no third party designee is indicated in Setup gt Options the No N box is marked on the third party designee line of Form 1040 UTES If you select Yes on the PREP screen the PREP screen fields over ride any third party information in setup If you select Yes but leave the other fields blank the third party section of Form 1040 will be blank Tax Year 2009 147 Signing the Return Drake Software User s Manual Signing the Return Form 8879 Screen codes 8879 PIN Signature Date Obtaining Client PIN Signatures Direct Debit Consent 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 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 NOTE The signed Form 8879 does not have to be mailed to the IRS It must instead be retained by the ERO for three years See Form 8879 instructions for more information Use the PIN screen accessible from the General tab to complete Form 8879 The generated return uses both the taxpayer s PIN and the ERO s Practitioner PIN A PIN signature date is required at the top of the
55. Exempt Organization Return for Form 1041 A and Form 5227 The following other screens and capabilities have been added to the 1041 package e LOSS screen This screen is similar to the LOSS screen in the 1040 package See Net Operating Losses on page 157 for more on the LOSS screen e Deduction allocation capability The program now allows you to allocate deductions on screen 3 Income Deductions Payments by selecting the income line against which the deduction should be allocated 331 Estate 706 Package Drake Software User s Manual Worksheet columns added Columns have been added to the worksheet for income and deductions to follow income DNI and distribution More information on 1041 package features will be provided in the 1041 supplement to the manual Estate 706 Package 332 New to the 706 package this year is Form 706 QDT United States Estate Tax Return for Qualified Domestic Trusts To complete Form 706 QDT in Drake use the screens available under the Form 706 QDT tab in the 706 package When filling out Form 706 QDT in Drake note that the surviving spouse s name and SSN must be entered on screen 1 of the program under the Form 706 Estate Forms tab Also new this year Form 706 NA U S Estate and Generation Skipping Transfer Tax Return Estate of nonresident not a citizen of the U S is now available as a blank form To access it to go Tools gt Blank Forms click the Estate tab
56. Form 4797 Sales of Business Property 6252 Form 6252 Installment Sale Income 6781 Form 6781 Gains and Losses From Section 1256 Contracts and Straddles 8824 Form 8824 Like Kind Exchanges HOME Worksheet for Sale of Residence not an IRS form 99C Form 1099 C Cancellation of Debt When forms require identical data such as when amounts from the 4684 and 6252 screens must be carried to Form 4797 Drake prints the data on the appropriate forms Capital Gains Losses Carryovers Screen codes D D2 Use screens D and D2 to enter data for Schedule D Capital Gains and Losses These screens are available under the Income tab of the Data Entry Menu NEW FOR 2009 Screen D Capital Gains amp Losses Tax Year 2009 The program now calculates capital gains and losses and tracks cap ital loss carryovers for Alternative Minimum Tax AMT purposes To enter AMT amounts use the AMT Cost Basis column on screen D and the AMT if Different column on screen D2 Use screen D for basic entries about short and long term capital gains and losses Fol lowing are guidelines for data entry on screen D 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 any additional characters are displayed in red Date Acquired If a single date does not apply type VARIOUS for multiple dates or INHI ERIT for an
57. HOME Worksheet Blank Form Preparer Override X emer Help Select All Unselect All Process 1040 Cancel Figure 4 9 Options dialog box includes Process button circled N To have a certain preparer s name appear on the pre season DTE engagement and privacy policy letters select a name from the Preparer Override drop list 4 Click Process Figure 4 9 to open the Batch Printing dialog box Figure 4 10 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 1120S Proforma 1065 Proforma 1041 Proforma COVER Envelope Slip Sheet LETTER Pre Season Letter PRIVACY Privacy Policy Letter ENGAGE Engagement Letter REFERRAL Referral Coupon LL aney i Mom naam Be Pe T Figure 4 10 Select forms to print from the Batch Printing dialog box 5 Select the individual forms to print NEW FOR You can now print an engagement letter with an organizer To do so 2009 mark the ENGAGE box in the list of forms to print Tax Year 2009 75 Scheduler Scheduler Scheduler Drake Software User s Manual 6 Click Print and then click Print again If printing proformas for multiple return types additional Proforma Optio
58. Health Coverage Tax Credit 119 Form 1099 INT Interest Income 94 96 Form 1099 MISC Miscellaneous Income 93 Form 1099 OID Original Issue Discount 95 Form 1099 PATR Taxable Distributions Received from Cooperatives 115 Form 1099 Q Payments From Qualified Education Pro grams 116 Form 1099 R Distributions From Pensions Annuities Re tirement or Profit Sharing Plans IRAs Insurance Contracts etc 104 Form 1099 S Proceeds from Real Estate Transactions 101 Form 1116 Foreign Tax Credit 95 126 Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer 161 Form 2106 Employee Business Expenses 118 Form 2120 Multiple Support Declaration 161 Form 2210 Underpayment of Estimated Tax 138 Form 2350 Application for Extension of Time to File 148 159 Form 2439 Notice to Shareholder of Undistributed Long Term Capital Gains 142 Form 2441 Child and Dependent Care Expenses 127 128 Form 2848 Power of Attorney and Declaration of Repre sentative 16 162 Form 3468 Investment Credit 131 149 Form 3800 General Business Credit 131 Form 3903 Moving Expenses 119 Form 4136 Credit for Federal Tax Paid on Fuels 131 142 Tax Year 2009 Index Form 4137 Social Security and Medicare Tax on Unre ported Tip Income 132 Form 4506 Request for Copy of Tax Return 161 Form 4562 Depreciation and Amortization 25 149 154 Form 4797 Sales of Business Property 101 149 154 Form 4835 Fa
59. ID numbers for Mississippi Information Minnesota and New Hampshire returns and choices for Illinois returns Figure 5 12 State specific information z a e AA ID number for use by Ml MN amp NH E salawe OMNIS ATHS a a a A A nets ancereastsartararaaevetnsraasen z IL Schedule M interest source description Figure 5 12 State specific fields on INT screen 1099 OID Enter interest from Form 1099 OID Original Issue Discount on either screen 3 Interest income field if less than 1 500 or the INT screen if 1 500 or more Foreign Interest and Dividends Use the INT 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 hyperlink Foreign Tax The INT and DIV screens include a section for Form 1116 FTC information Credit Data Figure 5 13 shows this section as it appears on the DIV screen Form 1116 FTC Information 6 Foreigmtax pall a aeke eee ary er a eres ev Pern ee Rey ec 1116 NOT required Form 1116 7 Foreign country be Type of income z Date paid or accrued
60. 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 then click Delete See Existing Forms List on page 60 You can also access these features by right clicking the screen and selecting shortcuts A blinking cursor indicates an active field Click a field to activate it Following are keyboard only methods of moving from field to field e Press TAB to move the cursor forward one field e Press SHIFT TAB to move the cursor back one field e Press CTRL or CTRL 7 to move the cursor up or down one field respectively Grid data entry allows faster data entry for the Dependents INT DIV and 4562 screens In grid data entry mode click a field to activate it and then type data directly into the field Drake 2009 Grid Data Entry Press lt F3 gt to access the detail screen for the current item Click on a column header to sort data click again to reverse the sort To delete an item click on a row number and then press Ctrl D Hold the Control key down to select more than one item at a time l First Name Last Name Suffix SSN Relation Months Date Of Birth Child Care Exp il ELLA 400001001 DAUGHTER 10312002 2 THEO 400001003 50N 12042008 SS al O E O E a E E n St aT aaa EI E gee Figure 3 11 Grid data entry To access grid data entry from full screen mode press F3 Press F3 a
61. If the filer is a category 3 filer select CAT3 and com plete the For Code CAT3 Only fields located at the bottom of the SUPP screen IB1 Sch Blocked Foreign If on the SCHI screen the first check box on line 7 is Income answered Yes select IB1 and complete the top Explanation pane IB2 Sch I Unblocked For If on the SCHI screen the second check box on line eign Income 7 is answered Yes select IB2 and complete the top Explanation pane P3Y Sch O Returns Filed For filers that completed Section F on screen O2 for Three Prior Years select P3Y and complete the top Explanation pane 330 Tax Year 2009 Drake Software User s Manual Fiduciary 1041 Package Form 8716 Form 8925 Schedule N More detailed information about Form 5471 in Drake will be provided in the applica ble supplemental manuals Use screen 8716 to complete Form 8716 Election to Have a Tax Year Other Than a Required Tax Year for a corporation S corporation or partnership This screen is available under the Other Forms tab in all applicable packages Use screen 8925 to complete Form 8925 Report of Employer Owned Life Insurance Contracts for a corporation S corporation partnership or tax exempt entity This screen is available under the Other Forms tab in all applicable packages Use screen N to complete Form 1120 Schedule N Foreign Operations of U S Corpo rations This screen is available under the Other Forms
62. L Electronic Training Center ETC For tax courses tutorials videos and testing go to Drake Software com ETC LJ Tutorials The 2009 tutorials can be accessed through the Help menu or from the Drake Support site enter your EFIN and password and then go to Training Tools gt Tutorials U Drake User s Manual Familiarize yourself with this manual and use it as a resource for learn ing how to use the software and prepare individual returns LJ Drake Advisory Group Learn more about the new Drake Advisory Group which can help you help your clients with tax reduction business continuation and restructuring and retirement plan ning See Drake Advisory Group on page 249 Ul Practice returns Use our practice returns to learn program navigation and data entry Tax Year 2009 A 3 Appendix A Preseason Checklist Drake Software User s Manual Drake Web site Add Support DrakeSoftware com to your Favorites list Drake Knowledge Base Practice using the Knowledge Base at the Drake Support site Drake Forums Sign up for the Drake Forums at the Drake Support site RIA online Review the features offered by RIA Checkpoint Online EF Database Review and practice using the online EF database Oovocoo oO Execute your marketing plan Consider running radio spots hanging posters or banners and encouraging word of mouth marketing Drake Software offers marketing ideas online at Drake Soft
63. Manager Table 12 1 Report Categories Report Category Description Client Reports Criteria for these reports consist of data that is not directly related to e filing including client contact data preparer and revenue data return details status and tracking data and summary data EF Bank Reports Criteria for these reports consist of data related to e filing and banking including bank product status tracking check and sum mary data and EF status tracking and summary data Scheduler Reports Reports are based on data entered in the Scheduler and include 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 the Scheduler and the Fixed Asset Manager and allows you to compile depreciation lists and hash totals Tax Year 2009 289 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 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 Wh
64. Manager box located under Main Dialog Options Preparer Notes The logged in preparer can use the Preparer Notes section of the Home window to write brief notes reminders to do lists etc Aa ORPURETION S A S en eon F007 Mi erase era JONES JOHN B 706 In Progress 10 26 2009 13 3 FAWLEY JUDE amp BRIDESHEAD SUE 1040 In Progress 10 27 2009 12 4 v TE gt Contact Ella re tomorrow s meeting agenda Run and print reports prior to mtg with Richland Towing Review promo flyer deadline is Friday Order roses for Nina s birthday Drive C Windows XP 11 02 2009 Reminders off Figure 3 3 Preparer Notes section of Home window Notes are visible only to the logged in preparer who wrote them In other words one preparer s notes will not show up on another preparer s Home window Notes remain in the Preparer Notes section until they are deleted Enabling Privacy You can now hide recent returns the PCM and the Preparer Notes sections of the Drake Home window as needed for example if a co worker or client is looking at your computer screen with you To do so click the Enable Privacy button shown in Figure 3 2 on the Home window Click Disable Privacy to view the list again 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
65. Menu press CTRL I to change the selector field 2 Enter the proforma code numbers one in each text box The Figure 4 6 example shows that a 2 and a 6 would be entered to access the W2 screen Tax Year 2009 73 Organizers and Proformas Drake Software User s Manual Enter Interview Sheet Number and Section 2 6 Figure 4 6 Example Enter 2 and 6 to access the W2 screen 3 Press ENTER The applicable screen is displayed for data entry Heads down Combine the proforma codes and heads down mode to move efficiently to the proper Data Entry areas of a screen for data entry To work in heads down mode 1 Open a screen in data entry 2 Press CTRL N Numbers appear beside each field as shown in Figure 4 7 1 Wages tips 2 Federal tax wih 6 58000 H 25000 3 Soc Sec wages 4 Soc Sec wih 58000 El 25000 5 Medicare wages 6 Medicare tax wh ENO ET et eee eet eee Figure 4 7 Numbered fields in heads down mode 3 Inthe Heads Down box at the top of the screen enter one of the field numbers in the first text box and press ENTER 4 Enter data for the field in the second text box and press ENTER The data is placed in the proper field and the system returns you to the line number box Drake 2009 Data Entry Heads Down Mode 16 46000 Line Number Field Data Figure 4 8 Heads down data entry 5 Repeat for all other fields pressing ENTER after the data for each field is entered To return to the Data E
66. Messages Return Notes and Description right click for full description Schedule C E or F or Form 4835 has a loss and the at risk question Federal Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ O008b must Fee Type and Federal 29 Tax Return Identification Page 1 EFIN of Originator SEQ 0008b r Amount Federal 29 Tax Return Identification Page 1 EFIN of Originat must Anator SEQ OO08b must EFIN of Originator SEQ 0008b must PS TTT fem ANNAL Federal 29 Tax Return Identification Page 1 Federal 23 Tax Return Identiic jgz w amp Woe WITHA St IS HIGHER THAN MAX TAX RATE NON STANDARD W 2 KEYED NON STANDARD W 2 KEYED DCN OL J gt Total Tax Refund Current Program Calculation Complete SEE MESSAGE PAGE as R EF Continue Description Press lt ENTER gt key or Click Here to Continue Figure 6 2 Calculation Results window 172 Tax Year 2009 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 filing a green check mark is displayed If a portion of the return is ineligible for e filing a red X is displayed and a message appears in EF Messages Figure 6 3 Summary Details __ Tatatncome Taste icone
67. NOTE Since print files appear on the EF transmission selection list you might want to delete print files for returns that are not ready Deleting To manually delete a client file from the database Client Files 1 From the Home window select Tools gt File Maintenance gt Delete Client Files 2 Enter the SSN or EIN of the client file to delete 3 Click OK 4 Click Yes to continue 5 Click Yes 6 Click Exit to return to the Home window NOTE If you are not accessing files on a network the deleted files go to the recycle bin Changing Return Types A return can be changed to another file type without having to create a new file When a return type is changed the following information is transferred e Name address including county and telephone e Fiscal year e All depreciation data including screens 6 7 8 9 and 10 When a corporate return is converted to an S corp return the balance sheet and Sched ule A information also are transferred IM H RT ANT Not all data is transferred Before using Change File Type back up the original file See Backup on page 271 To change a return type 1 From the Home window select Tools gt File Maintenance gt Change File Type 276 Tax Year 2009 Drake Software User s Manual File Maintenance 2 Enter the SSN or EIN of the file to convert and click OK 3 Select the new file type Individual Corporate Sub S Corp Fiduciary Part nership Tax Exempt Es
68. PIN screen If no date is entered an EF message is generated and the return cannot be e filed Ideally the client signs Form 8879 in your office If the client is not available to sign you can e mail Form 8879 as a PDF file to the client and have the client sign the form 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 keyed or Spouse keyed If the client is not available and you enter the PIN sig natures leave the check boxes blank The taxpayer can elect to use the PIN generated by the software NOTE To turn off the option to generate PINs go to Setup gt Options gt EF tab and clear the check mark from Auto generate taxpayer s PIN 1040 Only option If there will be a direct debit from the client s bank account to make a tax payment selecting Direct Debit Consent indicates that the taxpayer authorizes funds to be electronically withdrawn from his or her account PIN Signatures for Forms Other than the 1040 148 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 e Form 4868 Application for Automatic Extension of Time to File U S Individual Income Tax Return with payment e Form 2350 Applicat
69. Property Tax Year 2009 You can now allocate rental and personal use portions of multi dwell ing properties See Property Usage on page 107 Enter the property type such as brick duplex and address at the top of screen E List each dwelling for the Schedule E on a separate screen To access a separate screen press PAGE DOWN The following fields are also located at the top of screen E Activity type Select whether the activity is passive or non passive If option D Not a passive activity is selected and EIC is involved the program prints NPA on the appropriate line of Schedule E For more on selecting activity types see Activity Types on page 110 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 Property was 100 disposed of in 2009 Mark this box if the property was sold or otherwise disposed of in the current tax year If the property was 100 disposed of and a 4562 screen has been NOTE 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 Item 2 of screen E contains f
70. Property Tax KY 500 C 4 Tax Year 2009 Drake Software User s Manual Appendix C Keywords Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description Massachusetts Individual OtherTax1 Income Tax Corporation OtherTax1 Corporate Excise Tax OtherTax2 Unitary S corporation OtherTax1 Corporate Excise Tax OtherTax2 Unitary Partnership OtherTax1 Income Tax Fiduciary OtherTax1 Income Tax Estate OtherTax1 Estate Tax Michigan Individual OtherTax1 Single Business Tax Minnesota Individual OtherTax1 Property Tax Credit Mississippi S corporation OtherTax1 Franchise Corporation OtherTax1 Franchise Missouri S corporation OtherTax1 Kansas City OtherTax2 St Louis Partnership OtherTax1 Kansas City OtherTax2 St Louis Individual OtherTax1 Kansas City OtherTax2 St Louis Fiduciary OtherTax1 Kansas City OtherTax2 St Louis Corporation OtherTax1 Kansas City OtherTax2 St Louis New Hampshire 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 Tax Year 2009 C 5 Appendix C Keywords Drake Software User s Manual Table C 1 Letter Keywords Other Tax Types for State Packag
71. SSA screen to enter SSA 1099 data If this form was not distributed use screen 3 to enter the following Social Security benefit amounts see Figure 5 34 e Social Security benefits that apply for the current year e Lump sum benefits from prior years total received and taxable portion e Railroad Tier 1 benefits for the current year ae ie ee Am Oe a Se unemployment repaid in 2009 20a Net Social Security benefits received for 2009 Lump sum benefits earlier years TOTAL received Lump sum benefits earlier years TAXABLE portion Portion of above Note Program will figure taxable portion of 2009 SS benefits Ee ey ee EE S v aai S T F aT Figure 5 34 Screen 3 fields for Social Security benefit amounts These figures are combined with any Social Security benefit amounts from the SSA screen calculated and displayed on the Social security benefits line of Form 1040 RRB 1099R Screen code RRB The RRB screen reflects the federal RRB 1099R form Benefits from Form RRB 1099 should be entered on screen 3 as Net railroad Social Security equivalent Tier 1 benefits received field see Figure 5 34 Other Income To report taxable income that is not reported elsewhere Schedule C Schedule F 1099 MISC etc in the return you can use the Other income fields on screen 3 Several screens are available in Drake for entering other types of income as described in the following sections
72. Saturday closest to the end of December giving the entity a 53 week year for 2009 N An entity that has filed returns in the past must complete only steps DTE 1 and 2 of this process An entity that has never filed a return before must continue with steps 3 through 6 3 Click the ELEC link to open the Election Options screen Figure 14 2 324 Tax Year 2009 Drake Software User s Manual Entity Packages Drake 2009 Data Entry 414141414 Partners in Grime Cleaning Election Options 2 53 WWeek Tax Year Election 1 Month in which new 52 53 week tax year OMdS ccccccccccscsssssssssssssusssseseseececececsessssnssininuussseseseeseeeceesesa 2 The day of the week on which the tax year always ends ana Enae er e a ceases tetsenarnrerectenseserrisraritreseemerteecsseststecteesrrecrseieeers a nt menea antandi aan gipa apesta a E E E a nto Figure 14 2 Elections for 52 53 week tax years 4 Forline 1 select the month in which the 52 53 week year ends for the current fis cal year 01 January 02 February etc a For line 2 select the day of the week the tax year always ends 6 For line 3 enter the actual date that the tax year ends the same date entered in the Fiscal year ending field on screen 1 Once a 52 53 week year is selected the entity must use that NOTE accounting period every year To change accounting periods the entity must submit to the IRS Form 3115 Application for Change in Acc
73. Search item 1 the file is attached item 2 Tax Year 2009 255 Interactive Support Drake Software User s Manual 4 Inthe SSN EIN Search text box enter the SSN or EIN of the file to send see item 1 in Figure 10 15 5 Click Search or press ENTER The file appears in the Attachment s pane to the right see item 2 in Figure 10 15 Clicking Browse opens the Attach File dialog box displaying the various DT folders listed O through 9 Returns are stored in these DT folders by the last digit of their SSN EIN for instance TIP return 400006665 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 bottom 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 15 Follow Step 6 below 6 Click Done You are returned to the Compose Message window with the file attached see Figure 10 14 on page 255 7 Complete the To and Subject fields and compose your message 8 Click Send The e mail with the client data file attachment is sent to the recipient Attaching Other file types can be attached to an e mail message from the Attachments dialog Other a box in the Drake e mail program see Step 3 of previous procedure and Figure 10 15 of Files e To attach a file from the DDM use the Document Manager File s section of the Attachments dialog
74. See Figure 12 6 on page 296 In the Filter Condition Editor dialog box select a Keyword Name Select a Comparison option and a Value if required Figure 12 7 Condition Filter Settings Keyword Name AGI Comparison is at least xl Value 50000 Ask about this Condition each time the Filter is used Figure 12 7 Comparison is at least and Value 50000 selected for AGI keyword Ifa value is required the Value field appears A value can be alphabetic or numeric For example if AGI is selected with a comparison of is at least the 297 Filter Manager Drake Software User s Manual 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 Any Edit Additonal Search Conditions for the Selected Filter Schedule C is present Add Condition AGI is at least 50000 Edit Condition Delete Match All Conditions C 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 7 Select Match
75. Support team E mail Support Support DrakeSoftware com Recommended for simpler Drake Software questions Telephone Support 828 524 8020 Recommended for more complicated Drake Software questions Fax Support 828 349 5718 Drake replies to faxes with faxes not phone calls Drake Support Hours 2009 2010 December 1 2009 April 20 2010 April 21 November 30 2010 Monday Friday 8 a m 10 p m ET Monday Friday 8 a m 9 p m ET Saturdays 8 a m 6 p m ET Saturday 9 a m 5 p m ET For more on the many helpful resources provided by Drake Software see Chapter 10 Resources and Support M p l RTANT State and federal tax rules and regulations can change at any Tax Year 2009 time Read the Drake shipment letters and broadcast e mails throughout the season to stay up to date on the latest changes to the software and in the state and federal tax laws Contacting Drake Support Drake Software User s Manual This page intentionally left blank 6 Tax Year 2009 2 Installation amp Setup Read this section before installing your 2009 Drake program The initial shipment of the software sent in early December includes e Drake Software CD with all federal packages 1040 1120 1120S 1065 1041 990 706 and 709 e 2009 year end update of Drake s Client Write Up CWU accounting payroll and accounts payable program The 2010 version is released in Janu
76. Taxable Distributions 1099 Q Ifthe amount on Form 1099 Q Payments From Qualified Education Programs exceeds the amount of education expenses compute the taxable amount of the distri butions and enter it on screen 5329 Part II line 5 and on screen 3 line 21 116 Tax Year 2009 Drake Software User s Manual Other Income Medical amp Enter distributions from Medical Savings Accounts MSAs on the 8853 screen Form Health 8853 Archer MSAs and Long Term Care Insurance Contracts Enter distributions Savings from Health Savings Accounts HSAs on the 8889 screen Form 8889 Health Sav Accounts ings Accounts HSAs Taxable amounts from these screens flow to Form 1040 N Lines 1 coverage indications and 2 HSA contributions for the DTE year of the 8889 screen are required if Form 8889 is to be e filed with the return Gambling Income amp Loss Screen code W2G Use the W2G screen accessible from the General tab to enter gambling income and loss information from Form W2 G Data from the W2G screen is carried to line 21 and line 22 if applicable of Form 1040 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 or 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 of screen 3 Cancellation of D
77. Taxpayer or spouse owes money to the IRS The taxpayer can call 800 829 1040 for more information F FMS Debt Taxpayer or spouse owes money to a branch of the federal govern ment owes money on student loans or child support or has a state obligation The taxpayer can call 800 304 3107 for more information B Taxpayer or spouse has both an IRS debt and an FMS debt N None A Bank Code indicates the bank through which the taxpayer requested a product and displays the status of the request The loan status name varies for different banks indicates the status of the loan request Codes vary by bank For more information refer to the guide provided by your bank The Check Information grid displays information pertaining to any checks approved or printed for the taxpayer The F2 Bank Direct Deposit tab contains detailed data about any bank products e Bank information is located on the left side of the window e Direct deposit information involving bank loans is located on the right side of the window This information includes amounts paid to the bank amounts paid to the preparer and the dates of the payments e Information on direct deposits not involving bank loan fields can 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 The F3 Fees Miscellaneous Info tab contains general return informati
78. To delete the recipient list click Cancel Query at the bottom of the Compose Message dialog box If you close the completed message before sending you will be prompted to save it in the Drafts folder The e mail message is saved along with the generated report list and keywords Alternative The e mail program uses your 1040 com e mail address your EFIN 1040 com for example 777777 1040 com This address is used for both your sender and reply address To change this address to an alternative address Reply Address 1 2 3 4 From the Drake Home window go to Help gt E Mail From the menu bar within the e mail program select Setup gt Options Select Use Alternative Reply To Address Enter an Alternate Address This address replaces your 040 com address appearing as the sender and reply address on e mail messages you send Enter a Display Name if desired If none is entered here the preparer s login name will be used as a display name on all e mails Click Save Tax Year 2009 259 Interactive Support Drake Software User s Manual Phone Work one on one with a Drake customer support technician to resolve software issues Drake s technicians are trained year round on Drake Software topics such as connections conversions networking and other customer service needs To reach any department call 828 524 8020 or fax 828 349 5718 Additional phone numbers and contact information a
79. _Ttalta _Retel _Selenee Due Payment Met Eligible For EF 2 521 Check or CC 0 Receive Check Wisconsin b California Return is ineligible for e filing EF messages are displayed EF messages ouble click on any highlighted item in the list belovytto fix the problem Pakage Code Description right click forfulldpeription o ooo Federal 5704 The amount of the economic stimulus payment received by the taxpayer Federal 5244 Direct Deposit info was duplicated incorrectly in data entry _ ON re ee ee TT ToT ae OY Medic dai Nuta apane a TT sP T ainn Figure 6 3 Return in this example is ineligible for e filing The EF Messages section lists e filing message codes and descriptions by package EF messages pinpoint the reason a return is ineligible for e filing Identified issues must be corrected for a return to be eligible for e filing e Accessing full messages Some messages do not fit in the Description row To view a full message right click a row and select View Full Text Of EF Message e Accessing message links If an EF message is blue double clicking it opens the data entry screen that contains the error If applicable the field that caused the EF message is activated NOTE If you double click an EF message in black text a window with the full EF message is displayed Only blue text messages link to screens within the return EF messages appear as red MESSAGES in View Print mode For more information o
80. a second address and will accompany the screen 1 address on the e Collect application Mark the selected disbursement method Option availability depends on e Collect product type see About e Collect on page 209 and may include e El Card If this option is selected click the application link to complete the required application See The E1 Screen following e e Direct If this option is selected enter the taxpayer s required account infor mation in the fields provided Note that this information must be entered twice e e Check If this option is selected you will print a check in your office Once all required fields are completed the appropriate documents will be generated just like a traditional bank product The E1 Screen Demo graphic Info Use the E1 screen to enter all information necessary to apply for the E1 Card accessi ble via links from any of the bank screens and the ECOL screen This screen is not available from the Data Entry Menu The purpose of the Step 1 Demographic Information section is to provide a means for your client to be notified when funds have been loaded onto the E1 Card Select E mail Text Message or Both The program uses the e mail cell phone information provided on screen 1 To override the screen 1 information enter an e mail address or cell phone number in the fields provided on the E1 screen M p l RTA NT An entry for e mail or cell phone is necessary fo
81. account Direct Deposit of Federal Refund If a single account is entered on the DD screen the information flows to the Refund section of Form 1040 If multiple accounts are entered the program produces Form 8888 You can enter up to three accounts Form 8888 The following conditions must apply for the taxpayer to file Form 8888 Conditions e The taxpayer cannot choose to get any part of the refund as a check Tax Year 2009 143 Direct Deposit IMPORTANT Multiple Accounts NOTE Drake Software User s Manual e The account indicated for the refund deposit is a checking 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 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 53 The default selection is Yes Account 1 Deposit selection Federal selection Name of financial institution N FIRST BANK OF ANYTOWN Le Repeat Account Information Figure 5 53 Select No if federal refund is not to go to the account listed To indica
82. amount on a client s bill go to screen 1 and enter the desired the Total amount in the Fee Override field located in the Return Options box Adjusting Use the BILL screen to adjust individual amounts on a client s bill The following Individual items are added to or subtracted from the bill using the BILL screen Amounts e Write in Adjustments such as for coupons and other discounts e Balance due from prior year e Tax Planner fees e Percentage increases and discounts e Sales tax percentage e Prior Payments NOTE To create user defined drop lists for the write in Adjustments and Payments screens see Customized Drop Lists on page 30 You can also indicate the following adjustments from the BILL screen e To include Form 8888 on the bill if the taxpayer is paper filing and depositing the refund into multiple accounts e To exclude a charge for the Filing Status Optimization Report See About the MFJ MFS Report on page 66 e To adjust the bill as needed for a self prepared or firm prepared e filed return The BILL screen also allows you to override the date printed on the bill and add a short note separate from the custom paragraph to the bottom of the bill Pricing for a To override Pricing Setup and establish prices for a single return Single Return 1 In data entry click View to access View mode for the return 2 Right click a form in the left column and select Setup gt Form Properties The Properties d
83. amp Adjustment Fields on page 63 Adjustment Field Indicator Format adjustment fields in data entry see Override amp Adjustment Fields on page 63 Use grid data entry format for Choose to activate grid data entry for the Dependent Dividend Income Interest Income and 4562 screens See Grid Data Entry on page 60 Calc amp Options under the Calculation amp View Print options tab are described in Table 2 6 View Print Options Table 2 6 Options Setup Calculation amp View Print Option Description Auto calculate tax return when exiting data Returns are automatically calculated every time you exit the return entry 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 Go from a data entry screen to the corresponding form in View mode or Data Entry mode when clicking the View button or pressing CTRL SHIFT V When the Data Entry button is clicked in View mode the program returns to the data entry screen Audible notification of calculation error messages 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
84. and street If you have a P O box se i i Text Data please print 842 WEEPING WILLOW IN Color Red sl a City town or post office state and ZIP code If you have a ri fhe T i ee ne Mae en Figure 6 14 Customizable colors in Enhanced View Print mode To change colors in Enhanced View Print 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 View Print uses the multi color cascade of forms it offers more oppor tunity for color configuration on the screen In addition to changing the form back ground and text data colors you can customize the following items in Basic mode View Mode View mode only Print Mode Print mode only EF message page Notes page To change the colors shown in the cascade of forms in Basic View Print modes 4 Go to Basic View or Basic Print mode of a return Select Setup gt Color Configuration The View Print Mode Color Configura tion dialog box displays the default colors for Basic View Print Click a color box and select a new color from the Color palette You can also click Define Custom Colors to create any desired color Click OK The corresponding color box changes to the color you selected To restore the default color palette click Restore Colors
85. aware that processing can take up to 45 days If you are a new ERO this year you must submit the following items to the IRS e Form 8633 Application to Participate in IRS e file Program e A set of IRS authorized federal fingerprint cards for each principal and responsi ble official of the company An established ERO must file Form 8633 only if the information in its original appli cation has changed N If you plan to e file business returns this year after filing only 1040 UTE returns in the past you must update your 8633 information or your e filed returns will be rejected by the IRS Form 8633 can be completed online using the IRS Web site or you can print the form in Drake from Tools gt Blank Forms To request federal e file program fingerprint cards contact Drake s Education Department at education DrakeSoftware com or call 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 Form 8633 is pro cessed the IRS assigns the EFIN If your firm has applied for an EFIN but does not have one yet Drake will assign you a temporary EFIN Your temporary EFIN cannot be used to e file returns but it does allow you to transmit test returns When you receive your EFIN forward a copy of the 8633 response letter from the IRS to accounting DrakeSoftware com so we can update your Drake customer account Testing Transmission Once you ha
86. 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 View Print 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 View Print Other Setup Options 184 The following programs and setup options are also available in both Basic and Enhanced View Print modes e Pricing setup See Pricing Setup on page 32 e Printing setup See Printing Setup on page 41 e Printing sets setup See Printing Setup on page 41 When changes are made from View Print mode of a return those changes apply to the open return only They do not affect the default settings or any other returns Tax Year 2009 Drake Software User s Manual Archive Manager Archive Manager The Archive Manager is a tool that allows you to archive returns and to review g restore or delete the archived returns This means you can save various versions of a REE return such as the amended return and the original r
87. 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 170 Tax Year 2009 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 You can also calculate one or more returns from the Home window without having to open data entry To calculate returns from the Home window 1 Click Calculate The Batch Calculation dialog box Figure 6 1 displays up to the last nine returns calculated Each return is indicated by a function F key Batch Calculation Enter SSN EIN and press the ENTER key to add it to the list of returns to calculate or press F1 F9 to add returns that are listed on this screen Click OK to start the batch calculation m F1 400001015 CAESAR TEST amp CLEO F2 400001010 PHROZINTOWES TEST F3 400001008 LUCKY TEST F4 400001007 BEHAVIOR TEST F5 400001006 BARRELL TEST F6 400001005 MAPLE TEST F7 400001004 BLOWNAPART TEST amp FRED F8 400001003 ERTIA TEST F9 400001002 LAMB JOHN
88. click Remove All e To change the column order drag items up or down the list in the right pane e To reset columns to original view click Reset 2 Click OK to save your changes Other ways to customize the display click a column header to sort Tip in ascending or descending order adjust column widths by drag ging the edge of a column to the desired width and double click a column header s right border to quickly size to fit 234 Tax Year 2009 Drake Software User s Manual Searching Updating and Filtering and Viewing 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 AP Record text box As you type the client name or ID the CSM searches for and high lights the matching record Click Close to exit Search Updating the CSM To incorporate the latest return updates when the CSM is open either click the A Refresh button or press F5 on your keyboard Refresh N CSM data is updated automatically through different components of UTE the application Processes affecting CSM data include data entry changes return printing e filing and check printing functions Filtering Data in the CSM v r 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
89. 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 141 Additional Child Tax Credit and Combat Pay Drake Software User s Manual 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 either of the EIC Blocker fields in Drake EIC blocker fields are located on screens 8867 and 5 Additional Child Tax Credit and Combat Pay The 8812 screen contains override fields for the following items 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 calculations and generates the form Use the Addi tional Child Tax Credit field on the 8812 screen only if you must override the calcu lation for total earned income See EIC and Combat Pay on page 141 Other Payments Use the following screens to enter other payments from credits Table 5 14 Other Payments from Credits Screen Name of Form 2439 Form 2439 Notice to Shareholder of Undistributed Long Te
90. 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 Drake09 Reports folder Click OK a 302 Tax Year 2009 Drake Software User s Manual Client Status Manager CSM Reports Using Fixed Asset Manager Macros Use the Fixed Asset Manager macros to run a set of standard reports at one time To set up a macro in the Fixed Asset Manager 1 From the Home window select Reports gt Fixed Asset Manager 2 Click Edit Macros to open the Fixed Asset Manager Macros dialog box This box has three drop lists one for type of Report one for Depreciation method and one for Style 3 Select a report depreciation method and style for each report to be printed under the macro 4 Click Save to save your changes and return to the Fixed Asset Manager dialog box Figure 12 10 on page 302 To run the macro select Auto Code Print as the report type and click Run Report Client Status Manager CSM Reports Hash Totals Tax Year 2009 For information on running CSM reports see CSM Reports on page 236 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
91. e VGA monitor capable of 800 X 600 resolution and 256 colors e Internet Explorer 6 0 or later e CD drive e Adobe Acrobat Reader for viewing PDF documents such as the Drake manual NOTE If using Windows Vista it might be necessary to upgrade your ver sion of Adobe Acrobat Reader to version 8 0 or later Version 9 0 might be required if using the 64 bit version of Windows 7 To take maximum advantage of the software s features you must have e A Hewlett Packard HP compatible laser printer e High speed Internet access or a 56K modem e A backup media source such as a USB drive memory stick floppy disk etc e A document feed scanner Drake supports all TWAIN compliant flat bed and document feed scanners for use with the DDM NOTE If you do not have Windows XP and want to back up your data on CD you must use your CD burner software not the Drake backup tool to perform the backup If you have Windows XP or WIndows 7 you can back up directly to the CD without other software Before installing the software close all open programs on your computer Table 2 1 outlines the installation process for the first and subsequent CD shipments Note that both the 2009 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 2009 Drake CD into the drive Insert the 2
92. extension has been filed Amended Letter Similar to the result letter but for an amended return Estimate Payment Provides details for making a 2010 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 Pre season Letter Reminder to 2008 clients that tax season is coming up all applicable packages Post season Letter Customized Supplemental Letter Engagement Letter E file Status Letter Privacy Policy Letter thanking 2009 clients for their business available for all applicable packages Fully customizable template that can be used to create a customer survey package or product offering sheet generic letter client coupon etc Standard engagement letter for tax services Provides 2009 clients with an acknowledgment summary of their e filed returns available for all applicable packages Generic privacy policy for clients K 1 Cover Cover letter for a shareholder partner or fiduciary receiving a Schedule K 1 S corp partnership and fiduciary packages only K 1 Amended Cover letter for a shareholder partner or fiduciary receiving a Schedule K 1 that has been amended S corp partnersh
93. filed 163 non resident 160 NOTES pages 173 opening 58 233 Pay Per Return PPR 20 pay per return PPR 21 practice 68 246 preparation of 87 170 pre prepared entry 286 printing 174 requesting copies from IRS 161 splitting 65 state 68 197 198 statuses of 231 storing information in DDM 305 317 test 68 tracking information on 170 updating from prior year 69 72 viewing and printing 174 184 RIA Checkpoint 252 River City Bank 214 Tax Year 2009 Drake Software User s Manual rollover of pensions annuities 105 Roth IRAs 105 rounding amounts 27 royalties 107 RT Refund Transfer 214 S S corporations changing from C corps 276 sale of residence 102 sales tax 170 saving previously prepared returns 185 scanners 8 310 314 315 scanning DDM files 314 Schedule A Itemized Deductions and application for tentative refund 158 applying to MFS returns 65 depreciation schedules for 149 entering data for 124 125 printing 25 45 Schedule B Interest and Ordinary Dividends entering data for 94 95 order of items listed on 25 printing 25 45 Schedule C Profit or Loss From Business applying expenses to 155 depreciation schedules for 149 e filing 98 entering data for 97 98 for clergy 124 for statutory employees 92 foreign income on 118 Schedule C EZ Net Profit From Business 98 Schedule D Capital Gains and Losses entering AMT cost basis on 100 entering data for 99 importing data from spreadsheet 1
94. following Table 5 7 Form 1116 Required Statements Form 1116 Statement Statement for item 3b Other deductions Number to be Assigned 90 Other deductions statement 91 Passive category Income 92 Lump sum distributions 93 Section 901 j income 94 Certain income re sourced by treaty 95 General category income Directly allocable expenses 96 to list the expenses as a separate statement Compensation for personal income 97 Foreign taxes paid or accrued 98 line A Part Il of Form 1116 99 line B 100 Line C If the return receives reject code 0973 on Form 1116 a statement must be entered as statement number 98 99 or 100 indicating the line of the form see Table 5 7 and stating how the foreign currency was converted into U S dollars For information on adding unformatted statements in Drake see Unformatted Schedules on page 168 Child and Dependent Care Expenses Credit Use the 2441 screen accessible from the General tab for Form 2441 Child and Dependent Care Expenses Screen code 2441 Enter dependent care information on screen 2 Dependents Enter provider information on the 2441 screen Schedule 2 Child and Dependent Care Expenses for Form 1040A Filers is obsolete for the 2009 tax year Form 1040A filers must now use Form 2441 Child and Dependent Care Expenses This is han dled automatically by the program New in 2009 a TSJ box has been added for each
95. 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 The result letter is the standard letter that is printed with a return It tells the client that the return has been prepared from the information provided states the amount of the refund or balance due and provides instructions for mailing the return if paper fil ing The program uses Result Letter 1 as the default To change the default letter for a return go to the LTR screen and select a new letter from the Letter drop list In addition to other result letter templates you can have the program generate a Spanish result letter Figure 2 25 an extension letter or an amended return letter instead of the program default letter 49 Making Changes on the Fly Drake Software User s Manual LTR Custom Paragraph for the Letter Letter v This selection overrides any entry in setup Individual Result Letter 01 Default Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template Individual Result Template 10 Individual Result Spanish 11 Individua
96. for each state program E filing Options under the EF tab are described in Table 2 11 Some of these options can be adjusted for an individual return from the EF screen in data entry A change on a return s EF screen does not affect the global settings selected in Setup gt Options Option Auto generate Taxpayer s PIN 1040 Only Require Ready for EF indicator on Table 2 11 Options Setup EF Description Taxpayers can choose their own PINs or the software can assign a ran domly generated PIN Select this option to require that the Ready for EF indicator on the EF EF screen Lock client data file after EF accep screen be marked before a return can be selected for e filing Select this option to lock the client s data file once it has been e filed tance Locked files are not editable after the IRS accepts them To unlock the file go to Tools gt File Maintenance gt Unlock Client Files Print 9325 when eligible for EF Print Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically for every eligible return Suppress federal EF 1040 only Print EF status page Select this option to prevent e filing of any 1040 return Select this option to have the EF Status page printed whenever a return is Alert preparer when bank product is eligible for e filing Select this option to alert the preparer after each calculation that there is not n
97. foreign tax credit 127 looking up 199 200 troubleshooting acks 194 release notes 249 rental real estate with active participation 110 rentals see also Schedule E Supplemental Income and Loss by clergy 124 converted from home use 103 farm 114 repairing index files 270 report cards ETC 247 reports appointment 85 creating 291 CSM 236 deleting 295 depreciation list 300 filters 293 299 hash totals 303 in Drake 289 303 keywords Appendix C Multi Office Manager MOM 205 Tax Planner 321 reprinting checks 225 Republic Bank 214 requirements e filing see e filing EIC due diligence 140 for bank product eligibility 213 xviii Drake Software User s Manual service bureau 214 system for running Drake software 7 resetting check stock 226 restoring see also backup and restore files archived returns 186 client files 270 271 color settings 40 CSM data 237 DDM files 307 default color palette basic view print 183 letter templates 39 print order settings 43 statuses in the CSM 233 Tax Planner data 322 RET Refund Electronic Transfer 214 retirement income 104 106 returns amending 159 archiving 185 186 calculating 171 174 189 comparing data between 166 creating 58 e filing process 187 207 e mailing to Drake 254 entity packages 990 1120 1120S 1065 323 331 estate 706 277 332 extensions 159 fiduciary 1041 51 115 331 filing late 163 gift 709 160 indicators on 46 ineligible for e filing 198 late
98. 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 64 for more on using the For and Multi form code boxes in Drake Prior Year s Mileage The Prior Year s Mileage field Figure 5 60 allows you to keep a running total of the mileage covered by the vehicle since being placed in service The total amount is used to calculate the cumulative business percentage for the life of the vehicle It is also used to calculate the business cost and sales price when the vehicle is sold Prior Year s Mileage Business Total Figure 5 60 Prior Year s Mileage fields Prior year mileage data is updated each year when you update your system NOTE 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 Expenses for Business Use of Your Home on the 8829 screen accessible from the Adjustments tab Applying 8829 Data to a Form Tax Year 2009 The 8829 screen can be applied to Schedules C and F Form 2016 and Schedule K 1 for Partnership Select the form type from the For menu at the top of the 8829 screen Use the Multi form code box as needed default is 1 See Associating One Screen with Another on page 64 155 Office in Home Special Conditions Form 2106 Drake Software User s Manual The m
99. forms only when required 25 from enhanced view print 174 labels 281 letters batches 279 list of EINs 284 list of firms 15 list of preparers in a firm 19 on the fly 44 optional worksheets 25 options 182 184 organizers and proformas 74 preparer fees withheld 27 printer sets 179 referral coupons 26 return summary 26 sets 42 SSN on bill 27 Tax Planner 321 tax returns 174 taxpayer phone number 27 third party designee 27 using the PRNT screen 44 privacy letter 26 of Home window information 55 private appointments setting up 81 mortgate insurance PMI 109 processing acknowledgments 193 loan checks for bank products 223 proformas 73 76 property disposal of 107 listed 151 on Schedule E 107 personal use of 108 qualified Indian reservation 153 rental of personal 109 sale of 109 section 179 expensing 151 type and usage 107 publications IRS Drake etc 249 purchasing xvii Index Pay Per Return PPR 21 W 2 downloads 93 Q Quick Estimator 21 286 QuickBooks imports 277 R railroad benefits 116 RAL Refund Anticipation Loan 215 Ready for EF indicator 28 real estate 107 110 Real Time Loan 214 receiving acks only 192 recurring appointments setting up 81 referral coupons 26 refunds direct deposit of 143 145 Regulation 7216 Consent to Use and Disclosure of Tax Return Information 15 211 213 reject codes see also acknowledgments due to multiple 2106 forms 118
100. 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 estimates only select Estimates Only from the Federal of Estimates selection drop list By default the estimate payment amounts and dates see Figure 5 56 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 146 Tax Year 2009 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 party designee drop list Options are shown in Table 5 15 along with descriptions of how the options affect the Third Party Designee section on page 2 of Form 1040 Table 5 15 Setup Options for Third Party Designe
101. from Tools gt Install State Programs Once they re installed update the state programs from Tools gt Install Updates Software release notes from prior years are available on the Drake Support site Resources gt Release Notes Select a year and update category to view the list of releases and release dates Click a note link to view the release note To download software to convert data files from other tax programs into Drake for mat go to the Drake Support site and select Resources gt Conversions Choose a tax year and a brand of software Read the instructions available for downloading and printing before running the conversion From the Drake Support site select Training Tools gt Publications to download some commonly accessed IRS publications At the bottom of the publications list is a Search 1040 com for more publications link which takes you to the 1040 com Web site From this site you can search for federal and state tax forms instructions and news get tax tips download tax tables find federal tax estimators and financial calcu lators and get information all professional tax preparers need Advertise your business using the newspaper ads posters banners and radio spots available at the Drake Support site Select Training Tools gt Marketing Kits to access and order these resources visit links to other marketing resources and pick up free marketing kits from the IRS From the Drake Support site click Par
102. 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 Mail N box Status or press CTRL S UTES E mail messages are downloaded only once per EFIN If multiple computers are using the same EFIN consider designating one per son to download Drake e mail and forward it accordingly Tax Year 2009 253 Interactive Support Drake Software User s Manual Message Downloaded messages appear in your Inbox double click a message to open it In Storage addition to the Inbox your mailbox includes a Sent Item box a Drafts box and a Trash box Figure 10 13 Drake 2009 Email Inbo File Message Folder Setup d Send Receive New Figure 10 13 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 been sent e Drafts If you attempt to close a message before sending it you are prompted to save a draft of the message in your Drafts folder to be completed later To accept click Yes To discard the message click No e Trash Deleted messages are stored in Trash To permanently delete a message select it 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 opt
103. if desired To search for a state reject code for an individual return select 1040 and then select the state from the Category drop list before entering the reject code To view Loan Status Codes wording varies by bank select that option You do not have to click Go Explanations are displayed in the lower box To view Bank Decline Reasons select that option and then choose a bank from the drop list You do not have to click Go Explanations are displayed in the lower box Leaving the EF Database Take one of the following actions to close the EF database or access another applica tion from within it e To return to the Drake Home window click Exit The EF database is closed e To open the Online EF Database click F10 Online DB or press F10 The EF database in Drake remains open e To access data entry for a selected return click F5 Data Entry or press F5 The EF database is closed Peer to peer networks only For non transmitting workstations to NOTE view the EF database you must enter the drive letter of the trans mitting machine in the Shared Drive Letter field in Directories and Paths Setup See Directories and Paths Setup on page 21 Online EF Database The online EF database displays real time data on e filed returns You can run reports on returns loans and checks search for e filing information for a single SSN or EIN access the Multi Office Manager MOM view CSM data for one or multiple offic
104. in Setup gt Firm s on page 218 For more on individual bank selections see Chapter 8 Banking 4 Click Save The program assigns a number for each firm entered in Firm Setup N To view a report of the revenue you ve earned from the add on fees DTE for e filing log in to Support Drake Software com and select My Account gt Add on Fees Report Editing Firm To edit a firm s information Information 1 From the Drake Home window go to Setup gt Firm s Shortcut Double 2 Select the firm to edit and click Edit Firm to activate the bottom half of the Firm click a firm s row to edit firm data Setup window 3 Edit the firm information See Adding a Firm on page 14 4 Click Save and then click Exit to close the Firm Setup window Deleting a To delete a firm from Firm Setup Firm 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 Delete 14 Tax Year 2009 Drake Software User s Manual Software Setup Printing a To print a list of firms entered in the program List of Firms 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 Click Exit and then click Exit again to close the Firm Setup wi
105. in the tree directory left column of window 5 Double click the lt Paragraph from LTR screen gt keyword The keyword appears in the letter template 6 Click Save When the return is generated the letter displays the custom paragraph as directed E filing or Ifa return has an EF message when calculated the return is considered ineligible for Paper filing e file and the program generates a result letter for a paper filed return If the return is considered eligible for e file a letter for an e filed return is generated You can over ride these defaults for the federal and state tax returns and extension applications 50 Tax Year 2009 Drake Software User s Manual Making Changes on the Fly Printing Additional Letters To override the defaults go to the LTR screen and select EF or Paper for the selected returns Figure 2 26 To indicate one or more state returns select state abbreviations from the drop lists provided In the Figure 2 26 example the resulting letter will be worded as if both the federal and Arizona returns are going to be e filed Override Options Result Letter Paragraph Override Extension Letter Paragraph Override Setup Options Override keder HEr iEanoriyfEcderal EF I Paper v Customized Supplemental Letter AZ oy M EF Paper ad EF I Paper Paper z IEE I Paper N z Engagement Letter Zi T EF Paper z EF M Paper z Privacy Policy EF Paper z M EF M Paper Zi EF M Paper td EF M Pape
106. indicate where state programs should be installed and updated Paths 1 From the Drake Home window go to Setup gt Directories Paths 2 Select a drive from the Drive Letter for State Programs list This location will be accessed for state programs If this field is set to None state programs will be installed and updated to the location where the Drake program is installed NOTES To access state programs from the Drake CD rather than installing them on the hard drive select the CD ROM drive from the list If you choose this option the state packages will not be updated with the rest of the program 22 Tax Year 2009 Drake Software User s Manual Software Setup Setting Data Paths 3 Click OK The data path settings are determined by the chosen network configuration You should not have to change the path settings after selecting the desired configuration To override a default path in Directories and Paths Setup select Admin Override and then make the necessary path adjustments Click OK to save your changes Options Setup Options setup is not required for completing or e filing tax returns Data Entry Options The tax software is shipped with the most common preferences set as the defaults Use Option Setup to view or change the defaults for the various options available Options are categorized into tabs as shown in Figure 2 10 Administrative users also have an Administrative Options tab Drake 2009
107. individual Rhode Island returns in the previous season to e file their clients individual both resident and non resident state income tax returns for tax year 2008 Preparers filing 100 or more returns of any package individual S corp partnership etc must submit them electronically The mandate is separate for each package 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 Beginning with tax year 2005 tax preparers who file 101 or more income tax returns in a filing period are required to file all such returns using scan technology or e filing 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 or using 2 D bar code technology A tax professional who prepares 100 or more individual income tax returns is required to e file Filing returns on substitute forms using 2D barcodes no longer meets the electronic filing mandate Income tax preparers who filed more than 100 personal income tax returns last year and will be using tax preparation software to complete one or more of these returns must e file them for the current tax year Paid preparers who prepared 100 or more Wisconsin individual returns must e file all Wisconsin individual returns Tax Year 20
108. is not true for your client select Some investment is NOT at risk Business Codes Press To locate a specific business code place the cursor in the Business Code box field B A ie 2 and press CTRL SHIFT S Enter a search term and click Go All codes that include the l search term are displayed as shown in the example in Figure 5 15 Please input search data publishing Go Results 516110 Internet publishing amp broadcasting GT WP a ee F a P ee a we a 1 Figure 5 15 Example of a search using Data Entry Search Select the desired code and click OK or press ENTER Tax Year 2009 97 Self Employment Income Schedule C Drake Software User s Manual Tax Treatment Codes Screen C contains a Special tax treatment code drop list Figure 5 146 E v Special tax treatment code Schedule SE N Exempt notary income D Meals are subject to the DOT hours of service rules P Paper boy excluded from SE under age 18 Figure 5 16 Special tax treatment code drop list on screen C Car and Truck Expenses Use the Auto Expense Worksheet AUTO screen to manage auto related expenses for Schedule C See Auto Expenses on page 155 Depreciation Use the Depreciation Detail 4562 screen to enter depreciable assets for Schedule C To open the 4562 screen without exiting screen C click the Form 4562 hyperlink or place the cursor in the Depreciation field and press CTRL W For more on entering depreciation in Drake see
109. jumps ahead one field from the active field before inserting the data If inserted after the selected data the program inserts the data first then moves the cursor forward a field Escape If the symbol is inserted after the selected data in a macro the program inserts the selected data saves the data and exits the screen D Insert date If D is part of a macro the program enters the current date into the active field Tax Year 2009 33 Software Setup Drake Software User s Manual Table 2 13 Macro Symbols Symbol Action Launch heads down data entry mode If the symbol is inserted after the selected data in a macro the program enters the data then activates heads down data entry To have heads down closed from the macro add a second symbol See Heads Down Data Entry on page 67 Bypass the Existing Forms List when performing the task set by a macro Enter an asterisk only once in any macro and place it at the beginning of the macro When you open a screen that has multiple records an Existing Forms List is displayed and you have the choice of selecting an existing record or creating a new one To bypass the New Record option and open the first record listed enter the symbol in front of the macro For example C opens the first Schedule C record To open the second record enter a 2 inside brackets 2 thus the macro C 2 opens the second C screen C 3 opens
110. letter will state the balance due amount provide the e filing information and give instruc tions for mailing the balance due Because so much of the letters program is automatic you may not have to edit the let ter templates at all If you do have 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 A letter in the Client Communication Editor accessed from Setup gt Letters con tains three categories of letter elements keywords text and conditional paragraphs lt Current Date gt lt Taxpayer Name and Address gt ae Text lt Greeting Title and Last Name gt Conditional Tort Paragraph lt Federal Electronic Filing Paragraph gt Enclosed is your lt Current Tax Year gt Form 1040 U S Individual Income Tax Return prepared fi the information provided Your return will be electronically fled with the IRS once we receive your signed Form 8879 IRS e file Signature Authorization Figure 2 17 A letter template consists of keywords text and conditional paragraphs Keywords appear as red text within angle brackets A keyword is a description of the type of text to be generated and added to the letter For example the keyword Current Date is at the top of each letter When a letter is generated the Current Date key word is replac
111. login e The schedule grid which shows scheduled appointments for each calendar type Figure 4 11 shows the Appointment Scheduler window in Preparer mode Drake 2008 Appointment Scheduler Ys e ew Export Setup Exit nas jana maaan Time Name Comments D a January 2009 Sun Mon Tue Wed Thu Fri 28 29 30 31 T2 4 5 6 7 8 9 11 12 13 14 15 16 18 19 20 21 23 25 26 27 28 29 30 February 2009 Sun Mon Tue Wed Thu Fri 12 oF 4 BB 8 9 10 11 12 13 15 16 17 18 19 20 22 23 24 25 26 27 1 2 3 4 5 6 einai 8 9 10 11 12 13 Z Today 9 22 2008 v a Figure 4 11 Displayed in the Appointment Scheduler window are a toolbar item 1 a calendar overview item 2 calendar tabs item 3 and scheduled appointments item 4 If the user is logged in as an administrative user the Batch Appts button will be dis played in the toolbar See Batch Appointment Generator on page 16 77 Scheduler Setting Up Scheduler Options Drake Software User s Manual 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 e Setup Tab General Click the Setup icon in the Scheduler toolbar The Scheduler Setup consists of two tabs a General tab for default settings and a Calendars tab for setting viewing options for
112. n teen nee 115 Social Security and Railroad Benefits 0 0 ccc ect teen ene neae 116 Other INCOme sumes eraa neire She RA oe ae OE OS wed Goes eae wend aw aoh dae ard el ode wlan 116 Tax Year 2009 ili Table of Contents Drake Software User s Manual Educator Expenses xiv scene s oe aE ea ae aati a ea eRe She Rin a Bie Dobe ed MEd EAE E EE 118 Employee Business Expenses 00 0 ccc eee nen ent e teen e eens 118 Health Savings Account HSA Deduction 0 0000s 119 Moving Expenses es x os chs nia Ghia ed Gee eh Sh SS ee AES Se OS ed tes 2 oe es 119 Self Employment Adjustments 0 00 0 c ccc nnn nn eee ete nen neae 120 Penalties ss sis aicacniesned snan a e a eddies Abate cane E gloves a Aa EA EAA EAA A 122 Alimony Paid 4 2 scock cgi con dok ghd oie te ah ed A E E EA E ARA E EN A wane boas ae 122 IRA Adjustments ccc aca eae tga nee Gace oe Poe Sa edd Cae aw dee boas Gee eee 122 Student Loan Interest Deduction 0 0 e nett een n ene 122 Education Expenses is is dica sc dees e es dohe de ads E E fonglaa dene qua dinca AE A OEE A 122 Domestic Production Activities Deduction 0 0 0 cect teen e eee ene 123 Other Adjustments pa taio aw das aea dee a hate oh ia Sa ha Aa eae Ae ae 123 Standard and Itemized Deductions 1 0 2 0 nent etn e nent n ene 124 Alternative Minimum Tax c ic sc vce ee ae ee eee net Eee EADS aS a EEEE ne be eR Re 126 Foreign Tax Credit s srrsere rieri bene cel weaned Gina ne
113. 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 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 This is done using hierarchy levels The three levels of the reporting hierarchy are shown in Table 7 6 Table 7 6 Online EF Database Hierarchy Levels for companies with multiple EFINs Level Description Master Master EFINs can view all data for the Master EFIN and any Level 1 and Level 2 EFINs configured below it This is the default level 1 Level 1 EFINs can view data for Level 1 EFINs plus any Level 2 EFINs 2 Level 2 EFINs can view only Level 2 EFIN data Building a To build an EF database reporting hierarchy Hierarchy Log in to the online EF database using the Master EFIN 2 Click Options 3 Click Configure EFIN Reporting Hierarchy to view the grid for the EFIN hier archy The top level EFIN is shown in the top row 4 Click add in the top row 5 Enter the EFIN a description optional and your five character Drake
114. now includes hyperlinks which allow easier more concise data entry Hyperlinks allow you to access related screens without having to return to the Data Entry Menu each time Hyperlinks are available in all packages and fall into two categories links and tabs Links Use links to move quickly from a federal screen to another federal screen or from a federal screen to a state screen The example in Figure 3 5 shows that both the INT Interest Income and DIV Dividend Income screens can be directly accessed from screen 3 Income Form 1040 Income F x ST zi CITY zl Description Taxpayer Spouse 7 T able scholarships not reported on WER eerren rieren eeaeee eie 7 Other income reported on line 7 NOT W 2 WageS ss isssssirsrssssrrrersrrsresrrrersnrrrsenenrres 8a Interestincome NO Schedule B required CD 8b Tax exempt interest NO Schedule B required ess essssseccsssseessssseecssseteessnneessnsnes 9 Dividend income NO Schedule B required cece eesceseesesstenteseeseeseesteneesees Cow 10 Taxable refunds n ate anpa Demana gfetin sion OY ete Cam tient seat an aaan Figure 3 5 Hyperlinks from the Income screen to the INT and DIV 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 56 Tax Year 2009 Drake Software User s Manual Creating and Opening Returns for
115. 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 84 Finding a The Lookup feature allows you to find a client s record and insert the client informa Client tion into an Appointment Detail dialog box Record To locate a client record C 1 From the Appointment Detail dialog box click Lookup D T 2 Select the location from which to search Select a client name from the displayed list Clients are listed in alphabetical order by last name or business name 4 Click OK The list is closed and several fields are filled with client data Content is determined by what was entered on screen 1 in data entry Changing To change the details of an appointment that has already been entered into the Sched Appointment uler double click the time slot of the appointment in the Appointment Scheduler Details When the Appointment Detail dialog box for the selected appointment is opened make any changes necessary Click Save Deleting an To delete an appointment from the Scheduler Appointment 1 Double click the appointment time slot in the Appointment Scheduler C
116. on page 117 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 most cases no Schedule B is required if interest and dividend income does not than 1 500 exceed 1 500 Amounts can be entered directly on screen 3 Income Figure 5 9 ST ee lea CL eRe roe cr a lll cache Oa Taxable refunds ha a ani NHS T OO at ac a ON ts Lam aman she te Figure 5 9 Interest and dividend fields on screen 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 N Schedule 1 for Form 1040A is obsolete for the 2009 tax year Form DTE 1040A must now use Schedule B Interest and Ordinary Dividends The program automatically generates Schedule B as required Reporting Certain portions of ordinary dividends domestic dividends not taxable by a state and Portions Of ordina
117. on screen 1 2 Type the surviving spouse s name in the In care of field on screen 1 If tax infor mation should go to someone else enter that person s name instead If there is a name in the In care of field all correspondence generated by the program letters bills etc will be addressed to that person Tax Year 2009 Drake Software User s Manual Exemptions Exemptions Screen code 2 Use screen 2 Dependents accessible from the General tab to complete the Exemptions section of Form 1040 Enter the dependent s required data name SSN etc at the top of screen 2 In Figure 5 2 note that the dependent s age is displayed once the birth date is entered State Information Dependent Information Use lt F3 gt to switch to grid mode AR LA NY EIC NY 272 PA Dependent Last name Months Date of first name if different Suffix SSN Relationship inhome birth SCOUT 400005008 DAUGHTER x joo oO 12042009 Childcare Expense Information Form 2441 ace l 1 ae rr Age determined by Qualifying childcare expenses incurred and paid in 2009 date of birth as of 12 31 2009 Portion of qualifying expenses provided by employer Jautis Enge on sept Atte Ag calle GOP A Leet aa T E ENNE ee ee ee Figure 5 2 Calculated age is displayed Information entered here flows to the Exemptions section of Form 1040 To open a new screen 2 press PAGE DOWN Start a new screen 2 for each dependent to be listed on a retu
118. on the status bar of the screen The number of records is also shown on the Data Entry Menu IL en Oe Ate Stet eg oh J Over 18 and disabled r 2 General Income Adjustments Cy I Not eligible for Child Tax Credit or i I NotU S citizen or resident alien a ong Name and Address 1 2 Dependents 2 3 Income Ca 4 Adjustments a 5 Payments P i i apii Becord 2 of 2 Press Page Down for New Screen Figure 3 13 Multiple instances of a screen are shown in status bar and Data Entry Menu Field Flags Use field flags to set certain fields apart for review Flagged fields are shaded default is green and must be manually verified cleared prior to e filing To flag a field click the field to activate it 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 14 2210 Options PEANO x 2008 Fed tak SSS 2008 State tax Figure 3 14 Flagged fields are shaded default is green When a return with flagged fields is calculated an EF message page is generated This page must be removed in other words all flagged fields must be cleared before the return can be e filed To clear a flagged field place the cursor in the field and press F4 To clear all flagged fields in a screen at once open the screen and press CTRL SHIFT SPACE To clear all flagged fields in the return go to the Data Entry Menu and p
119. 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 N If you encounter an error accessing the Help System run UTE F DrakeO9 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 250 Tax Year 2009 Drake Software User s Manual Content index Search Help Last Year Data An Contacting Drake Supp IRS amp Social Security A Contents Search Type in the kepword to find organizer Organizer Even Organizer Fi ter Selection diz Software Support Contents Index Type in the keyword to find organizers List Topics Select Topic to display Contents Index Search Blank Forms Opening Return Tania a aan Figure 10 10 Contents Index and Search tabs Arranged in a Table of Contents style the Contents tab Figure 10 10 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 The Index tab Figure 10 10 allows you to access the Help index by keyword As you type a keyword into the search field
120. options electronic 145 payroll see Client Write Up PCM see Personal Client Manager PDF files e mailing forms as 148 saving returns as 185 penalties estimated tax 139 for early withdrawal of savings 122 for late filed returns 163 IRA 106 122 Pennsylvania city tax rates 285 penny rounding 27 pensions self employment 121 Personal Client Manager 29 54 piggyback returns 197 PIN signatures auto generating for taxpayer 28 in data entry 148 149 of preparer 16 PMI private mortgage insurance 109 postcards 282 power of attorney 16 149 PPR see Pay Per Return practice returns 68 246 preparer add on fees 218 checklist for EIC 140 mode in Scheduler 76 notes Home window 55 PIN signature 16 schedules 80 86 security settings 16 setup 16 19 pre prepared entry also forms based data entry 286 presidential campaign 88 previously passive activities 110 pricing for a single return 48 maximum minimum fees 33 per item and per form 32 setup 32 printer setup 41 44 printing see also viewing bank product fees withheld 27 bill summary 26 calculation details 174 carryover worksheets 25 checks 223 224 data entry screens 67 Tax Year 2009 Index date of signature 27 depreciation schedules 25 documents only when required 28 due diligence info for homebuyer credit 29 EF status page 28 EIC due diligence documents 29 estimate vouchers 135 filing instructions 26 forms in a certain order 183 forms in a return 178
121. pane to the right of the tree view For more information on view mode see Enhanced View Print 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 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 NOTE 350 For more on setting up pricing in Drake see Pricing Setup on page 32 To suppress the charge for an individual return use the BILL screen See Overriding the Bill Amount on page 47 Use detail worksheets to enter up to 30 items for a numeric field Totals are calculated automatically To use a detail worksheet 1 Select the numeric field to which the worksheet will apply 2 Double click or press CTRL W A Detail Worksheet is opened Figure 3 22 Detail Worksheet Sort Options F1 Description Ascending F2 Description Descending F3 Amount Ascending F4 Amount Descending Title SCHEDULE C LINE 8 ADVERTISING Description Amount RADIO 400 TELEVISION 600 MEVSPAPER 150
122. password protection repeat the previous steps When you click OK you will be asked if you want to remove the password protection Unlocking Client Files If files are automatically locked upon e file acceptance they can be viewed but not changed after e filing The option to lock files automatically is available in Options Setup see E filing on page 28 To unlock a client file that has been locked 1 2 3 From the Home window select Tools gt File Maintenance gt Unlock Client Files Enter the SSN or EIN of the return Click OK The file can now be modified in data entry Deleting Files from the Program A client file is created when a return is prepared A print file is a temporary file that is created when a return is calculated Print files are used for e filing and are automati Tax Year 2009 275 File Maintenance Drake Software User s Manual cally removed from the system after the designated number of days See Options Setup Calculation amp View Print on page 24 to view or change the number of days to store print files Deleting To manually delete print files 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 2 Select the file to delete To delete all files click Select All 3 Click Delete 4 Click OK to return to the Home window
123. program retains the names of all financial institutions when they are entered for Database the first time in data entry The next time the first few letters of a saved name are entered the program auto completes the entry automatically fills the field with information by displaying the whole name To add edit or delete entries from the bank name database place the cursor in a bank name field and press CTRL SHIFT E and follow the instructions that are displayed Tax Year 2009 63 Data Entry Common Screen Fields Associating One Screen with Another 64 Drake Software User s Manual Many screens in Drake have fields labeled TS F ST and City These fields shown in Figure 3 19 are used to apply the data on the screen to the taxpayer or the spouse or both on federal state or city returns Schedule C TS Ss amp F o S ST MI x City DT th Figure 3 19 Screen code examples for Schedule C TS or TSJ Select T if a screen applies to the primary taxpayer S if it applies to the spouse or J if it applies to each spouse equally Default is T e F Code indicates whether the screen data should be used in calculating the fed eral return Data is not carried to the federal return if a zero 0 is entered here e ST Code indicates whether the screen data should be used in calculating a spe cific state return If this field is blank the software uses the resident state by default The data is not carrie
124. provider on the 2441 screen to facilitate proper splitting of the return should the tax payers want to change their filing status from MFJ to MFS NOTES Where to Enter Data Enter data on both the 2441 screen and on screen 2 for each dependent for whom expenses were incurred Tax Year 2009 127 Elderly Disabled Credit Drake Software User s Manual 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 qualifies for the credit the spouse s income must be entered at the bottom of the 2441 screen in the Earned income for 2441 purposes ONLY field Pua tel Oe aT SP ae ey eee E ee E ee ee 15 amount carried over trom 200tranid usedin 2009 during the grace period z E AB Amonio i ae a E aa a E 18 Amount of qualifying expenses incurred in 2009 4 5 20 21 Earned income for 2441 purposes ONLY 24 Amount ofline 14 thatis from your sole proprietorship or partnership cccecccccccccccsssessssesssemeeseeseseee Figure 5 41 Earned income fields on 2441 screen An entry in these fields affects Form 2441 amounts only and must be at least as great as the childcare expenses Employer Provided Dependent Care Benefits Dependent care benefits provided by the employer box 10 on the W2 screen adjust the credit by the amount provided Any amounts above the allowed credit appears on t
125. 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 print 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 Tax Year 2009 Before printing checks you might want to run a test print to ensure that checks will print correctly One test check for each bank is loaded into Drake when you test print a check the program uses the test check matching the bank that is set up as 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 223 Processing the Check Drake Software User s Manual 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 See Figure 8 6 4 Click Print in the Print dialog box Printing Checks for Bank Products 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 M p
126. return Notes to be Notes in the top section of the NOTE screen apply for the current year only To have Updated notes included in subsequent updates use the Miscellaneous Notes box below it Preparer Notepad Screen code PAD The Preparer Notepad PAD screen accessible from the General tab offers an area for keeping more extensive notes and other pertinent return information The contents of this screen are brought forward each year when the return is updated You can also access the PAD screen 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 is a tool for adding statements and explanations not supported else where in the return Some not all unformatted schedules can be e filed An unfor matted schedule can also be saved as an in house note for taxpayer and preparer records only SCH screen amounts do not flow to any other form or schedule The SCH screen is accessible from the Miscellaneous tab or via hyperlinks from other screens where an attached statement is required N Create as many unformatted schedules as needed however DTE unless the software specifically directs you to use the SCH screen for a statement the statement will not be eligible for e filing Types of Ifthe Type of attachment field of any SCH screen is blank the text is attached t
127. returns 42 Windows operating system default printers 41 enabling standard keystrokes 24 print driver GDI 42 using system colors 40 worksheets AUTO 155 carryover 25 detail Ctrl W 66 67 for Schedule D import 100 next year depreciation listing 45 optional on return 25 sale of home HOME screen 102 sales tax 170 Z ZIP code auto fill 23 database 63 Tax Year 2009 Drake Software User s Manual xxii Tax Year 2009
128. s account bypass ing a trip back to the tax office to pick up a paper a paper check See Direct Deposit on page 143 to enter direct deposit information The most frequently used method of bank product delivery is a cashier 5 check printed in the tax preparer s office See Printing Checks for Bank Products on page 224 The E1 Visa Prepaid Card program is also a disbursement option NOTES that can be used with banks see About the E1 Visa Prepaid Bank Denials Card Program on page 210 Banks provide certain non loan products for state refunds Check with your bank for a list of eligible states 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 8 3 if an application is denied Preparing to Offer Bank Products 216 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 the appl
129. screen 1 Tax Year 2009 135 Estimated Taxes Drake Software User s Manual Note in Figure 5 48 that the screen 1 fields are overrides If selections are made on both screens the program disregards the ES screen selection and uses screen 1 Estimate ES codes are shown in Table 5 10 ES Codes Table 5 10 Estimate Codes in Drake Poon Description blank Does not generate estimate vouchers P Generates estimate vouchers with no dollar amounts X Generates estimate vouchers with payments rounded to nearest 5 T Generates estimate vouchers with payments rounded to nearest 10 F Generates estimate vouchers with payments rounded to nearest 25 H Generates estimate vouchers with payments rounded to nearest 100 All vouchers include the taxpayer s SSN name and address Overriding The program divides the estimate amounts equally among the four vouchers To have Voucher different payment amounts displayed on the vouchers you must enter the amounts Amounts manually in the Estimate Amt fields of the ES screen shown in Figure 5 49 NOTE Use the ETA screen to enter estimate adjustments rather than overrides see Estimated Tax Adjustments following Estimated Tax Adjustments Screen code ETA Use the Estimated Tax Adjustments screen if the taxpayer expects a significant change in income the following year If entries are made on this screen the program generates an estimated tax worksheet WK_ES that shows the cal
130. 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 Tax Year 2009 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 67 About State Returns Drake Software User s Manual About State Returns When a return is prepared Drake automatically generates state returns based on data entered for the federal return Calculation is based on the state entered on screen 1 for resident state and on the state codes indicated on ot
131. set globally from Setup 45 Making Changes on the Fly Drake Software User s Manual 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 gt Billing tab and Format can be changed on the fly from within a return Table 2 18 Billing Options that Can Be Changed on the Fly Option Choices Billing Statement Format Total only Forms and total Forms prices and total Bill by time Charge per form Custom Paragraph None Top of bill Bottom of bill Use the override fields on the BILL screen in data entry to override established defaults For more on the BILL screen see Overriding the Bill Amount on page 47 NOTE Write the custom paragraph for the bill in the Custom Paragraph field at Setup gt Options gt Billing tab 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 gt Optional Items on Return tab Calculations and can b
132. tab of the 1120 package Fiduciary 1041 Package INT amp DIV Screens PACR Screen Other New Screens amp Capabilities Tax Year 2009 In addition to updating screens to reflect IRS changes changes to the 1041 package include revised INT and DIV screens and the new PACR screen The interest INT and dividend DIV screens have been updated in the 1041 pack age to match the equivalent screens in the 1040 package These screens reflect the 1099 INT and 1099 DIV forms respectively Data from these screens is carried pri marily to Schedule B Interest and Dividends and when applicable to Form 1116 Foreign Tax Credit For information on how these screens work in Drake see Passive and Investment Income 1099 DIYV etc starting on page 94 of this manual The Passive Activity Credit PACR screen in the 1041 package works the same way as the new PACR screen in the 1040 package For more information see Passive Activity Credits on page 129 Capability for completing the following forms has been added to the 1041 package for tax year 2009 e Form 2210 F Use the 2210 screen and mark the Use 2210F box to generate Form 2210 F Underpayment of Estimated Tax by Farmers and Fishermen e Form 8855 Use screen 8855 to complete Form 8855 Election to Treat a Qual ified Revocable Trust as Part of an Estate e Form 8868 Use screen 8868 to complete Form 8868 Application for Exten sion of Time to File an
133. test print a check LI Set bank fees and complete Firm Setup in the software Review Equipment Staff Needs U Learn about tax law changes Do online research visit and study the IRS Web site and state tax departments sites U Learn new phaseout limits Be prepared to explain to your clients why they no longer receive benefits they ve received in the past m Review or learn EIC rules Prepare for EIC due diligence interviews m Review staffing needs Set staff software security levels m 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 O Ovo O Check scanner Review Drake recommended scanners If necessary purchase a scanner to use with the Drake Document Manager L Purchase office supplies These include folders envelopes paper and toner Install and Set Up Software LI Review system requirements for installation See System Requirements on page 7 LJ Install the 2009 Drake Software CD Refer to your shipment letter or see Installation on page 8 L Customize program settings Complete required and optional program settings Check the packing slip to verify your EFI
134. the Zero Due address listed on Pennsylva nia s Municipal Tax Information Web site 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 Pennsylvania municipality select Allow penny rounding 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 285 Forms Based Data Entry Drake Software User s Manual 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 N Penny rounding can be set globally from Setup gt Options gt Optional DTE Items on Return Note that amounts on federal returns must be rounded to the nearest dollar in order to be eligible for e filing Forms Based Data Entry Formerly known as pre prepared forms based data entry allows you to enter a previ ously prepared return into the tax software To enter a pre prepared return in Drake 1 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 particu
135. the data shown in Figure 5 25 TRAC Table 5 24 TRAC Screen Information Type of Information Fee and Payments Description Amounts are updated from prior year Return preparation from first meeting to client pickup to date completed Used in timed billing optional feature Current year bank product data Number and amount of check are com pleted automatically preparer must enter the date the check is picked up Prior year bank product data Dates and amounts are retained from prior year Software stats for the return admin users only These fields are completed automatically EF transmission data admin users only Bank codes admin users only These fields are completed automatically These fields are completed automatically Note that some TRAC screen fields are automatically filled with data from elsewhere 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 NOTE Some data from the TRAC screen can be incorporated into Report Manager and Client Status Manager CSM reports Sales Tax Worksheet Screen code The software uses data entered into the State amp Local General Sales Tax Deduction STAX 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
136. the dependent are MFS and reside in different states Enter a state code disabled adopted etc as applicable To view all state codes place the cursor in the State codes field and press F1 Double click a displayed code to select it Additional Dependent Information It could be necessary to override or further clarify dependent information entered on screen 2 Some examples are if a child is over 18 and disabled or is not a U S citizen Use the Additional Information section of screen 2 for this kind of information Personal Service Income W 2 1099 MISC Use the W2 and 99M screens both accessible from the General tab to enter personal service income data from a taxpayer s W 2 and 1099 MISC forms respectively 90 Tax Year 2009 Drake Software User s Manual Personal Service Income W 2 1099 MISC W 2 Screen code W2 The W2 screen is designed to reflect the IRS Form W 2 Wage and Tax Statement Accuracy of Data entered on the W2 screen must match the client s W 2 form The following fields W 2 Data can be completed automatically by the program e Names and Addresses The employer information can be filled in automati cally if the EIN is in your Drake database The employee information is not required unless it is different from that provided on screen 1 e Wages and Withholding When wages are entered in box 1 of the W2 screen boxes 3 6 are filled automatically These amounts should match those on the W 2
137. to have your firm s information and logo generated on client bills and letters Letterhead To set up your letterhead 1 Inthe Client Communications Editor go to Setup gt Letterhead and Margins You can also use 2 Select options from the Letter Bill Indicators section the Client Commu og ae nications Editor to 3 Designate Coordinates In the right column number settings indicate the position a igs aaa head of the firm information and logo Settings for the default graphic are e Left most column for logo 8 e Top most row for logo 3 e Left most column for firm info 25 e Top most row for firm Info 4 4 Enter the path to the graphic in the Path Filename for Bitmap Logo text box or use the Browse button The full path and filename are required To use the simple default graphic enter C DRAKEO9 CF LOGO BMP C indicates the drive letter to which the program is installed Change if necessary Leave blank for no logo 5 Click OK Changing The left margin of a letter can be changed to suit your printing needs To change the Letter left margin of the default letter Margins 1 Inthe Client Communications Editor select Setup gt Letterhead and Margins 2 Enter a number under the Left Margin Adjustment box Figure 2 21 38 Tax Year 2009 Drake Software User s Manual Software Setup Drake 2009 Setup Letterhead Set up Letterhead Logo Letter Bill Indicators Select desired
138. tools and file maintenance capabilities available on the Tools menu and includes details on other Drake tools and accessories Update Manager Use the Update Manager formerly Install Updates to obtain and then install files to update the federal and state packages of the program Updates include modifications in both the federal and state packages to reflect the most recent changes in the tax law If you haven t installed updates yet you must first create an update profile The software automatically looks for and installs updates for all tax NOTE packages and installed states Program updates do not include updates to the Drake Document Manager DDM DDM updates are handled through the DDM Update Manager see Updating the DDM on page 307 Updates can be downloaded manually or you can set up to program to download them automatically Downloading and Installing Updates Manually To download and install updates manually 1 From the Home window select Tools gt Update Manager The Update Manager dialog box is displayed Figure 11 1 Tax Year 2009 263 Update Manager Drake Software User s Manual Drake 2009 Update Manager Drake Update Manager Use this screen to obtain and install updates to your software State tax programs can be installed by using the Drake Tax Software CD ROM Manual Updates Automatic Updates Check For Available Updates Auto Updates is currently turned on View Release Notes Auto Updat
139. up pricing for e Collect access Setup gt Pricing from the NOTE Home window and enter the desired price 40 max for Form 190 e Collect Product Information See Pricing Setup on page 32 for more information on setting up pricing About the E1 Visa Prepaid Card Program 210 The E1 Card is a versatile product in that it can be used as disbursement option for either the e Collect program or the traditional bank products offered through Drake s banking partners Chase Republic Bank River City Bank and Santa Barbara Tax Products Group LLC To set up pricing for the E1 Card access Setup gt Pricing from the NOTE Home window and enter the desired price 10 max for Form 189 E1 Card Product Information See Pricing Setup on page 32 for more information on setting up pricing If you re offering the E1 Card you will provide your client with the card at the time of tax preparation Once funds have been loaded onto the E1 Card generally within hours of bank approval your client can receive notification by e mail or text mes sage The refund amount must be larger than the sum of the preparer fees service bureau fees and any Drake fees A minimum first time load amount of 10 applies This card can be used year round and clients can reload it at any time using one of the following methods e By direct deposit of their payroll e By direct deposit of government benefits e Through an approved E1 Card reloa
140. wane do Gate ae eo Se 143 Electronic Payment Options 1 0 0 eee nee n tenn eens 145 Third Party Designee crios t cad ses eee ce he bene he Ok he See ee ee ee ee ees 146 Sienme the Reu0 yi4 0 dour sa ved beanie ee ete wee ee dee eee haere Ren E eens 148 D preciatiOnus och tcts eeeks Galera bdo Re Pat Pe abe hei bidu Maat dene eed beaks 149 Auto EXPenseS iis eair adi 4 006 Paradis se eiaha Bae Medea Edo le Mag Maw hag Ad Owe es oe A A 155 Office in HOMeC iis ahs a hee tate ache E nee Ea Hebe BORA Mes week Geneon deindye Ress 155 Net Operating LOSS S torrare erene inete E ee eleods eeee nde velew ed alee es been e anaes 157 Election Options 0 0 ne enn ett nent e teens 158 Special Returns sc basen e detach doud dud dacaee boa td oda na a eden da dees 158 Requests Claims and Other Forms 0 ccc een tenn eens 161 Features for Late Filed Returns 0 riy duat s ta ia eee n enn E eens 163 Other Special Features in Data Entry 2 0 cence nee n eens 166 Retur Results oerna Aai 171 Calculating Retutn cessere coda aed cod Bod ets edhe Sed ood A O ears 171 Calculation Results cp 244 024 fd dda ed dead dawad dd a a A oda datendweatawwabans 172 iv Tax Year 2009 Drake Software User s Manual Table of Contents Viewing and Printing a Return 0 nett ete e nent n nee 174 E mailing from View Print 0 0 eee t eet e teen eens 180 Setting Up View Print Options 0 0 een EE GAER E teen teen ene 182
141. with multiple computers but no network might have to copy data from com puter to computer using a disk USB flash drive or other memory storage device M H RTANT Copying EF data from one computer to another is not recommended for firms that use a network Copying to Another Location To copy EF data from a computer to a memory storage device 1 From the Home window select EF gt Copy EF Returns to Disk and select the boxes of the returns to copy Click Select All or Unselect All as needed TIP Click column headers to sort in ascending or descending order 2 Click Continue 206 Tax Year 2009 Drake Software User s Manual About State Filing 3 Select the output drive from Select Drive then click Copy Files Figure 7 13 pe o an x s 3 a Dd aes PREA A i Pe 2 4 i tee Bu a rs amt nee fed rw Sep ae ad be et y Select Drive D CD ROM Drive Drake08 E xport hd Figure 7 13 Copying files to CD 4 Click OK after files are copied Copying From a Storage Device To copy EF information from a data storage device 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 and then click OK to copy each file Click Exit to close About State Filing Tax Year 2009 Most states accept e filed returns and some require it or have regulations that deter mine at what point a
142. x 11 paper select Landscape to produce it horizontally Tax Year 2009 Drake Software User s Manual Software Setup Table 2 6 Options Setup Calculation amp View Print Option Pause option for calculation Description Choose the circumstances under which the Calculation Results win dow appears allowing a review of calculation results before proceed ing to View Print mode Number of days to store print files Select to store print files from 1 to 9 days or to have them removed after being selected for e filing If a return is needed after the print file is removed recalculate the return to recreate the print file Print sort options for Interest Dividends Choose how items entered on the INT and DIV screens are sorted when printed on Schedule B alphabetically numerically or not at all Form amp Options under the Form amp Schedule Options tab are described in Table 2 7 Schedule 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 Mini
143. 0 M 9465 only NV 56 only Do NOT send Federal Figure 7 6 Federal E file Override options in this example Form 56 will be e filed Be aware that if Form 9465 or Form 56 are ready to be e filed they will be transmit ted automatically By selecting 9465 only or 56 only you are indicating that the pro gram should transmit only those forms M p 0 RTANT Leaving the 1040 box blank does not prevent the 1040 from being transmitted if it is otherwise ready to be e filed If filing an extension the applicable box 4868 or 2350 must be selected on the EF screen in order for the program to transmit it E filing State Returns State returns can be e filed using one of two methods If e filed directly the state return is sent directly to the state If e filed piggyback the state file is attached to the federal return and the IRS then sends it to the state When you e file with Drake the program sends the resident state return piggyback by default Any other eligible state returns are sent directly to the applicable states To transmit a different state return piggyback go to the EF screen and select a state from the Select state for piggyback e file drop list Any other eligible state returns will be sent directly to the applicable state To suppress one state or city return while e filing others select the states or cities you want to e file from the Select other states cities to e file drop lists In the example in Figure 7 7 the
144. 00 Figure 5 67 Enter available rates for each applicable quarter Setup gt Options gt Optional Items on Return tab 3 Click OK to exit the screen and save the settings If the Automatically calculate box is marked the program applies the rates to all late filed returns If it is not marked the pro gram 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 Overriding The LATE screen has the following fields for overriding penalty and interest amounts Program that would otherwise be calculated by the program Calculations 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 Tax Year 2009 165 Other Special Features in Data Entry Drake Software User s Manual 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 Comparing Tax Returns Screen code COMP 166 In
145. 00 sale of home 103 Schedule E Supplemental Income and Loss activity types 107 110 applying expenses to 155 depreciation schedules for 149 entering data for 107 109 using for farm income amp expenses Form 1041 115 Schedule F Profit or Loss From Farming applying expenses to 155 depreciation schedules for 149 entering data for 114 115 Schedule H Household Employment Taxes 132 Schedule J Income Averaging for Farmers and Fishermen 114 Schedule K 1 Share of Income Deductions Credits etc accessing screens 109 applying expenses to 155 Tax Year 2009 Index basis worksheets for 112 entering data for 109 112 exporting data from another return 111 letters 26 37 45 51 printing page 2 25 state amounts if different from federal 110 Schedule R Credit for the Elderly or the Disabled 128 Schedule SE Self Employment Tax 120 Scheduler 76 86 establishing daily schedules 79 new features this year 76 reports 85 289 searching 84 screen captures 67 search conditions in Filter Manager 296 298 searching appointments 84 business codes 97 city codes 88 CSM 235 DDM 312 Drake Software User s Manual 1 EF database 199 federal and state publications 249 Help feature in Drake 250 Knowledge Base 241 preparers 19 reject codes 200 201 reports 296 student records ETC 247 section 179 expensing entering data for 150 152 for general partner on K1P screen 110 report of assets 301 security Document Manager 309 gr
146. 009 Drake CD into the drive Wait for the Drake 2009 Software Pro Wait for the Drake 2009 Software Pro grams window to be opened grams window to be opened 2 Click Install Drake 2009 Tax Software Click Install Drake 2009 Tax Software 3 Accept the Drake Software 2009 Accept the Drake Software 2009 License Agreement Click Next License Agreement Click Next 4 Ensure that Install 2009 Drake Tax Optional Select Install State Tax Pro Software is selected both this and the DDM should be marked by default States are not available on this ship ment Click Next grams Click Next Tax Year 2009 Drake Software User s Manual Step Installation Table 2 1 CD Installation First CD Shipment Select a drive or select New to install to a new location Optional Select Install test returns if you are going to test e fil ing capabilities Click Next Subsequent CDs Select a drive or select New to install to a new location Click Next Enter the serial number from your soft ware packing slip Click Next Enter the serial number from your soft ware packing slip Click Next If you chose New in step 5 select an installation drive and click Next Select an installation drive from the list of available drives Click Next If you chose to install the DDM in Step 4 select an installation drive and click Next Select states to install from the States on CD listing Click Next
147. 09 Drake Software User s Manual Appendix F Addenda Pages for 2009 Appendix F Addenda Pages for 2009 As changes are made to the software to reflect IRS changes and improve the user experience for tax prepar ers the Drake Software User s Manual is updated accordingly The manual is provided in electronic ver sion on your CD online and as a hard copy which can be ordered from Drake Software for a fee To access the online manual e From the Drake Home window select Help gt Drake Software Online Manual e From the Drake Support site select Training Tools gt Manuals and click the link for the 2009 manual Note to dial up users The PDF document is large and will take time to download We suggest that you use the version on your latest CD rather than trying to download the PDF The manual is updated via addenda pages that can be inserted into a paper manual or accessed electroni cally as needed This appendix is a guide to the addenda pages added to the Drake Software User s Manual in 2009 This appendix will be updated regularly throughout tax season Addenda pages are available on the Support site and are shipped with each new CD Table F 1 Addenda Pages for 2009 Updates to this table begin with the second CD shipment New Replaces Page Page Explanation 281 281B 281 New steps to printing labels from data entry 28A 28B 28 Correction to procedure to unlock client files Tax Year 2009 F 1 Drake Softw
148. 10 400 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 Click the Link File button from the DDM toolbar Browse to and select the document to be linked Click Open The link is indicated in the Type column of the DDM i Type N Last Modified St LINKED DOC File 10 14 2009 13 51 50 3 ae a a ead ee E T a E 3 APON Consentto Use of Tax Return Informatio Figure 13 9 Link is indicated in Type column of DDM Each time an action occurs to a file the DDM makes note of it in an audit log An action includes importing linking exporting copying moving opening and renam ing The audit log records the action the date the action was taken and the user who performed the action It also shows the document name and path and has a field for entering a document description To access the DDM Audit Log select a file from the DDM document list and choose Properties from the right click menu or click F9 If desired enter a description of the document in the Audit Log
149. 115 Change in Accounting Method Used to access fields for Form 3115 including Parts I through IV and Schedules A through D 327 Entity Packages 328 Form 4720 Drake Software User s Manual e Screen 311E Schedule E Used to request a change in depreciation or amorti zation methods e Screen ATT Explanations and Attachments Used to create and view cer tain attachments to be generated by the software Screen ATT2 Pt II Ln 12 amp Pt II Ln 23b Attachment Used to complete certain parts of Form 3115 that require specific attachments In many cases attachments are required for data entered in the Form 3115 screens Screens ATT and ATT2 are used to provide the data for these attachments Individual lines typically have links to an attachment screen if an attachment is required Detailed information on completing these screens will be provided in the applicable manual supplements to be published in 2010 Form 4720 Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code is available in the 990 package It cannot be e filed Several screens must be used in order to complete Form 4720 in Drake All screens listed below are available from the Other Forms tab or by typing the screen code into the selector field and pressing ENTER e 4720 screen Contains fields for Parts I and II B and Schedules B and G acces sible from the Other Forms tab EVNT Event Schedules screen
150. 127 claiming if married filing separately 90 education credits for 123 EIC information for 139 Drake Software User s Manual kiddie tax 133 134 release of claim to exemption Form 8332 161 state related data 90 tuition and fees deductions for 123 depreciation see also depreciation schedules see also section 179 expensing elections 154 in data entry 149 154 of farm assets 115 of home 152 156 of sold assets 153 of traded assets 103 reports and lists 300 303 stopping depreciation on an asset 153 depreciation schedules for 2009 25 generated in Drake 149 layout portrait or landscape 24 detail Ctrl W worksheets 66 67 direct debit consent Form 8879 148 from multiple accounts 146 of balance due 145 146 of estimates 146 direct deposit of bank products 200 216 of refunds 143 145 to multiple accounts 144 direct expenses on Schedule E 108 directories and paths 21 23 disabling grid data entry 61 disaster payments farm 114 special tax treatment due to 46 104 disposal of property 107 dividends and interest 94 96 document control numbers see DCNs Document Manager installing 8 printer setup 44 using 305 317 dollar rounding 27 domestic production activities deduction 123 downloading ABC Voice Files 205 automatic updates 265 conversion software 249 Drake tax software 249 e mail messages 253 fonts 268 prior year state programs 249 program updates 263 publications
151. 13 0 11 02 2009 12 5 10 22 2009 16 2 11 02 2009 12 5 10 19 2009 13 1 05 26 2009 14 4 10 19 2009 12 4 10 28 2009 13 2 10 27 2009 18 5 10 19 2009 12 5 11 02 2009 12 5 10 16 2009 18 0 10 26 2009 13 3 10 27 2009 12 4 Prep ADMIN 6 Updated Drive C Windows XP Figure 3 2 Drake Home window 11 02 2009 Reminders off New in 2009 the Home window has the following new features the Personal Client Manager item 7 in Figure 3 2 a section for preparer notes item 8 in Figure 3 2 and an Enable Privacy button top of item 7 in Figure 3 2 Personal Client Manager 54 The Personal Client Manager PCM allows a logged in preparer to manage client returns more easily by providing a personalized version of the Client Status Manager CSM Client records can be sorted by name return type status date the return was Tax Year 2009 Drake Software User s Manual General Navigation started or completed date of last change transmission date acknowledgement code or date and phone number To sort records click a column header N The PCM operates much the same as the CSM For more specific UTE instructions 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 gt Administrative Options tab and select the Enable logged in preparer s Personal Client
152. 2 updates 263 interest and dividends 94 96 and penalty for late filed returns 163 rates manually entering 165 IRA adjustments 122 contributions 105 converting to Roth 105 income not reported on 1099 R 104 penalty computations 106 IRAL Instant RAL 215 IRS Regulation 7216 Consent to Use and Disclosure of Tax Return Information 15 211 213 itemized deductions 124 K K 1 see Schedule K 1 KB see Knowledge Base key combinations 56 60 keyboard 56 keywords Appendix C Kiddie Tax 133 134 Knowledge Base KB 240 L labels 280 language Spanish 24 late filed returns 163 165 letterhead for bills and letters 38 letters about 35 37 available templates 37 batch 279 281 bringing forward from last year 40 Tax Year 2009 Index Client Communications Editor 35 customized supplemental 26 default templates 26 editing a template 37 engagement 26 envelopes 282 estimate payment reminders 279 K 1 1120S 1065 1041 only 26 37 45 keywords Appendix C letterhead 38 mailing labels 280 margins adjusting 38 overrides LTR screen 49 printing 42 279 privacy 26 restoring 39 setup 37 viewing 39 lifetime learning credit 123 like kind exchanges 103 listed property types 151 live payroll see Client Write Up loans see bank products logging in as ADMIN 9 to Drake 9 53 to ETC 243 to online EF database 202 logging out of Drake 53 long term care insurance 117 losses capital gains and 99 net operating NOLs 157
153. 250 Gain If unrecaptured section 1250 gain is present enter the gain amount on screen 6252 just above the Part II head ing The taxable amount is calculated on the WK_1250 worksheet and is car ried to Schedule D line 19 based on these calculations 4 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 hap N DTE pens the return may not be eligible for e filing If recapture is neces sary the two 4797 forms cannot be avoided and the return must be paper filed f there is no recapture delete the second 4797 form for the asset and recalculate the return Basis of Primary Residence Screen code HOME Related Worksheets 102 Updating from the Prior Year Use the HOME screen to accomplish the following tasks e Report the sale of a primary residence e Enter data to determine the taxpayer s basis in the primary residence and calculate the tax implications of the transaction e Allow the program to reduce the maximum exclusion if the taxpayer is eligible for part but not all of the gain exclusion 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 was taken on the home A Primary Residence Calculations workshe
154. 3 Entity Packages Drake Software User s Manual NOTE For information on overrides and adjustments in Drake see Over ride amp Adjustment Fields on page 63 Access these guides from the FAQ screen of the 1120 1120S and 1065 packages Each worksheet includes information on the tax package name the screen containing the adjustment or override field the field itself and the location of the information being adjusted or overridden New E filing Features Drake now provides customers with the ability to e file the following special types of business returns e Returns for entities using a 52 53 week year e Short year returns e Inactive returns This new capability is available in the corporation 1120 S corporation 1120S and partnership 1065 packages Electing a To elect a 52 53 week year a new entity one that has never filed a return must enter 52 53 Week data on both screen 1 and the ELEC screen Year Initial Return To elect a 52 53 week year for any entity 1 In the If not calendar year section of screen 1 enter the Fiscal year beginning and Fiscal year ending dates Use MMDDYYYY format as shown in the exam ple in Figure 14 1 2 Mark the 52 53 week tax year box If not calendar year Fiscal year begine b2726 2009 Fiscal year endS 91 01 2010 52 53 week tax year ELEC Figure 14 1 In this example the fiscal year begins 12 26 09 and ends 1 1 10 the
155. 5329 To access the 5329 screen directly from the 1099 screen click the blue Form 5329 hyperlink shown in Figure 5 23 On the 5329 screen exception numbers 01 and 06 Part I line 2 apply only to distri butions from qualified employee plans not to those from IRAs annuities or modi fied endowment contracts To view full descriptions of each exception number place the cursor in the Exception number field and press F1 Supplemental Income 106 Links for Schedule E and K 1 screens are located in the Schedules E and K1 section of the Income tab Tax Year 2009 Drake Software User s Manual Supplemental Income Schedule E Screen code E Schedule and K F Rent and Royalty Income KIP Partnership K 1 Parts of K1F Fiduciary K 1 Schedule E K b SK z E2 Partnerships S Corps pe oe prd E3 Estates and Trusts ncome tab E4 REMICs Figure 5 24 Screens for entering Schedule E data Use screen E to complete Page 1 of Schedule E Part I Income or Loss From Rental Real Estate and Royalties Page 2 of Schedule E Parts II through V is calculated from K 1 schedules The corresponding screens in Drake E2 E3 and E4 primarily contain override fields data entered here overrides amounts that would otherwise flow from the K 1 Enter data on one of these screens only if transcribing the informa tion from a Schedule E that has already been calculated and completed by hand NEW FOR 2009 General Property Information
156. 65 Credit for Increasing Research Activities 8396 Form 8396 Mortgage Interest Credit 8586 Form 8586 Low Income Housing Credit 8609 Form 8609 Low Income Housing Credit Allocation and Certification 8801 Form 8801 Credit for Prior Year Minimum Tax 8820 Form 8820 Orphan Drug Credit 8826 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 8864 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 8874 Form 8874 New Markets Credit 8880 Form 8880 Retirement Savings Credit 8881 Form 8881 Credit for Small Employer Pension Plan Startup Costs 8882 Form 8882 Credit for Employer Provided Childcare Facilities and Services 8885 Form 8885 Health Coverage Tax Credit 8896 Form 8896 Low Sulfur Diesel Fuel Production Credit 131 Unreported Social Security and Medicare Tax Drake Software User s Manual Table 5 8 Other Credits Calculated in Drake Screen Form and Credit 8907 Form 8907 Nonconventional Source Fuel Credit 8908 Form 8908 Energy Efficient Home Credit 8909 Form 8909 En
157. 7 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 To do so press ESC to exit each window press ESC again to exit the Flag Fields for Review window and then click Exit 8 Click OK to save your changes and exit Setup 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 Penner 100 lt lt Direct entry field ae 100 Override field AE i 100 Adjustment field KNOR Aoo Figure 3 18 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 entered A positive number increases the calculated amount a negative number decreases it ZIP Code When a ZIP code is entered on a data entry screen the city and state fields are filled Database automatically by default from the program s ZIP code database There is no need to enter the city and state EIN When new employer data is entered on a screen the program stores the EIN business Database name and business address in the EIN database The next time the EIN is entered on a W2 1099 or 2441 screen the business name and address automatically appear in the required fields Bank Name The
158. 7 8 Form 8453 Paper Document Indicators M Appendix A l Form 8283 Select all paper document indicators that apply For I Form 1098 c I Form 9332 more information on the paper document indicators T Form 3115 l Form 9858 click the Screen Help button atthe top of the screen Form 3468 Form 8864 M Form 4136 Form 8885 l Form 5713 Schedule D 1 Figure 7 8 Form 8453 section of EF screen When the return is generated Form 8453 is included with the applicable boxes marked to indicate what forms will be mailed Click Screen Help at the top of the EF screen for more information on Form 8453 198 Tax Year 2009 Drake Software User s Manual EF Database EF Database The EF database is a searchable database that displays information about all returns your office has e filed for the current tax year gt To search the EF database 1 2 3 From the Home window click EF gt Search EF Database Enter an SSN EIN or name in the SSN EIN Name To Search For field of the Search EF Database window Figure 7 9 To browse all records leave this field blank SSN EIN To Search For SSN Name 400001001 Taxpayer 400001001 JOHN amp JANE lt DOE Spouse 400002001 F1 General Information F2 Bank Direct Deposit Info F3 Fees Miscellaneous Info F4 Reject Code Lookup Figure 7 9 Search EF Database window Click Go To scroll through the records use the arrows at the bottom of the screen or press PAG
159. 709 documents if applicable A tree view directory of all forms worksheets and other documents in a return allows you to view at a glance the components of a return Expand or collapse the tree as necessary for your viewing needs The preview pane provides a preview of a selected document within the return To preview a document click the document name in the tree view Viewing in Enhanced View Print NOTE To view a document in Enhanced View Print mode 1 Open Enhanced View Print for a return The All Forms tab is shown by default 2 Expand the tree view as needed and click the name of a form to view To view a form click the form name Do not select the box next to the form This is a printing function and is described in Printing from Enhanced View Print following Printing from Enhanced View Print Tax Year 2009 You can print selected forms selected sets of forms or individual forms in a return 177 Viewing and Printing a Return Drake Software User s Manual Printing To print tax return forms and other documents from Enhanced View Print Forms ina Return 1 Open Enhanced View Print for a return The All Forms tab is shown by default 2 Collapse or expand the tree view as needed and select the forms to be printed To print all forms in a set select all of the boxes in the tree view under All Forms NOTE If the main box of a set is selected all sub boxes are automatically selected Shortcut Press 3
160. 88 firm setup 13 15 First Advance RAL 214 first time homebuyer credit 142 Fixed Asset Manager 300 flags activating 61 clearing 29 customizing 29 in all returns global 62 fonts for printing tax forms 42 268 foreign account reporting 162 earned income 117 employers 91 interest and dividends 95 mailing address 88 tax credit 126 127 Form 56 Notice Concerning Fiduciary Relationship 149 162 196 Form 706 U S Estate and Generation Skipping Transfer Tax Return 277 Form 706 A U S Additional Estate Tax Return 277 Tax Year 2009 Drake Software User s Manual Form 709 U S Gift and Generation Skipping Transfer Tax Return 160 Form 90 22 1 Report of Foreign Bank and Financial Ac counts 162 Form 940 see Client Write Up Form 944 see Client Write Up Form 944SS see Client Write Up Form 970 Application to Use LIFO Inventory Method 161 Form 982 Reduction of Tax Attributes Due to Discharge of Indebtedness 162 Form 1040 U S Individual Income Tax Return 87 170 Form 1040NR U S Nonresident Alien Income Tax Re turn 160 Form 1040X Amended U S Individual Income Tax Re turn 159 Form 1045 Application for Tentative Refund 158 161 Form 1098 Mortgage Interest Statement 125 Form 1098 C Contribution of Motor Vehicles Boats amp Airplanes 125 Form 1098 T Tuition Payments Statement 123 Form 1099 C Cancellation of Debt 117 Form 1099 DIV Dividends and Distributions 94 96 Form 1099 H
161. 8917 screen to enter tuition and fees deductions for the taxpayer or spouse To enter tuition and fees deductions for a dependent use the Education Expense Infor mation section of screen 2 Education Credits Use the 8863 screen to enter education credit information for the taxpayer or spouse To enter education credit information for a dependent use the Education Expense Information section of screen 2 NOTE If a dependent does not qualify for an education credit the software does not apply this information when calculating the federal return Education When entering education expenses complete either the American Opportunity Credit Types Credit the Hope Credit or the Lifetime Learning Credit field as applicable 1098 T Enter amounts from Form 1098 T Tuition Payments Statement on the 8863 screen NOTE Use screen 3 to enter the amount received from any taxable schol arship that was not reported on a W 2 or 1098 T Domestic Production Activities Deduction Use the 8903 screen accessible from the Adjustments tab for Form 8903 Domestic Production Activities Deduction Screen code 8903 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 T
162. 9 241 Online Support Drake Software User s Manual Navigation From within each KB article you can use the icons at the top right corner of the win Icons dow to return to the previous article print or e mail the article save the article to a browser s Favorites folder or save the article to another location Related A Related Articles link at the bottom left corner of an article window indicates that Articles the KB has other articles related to the one you queried Feedback Drake encourages you to respond to any article you read in the KB Your suggestions are used to improve the KB s content for other clients In the bottom left corner of an article window click Feedback to open the feedback window Enter your feedback and click Submit Drake Electronic Training Center ETC Drake ETC is a convenient resource for training your office staff using tutorials prac tice returns videos and interactive tax courses ETC also provides tracking tools and interactive testing so individuals and group administrators can monitor their personal and collective progress To access Drake ETC go to the Drake Support site and select Training Tools gt Drake ETC NOTE ETC is free for Drake clients People who are not Drake customers can also use ETC but certain fees apply Creating an Before you can log in to ETC your office must have an ETC administrator Admin ETC Admin account Once the account is established you can create
163. 9 4 CTRL L to view the filter list i v All Preparers Filter by o T preparer gt urrent Preparer All Status Types Work In Progress Filter by Completed Returns status gt EF Not Sent EF Pending EF Accepted EF Rejected Missing Files All Return Types All Business Returns Individual 1040 Filter by BE Corporate 1120 return type Sub S 11205 Partnership 1065 Fiduciary 1041 Estate Tax 706 4 Tax Exempt 990 Hide or Hide Inactive Returns display gt Hide Completed Returns returns Display Deleted Records Figure 9 4 CSM filter list 3 Select filters You can select one filter from each of the first three lists and any or all of the filters in the bottom list A selected filter is indicated by a check mark Tax Year 2009 235 CSM Reports Drake Software User s Manual The CSM displays the files that fall within the selected filters NOTE In the Status column a red File Not Found message indicates a deleted return Deleted files stay in the CSM for tracking purposes Quick View The Client Quick View window summarizes the CSM data for a selected record To 373 open this window for a client in the CSM select a client row and click Quick View Besa Displayed are client information preparer and firm information significant dates and actions regarding the return and the amount of the refund or balance due From the Client Quick View window click Print to print the data or click Open to open t
164. 99 INT Interest Income Consent to Disclosure of Tax Return Info 1099 G Government Payments Direct Deposit Form 8888 1099 MISC Miscellaneous Income Electronic Funds Withdrawal RRB 1099 R Railroad Retirement 8879 8878 e file Signature 1099 SSA Social Security EF Options Override F n codas Each acis Client Bill Adjustments Notes aboutthe return has a unique code Frequently Asked Questions Preparer Notepad Enter Screen State or City Code seo Spec Loring Status bar General Return Status New Client Return Type Individual Tax Retum Current Package Federal A info on open return Figure 3 10 Data Entry Menu Working in a Tax Return Prepare tax returns in Drake by entering pertinent information on specific data entry screens Entries are used to calculate the federal state and city tax returns To open a screen use one of the following methods e Keyboard From any tab type a form code in the selector field Press ENTER e Mouse Select a tab and click the screen name Tax Year 2009 59 Data Entry Managing Screens Navigating Fields Grid Data Entry Existing Forms List 60 Drake Software User s Manual Use the following methods to exit save reset and delete screens in Drake e Press ESC to save your changes and exit a screen e Press SHIFT ESC to exit a screen without saving your changes e Press CTRL U to reset a screen to the last save e Press CTRL D to delete a screen
165. A screen 136 applying overpayments to 136 codes in Drake 136 direct debit of 146 paid in 2008 134 payment reminders 279 payments for 2009 135 penalties 139 underpayment of 138 vouchers for 135 estimating 1040 results Quick Estimator 286 ETC see Electronic Training Center exemptions see dependents existing forms list 60 expenses direct and indirect on Schedule E 108 exporting see also importing check register 226 client data 274 CSM data 237 Kiddie Tax data 133 reports to spreadsheet format 203 Schedule K 1 data 111 extensions 159 F F federal code 64 FAQs 250 farm income 114 115 fax cover letter for support 261 federal state facts 247 fees add on 14 calculated 173 charging for bank products 14 in EF database 200 minimum and maximum 33 Drake Software User s Manual preventing override of e filing 218 pricing setup 32 reports 237 reports of bank and preparer 202 setting 194 Tax Planner 48 types of 173 Fees to ACH bank acknowledgment 223 fiduciary 1041 returns 51 115 331 field flags see flags file maintenance 270 279 files automated backup of 272 backing up 270 changing types 276 client vs print 275 deleting from Drake 275 e mailing client files to Drake 254 exporting 274 password protecting 275 restoring 270 structure of in DDM 313 unlocking 275 filing instructions 26 late 163 status selection 87 filters and filtering see also reports CSM data 235 report data 293 fingerprint cards 1
166. ABC Voice Files client contact information lists see 94x Reports on page 204 Multi Office Multiple office reports see Multi Office Manager MOM on page 205 Manager MOM To select a report category click one of the report buttons shown in Figure 7 11 777777 j Online EF Database Drake SSN Lastname Lookup co Bank Products Checks Fees Summary Tools Options MOM heen ihe pt ante Se ee a Png orate nine gatan gh me oe Figure 7 11 Online EF database report categories Viewing a_ To view a report Report Click a category button to select a report category Figure 7 11 2 Enter a Start Date and End Date The report pulls information from only those returns with records that fall within the date range selected 3 optional for multiple EFIN offices only Select Restrict to Multisite and choose an EFIN to restrict reporting to returns for a particular EFIN 202 Tax Year 2009 Drake Software User s Manual Online EF Database 4 Enter any other report criteria desired Criteria differ for each report type 5 Click Run Report Click the Print and Export icons respectively to print a report or export it in CSV 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 7 11 2 Enter the report criteria 3 Type a report
167. All Conditions for narrower results or Match Any Condition for broader results as applicable 8 Click Save N To edit a search condition select the condition and click Edit Con DTE dition 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 294 can be modified as needed Create new filters edit existing ones or rename filters Creating a To create a new filter in the Filter Manager Filter Click New Filter Enter a unique filter name Click OK Modify the search conditions as needed See Search Conditions on page 296 Click OK TAON The new filter is added to the Available Filters and can be edited Modifying a To create a filter in the Filter Manager using an existing filter as a template Filter 1 Selecta filter to use as a template 298 Tax Year 2009 Drake Software User s Manual Report Viewer Renaming a Filter DARON Click Copy Filter Enter a unique name for the new filter Click OK Modify the search conditions as needed See Search Conditions on page 296 Click OK The new filter is added to the Available Filters and can be edited To rename a filter in the Filter Manager 2 3 4 Select a filter to use as a template Click Rename Filter Enter a new name for the filter Click OK The renamed filt
168. Approval Code Step 3 Process Approval Code Process gt ant P a a em N a aT aii Figure 2 7 PPR window 2 Enter the number of PPRs to activate on the computer item 3 in Figure 2 7 and click Get Code 3 An approval code appears in the Approval field item 4 in Figure 2 7 4 Click Process to activate the returns 5 Click OK M p RTA NT Be sure you are connected to the Internet before trying to activate Restrictions 20 and Notes PPRs If the items under For This EFIN item 1 in Figure 2 7 read UNKNOWN then you are not connected to the Internet If you are a PPR client be aware of the following PPR restrictions and notes e If computers are connected to a server Install your software on the server Activate your returns from the server e If computers are stand alone computers Install the software on all comput ers You can activate the returns from any of the computers For instance activate three PPRs on one machine four on another and eight on a third for a total of 15 Activate returns as you use them or activate them all at once e PPRs cannot be transferred Once a return is activated it cannot be moved to another computer however after a return is created filled out with client name and SSN it counts toward your total of used returns and can at that point be Tax Year 2009 Drake Software User s Manual Software Setup Purchasing PPR Returns moved to
169. BBS password 6 Click Add A Level 1 EFIN has now been added To add a Level 2 EFIN click add in a Level 1 row and repeat Step 5 and Step 6 above Tax Year 2009 203 Online EF Database TIP Drake Software User s Manual For best results map out the hierarchy on paper before starting Be sure to have all of your EFINs and Drake passwords available To remove an EFIN from the hierarchy click Remove in the row of the EFIN to be removed Be aware that if you remove a Level 1 EFIN that has Level 2 EFINs below it the Level 2 EFINs are also removed Setting Security Levels Tools 94x Reports 204 Security settings allow you to password protect reports in the online EF database Because security is managed at the office level a setting at one level does not apply to sub levels therefore offices using an EFIN hierarchy must set security at each level To define security settings for an EFIN level 1 2 3 4 Enter an e mail address and password and click Add Update Security Password Log in to the online EF database using the Master EFIN Click Options Click Configure Report Security From the Tab Security section click Secured or Unsecured for a whole report category e From the Report Security section click Secured or Unsecured as desired for a specific saved report To exit the report security screen choose another tab in the EF database Three functions are available from the Tools tab Run
170. DM is integrated with the software See Document Manager on page 305 Opening a Return Recentlyaccessed To open an existing return in Drake returns can be selected from the Recent Returns list in the Home window 1 From the Home window click Open New Drake 2009 Open Create a New Return Enter the SSN EIN or the LAST NAME for the return you want to open create If aNAME is entered then the closest match will be displayed and the corresponding SSN EIN will be entered in the SSN EIN field automatically Last 9 v SAMPLE HUGH amp GWEN nh ati MOORE ROBERT amp SILVIA FERNANDEZ CESAR amp CIER there ert C 1040 YOUNG JOHN ig C 1120 MCGILLICUDDY FELIX teh aie EDWARDS CLEMENT amp KATH C 11205 MONK STEPHEN amp MEGAN phate tt C 1065 PRITCHARD MARGARET om MCCLURE JEREMY c 990 C 706 OK Cancel Figure 3 9 Open Create a New Return dialog box 2 Inthe Open Create a New Return dialog box Figure 3 9 perform one of the following tasks e Enter the ID number of the return item 1 in Figure 3 9 e Select a return type item 2 in Figure 3 9 Returns are displayed in the grid to the left Click a row to select a return 3 Click OK The Data Entry Menu is opened for the selected return 58 Tax Year 2009 Drake Software User s Manual Data Entry Data Entry Returns are prepared in data entry mode Access data entry screens from the Data Entry Menu Figure 3 10 When in data ent
171. Deposit era LA a Reun i e carm Penalties 1040 04 15 2010 04 15 2010 N A N A Extensions 15th day of the 3rd Month after Products by Package 1120 03 15 2010 03 15 2010 the close of the taxable year Same Web Information 4120S 03 15 2010 03 15 2010 15th day of the 3rd Month after Same the close of the taxable year Shipment Letter 15th day of the 4th month after ees 1065 04 15 2010 04 15 2010 ta close of the year Same ate Notes Qrake Forum 1041 04715 2010 04 15 2010 1th day of the dth month after same Extension 10 15 2010 Figure 10 9 Link selections item 1 on the CA page link to the state taxing authority 2 State pages offer a list of available topics item 1 in Figure 10 9 from which to choose Click the state taxing authority link item 2 to go to that Web site Drake Forums The online Drake Forums allow you to interact with other Drake clients Participation in Drake Forums is strictly voluntary To access Drake Forums from the Drake Sup port site select Resources gt Forums First time users must register before participat ing read the text on the Forums page regarding registration requirements and then click Click here to Register Follow the instructions provided on your screen Once registered for the Forums click Click here to Login on the Forums page After logging in click FAQ for further instructions Click User CP to set up a user profile NOTE The Drake Software Forums are strictly voluntary an
172. Drake you can compare data between two versions of the same tax return You can also produce a tax return comparison worksheet that shows data for a client s returns for the current year and the two prior years The Checking Information screen allows you to cross check Drake calculations with amounts from a previously prepared return Any discrepancies between the Drake return and the previously prepared return are shown in an EF message Figure 5 68 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 9 Exit the CHK screen and calculate the return 4 In View Print mode view the EF message page Figure 5 68 which shows where discrepancies occurred ELECTRONIC FILING MESSAGES MUST be corrected before electronic filing is allowed Name s Your social security number TEST O MAPLE 400 00 1005 5152 Info on CHK screen WAGES did not match the return 5162 Info on CHK screen TAX did not match the return TN ey eee Ene ree S T Figure 5 68 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 its
173. E UP or PAGE DOWN on your keyboard To close the EF database click Exit Database Content General Information Tax Year 2009 The EF database stores data about the return and the associated bank products fees and reject codes Different types of data are stored under tabs See Figure 7 9 The F1 General Information tab displays basic taxpayer information along with IRS acknowledgments Federal code and date transmission date filing status and refund amount or balance due are displayed in the left column This data is from the most recent transmission record for the client file State acknowledgments Under State the middle column displays the state code and date filing status and refund amount or balance due This data is from the most recent transmission record for the client file 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 200 IRS Debt and Bank Codes The IRS debt indicator and bank codes are located below the reject codes An IRS Debt Code indicates some sort of debt to the federal government IRS debt codes are listed in Table 7 4 199 EF Database Bank Direct Deposit Info Fees Misc Info Reject Code 200 Lookup Drake Software User s Manual Table 7 4 IRS Debt Codes Code Description l
174. Figure 13 1 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 you are backing up to a CD DVD drive This is because the data is stored within the Windows OS temp files to wait to be copied to the disk at the user s convenience however you can check the available space on the disk before backing up to make the Free Space determination To restore backed up contents of the DDM 1 Click a specific drawer cabinet or folder to back up 2 Click the Backup button on the DDM toolbar The Backup Restore Manager dialog box is displayed See Figure 13 1 3 Click Restore located in the bottom half of the dialog box 4 From the Backup to Restore drop list click a location from which to restore files 5 Click Start to begin the restore process NOTE If you see a No Backups were found at message you may have selected an incorrect location to fill the Backup to Restore 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 Updating the DDM Tax Year 2009 New in 2009 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 g
175. Figure 2 18 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 19 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 The Client Communications Editor gives you a place to read edit re write print and save the letters contained in the program You can also add your company letterhead and logo to the letters The right pane of the Client Communications Editor displays the letter template The left pane displays paragraphs and keywords by category Figure 2 20 click to expand a category or click to contract it Hover your pointer over a keyword to view its description Keywords gt F Client Information Federal Return Paragr
176. Figure 3 22 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 22 5 Press Esc Drake saves your work and displays the total in the data entry field Note that the field is shaded to indicate a worksheet is present Default is red Tax Year 2009 Data Entry Drake Software User s Manual Screen Captures Calculator Macros NOTES Part Il Expenses B ACVOMSING i 9 Car and truck expenses 10 Commissions and fees 11 Contract labor eee Figure 3 23 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 amount enter a slash in front of the description If you press CTRL W or double click in a Depreciation field the program opens the associated 4562 Depreciation screen with the For and Multi Form Code boxes completed See Associating One Screen with Another on page 64 You can now take screen captures of screens in data entry and send them to the clip board a printer or a file To capture a data entry screen 1 Right click any open screen not from within a field or text box 2 Select Screen Shot The program offers three choices for screen captures e To File Save the
177. Franchise Tax Exempt OtherTax1 Franchise Tax Year 2009 C 7 Appendix C Keywords Drake Software User s Manual This page intentionally left blank C 8 Tax Year 2009 Drake Software User s Manual Appendix D Acronyms amp Abbreviations Appendix D Acronyms amp Abbreviations cA ack ack ACH ACRS AGI AMT ATIN B ack CAF CSM COGS CWU py ack DAN DCN DD DI DDM doc Tax Year 2009 This appendix lists and defines many of the acronyms and abbreviations you may encounter when using Drake tax software Accepted transmission Acknowledgement A report generated by the IRS and by Drake to a transmitter that indicates receipt of transmissions Automated Clearing House A system that administers electronic funds transfers EFTs among participating financial institutions Accelerated Cost Recovery System Adjusted Gross Income Alternative Minimum Tax Adoption Taxpayer Identification Number A tax processing number issued by the IRS as a temporary taxpayer identification number for a child in the domestic adoption process who is not yet eligible for a Social Security Number SSN Bad transmission Centralized Authorization File number issued to a preparer by the IRS Client Status Manager a tool for tracking workflow within a preparer s office Cost of Goods Sold Client Write Up Duplicate of previously filed return Rejected Depositor Account
178. Georgia return is piggybacked with the federal return and the Missis sippi and Louisiana returns are filed separately No other state returns are e filed for this taxpayer even if they are eligible Tax Year 2009 197 EF Override Options in Data Entry Drake Software User s Manual STATE E FILE OVERRIDE Choose the states cities you want to e file Note If you do not make a selection below all eligible states will be e filed Select state for piggyback e file GA Si Select other states cities to e file La Si v Ad x v X x X X M Do NOT send any states Figure 7 7 State E file Override options Additional Options The Additional Options section of the EF tab allows you to specify that a return should not be eligible for a bank product and elect to submit an imperfect return See Imperfect Returns on page 195 E filing Returns with Ineligible Forms A return can be e filed even if it contains certain forms that are ineligible for e file The IRS requires that Form 8453 U S Individual Income Tax Transmittal for an IRS e file Return be e filed in lieu of the ineligible forms and that the ineligible forms be mailed Form 8453 must indicate which forms are being mailed separately To produce Form 8453 for ineligible forms that will be mailed 1 Open the return and go to the EF screen accessible from the General tab 2 Select the appropriate forms in the Form 8453 Paper Document Indicators box Figure
179. IC Information section of screen 2 must be completed for each qualifying dependent e 8867 screen for Form 8867 Paid Preparer s EIC Checklist must be completed for the taxpayer claiming EIC In addition the EIC Due Diligence screens provide supplemental questions to help ensure a comprehensive interview of each taxpayer While the IRS does not require answers to these supplemental questions these screens provide a means for collecting valuable supporting documentation in case of a due diligence audit EIC Information for Dependent If the taxpayer has EIC with qualifying dependents the EIC Information section of screen 2 must be completed for each qualifying dependent If item 13a is answered No items 13b and 13c can be left blank as shown in the Figure 5 51 example Tax Year 2009 139 Earned Income Credit EIC EIC Information NOTE Upon completion of the EIC Information section on all applicable dependent screens goto the 8867 screen and complete Parts amp IV Part Ill might also be required if no dependents have a qualifying child status I Not eligible for EIC Yes 10 Is the child unmarried OR married and can be claimed as the taxpayer s dependent cc ccc ceeccessesessseeteseestenteseeneenee v 11 Did the child live with the taxpayer in the U S for more than half of the year cess eecseessesssecnessueesveessssscssesssecsesseesseesnesseeeses Iv 13a 13b 13 iz Ifthe tiebreaker rules apply would the child be tr
180. January 1 2010 for the 2009 tax year Software developers producing MBT preparation software must support e file for all eligible MBT forms included in their tax preparation software Therefore all eligible SBT returns prepared using software must be e filed Any business that prepared more than 100 Minnesota individual income tax returns for the previous tax year is required to e file all individual income tax returns Prepar ers are encouraged to e file property tax refund returns but e filing property tax refund returns are not required Beginning January 1 2010 any ERO that prepares and files for than 250 individual income tax returns annually must e file New for 2009 All practitioners who prepared 25 or more 2007 returns are required to e file their clients subsequent returns Starting in calendar year 2008 preparers who prepared more than 25 individual income tax returns in the previous filing season are required to file all returns using electronic means Electronic means includes e filing or submitting printed returns with 2D barcodes New for 2009 The income tax mandate for tax return preparers now includes partner ship returns and partnership extensions in addition to income tax returns and exten sions for tax years beginning on or after January 1 2008 Preparers must e file all individual income tax and partnership returns and extensions beginning on January 1 2009 if they were subject to the mandate in a prior ye
181. Manager click Exit Tax Year 2009 Drake Software User s Manual Setting Up a Report Selecting Additional Report Options Sort Summary Order Data Calculations Prior Year Data Output File Name Additional options for sorting data calculating numeric data using prior year data and assigning an output file name are available from the Report Editor Step 2 win dow Figure 12 3 on page 293 Under Additional Report Options choose a keyword by which to sort reports If for example you re building a report on Clients and you want to sort the results by the clients last names by ZIP code or by state choose the desired option from the list This list includes all the keywords in the report in addition to taxpayer ID taxpayer last name ZIP code preparer number firm number DCN date return was e filed and federal acknowledgment code Select the Summarize the Report Data box to have the program calculate and total each column Not all reports benefit from summarizing Edit your report and add such keywords as Count Average and Percentage to enhance the summary The program queries current year data by default To have a report run prior year data select the Use Data from 2008 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 299 Creatin
182. N 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 A 2 Tax Year 2009 Drake Software User s Manual Appendix A Preseason Checklist L Perform database updates Update the EIN Database from the prior year LI Set up your office s network See Running Drake on a Network on page 10 L Perform configuration updates Update configurations for firm information macros etc from the prior year L Establish billing amounts Setting your billable amounts now saves time later Help Clients Prepare for Tax Season L Prepare proformas or organizers for prior year clients Note that reports organizers profor mas and returns can be stored and e mailed as PDF files L Prepare preseason letters and coupons to send with organizers L Begin preseason scheduling Get a jump start on tax season Schedule clients who are eager to file early Ul Order mailers from Nelco if necessary Update and Configure Data LJ Choose the backup media type that best suits your needs U Familiarize yourself with the new Update Manager feature in the program See Update Manager on page 263 E Update and back up Run the update routine see Prior Year Updates on page 69 and make a backup copy of the software setup see Backing Up and Restoring Files on page 270 Take Advantage of Drake Resources
183. Note that the RTN Account number and Type of account must be entered twice for verification 220 Tax Year 2009 Drake Software User s Manual Using e Collect and El Card Screens in Data Entry Other Required Information All bank screens include a Military Personnel Dependent Identifier section This section is required and must be completed before a bank product can be requested All bank screens include an Additional Information section with a field to indicate when the bank application was signed This information is required and must be com pleted before a bank product can be requested Using e Collect and E1 Card Screens in Data Entry Table 8 5 lists the e Collect and E1 Card screens that are available in data entry Table 8 5 e Collect Screens in Drake Screen Description ECOL Has the fields required to apply for an e Collect product Steps for completing this screen are provided in The ECOL Screen following E1 Has the fields required to apply for the E1 Card Steps for completing this screen are provided in The E1 Screen on page 222 Consent to Use of Accessible from any bank screen includes components required in Tax Return Infor order to obtain electronic consent to use the taxpayer s information mation prior to applying for the E1 Card This screen is similar to the USE screen for e Collect and other banks Consent to Disclo Accessible from any bank screen includes components require
184. Number The financial institution account to which a direct deposit refund is to be routed Declaration Control Number A unique 14 digit number assigned by the ERO or in the case of online filing by the transmitter to each e filed tax return Direct Deposit Debt Indicator A field on an acknowledgment that indicates whether a debt offset of a taxpayer s refund will occur Drake Document Manager File extension for Microsoft Word files Appendix D Acronyms amp Abbreviations DTP EA E ack EF EFIN EFT EFTPS EFW EIC EITC EIN ERC ERD ERO ETA ETC ETD ETIN FMS HOH IRC D 2 Drake Software User s Manual File extension for Drake Tax Planner files Enrolled Agent IRS acknowledgement for an imperfect return Electronic Filing Electronic Filer s Identification Number Electronic Funds Transfer The process through which direct deposit refunds are trans mitted from the government to the taxpayer s account at a financial institution Electronic Federal Tax Payment System A free service from the U S Treasury through which federal taxes may be paid via the Internet by phone or through a ser vice provider Electronic Funds Withdrawal A payment method which allows taxpayers to authorize the U S Treasury to electronically withdrawal funds from their checking or savings accounts Also known as direct debit Earned Income Credit Earned Income Tax Credit A refundable indivi
185. O Update Preparer and Firm Number Information O Update the Custom Paragraph of the LTR Screen CO Update Employee s Info w2 W2G 1099 99M RRB O Update 8283 s Donee s Information C Update Child s Information on Form 8814 O Update Taxpayer s and Spouse s PIN O Update Bill Screen Information O Update Retumn Password J Help Select All Unselect All Update 1040 Cancel Figure 4 2 Individual Update Options box 2 optional Select additional items to update Click Select All to choose all items 3 Click Update 1040 Once the program has updated the return it opens the return to the Data Entry Menu 70 Tax Year 2009 Drake Software User s Manual Prior Year Updates Update To update all returns in a package not recommended Returns Globally 1 From the Home window select Last Year Data gt Update 2008 to 2009 Click Next Select filters optional and then click Continue optional Select additional items to bring forward See Figure 4 2 Click Update 1040 IRON M p RTANT All returns are updated according to selections in the Update Options box Once returns have been updated the updates cannot be reversed To avoid oversights update each return individually Once the program has updated the returns it displays a report listing the returns that were updated Click Exit to close the Report Viewer Building the EIN Name Index Each time an employer is entered on a screen for a form
186. Other DDM File Tasks Task Description z Click the File button and select Open Rename or Delete in order to open uD bg rename or delete a file respectively File rS Select a file in the DDM document list then click Copy Choose to copy to a EEI 7 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 as To copy a folder to another document use the Copy button Cut 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 7 Select a file in the DDM document list or select multiple files using the SHIFT or Q CTRL keys then click Email Your default e mail program is opened with the Email document added as an attachment Enable drag and drop navigation which allows files to be dragged and Ay dropped from one location on the computer into the DDM You can also drag Drag and drop files within the DDM Use your mouse to drag the selected file to the new location Access online help Exit the DDM Tax Year 2009 317 Tax Planner Drake Software User s Manual
187. Reports Labels and Copies Number of copies to print not available for labels or checks CNECKS Duplex Directs printer to print duplex Only forms that are approved for duplex will be printed as duplex front and back in order of appearance Staple If the printer supports stapling after each print job select this option to turn stapling on Show Dialog Causes the Print dialog box to be opened before each print job Tax Year 2009 41 Software Setup Drake Software User s Manual 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 front and back in order of Sets on page 179 appearance Duplex All Directs printer to duplex print all forms approved or not Not available for sets to be mailed to the IRS or a state Staple If the printer supports stapling after each print job select this option to turn stapling on Print Set Indicates which sets should be available for printing after a return is calculated Watermark Adds watermark text to client and preparer sets The text in the Text Watermark Text entry box is printed on every set T
188. Requirements on page 213 Click OK Click Help for more information on ERO options NOTE New to e filing this year Before transmitting live returns your firm 1 an 2 3 4 5 ERO Setup 1 2 3 4 5 6 7 Tax Year 2009 must apply to the IRS for an Electronic Filer s Identification Num ber EFIN If you have not yet received an EFIN Drake assigns a temporary EFIN that you can use to test e filing and access Drake Internet tools and resources For more information about applying for an EFIN see Obtaining an EFIN on page 188 15 Software Setup Drake Software User s Manual Preparer Setup Preparer Setup fields must be completed before preparing and e filing returns All pre parers must be entered in Preparer Setup Data entry operators can also be entered Each time a name is added to Preparer Setup a number is assigned to that name i Include data entry operators in Preparer Setup to 1 track data IP entry information and 2 easily set up Front Office preparers in the Scheduler See Scheduler on page 76 Adding a Information entered here determines what preparer information appears on the tax Preparer returns To add a new preparer in Drake 1 From the Drake Home window go to Setup gt Preparer s 2 Click Add to activate the bottom half of the Preparer Setup window 3 Enter General Information Shaded text boxes indicate required information ss The following fields are require
189. 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 270 Tax Year 2009 Drake Software User s Manual File Maintenance If multiple machines are used for tax preparation in one office files can be moved to other computers and uploaded to a single machine to create a master file M pP l RTANT Back up your files often and store them at an off site location Backup To back up your files from the hard drive 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 7 Drake 2009 Backup Back up Files Enter a single SSN or choose one of the file groups to back up all files of the corresponding type To select specific files click the Advanced button Select a backup location a CY Select the type of file s to back up Single SSN or EIN 9 Digits P All File Types Setup Files Pricing Setup Information Files System Files CSM EF Database IRS Bank and Scheduler Files J Client Files 1040 1120 1120S 1065 1041 706 990 Advanced Help Automatic ee Exit Figure 11 7 Backup window 4 Select the file or file types to back up by entering the SSN or EIN or by selecting All File Types Setup Files System Files or Client Files 5 Ifyou marked a box click
190. SCH2 screen and select X General expla Tax Year 2009 Drake Software User s Manual Form 5471 Tax Year 2009 Entity Packages nation attachment from the Schedule drop list Enter the explanation in the space provided If you need more space press PAGE DOWN for a new screen e UBTI Computation On screen 4720 if you indicate that there is unrelated business taxable income UBTI for a charitable trust see Part I In 11 on this screen an attached schedule must show how the UBTI was computed Form 990 T which can be completed in Drake may be used as the attached schedule Form 5471 Information Return of U S Persons with Respect to Certain Foreign Cor porations is available in the 1120 and 990 packages and is e fileable with the 1120 return In Drake this form consists of Information screens and various schedules all accessible either from the Other Forms tab of the Data Entry Menu or through linked tabs within the screens themselves These screens and schedules and the methods of accessing them are listed in Table 14 3 Table 14 3 5471 Screens and Schedules Section of Form Form 5471 Page 1 Information Return of U S Persons with Respect to Certain Foreign Corporation Where Accessed Other Forms tab click 5471 Form 5471 Page 1 Item D Persons Filed on Behalf Of Other Forms tab click PERS Schedule A Stock in the Foreign Corporation Other Forms tab click SCHA Schedule B U S
191. SSN App Sign Date Bank Code State BONU Requested BONU Loan Status Loan Amount BONU RAC Indicator Prior Debt Withheld Check Information Status Amount Number Prioro Print Date _ Clear Date Help Test Get Next Check Exit Figure 8 6 Reprint Checks dialog box 2 Type an SSN and press TAB or click ENTER The Reprint Checks dialog box dis plays any previous taxpayer and check information see Figure 8 6 3 Click Print The program automatically voids the 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 Tax Year 2009 225 Troubleshooting Check Printing Drake Software User s Manual 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 number date amount EFIN sequence number client ID and client name for all checks within the parameters 4 optional Print or export the register as needed See Report Viewer on page 299 for more on using these features in the Report Viewer 5 Click Exit to close the Report Viewer Available from Tools gt Blank Forms a printed check register REGISTER PG allows accurate record keeping of all RAL checks both voided and issued in the office Com
192. Setup Options Data Entry Customize data entry functionality by indicating your preferences below Billing States Data Entry Calculation amp View Print Form amp Schedule Options Optional Documents Optional Items on Return Language for menus and data entry screens i Engish zl aiiai entry sagasato show mosidjalda withont scaling i ith nguna agia n Figure 2 10 Options tabs from Setup gt Options From the Home window go to Setup gt Options and select a tab Table 2 5 through Table 2 12 describe the options available on each tab in Setup gt Options Options under the Data Entry tab are described in Table 2 5 Table 2 5 Options Setup Data Entry Option Description Maximize data entry screens where Increase the size of the Drake screen to fill your monitor Effective at all possible for easier viewing monitor resolutions Size data entry screens to show most Decrease the size of large Drake screens so they fit on your monitor Effec fields without scrolling tive only when monitor resolution is set to 1024 x 768 or smaller Disable sizing of data entry screens Keep preparer from resizing screens Effective usually for monitor resolu tion set to 800 x 600 or smaller Tab to zip code field skip city state Press the TAB key while entering an address in data entry to bypass the and use zip code database City and State fields and go directly to the ZIP field City and State fields ar
193. Shareholders of Foreign Corporations Schedule C Income Statement Schedule E Income War Profits and Excess Profits Taxes Paid or Accrued Schedule F Balance Sheet Other Forms tab click SCHB 5471 screens click Sch C Other Forms tab click SCHE 5471 screens click Sch F Schedule F Subsidiary Schedule Other Forms tab click SCHF Schedule G Other Information 5471 screens click Sch G H Schedule G Additional Information Other Forms tab click SCHG Schedule H Current Earnings and Profits Schedule Summary of Shareholder s Income From Foreign Corporation Schedule J Accumulated Earnings 5471 screens click Sch G H Other Forms tab click SCHI 5471 screens click Sch J Schedule M Transactions between Foreign Corpora tions and Shareholders 5471 screens click Sch M Schedule O Organization or Reorganization of Foreign Corporation Other Forms tab click O1 and 02 Worksheets A B C and D for Schedule 5471 screens click Sch I and Sch I cont d Supplemental Information Other Forms tab click SUPP 329 Entity Packages Drake Software User s Manual Not all schedules and worksheets are required for all 5471 returns See the IRS Form 5471 instructions for more information Listed below are some important details you must know if filling out this form in Drake e Currency Exchange Rates DASTM These fields are located in the Foreign Corporation se
194. Software Automatic Update Manager Options Automatic Updates On Off Auto Update mode is active The update will run at the next scheduled time pe ean 22600 AM Status Last check Lo COOOOCOCOCOC EETEENNLY Last Updates Figure 11 3 Drake Software Automatic Update Manager 3 Choose one of the following options e Select On to turn on automatic updates If you select this option specify the hour minute and second each day that you want the program to check for updates e Select Off to turn automatic updates off Tax Year 2009 265 Update Manager Drake Software User s Manual 4 Exit the Automatic Update Manager dialog box by clicking either Hide if you turned automatic updates on or Exit if you turned automatic updates off If you clicked Hide the Hide Download Manager message will be displayed informing you that the Update Manager will be hidden from view but that auto updates will continue to operate normally Click OK to close the message and return to the Update Manager dialog box All instances of Drake must be closed at the time of download The NOTES downloading computer or server must be left on and online If you are using automatic updates you can access the Drake Soft ware Automatic Update Manager from your system tray Notification When you log in to the program you can immediately see if program updates are of Updates available and ready for download even if automatic updates
195. Spouse name Spouse date of birth Spouse blind Street address 7842 WEEPING WILLOW LN City state zip AUDUBON NJ 08106 7842 Daytime phone 201 555 1111 Multi Year Next gt gt Notes 3 Pe eee M 4 gt Q Client Setup Demographics Z Summary Income Adjustments Itemized Deductions Credits lt Figure 13 11 Menu bar item 1 toolbar item 2 data and tabs item 3 318 Tax Year 2009 Drake Software User s Manual Tax Planner GoTo Schedule C X lt lt Back Next gt gt 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 11 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 N Summary tab cells do not accept direct entry If you click Sum DTE mary 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 screen click a tab at the bottom of the window or select Go to from the toolbar and select a tab Each tab incl
196. This feature establishes security settings Security for an individual To assign the same security level to many preparers the Group Security feature may be a better option See Setting Up Group Security on page 17 Tax Year 2009 Drake Software User s Manual Software Setup To customize security settings for a preparer 1 From the Drake Home window go to Setup gt Preparer s Edit Preparer 8 Security APON Select a preparer and click Edit Preparer Select Security gt Custom Security In the Preparer Security Setup window select the items to which the preparer should be allowed access Items left blank will be inaccessible to the preparer Fie EF Tools Reports Last V Open Retum I Cale Print Vv View 3 Lg Preparer can open and view returns but cannot calculate or print them JV Pre Prepared Entry Quick Estimator a aat 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 Table 2 4 Preparer Security Options Security Option Set Security to Allow No Options Description Employee cannot access any part of the program Set Security to Allow All Options Employee can access all parts of the program except for administrative only features Set Security Equal to Existing Pre parer Employee is given security settings to match those
197. W 2 W 2G 1099R 1099G 8283 or 2441 that employer s name identification number EIN and corresponding information is automatically added to the EIN database To update the EIN name database from 2008 1 Open the 2009 version of the program 2 Select Last Year Data gt Build EIN Name from 2008 3 From the Build EIN and Name Index dialog box select the indexes to update and click Continue 4 Wait for the program to finish scanning the files This update takes about one minute for every 2 000 client files 5 Click Exit The program searches the indexes for existing data whenever an employer is entered Updating Settings Apply your firm s 2008 software settings to the 2009 program to save preseason prep aration time Once the settings are brought forward for the year they can be individu ally adjusted M P RTANT a previously updated item can cause a loss of current To update settings from 2008 1 Open the 2009 version of the program 2 Go to Last Year Data gt Update Settings 2008 to 2009 to open the Update Set tings dialog box Tax Year 2009 71 Organizers and Proformas Drake Software User s Manual Drake 2009 Update Settings Update Settings The application has detected Drake 2008 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 Informa
198. WRITERS NETWORK OF FRA No EF F for EF PENH HE THE COMPTON ROGERS TRU Ready For ig Tame SUMMERLIN HERBERT N amp No EF Docugi eee T amp L CRAWFISH FARM No EF Doci ED S EATS No EF Docu wo HARRIMAN ANGELA B No EF Doct Eligible ee BUTCHER GEORGE T amp KR No EF Doc for EF m Oo ESTATE OF JACOB MARLEY Ready roth teow MONK STEVEN amp MEGHANN No EF Doc Beet co ae Cree Oe ae Te ane opal Figure 7 2 Eligible returns are indicated by check boxes 2 Select the boxes of the returns to transmit Use the Select All or Unselect All but tons as needed TIP Click column headers to sort returns by column 190 Tax Year 2009 Drake Software User s Manual E filing a Return EF Select Button Trouble shooting Return Selection Tax Year 2009 3 optional Double click a return to open an EF Transmission Detail box for the return This box displays the client name ID number EF status and federal and state including piggyback documents to be filed and allows you to finalize the specific documents to be transmitted Click Save to retain any changes you make 4 Click Continue The Report Viewer shows the EF Selection Report which lists all returns that are awaiting transmission See Report Viewer on page 299 for details on Report Viewer features 5 Click Exit to close the Report Viewer The selected returns are now in the send queue and are ready for transmission The EF Select button is available in all p
199. able 5 6 These screens are all available from the Adjustments tab Table 5 6 Other Adjustment Screens Available from Adjustments Tab Screen Form or Worksheet Notes CLGY Ministerial Income Allocation See Ministerial Income Allocation following 8082 Form 8082 Notice of Inconsis tent Treatment or Administra tive Adjustment Request Tax Year 2009 123 Standard and Itemized Deductions Drake Software User s Manual Table 5 6 Other Adjustment Screens Available from Adjustments Tab Screen Form or Worksheet Notes MFS Community Property Allocation Use for MFS in a community property state 8873 Form 8873 Extraterritorial Income Exclusion Ministerial Income Allocation Rental Parsonage Allowance Parsonage 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 to be calculated e Percentage of tax free income to be applied to Schedule C expenses marked with business code 813000 e Percentage of tax free income to be applied to Form 2106 expenses marked with a P pastor in the F federal box e Appropriate self employment income to flow to the Schedule SE If the church provides a rental or parsonage allowance but no parsonage enter the Parsonage or Rental Allowance and the Actual Expenses for parsonage If a sepa rate Utility a
200. ach return is ready to be e filed selecting this option can help prevent accidental e filing of returns To choose this option go to Setup gt Options gt EF tab and select Require Ready for EF indicator on EF screen Suppressing E filing To suppress e filing of a return that is otherwise eligible to be e filed 1 Open the return and go to the EF screen accessible from the General tab 2 Select one of the following boxes as appropriate e Do NOT send Federal suppresses e filing of federal return see Figure 7 6 e Do NOT send any states suppresses e filing of all state returns see Figure 7 7 e Suppress federal state EF and all bank products suppresses e filing of both the federal and state returns plus any bank product The selected returns are not e filed until the selected check boxes are cleared E filing Special Returns and Forms To e file an extension or to e file Form 9465 Installment Agreement Request only or to file Form 56 Notice Concerning Fiduciary Relationship only 1 Open the return and go to the EF screen accessible from the General tab 2 Under Federal E file Override Figure 7 6 select the forms to e file 196 Tax Year 2009 Drake Software User s Manual EF Override Options in Data Entry FEDERAL E FILE OVERRIDE Choose one from the options below Tip If you want to send a federal form and NO state forms check the Do NOT send any states box on the right M 1040 M 4868 I 235
201. ack 2 P Processing Wait for IRS ack retum acknowledgment Zd to IRS T Test transmission successful QOQ Ready to e file B Bad transmission rejected by Drake Install updates and try again 4 IRS Acknowledgement Codes A Accepted by IRS l N R Rejected by IRS see reject codes l o Fecave Transmit ii D Duplicate return is a duplicate of a previously filed return or DCN Rejected by IRS transmitted acknowledgment l E flingiprocess oe return complete X Problem with the transmission E Imperfect return Ack file was not posted to your EF database Run Repair Index in Drake D Drake Software User s Manual Appendix C Keywords Appendix C Keywords Keywords are used in the Reports and Letters programs in Drake Report Keywords Report keywords appear as columns in reports Figure C 1 Reports are generated from the Report Manager Extensions As Of 11 06 2009 Retum Type Phone Number Taxpayer Cell Phone 1040 8285559876 axpayer ID Taxpayer Name 404011117 PAT DUGGAN 400001005 WILL amp NANCY HAND 1040 8285556697 490460437 DAVID LEBLANC 1040 8285550645 ana aiian ata inn Mn ME att T O cells teenth 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 Se
202. ackages and is located at the bottom of the Calculation Results window By default the button is activated if the calculated return is eligible for e filing Figure 7 3 PO mr tee pment SE ee LO ppt E T ne E i w va e DCN 0 904101 01006 gt Total Tax Owed 2 566 f Eligible For E F Back Continue Figure 7 3 EF Select button at bottom of Calculation Results window By clicking EF Select you can send federal returns federal returns with state piggy back returns and direct state returns directly to the e filing queue NOTE The option to pause at the Calculations Results window must be selected in Setup gt Options gt Calculation amp View Print tab If a return is not in the EF Return Selector consider these troubleshooting actions e Recalculate the return e Eliminate any EF message pages Remember to check both state MSG pages and the federal MESSAGE page From the Home window go to Setup gt Options and select the EF tab to see if Require Ready for EF Indicator on EF screen is selected If it is go to the EF screen in the return In the EF Ready box at the top select X Ready for EF e Make sure the return has not already been transmitted and accepted Check the EF database EF gt Search EF Database see EF Database on page 199 or Open the return and check the Return Data section of the TRAC screen e Check to see if the return contains forms that are not e filable
203. agency regulations Section 12 690 1 require tax preparers who prepared 50 or more 2007 Connecticut income tax returns to e file all 2008 Connecticut per sonal income tax returns using the Federal State Electronic Filing Program e file A corporation in Florida must file and pay its income tax electronically if it paid 20 000 or more in tax during the State of Florida s prior fiscal year July 1 June 30 File Florida corporate income tax with the Florida Corporate Income Franchise and Emergency Excise Tax Return Form F 1120 and file through the IRS s 1120 Fed eral State Electronic Filing Program using approved software Indiana law went into effect Jan 1 2008 requiring most tax preparers to e file Indiana individual income tax returns Tax preparers who file 100 or more Indiana tax returns annually are obligated to follow this law 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 locations will be used to determine whether or not the tax preparer is subject to the e filing requirement If a tax preparer files 50 or more returns in 2009 then 90 of the returns must be e filed The e filin
204. aid on the C or F screen as applicable N Self employed health insurance deduction information is entered on UTE the same screen as self employed pension SEP information This screen can be accessed using either the SEHI or SEP screen code Self Employment Pensions Screen code SEP SEP screen data flows to the WK_ SEP worksheet for Self Employed Rate Deduction NOTE 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 fields on screen 4 Figure 5 38 EEA 28 Eg tator e expenses nie 2 SEP and or SIMPLE contributions Self employed health insurance deduction 30 Penaltv an eart withdrawal ofgayings a ya Sag ig a Mt ante neh PR ariant Figure 5 38 Adjustment fields on screen 4 Tax Year 2009 121 Penalties Drake Software User s Manual Penalties This section covers penalties on early withdrawal Penalties on estimated taxes are covered in Estimated Tax Penalty on page 139 Early Withdrawal Penalty If the taxpayer is subject to the penalty for early withdrawal of savings enter the pen alty amount on screen 4 Do not duplicate entries in this field on the INT screen the 1099 INT asks for the interest or principal tha
205. ake see Deleting Files from the Program on page 275 Restoring Data When restoring data the CSM scans a client file calculates the return searches the EF database and updates the data To restore data from the CSM right click a record and select Restore CSM Data This Client Click OK Removing Duplicates To remove a duplicate entry in the CSM right click a record and select Remove Duplicate Entries Entire Database Tax Year 2009 237 Admin only Features Drake Software User s Manual This page intentionally left blank 238 Tax Year 2009 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 At Drake one of our goals is to help you make the most of your tax preparation soft ware and use it successfully Drake does not however provide tax law advice Knowl edge of tax preparation is the responsibility of the preparer Support is provided as an aid to tax return completion only The accuracy of the return filed with the IRS and various state tax authorities is the responsibility of the tax preparer Drake Software Manual Tax Year 2009 The 2009 Drake Software Man
206. al support for the network itself Consult an IT professional for network setup and support Network Options Two network options are available a Server Only Install Drake on a server and link workstations to the server using a network link NWClient b All Workstations Install Drake on all workstations and designate one sta tion as the server All other workstations use the designated server to share files See Table 2 2 for a comparison of these options 10 Tax Year 2009 Drake Software User s Manual Running Drake on a Network Table 2 2 Network Options A Comparison Server Only Preferred Setup All Workstations For firms with a robust network setup For firms without resources to use a single server Simplified setup and updates Updates must be installed to each computer No need to stagger DCN counter Could be necessary to stagger DCN counter Server Only Using the instructions in Installation on page 8 install Drake onto the server NOTE Drake can be installed to the server from a workstation if necessary Be sure to select the correct server drive Once Drake is installed on a server complete the following steps at each workstation 1 From the Windows Start menu click Start gt Run 2 Type F DRAKEO 9 NWCLIENT NWCLIENT EXE into the Run dialog box sub stituting your server drive letter for F 3 Click OK Once thi
207. all new clients added to the DDM Use the DDM to create an organizational file structure for storing electronic docu ments such as PDF copies of tax returns scanned Forms 8879 and scanned copies of driver s licenses N Before storing items in the DDM determine the type of file structure UTE you want to use The structure can be difficult to rearrange once it is in place and contains files Tax Year 2009 305 Document Manager Drake Software User s Manual Think of the DDM file structure as a virtual filing cabinet with drawers and folders with Level 1 as a cabinet Level 2 as a drawer and Level 3 as a folder Folders can also have subfolders The documents themselves reside in the folders and subfolders Backing Up Restoring DDM Contents New in 2009 the backup restore feature allows you to copy files to a local networked CD DVD or USB drive You can back up and restore the entire DDM structure or a specific cabinet drawer or folder To back up individual files use the Copy To options See Table 13 2 on page 317 Use this tool to back up and restore files from one computer to NOTE another 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 T 2 Click the Backup button on the DDM toolbar The Backup Restore Manager o dialog box is displayed Figure 13 1 Backu
208. alog box Address Book 3 Click Add to open the Email Address Book dialog box 4 Enter first name last name and e mail address Click Save 5 Click Done Importing You can also import addresses from a CSV file into your Local Address Book The Addresses importing procedure is similar to that of the Schedule D import in that your spread sheet CSV file must have the proper headings before you can run the import To create a CSV 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 17 A 2 Sample Ella ellasample net net 4 3 Rogers Beau beaurogers net net 4 Sample Hugh hughsample net net 5 Duggan Regis regisduggan net net DoS SAAT S T nE E e a a TA Figure 10 17 Row headings must be Last Name First Name and Email Address Tax Year 2009 257 Interactive Support Drake Software User s Manual N Enter last names first names and e mail addresses of all individuals to be imported see Figure 10 17 Click File gt Save As Browse to the desired location and assign a filename From the Save as type drop list select CSV Comma delimited csv Click Save eS 2S To import the CSV file into your Local Address Book 1 From the Drake Home window click Help gt E Mail 2 From the Email Inbox window click the Address Book button to open the Edit Address Bo
209. alog box has drop lists for report types reporting options and sorting options Figure 12 10 Drake 2009 Fixed Asset Manager Fixed Asset Manager Choose to run a report edit a macro or cancel e Federal x Ful Schedule gt Help Edit Macros Cancel Figure 12 10 Fixed Asset Manager dialog box 2 Select a report type see Table 12 4 3 Select a tracking format Options are described in Table 12 5 Table 12 5 Fixed Asset Manager Format Options Format Description of Printed Report Federal Tracks federal depreciation methods State Tracks state depreciation methods Alternative Tracks alternative depreciation methods Book Tracks depreciation using book methods 4 Select a sorting option from the drop list on the right Choose to print a Full Schedule to sort By Department or to sort by Form Schedule Click Run Report 6 Inthe Asset Manager Client Selection dialog box create a report for one or more specific clients or create a filtered report based on all clients e One or more clients Enter SSN EIN in the blank field and click Add Cli ent Repeat for all desired clients then click Next e Filtered report Click Next to open the Asset Manager Filter Selection dialog box Select a filter or sort option then click Next to open the Basic Search Conditions dialog box Edit settings as desired see Search Condi tions on page 296 and click Continue 7 Select an option for displaying the
210. ame ssn 400001001 Not Exported SAMPLE 400001003 Not Exported E RR pe SO eat P 4d OO Figure 5 44 Dependents entered on return 4 Mark the applicable boxes Ifa row is selected the parent s data is exported to that dependent s tax return in Drake 5 Click Export 6 Click OK Tax Year 2009 133 Estimated Taxes Drake Software User s Manual Click Exit to close the Export 8615 dialog box The parent information is now ready to be imported into the dependent s return Importing After the 8615 data has been exported from the parent return you will be prompted to Parent import the data the next time you open or when you create the dependent return Information To import parent data into a dependent return 1 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 45 example Drake 2009 Data Entry 400001001 SAMPLE ELLA Screen Help AEE Ed Form 8615 Tax Computation for Certain Children with Investment Income Parent s First Name Last Name Parent s SSN Estimate HUGH SAMPLE 400001009 Parent s tillmigistatiicnasts tet ote et ee oer te Pec ar os Sane ern Get E AEN 2 z a Parent s taxable
211. an Instant RAL or IRAL a taxpayer must have a W 2 An IRAL allows a taxpayer to immediately receive a loan on a portion of the expected federal refund The loan is approved or denied on the spot so the taxpayer can receive a check within moments of applying If the bank accepts the loan application the return is sent directly to the IRS If the application is denied the taxpayer has the opportunity to select a different bank product To qualify for a RAL a taxpayer must have an income source other than Schedule C The RAL amount is based on the taxpayer s anticipated federal tax refund and allows the taxpayer to receive a loan on the refund amount within a matter of days within 24 hours in many cases If the taxpayer s RAL application is denied the bank flips the RAL to a non loan product see Table 8 3 since the IRS has already acknowledged the return RAL eligible refund amounts vary by bank and can range up to 9 999 99 The loan amount is paid in full when the IRS deposits the actual refund directly into the bank The bank could withhold preparer fees through this loan process A preparer can print the RAL check once the loan is approved Preparer fees are deposited into the pre parer s account within days after the check is printed Non loan bank products allow taxpayers a way to pay their preparation fees from their refund rather than having to pay their fees up front It also gives unbanked taxpayers an alternate way to re
212. ange You can also use Setup Checks to change the check number if necessary 7 Click Continue and then click Print 224 Tax Year 2009 Drake Software User s Manual Processing the Check 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 M p l RT ANT The check register must be transmitted to Drake before you can receive fees from the bank Drake recommends running EF gt Transmit Receive after printing large batches of checks Reprinting Checks To reprint a check 1 From the Home window select EF gt Print Checks e Ifno new checks are ready for printing you are prompted to reprint checks Click Yes to open the Reprint Checks dialog box Figure 8 6 e Ifnew checks are ready the Select Checks dialog box is displayed Click Exit then click Yes to open the Reprint Checks dialog box Figure 8 6 Drake 2008 Reprint Checks Reprint Checks This utility allows you to reprint a check that has been damaged or printed incorrectly Enter the client s SSN in the space provided and click Print Note You should not attempt to reprint a check that was lost or stolen Instead follow the procedures listed by the Bank for reissuing a lost or stolen check Enter the Client s SSN and click Print Name s Taxpayer SSN Decline Reason Spouse
213. another computer For details on transferring returns see Backing Up and Restoring Files on page 270 Each return a PPR Each return created counts as one PPR Do not create unnecessary returns in the software Use Drake test returns to practice data entry SSN verification A required SSN verification field on the New Return screen helps reduce errors Use care entering SSNs SSNs or EINs entered on screen 1 cannot be edited Once a return has an SSN or EIN entered the return counts toward your total and cannot be added back to your PPR bank of activated but unused returns The Tools gt File Maintenance gt Change SSNs on File feature is now available in the PPR package but you will be charged for another return if you use it Changing or correcting names Names can be changed however if you change the name on a return you will be charged for another return Read only When opening a prior year return you are prompted to pay for the return or open it in read only mode Entries cannot be made from read only mode Quick Estimator A return entered in the Quick Estimator counts as one return For more information on this feature see Quick Estimator on page 286 Your computer must be connected to the Internet in order to purchase more PPRs using the process described below 1 2 3 4 From the Drake Home window go to Setup gt Pay Per Return In the bottom section of the Pay Per Return dialog b
214. aphs BE 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 20 Category tree left pane of Client Communications Editor While the result letters are designed with keywords inserted to handle most situations additional keywords are available if you want to further customize the letter Tax Year 2009 Drake Software User s Manual Available Letters Software Setup Table 2 14 lists all available letter templates All letters can be modified using the Cli ent Communications Editor Templates with an asterisk indicate letters that can be generated individually or in batches separately from the tax return See Letters on page 279 Table 2 14 Letter Templates Available in 2009 Letter Template Result Letter Result Template Extension Letter Description Provides return results for the filed return s 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 written letter template is provided Explains that an application for
215. ar or if they meet both of the following conditions e Prepared more than 100 combined original individual or partnership returns for tax year 2007 in calendar year 2008 e Use tax software to prepare one or more New York State individual and or part nership returns for tax year 2008 in calendar year 2009 A corporation must e file all general business and NYS S corporation Article 9 A returns and extensions beginning on January 1 2009 and electronically pay the bal ance due on those tax documents if all three of the following conditions are met e Does not use a tax return preparer to prepare Article 9 A general business corpo ration and S corporation tax returns E 3 Appendix E State E filing Mandates Drake Software User s Manual Oklahoma Rhode Island South Carolina Utah Virginia West Virginia E 4 Wisconsin e Uses tax preparation software that has been approved by New York State for e fil ing business corporation and S corporation tax returns e Has broadband Internet access Any tax return preparer who prepared more than 50 Oklahoma income tax returns for the prior year must e file all Oklahoma income tax returns prepared for the current tax year This mandate does not apply to a return upon which the taxpayer has indicated he or she did not want the return e filed Legislation signed into law on July 1 2008 indicates that Rhode Island requires pro fessional tax preparers who prepared more than 100
216. are User s Manual ADDENDUM Recommended labels are three across and ten down ee 5160 or 8160 Printing a Client Label From Data Entry Tax Year 2009 This document is an addendum to the Drake User s Manual for tax year 2009 The contents of this document have been incorporated into the online manual If you have printed the manual and wish to insert this material into your printed copy use the page numbers provided below as a guide to where addenda pages should be inserted 4 5 N Enter the requested information if necessary and then click Next If the Filter Selection dialog box is opened Set filters as desired then click Next See Filter Manager on page 296 for information on filtering Select any Basic Search Options and then click Continue For more information on search conditions see Search Conditions on page 296 Position the mailing labels as needed Options are described below e Number of Copies of this Label Number of labels to be printed For example if you enter a 5 five labels will be printed e Position of the first available label Position of the first label on the avail able sheet If the first label on the sheet is missing you could enter 2 to have printing begin in the position of the second label e 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 e Horizon
217. are not activated This feature can be accessed if all of the following conditions are met e The program detects that the machine is connected to the Internet e You have security rights to install patches e You have permission to see the message regarding the updates ready for down load e Your system needs the updates If updates are available go to Tools gt Update Manager and follow the instructions for installing updates Updating Computers without Internet Access The process described here allows you to transfer downloaded update files from a computer with Internet access to other computers without Internet access There are three main steps to this process 1 getting a list of needed updates from the computer without Internet access 2 loading the updates from the computer with Internet access onto a media storage device and 3 copying the updates to the first computer You need a media storage device such as a USB flash drive or a floppy disk and the updated Drake program on a computer that has Internet access Getting an To get an update list complete these steps using the computer that needs the updates Update List the one without Internet access 1 Connect a media storage device to the computer 2 From the Home window go to Tools gt Update Manager 3 Under Updating computers without Internet access click the first option to copy updates from another computer to this one and then click OK to close the
218. ary e Shipment letter e Practice returns and e filing and banking practice files in PDF e Drake Software User s Manual PDF e Various informational fliers Software for state programs e filing banking the Tax Planner the Drake Document Manager DDM city tax rates pre prepared data entry and RIA tax research will be included in a subsequent shipment in January Federal and state programs are updated with each software release thereafter M p RTANT Hold on to your packing slip This slip includes your serial number and your Drake customer account number both of which are required for installing the software and subsequent CD updates 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 e Windows 2000 NT XP ME Vista 7 Windows NT users must have Service Pack 4 0 or higher available from www microsoft com e Pentium class processor operating at 166 MHz or higher Tax Year 2009 7 Installation Installation Using Windows Vista A system administrator or user with OS access must install your tax software Drake Software User s Manual e 540 megabytes MB available hard drive space Minimum performance requires at least 100 MB available hard drive space plus 7 MB for each state program e A minimum of 64 MB RAM for Windows 2000 or NT e A minimum of 128 MB RAM for Windows ME XP Vista or 7
219. assword in order to open the return Sending Client Files to Drake Support When you send an e mail to Drake Support from Enhanced View Print mode the pro gram automatically sends both the print file and the data file You have the option of sending return documents in PDF in addition to the client files To send files to Drake Support from Enhanced View Print mode Tax Year 2009 181 Setting Up View Print Options Drake Software User s Manual Open the return Click View or Print to access View Print mode optional Select any forms to be included as PDF documents in the e mail POND 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 the password The Compose Message dialog box is opened showing the attached files in the Attachment s list Figure 6 13 Drake 2009 Email Compose Message e N To Attach Help Exit 2009 Tax Return Documents PDF Print File 400001001 1040 Data File 400001001 1040 Subject 2009 Tax Return Information Attachments Add Dacii es a ee aa a a T na aaa ee ay Figure 6 13 Attachments shown in Attachments s list of the Compose Message dialog box 5 Click the To button see Figure 6 13 and double click an e mail address from the Drake Software Support Address Book Click OK 6 Click Send You have the option of attaching add
220. ated 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 ee Se EN ee 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 to view The tree view of the Client Communications Editor lists the keyword categories Click to view specific keywords within a category In the example in Figure C 5 the Preparer Firm and Revenue category has been expanded Client Information Miscellaneous Prep Firm and Revenue Firm E mail Address Firm Name Paid Preparer Fax Paid Preparer Name Paid Preparer Phone Figure C 5 Prep Firm and Revenue keywords To view a keyword description place the mouse pointer over the selected keyword A brief keyword description appears as shown in Figure C 6 Client Information p Miscellaneous Prep Firm and Revenue Firm E mail Address ri 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 35 C 2 Tax Year 2009 Drake Software User s Manual Appendix C Keywords OtherTax
221. ates 265 error message beeps 24 flags 61 grid data entry 24 heads down data entry 74 imperfect return election 28 macros 33 Pay Per Return PPR 20 prompting for check print transmission 28 state return options 28 W 2 verification option 24 addenda pages Appendix F adding custom paragraphs 28 50 employer information 283 firm information 14 preparer information 16 statements explanations to a return 168 student records ETC 247 add on fees 14 address book Drake e mail 256 addresses change of 162 foreign 88 in care of 88 military 88 taxpayer 88 adjusted basis tracking 112 adjustment fields 24 63 Tax Year 2009 Index ADMIN logging in as 9 administrative options setup 29 administrative rights assigning 17 administrator login see also ADMIN logging in as in CSM 237 in ETC 242 247 passwords 13 Scheduler options 78 advance EIC payments 132 alimony 97 122 Alternative Minimum Tax AMT data entry of 126 on Schedule D 99 amended returns 159 American Opportunity Credit 123 amortization codes 153 schedules 282 applications for bank products 213 217 appointment reminders 81 appointments see also Scheduler calendars 79 changing details of 84 on the Home window 54 overlapping 83 private 81 recurring 81 rolling over from prior year 82 scheduling 80 searching 84 Archer MSAs 117 archiving returns 185 186 assets depreciable 150 group sales 154 on Schedule C 98 sales of 99 section 179 expensing 151 sold 153
222. ation Logging In To log in to ETC 1 Go to the Drake Support site and select Training Tools gt Drake ETC 2 Inthe Returning Users section enter a Username and Password Figure 10 4 Returning Users Username MaxsTaxes Password eecces o Figure 10 4 Logging in as a returning user 3 Click Sign In Once yov re logged in the ETC Welcome page is opened On the left of this page is a sidebar listing the available resources described in Table 10 3 Table 10 3 Drake ETC Resources Resource Description Tax Courses Interactive tax courses explore IRS tax law and terminology and how they apply to Drake data entry CPE credits are available Current courses include 1040 1065 1120 and 1120S Tutorials Step by step instructional slide shows teach the basics of Drake Soft ware There are currently more than 50 Drake Software tutorials and more than a dozen CWU tutorials available Practice Returns Hands on data entry and e file training Tax Year 2009 243 Online Support Resource Videos Drake Software User s Manual Table 10 3 Drake ETC Resources Description Online videos covering such subjects as administration data entry e filing CSM DDM Drake Tax Planner Forms 4562 4797 and 1116 and Schedules C F and E Report Card Track students progress in the tutorials and in the tax courses includ ing dates of completion quiz results and CPE credits earned Administratio
223. ation should be designated as the server Each workstation must have access to the server computer s NOTE drive through a single drive letter A network technician can map each workstation to the server using the same drive letter All computers on the network must share the drive on which Drake is installed Map to the drive not to the Drake09 folder To establish the server computer 1 From the Home window in Drake select Setup gt Directories Paths 2 Select 3a This is the server 3 Click OK Now that a computer has been established as a server the workstations must be set up To set up the workstations complete the following steps from each workstation Open and log in to Drake From the Home window select Setup gt Directories Paths Select 3b This is a workstation Select the drive letter for sharing client files ae eS optional To allow the workstation to access shared files other than client files mark Admin Override and select the shared drive letter for all other shared files en Sr eS E fingen i iA iia eman PR ai pantin o 3 Software install d on server and workstations secondary network setup ix 4 3 Sb This is a workstation V dicate server drive letter for sharing Oo To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below r Paths Drive Letter
224. ber Asset Descriptions Date Acquired Date Sold Gross Sales Price Depreciation Amount Cost or Other Basis Loss Gain Department Summary Asset summary report sorted by department or schedule Produces an asset summary report sorted by department or schedule Year Summary Summary report of assets on a yearly basis grouped by department Each department has a summary line for each year up to 10 years prior Also totals depreciation for 11 years and prior Sorted by department then year Year Acquired Cost Prior Federal Depre ciation Current Federal Depreciation Total Federal Depreciation State Prior Depreciation State Current Depreciation and Total State Depreciation Preference Report List of assets placed in service after 1986 Asset Number Department Number Asset Description Date Placed in Service Method amp Recovery Period Basis Current Depreciation Alternate Depreciation and the Preference Amount Auto Code Print Report based on the macro setup for each client selected Reports can comprise any of the described reports and any valid options associated with them See Using Fixed Asset Manager Macros on page 303 Tax Year 2009 301 Fixed Asset Manager Drake Software User s Manual Running a Fixed Asset Manager Report To run a report using the Fixed Asset Manager 1 From the Home window select Reports gt Fixed Asset Manager The Fixed Asset Manager di
225. bill Select this option to have the taxpayer s e mail address from screen 1 printed on the bill Sales Tax Enter the sales tax percent to add to client s bill Enter a number greater than one For example 4 5 would represent a sales tax rate of 4 5 Billing statement format Select among seven formatting options including Billing by time preparing bill based on time spent preparing return multiplied by preparer s hourly rate as defined in Setup gt Preparers Billing by form preparing bill based on forms necessary to complete return by price 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 gt Optional Documents tab Header on bill Select among options for the header to be printed on the bill Tax Year 2009 27 Software Setup Custom Paragraph Choose to have a custom paragraph printed on the bill Select a location then write the paragraph in the supplied text box Drake Software User s Manual Table 2 10 Options Setup Billing Description 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
226. box Enter the SSN or EIN in the SSN EIN text box and click Browse to open the Add Attachment window Select the file to attach and then click Open The file is shown in the Attachment s pane of the Attachments dialog box Click Done e To attach a Drake program file click the Browse button for Drake Software Program File s see Figure 10 15 Locate the file in the Attach File win dow that is opened and then double click it or select the file and click Open The file is shown in the Attachment s pane of the Attachments dia log box Click Done e To attach a file other than the types described above click the Browse button for All other File s see Figure 10 15 Locate the file in the Attach File window that is opened and then double click it or select the file and click Open The file is shown in the Attachment s pane of the Attachments dia log box Click Done Once the files are attached complete the To and Subject fields and compose your message Click Send to send the e mail Removing an To remove an attached file select it in the Attachment s list see Figure 10 15 and Attached File select Remove from the right click menu Address When composing e mail messages you have several options for storing e mail Books 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 256 Tax Year 2009 Drake Software User s Manual In
227. calendars Options are described in Table 4 2 Table 4 2 Scheduler Setup Options Setup Option Appointment duration Scheduler times Description Set the default appointment time displayed in the Appointment Detail dialog box see Scheduling Appointments on page 13 Values are 15 30 60 75 or 90 minutes Set time intervals to be displayed on the calendar grid rows of the Appointment Scheduler see Figure 4 11 Values are 15 30 and 60 minutes Appointment reminders Activate the appointment reminder establish how far in advance to receive a reminder of an upcoming appointment You can also select this option on the fly when setting up an individual preparer s appoint ment Open Setup Schedule for Set up a preparer s general daily schedule in out times ZIP code autofill Activate the ZIP code autofill feature which automat ically enters 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 an indi vidual preparer s appointment Customer name autofill Establish how client names are displayed in the cal endar view Calendars Preparers in View Select which preparer schedules are visible by default Calendar vi
228. case sensitive 3 Re enter the password in the bottom text box to confirm it Drake Document Manager Integration Options 1 Set the location for the Drake Document Manager 2 Determine if you want Drake to set up the Document Manager client folders for you Document Manager Location C DrakeDDM V Allow Drake to set up Document Manager client folders Recommended Name of Custom Folder Add Custom Folder Under Client s Main Folder Client gt TAx gt 2009 DDM Password Confirm Password Help Save Cancel Figure 13 3 Adding a password to DDM 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 3 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 309 Document Manager Drake Software User s Manual NOTE For information on password protecting individual files in the DDM see File Security on page 316 Configuring To set configurations for the DDM the DDM 1 Open the DDM See Figure 13 6 on page 312 2 Choose Setup gt Options Options are listed in Table 13 1 and shown in Figure 13 4 on page 311 Table 13 1 DDM Setup Options
229. ceive their refund proceeds M p I RTA NT The taxpayer must understand that a non loan bank product is not a loan The disbursement reflects the actual deposited refund amount with bank transmitter and preparer fees deducted To provide any bank product the bank sets up a temporary account for direct deposit of the taxpayer s refund Once the IRS deposits the refund into the temporary account the bank deducts applicable fees and issues the remaining funds to the taxpayer Distribution Methods Tax Year 2009 Bank products can be distributed by direct deposit or cashier s check Fees are charged for each method Notify your client that the following fees can be subtracted from the refund amount e Tax preparation fees e E filing fees e RAL Bonu ERC preparation fees e A 2 Drake processing fee included on all bank products e Bonu ERC deposit account fee included on all bank products 215 Preparing to Offer Bank Products Drake Software User s Manual e Bank RAL fee included on all RALs e Additional transmission software add on fee e Bank IRAL fee included on all IRALs In addition the following technology fees are charged e 12 95 for each Chase bank product e 11 95 fee for each bank product from Santa Barbara e 22 95 fee for each Republic bank product Most bank products include a direct deposit option If a taxpayer has a checking or savings account funds can be deposited directly into the taxpayer
230. ces only one return if Married Filing Separately A separate return must be generated for the other spouse 286 Tax Year 2009 Drake Software User s Manual Quick Estimator e Because the names of dependents are not entered in the Quick Estimator the indi vidual names are not shown on the return The appropriate credit amounts are indicated if all applicable fields are completed in the Quick Estimator e The potential bank product amounts can be calculated by selecting the RAL and Bonus fields e An Override RAL amount entry overrides the selected loan amount on the BANK screen if this is allowed by the bank e A Prep fees w h entry overrides the Preparer Fees field on the BANK screen N Remember the Quick Estimator should be used only for estimating DTE taxes A full return should be prepared later Data from the Quick Estimator flows to the full tax program and might need adjusting Tax Year 2009 287 Quick Estimator Drake Software User s Manual This page intentionally left blank 288 Tax Year 2009 1 2 Reports The Reports function allows you to create printable reports based on data entered into the program via data entry the CSM or the Scheduler Report Manager Use the Report Manager to create a variety of pre defined and customized printable reports To access the Report Manager from the Drake Home window select Reports gt Report Manager Report Categories Five report categories are provided in the Report
231. child and dependent care expenses State links are located in a State Information section at the top right hand corner of a screen Figure 3 6 DER gt i 2 yn TSJ AE N tse Figure 3 6 Example of a State Information section for federal to state hyperlinks State Information CA HI ME NE Tabs Inthe past returns with multiple instances of the same form such as partnership returns that had numerous partners required extra steps to organize the forms Tabs eliminate the intermediate steps required previously Drake 2009 Data Entry 600008001 600008001AUSTEN PARTNERSHIP Schedule K 1 Partner s Share of Income Credits Deductions etc K1 K1 cont d Basis Wks Supplemental Info 8805 Item M _ 400001234 E DNumber eet F Name _ ELIZABETH BENNETT stsi isS pion ie atn na ae a n Figure 3 7 Tabs to K1 screens on a 1040 return On the K1 screen in a partnership return for example see Figure 3 7 tabs make it easy to enter the K 1 basis supplemental and Form 8805 information for the same partner Previously a preparer would have to return to the main screen and select the applicable partner before entering additional information These steps are no longer necessary 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 th
232. ciary 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 2009 C 3 Appendix C Keywords Drake Software User s Manual Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description Colorado Individual OtherTax1 Severance Tax Corporate 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 OtherTax1 Business Entity Tax Partnership OtherTax1 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 OtherTax2 FL 405 Corporation OtherTax2 FL 405 S Corporation OtherTax2 FL 405 Partnership OtherTax1 FL 405 Fiduciary OtherTax1 FL 405 Kansas Individual OtherTax1 Franchise OtherTax2 Homestead Corporation OtherTax1 Franchise S Corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Fiduciary OtherTax1 Franchise Kentucky All OtherTax2
233. consent the taxpayer and spouse if MFJ must enter their names and the date onto the USE screen for banks and e Collect If using the E1 Card taxpayer must also complete the E1 Consent to Use screen accessible as a link from the any screen see Figure 8 1 211 Using Banking Options in Drake Drake Software User s Manual 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 2009 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 HUGH F SAMPLE 02 18 2010 Name of joint taxpayer must be entered by the taxpayer Date GWEN D SAMPLE 02 18 2010 Figure 8 1 Names and the date as entered by clients on the USE screen Once the required fields on the applicable screen are completed the Consent to Use of Tax Return Information will be generated with the return N These forms for e Collect products can also be printed from Tools DTE gt Blank Forms Form filenames are E1_7216U PG for E1 Card and EC_7216U PG for e Collect Consentto The Consent to Disclosure of Tax Return Information contains banking option infor Disclosure mation and explains the IRS Regulation 7216 requirement to the taxpayer It must be of Tax signed before the return is e filed Return Information Paper F
234. creen FL and PA State specific fields for Florida and Pennsylvania returns are located on screen 4562 Occurrence of Schedule field Choose the occurrence of the state form or sched ule to which the asset relates default is 1 For PA entries this field applies only when the asset is sold e Schedule Form Data Flow list Select the state form or schedule to which the asset data should flow For PA this field applies only when the asset is sold e Removal Method field FL only Press F1 to view valid entries If left blank and a 2009 Date sold is entered the program uses the default 02 FL Sold Placed in Service Overrides The 4562 screen has the following placed in service override fields e Force convention MQ mid quarter or HY half year If MQ is selected the program calculates which quarter to use e Donot use MACRS tables Options include Qualified Indian Reservation Property Stopping Depreciation on an Asset To stop depreciation on an asset that was not sold enter the asset s remaining basis in the Salvage Value field fourth item on the left side of the 4562 screen The asset will be updated to next year No additional depreciation will be taken since the accumu lated depreciation equals the depreciable basis Depreciating Sold Assets To indicate the sale of an asset for depreciation purposes complete the applicable fields in the If sold section of the 4562 screen See Figure 5
235. ction of the 5471 screen For Functional currency enter the name of the currency used in the foreign country In the Exchange Rate fields enter the Average rate and the rate at Year End rounded to four places If using U S dollars leave the Exchange Rate fields blank If the DASTM method of accounting is used place a check mark in the DASTM box NOTE The program translates the functional currency wherever needed within the return e SUPP Screen Use the SUPP Supplemental Information screen to explain actions taken on other screens and to explain organizational information required by the IRS This screen is accessible from the Other Forms tab When filling out the SUPP screen you must make a Supplemental Information Selection Figure 14 4 Form 5471 Supplemental Information Multi form code for 5471 Schedule z d Multi form code for 5471 Supplemental Information Selection Explanation Use both explanation boxes for ORG l Supplemental Information aF ah A o a C ae aae Lng one SE ed Oe ae ee Oe a a Figure 14 4 Supplemental Information Selection drop list of SUPP screen Selections are described in Table 14 4 Table 14 4 Supplemental Information Selections on SUPP screen Type of Explanation SUPP Screen Instructions NC Name Change If a name change was recorded on the 5471 Infor mation screen select NC and complete the top Explanation pane CAT3 Category 3 Filer
236. ctions that cause the data in cells to change To make a direct entry in a cell click the cell and enter an amount Use this same pro 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 In some cases a worksheet is available for additional data entry The Detailed Worksheet is similar to the CTRL W worksheet in data entry To attach a detailed worksheet select the desired cell and press CTRL W Use the Detailed Worksheet dialog box to add edit and remove items for the cell Drake Tax Planner Detailed Worksheet Enter the description and amount for the item Click Add to place this item in the list below Item Description Amount Rich Mann 25000 Add Description Amount Edit O U Cash 1000 M P Kunious 2000 Remove Clear All Exit Total 3000 Figure 13 12 Adding items to a Detailed Worksheet dialog box Tax Year 2009 Drake Software User s Manual Tax Planner For example to add an item enter a description and an amount then click Add Once all items are entered click Exit The total is shown on a blue background Figure 13 13 Income Items Wages Nontaxable combat pay Taxable interest Nontaxable interest Dividends Qualified dividends Taxable refunds Alimony Business income Schedule C Capital gain loss Schedule D Figure 13 13 Work
237. ctiv ity loss deductions this year and how much is being carried over WK_6251B Suppresses exemption worksheet for Form 6251 Alternative Minimum Tax WK179LMT Proforma organizer 44 Prevents section 179 Business Income Limit Worksheet from being pre pared This worksheet shows the amount if any of section 179 deductions this year and how much is being carried over Prevents proforma organizer from being generated for next year See Organizers and Proformas on page 72 Tax Year 2009 Drake Software User s Manual Making Changes on the Fly The option to print or suppress the 1040A and 1040EZ for all returns if applicable is set at Setup gt Options gt Form amp Sched NOTES ule Options tab New in 2009 if the option to print K 1 letters is selected in Options Setup you can go to the PRNT screen to suppress printing of the K 1 letter for the 1120S 1065 and 1041 packages Forcing Table 2 17 lists PRNT screen items that can be forced even if the program calcula tions and established defaults would otherwise not generate them Items to Be Generated Table 2 17 Items That Can Be Forced from the PRNT Screen Item Description Schedule A Itemized Deductions Schedule B Interest and Dividend Income Form 4562 Depreciation and Amortization Form 6198 At Risk Limitations Form 6251 Alternative Minimum Tax for Individuals Form 8582 Passive Activity Loss Limitati
238. ctivity with active participa tion Calculation flows to the Rental Real Estate Activities With Active Participation section in Part of Form 8582 and to the WKS 1 worksheet 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 not an option for 4835 the calculations from this screen do not flow to Form 8582 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 General partner is selected on the K1P screen self employed NOTE income is automatically reduced by any amount entered in the Sec State K 1 Amounts If Different 110 tion 179 deduction field The unreimbursed partnership expense flows to a separate line on Part Il of Schedule E In cases where the state K 1 amounts differ from federal K 1 amounts such as when a state does not take the federal limits on depreciation it s important to be able to indi cate the difference in the software so the correct K 1 amounts flow to the correct fed eral and state forms By default the prog
239. culated estimates See the ETA screen help for more information Applying 2009 Overpayment to 2010 Drake provides several ways to indicate that a taxpayer wants to apply part of a 2009 overpayment to the 2010 estimate Figure 5 49 You can use the ES screen to enter the total overpayment to apply to all estimates item 1 in Figure 5 49 or you can enter the total overpayment amount directly on screen 5 item 2 The program applies the overpayment according to the overpayment OP code selected item 3 see OP Codes following To override the OP code selection enter amounts to be applied into the Overpayment fields for each voucher item 4 136 Tax Year 2009 Drake Software User s Manual Estimated Taxes OP Codes _OP Code zl Tax Year 2009 ES Screen Estimated Taxes DUE in 2010 Federal ES Code zl OP Code zl Overpa Estimate amt NOP Bes OA serra eect eer eee Voucher 1 Voucher 2 Voucher 3 Voucher 4 Screen 5 O Oth f payments Fom T4 76 Estimated tax penalty Rent ar EN T A E a E aaa ease anea p Figure 5 49 Entering overpayment amounts Note that the screen 5 field is an override When screens 5 and ES both contain a total overpayment amount the program uses the screen 5 entry however if the ES screen contains quarterly amounts only and no total the program calculates and uses the total of those quarterly amounts That calculated total overr
240. culations from elsewhere in the program Taxpayer Demographics Screen code 1 Use screen 1 Demographics accessible from the General tab to complete the Label and Filing Status sections of Form 1040 Screen 1 also has fields to indicate contact information and other relevant details of the return Selecting a Filing Status Select a filing status from the Filing Status drop list at the top of screen 1 Alternately you can type the filing status code Click in the Filing Status box and press F1 to view available codes N If the taxpayer is married enter his or her information in the left col DTE umn and enter the spouse s information in the right column If a married status is not selected the right column is not active Tax Year 2009 87 Taxpayer Demographics Drake Software User s Manual Entering Taxpayer Information Enter the full name date of birth occupation and contact information phone num bers and e mail address for each taxpayer For e filing purposes the combined length of the taxpayer and spouse s names must not exceed 35 characters Press F1 ina Name field to see alternatives for names longer than 35 characters Below the E mail Text Msg field select any applicable boxes to indicate if a taxpayer is a Dependent of another wants to donate to the Presidential campaign fund is Blind or has a Stateside military address If the taxpayer is active military and requires a special processing c
241. culator 67 calendars in Scheduler 79 cancellation of debt 117 of loans bank products 228 capital gains and losses see also Schedule D Capital Gains and Losses carryovers from prior years 100 carryback of net operating losses 157 carryforward of net operating losses 157 158 carryover worksheets 25 cashier s checks 216 casualties and thefts 99 CD shipments 8 change of address 162 changing client SSN or EIN 273 return types C corp to S corp etc 276 Chase Bank 214 check register 226 checks 219 lost or stolen 226 resetting check numbers 226 test printing 223 Child Tax Credit 130 child care expenses 127 128 church income see clergy city codes 64 tax rates for Ohio and Pennsylvania 285 clearing flags 61 clergy expenses 119 income allocation 124 indicating on W 2 121 self employment tax 120 Client Communications Editor 35 client files see files Client Status Manager 54 231 237 client statuses in CSM 231 Client Write Up 322 COBRA assistance 133 codes Tax Year 2009 Drake Software User s Manual acknowledgment acks 193 194 business 97 city 64 error in e filing 189 ES estimate 136 extension form 159 F federal 64 filing status 87 form 59 FTC foreign tax credit 126 investment credit 152 IRS debt 200 miscellaneous 167 multi form MFC 64 non paid preparer 14 OP overpayment 137 proforma 73 reject 200 searching 97 special processing 88 ST state 64 tax treatment 98 TS TSJ 64 under
242. d for e filing e Preparer Name To apply for a e Social Security Number If the preparer has a Preparer Tax Identification au das Number PTIN the PTIN replaces the SSN on the 1040 send to the IRS 4 Enter Login Information A login name is required for e filing Use of a pass 16 word is optional 5 Ifapplicable enter the Preparer LTP Number 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 automatically fill in any field requiring electronic signature with the preparer s PIN 7 Enter Power of Attorney information necessary for Form 2848 Power of Attor ney and Declaration of Representative Preparer Designation Select the designation under which the preparer has authorization to practice before the IRS CAF Number 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 8 Enter W 7 Acceptance Agent information for the preparer if applicable 9 Click Save Setting up Only administrative users can set security rights Settings must be established before a Preparer preparer can begin working in the software
243. d in sure of Tax Return order to obtain electronic consent to disclose the taxpayer s informa Information tion in applying for the E1 Card This screen is similar to the DISC screen for e Collect and other banks The ECOL Screen 7216 Signature Additional Product Options ID Info Tax Year 2009 Use the ECOL screen to enter all information necessary to apply for an e Collect product The 7216 Signature box must be checked if a DISC electronic signature is not present The signature can be on paper or electronic For a hard copy of the form go to PDF 7216 on your Drake CD To access the DISC screen for an electronic signature click the link provided on the ECOL screen The State Product field lists all states that allow direct deposit of funds The Tax Preparation Fees field is an override field an entry in this field will override the cal culated tax preparation fees on the bill In the Identification Information group box enter the ID type ID number Issue location and Expiration date for the taxpayer and spouse if applicable For mar ried filing jointly ID information is required for both the taxpayer and the spouse 221 Using e Collect and El Card Screens in Data Entry Drake Software User s Manual Demo graphic Info Disburse ment Method This field is not required if an address has been entered on screen 1 An entry on this field will not override the screen 1 address it will serve as
244. d network partner As with e Collect the E1 Visa Prepaid Card is available to certain taxpayers who are 18 or older For more information on qualifying for the E1 Card visit epsfinancial net or call Drake s support line at 828 349 5505 Tax Year 2009 Drake Software User s Manual Using Banking Options in Drake The E1 Visa Prepaid Card is issued by The Bancorp Bank pursuant to a license M H RTA NT from U S A Inc It can be used wherever debit cards are accepted The Bancorp Bank Member FDIC 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 Using Banking Options in Drake This chapter covers requirements for you and your clients processes for setting up your software for offering various banking options including e Collect and the E1 Card 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 Consent to Use of Tax Information
245. d overrides system calculations Tax Year 2009 151 Depreciation Drake Software User s Manual Method e AE erat eee oG He een ee e e E E Salvage value Override regula 179 expense elected in prior years an 179 expense allowed in prior years Bonus depreciation Additional Depr Elections Prior bonus depreciation ecco Figure 5 58 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 top right section of the 4562 screen See Listed Property Type on page 151 For returns being prepared in Drake for the first time the prior NOTE section 179 expense must be entered manually for the depreciation to be calculated correctly In the future the 179 expense allowed in prior years field see Figure 5 58 will be updated based on system calculations If the taxpayer expenses assets using section 179 the program produces a WK_1179L worksheet Section 179 Business Income Limit with the return Investment Credit Codes If an investment credit code is required select the code from the Investment credit code drop list on the 4562 screen Asset amp Department Numbers Land Cost The Asset number and Department number fields on the 4562 screen are for track ing purposes in the Fix
246. d should not be used as a substitute for obtaining help from Drake Support Other Resources The 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 248 Tax Year 2009 Drake Software User s Manual Online Support Drake Software Downloads Prior Year State Programs Release Notes Conversions Publications Marketing Kits Partner Programs Drake Advisory Group Tax Year 2009 The Download Center is available from Resources gt Download Center After you enter your EFIN and password the Download Center page displays the software and education training materials available for download Click an item to download it Drake s prior year software for state programs is available by selecting Resources gt Prior Year States and selecting the year to download From the list of states and revi sion dates click a state name and follow the instructions that appear on your screen For tax years 2003 to 2006 download state updates from the Support NOTE site s Download Center click the link on the Prior Year States win dow For 2007 and 2008 state programs are accessed through the software
247. d to any state or city if a zero 0 is entered here e City Code indicates the source of the income on city returns Press F1 in a screen field to view all acceptable codes for that field Drake allows you to associate one screen with another such as when an asset on one screen should be associated with a Schedule C To associate screens complete the For field and the Multi form Code field if applicable at the top of the asset screen For the For drop list select the form to be associated with the open screen In Figure 3 20 an asset entered on screen 4562 is being associated with Schedule C Form 4562 For v A C E F 2106 4835 AUTO 8829 Multi form code 2 1 999 1 is assumed if left blank Date Description Acquired Cost Basis y e F a E a ar Pam nw Figure 3 20 In this example the 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 20 For Schedule E rental properties assign each property a separate NOTE multi form code and associate the assets with individual properties accordingly Three properties will be printed on each Schedule E but the multi form code will
248. dates for taxpayer and spouse signatures excluding 1040 Print dates for taxpayer and spouse signatures excludes 1040 Select this option to print the signature dates on the return Taxpayer phone number Select this option to print the taxpayer s phone number entered on screen 1 Third party designee Select the third party designee name to print on the main form of the return Rounding amounts Select Dollar or Penny rounding Dollar rounding is required for e filing Penny rounding prints penny amounts on all forms 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 Show preparer fees associated with bank product Select this option to print bank fees on the bill Print taxpayer s phone number on the bill Select this option to have the taxpayer s telephone number from screen 1 printed on the bill Print taxpayer s e mail address on the
249. debit card is used A cancellation is not processed if the direct deposit from the IRS or state has already occurred Tracking Prior Year Information The TRAC screen in data entry displays prior year bank product information for fed eral returns 228 Tax Year 2009 Drake Software User s Manual Cancellations Tracking and Post Season Procedures Prior Year Bank Product Information 1040 Only NOTE These amounts are rounded to the nearest whole dollar Checks Anticipated Actual IRAL Fi Federal refund deposit NIA Fees Anticipated Actual Banki is Account setup a PHO WarOtincac vasactaccucseeseseneeees Serice UM AU ease ena Figure 8 8 Prior year bank product fields on TRAC screen Information must be entered manually the first year these fields are used Post Season Procedures Required post season procedures vary from bank to bank Refer to your bank s operat ing 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 2009 229 Cancellations Tracking and Post Season Procedures Drake Software User s Manual This page intentionally left blank 230 Tax Year 2009 9 Client Status Manager The Client Status Manager CSM is a too
250. deduction If section 179 EXP is selected as the depreciation method on more than one 4562 screen the program expenses the initially entered items first regardless of which schedule lists the asset The limitation occurs when the total of the expensed assets reaches the established limit for the current year again regardless of schedule To conform with IRS mandates Drake reports section 179 expense on the first Form 4562 generated with the return If multiple activities have section 179 expensing a section 179 summary is produced on the first Form 4562 All additional 4562 forms produced have only the Section 179 expense deduction lines completed NOTE Section 179 expense cannot be claimed on assets related to a pas sive activity Indicating Indicate section 179 expensing on the 4562 screen In most cases you do not have to Sec 179 use screen 6 which contains override fields for Form 4562 Part I Election to Expense Expensing Section 179 If screen 6 contains a section 179 expense override clear that field and enter the amount on the 4562 screen The entry appears on Form 4562 To expense the entire amount of tangible property under section 179 select EXP as the depreciation method To expense only a portion of the tangible property under sec tion 179 enter all information as if depreciating the full amount then enter the amount to expense in the 179 expense elected this year field Figure 5 58 An amount in this fiel
251. der Updating computers without Internet access click the second option to read a portable data drive from another computer then click OK to close the warning box The Read Update List button appears Figure 11 5 ee a ite a en pee Zs of eee t Pn r ena eeta i p in Deo AEn n pe fni EN A nel nine ape a bn i Updating computers without Internet access Choose this option to copy updates from another C computer to this one A portable data drive floppy disk USB drive etc must be in the computer g Choose this option if you are reading a portable data drive brought from a computer that needs updates Read Update List Help Update Profile Exit Figure 11 5 Option 2 Read Update List button 4 Click Read Update List and then browse to the location of the storage device Tax Year 2009 267 Download Fonts Drake Software User s Manual 5 Select PATCHLIST TXT and click Open If update files are needed they are cop ied to the media storage device If no updates are needed you are prompted to click OK 6 Remove the storage device from the computer Copying the To copy the updates complete these steps using the computer that needs the updates Updates the one without an Internet connection 1 Connect the media storage device to the computer 2 From the Home window select Tools gt Update Manager 3 Under Updating computers without Internet access click the first option to copy updates
252. described previously and must be signed before the return is e filed Franchisors e Paper Forms Access the form in PDF or Word from the PDF 7216 folder on the Drake CD Enter the firm and service bureau franchisor names in Word or PDF or print the documents and enter the names manually The taxpayer and spouse if applicable must sign and date the form prior to e filing 212 Tax Year 2009 Drake Software User s Manual Using Banking Options in Drake Screen code CONS Next go to screen CONS accessible from the Other Forms tab and select the first box in the Paper Consent section See Figure 8 2 Narn oF ort taxpayer mierke uneren by ther taxpayers A i bate ee n Paper Consent of Disclosure to service bureau or franchisor l Consentto Disclosure of Tax Return Information to service bureau or franchisor has been signed by the taxpayer and joint taxpayer if applicable M Consentto Disclosure of Tax Return Information to service bureau or franchisor has NOT been signed by the taxpayer and joint taxpayer if applicable Figure 8 2 Check boxes on CONS screen for disclosure to service bureau franchisor Electronic Signatures To obtain electronic consent the taxpayer and spouse if MFJ must enter their names and the date onto the CONS screen The Consent to Disclosure of Tax Return Information will be generated with the return and will include the name of the service bureau or franchisor from Setup gt
253. dge Base The Drake Software Knowledge Base is a comprehensive search able database consisting of support solutions and articles of interest providing support around the clock Limited Liability Company Modified Accelerated Cost Recovery System Megabytes Modernized e File Multi form code text box on certain screens that allows you to indicate the instance of a form with which the screen s data should be associated Married Filing Jointly Married Filing Separately Multi Office Manager Net Operating Loss Processing a successful transmission Passive Activity Number Personal Client Manager Portable Document Format Personal Identification Number Payment Reference Number Pay Per Return Preparer Tax Identification Number An ID number issued by the IRS that paid tax return preparers can use in lieu of disclosing their Social Security Number SSN on returns that they prepared Reject transmission Refund Anticipation Loan A RAL is money borrowed from a financial institution by a taxpayer that is based on a taxpayer s anticipated income tax refund Refund Electronic Transfer bank product D 3 Appendix D Acronyms amp Abbreviations Drake Software User s Manual RT RTN SSN ST Sub S T ack TS TSJ TILA txt TY UNVER XIs D 4 Refund Transfer bank product Routing Transit Number A number assigned by the Federal Reserve to each financial institution Social Secu
254. djusted for an individual return from the EF screen in data entry A change on a return s EF screen does not affect the global settings selected in Setup gt Options Option Auto generate Taxpayer s PIN 1040 Only Table 1 1 Options Setup EF Description Taxpayers can choose their own PINs or the software can assign a ran domly generated PIN Require Ready for EF indicator on EF screen Select this option to require that the Ready for EF indicator on the EF screen be marked before a return can be selected for e filing Lock client data file after EF accep tance Select this option to lock the client s data file once it has been e filed Open ing 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 Main tenance gt Unlock Client Files Print 9325 when eligible for EF Print Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically for every eligible return Suppress federal EF 1040 only Select this option to prevent e filing of any 1040 return Print EF status page Select this option to have the EF Status page printed whenever a return is eligible for e filing Alert preparer when bank product is not included Select this option to alert the preparer after each calculation that there is not a bank product entered on the current return Activate imp
255. dow go to Tools gt Letters gt Mailing Labels 3 Select a label type from the Select Label list Label selections are described in Table 11 3 Items with asterisks may require filtering of data before printing 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 280 Tax Year 2009 Drake Software User s Manual Letters Recommended labels are three across and ten down Avery 5160 or 8160 Printing a Client Label From Data Entry 6 Enter the requested information if necessary and then click Next If the Filter Selection dialog box is opened Set filters as desired then click Next See Filter Manager on page 296 for information on filtering Select any Basic Search Options and then click Contin
256. drop list shown in Figure 10 6 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 list of available practice returns Figure 10 7 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 Individual Practice Return 5 View Return View Solution eti agent om Be Ce ee ee ae ee Figure 10 7 List of practice returns on the Practice Returns page Click View Return to view the basic return scenario in a PDF document Use data entry to prepare the return according to the scenario Once you ve calculated the return go back to the Practice Returns page and click View Solution to compare your return to the solution return Drake ETC offers 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 document Tutorials and practice returns are also available outside of ETC To NOTE see the tutorials or to work on the practice re
257. dual income tax credit for certain persons who work Employer Identification Number Electronic Refund Check bank product Electronic Refund Deposit bank product Electronic Return Originator An authorized IRS e file provider that originates the electronic submission of returns to the IRS Electronic Tax Administration The office within the IRS with management oversight of the IRS electronic commerce initiatives Electronic Training Center Drake s online training center featuring tax courses tutori als and practice returns Electronically Transmitted Documents Electronic Transmitter Identification Number An ID number assigned by the IRS to a participant in the e file program Federal code generally a drop list at the top of an applicable screen Financial Management Service The agency of the Department of the Treasury through which payments to and from the government such as direct deposits of refunds are processed Head of Household Internal Revenue Code Tax Year 2009 Drake Software User s Manual IRS ITIN KB LLC MACRS MB MeF MFC MFJ MFS MOM NOL P ack PAN PCM PDF and pdf PIN PRN PPR PTIN R ack RAL RET Tax Year 2009 Appendix D Acronyms amp Abbreviations Internal Revenue Service Individual Taxpayer Identification Number A tax processing number for certain non resident and resident aliens who cannot obtain a Social Security Number SSN Knowle
258. e 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 290 Tax Year 2009 Drake Software User s 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 these 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 Assign report title and description Assign columns keywords Window Used 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 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 R
259. e Selection Third Party Designee Section of Form 1040 None Blank No box is marked This default can be overridden from the PREP screen see For a Single Return Override below Preparer 1 9 Designated preparer for preparer numbers see list in Preparer Setup Yes box is marked Return Preparer Preparer who prepared the return Yes box is marked ERO Preparer indicated at Setup gt Options gt EF tab as ERO SSN Indicator Yes box is marked If a preparer or ERO is selected a PIN must be entered for that preparer otherwise no preparer name shows up as the third party designee on Form 1040 For a Single Return Override Screen code Use the PREP screen to override the setup options for third party designee for a sin PREP gle return Enter the designee s name phone and PIN in the fields provided p Third Party Designee Allow another person to discuss this return with IRS cece eccecsecseeneeseenenee Bj x Firat nima a rana Phone PIN Last name at Emal a a Figure 5 57 Third party designee fields on PREP screen For more on how to use the PREP screen to override preparer information see Over riding Other Preparer Information on page 47 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
260. e click the Excel icon You are Ta 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 PARWN gt Multi Office Manager MOM The Multi Office Manager MOM is the online version of the CSM See Chapter 9 Client Status Manager for more on the CSM Designed for the multi office envi ronment MOM allows you to track the work flow of multiple offices providing a snapshot of your entire business Reports and statistics on demographics return status return type bank payments fees and billing information are available Companies with multiple EFINs that wish to use MOM must have NOTE an EFIN hierarchy configured The data available in MOM depends greatly on the hierarchy structure For details on creating an EFIN hierarchy see Building a Hierarchy on page 203 Transferring For CSM data to be transferred to MOM the software must be configured to send Data to MOM CSM data to Drake during the e filing process Each Level 1 and Level 2 EFIN office in a multi office environment must complete the following steps 1 From the Home window go to Setup gt Options gt EF tab 2 Under Session Options select Transmit return data to Drake for multi office web reports 3 Click OK Any changes made in CSM will be transmitted to MOM during e file transmissions Running a To run a MOM report MOM Report 1 Inth
261. e preparer schedules for a specified time range for a specific date or week Schedules are printed or exported for all preparers NOTE To print or export a schedule for a specified preparer see Creating Appointment Reports on page 85 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 a Starting Time and Ending Time and click OK Results are displayed in the Report Viewer from which you can print or export the data NOTE If the Weekly Calendar tab is selected the Report Viewer will dis play 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 a Starting Time and Ending Time and click OK Results are displayed as a printable spreadsheet Scheduling Appointments Appointments can be scheduled for an individual preparer or for a group of preparers NEW FOR The Batch Appointment feature allows you to schedule appointments 7009 based on client and recurring appointments from the previous tax year See Batch Appointment Generator on page 82 Foran A preparer s information must be entered in Setup gt Preparer s before appoint Individual ments can be scheduled in the Scheduler for that preparer N Preparer schedules and appointme
262. e Drake Software User s Manual for the 2009 tax year The Drake Team has been hard at work in 2009 to help ensure that your firm has a successful reward ing tax season Before getting started in the software please read this introduction which includes information on how to use your manual and describes the software s new features for tax year 2009 About Your Drake Software User s Manual The electronic Drake Software User 5 Manual has been developed for Drake clients to provide clear up to date easy to find instructions and guidelines for using the soft ware Use this manual in conjunction with other Drake resources such as the online and on screen help features tutorials training and phone support Be sure to take advantage of our extensive index and the Adobe PDF search feature both of which will help you locate information more efficiently in 2010 This manual is also available as a paper manual that can be ordered from the Drake Support site Support DrakeSoftware com To keep your manual updated Drake Software publishes addenda pages as tax season progresses Check Appendix F Addenda Pages regularly with each CD shipment and throughout tax season so you l know what pages in the manual have been updated Addenda pages are shipped with each software CD and are available on the Drake Support site IRS Changes amp Requirements Tax Year 2009 Changes and additions to IRS 1040 regulations and reporting require
263. e LastName Right click on the screen not a field again and select Client Labels Choose from the following label types e Mailing Label e Folder Label SSN EIN Name or Name only Select the label printer from the Print dialog box Click OK to print the label This option is designed for use with a dedicated label maker such NOTE as the DYMO LabelWriter 400 Label Printer Data can be printed on any label size but DYMO Label Writer labels size 30252 are rec ommended because they work well for folder and mailing labels Size 30252 labels are included in the DYMO printer starter kit Tax Year 2009 281 Amortization Envelopes Drake Software User s Manual To print addresses on envelopes Ensure that envelopes are loaded properly into the printer From the Home window go to Tools gt Letters gt Envelopes Select filtering and sorting options from the Envelopes Filter Selection box If you need a more complex filter click Edit Filters See Filter Manager on page 262 Click Next Modify the Basic Search Conditions as needed then click Continue For more on Basic Search Conditions see Search Conditions on page 296 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 then click Print NOTE Not all printers are capable of printing envelopes Verify that you
264. e Settings Updating computers without Internet access Choose this option to copy updates from another C computer to this one A portable data drive floppy disk USB drive etc must be in the computer Choose this option if you are reading a portable data drive brought from a computer that needs updates Help Figure 11 1 Update Manager dialog box 2 Click Check For Available 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 now 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 this information from Notes the Update Manager dialog box click View Release Notes As shown in Figure 11 2 release note data is displayed in a tabbed format with tabs representing the program packages and one representing all state updates Click col umn headers to sort data in ascending or descending order 1040 amp Program Corporate Sub S Partnership Fiduciary TexExempt Estate Git States Releas
265. e User s Manual When the return is calculated the program displays the words Inactive Return on the main form of the return specifically on lines 1c and 2 Zeros are displayed where required by the IRS in order for amounts to be properly included in the e file data NOTE All EF messages must be cleared in order to e file an inactive return Screens and Forms Several new screens have been added to the program most of them reflecting fields for the forms they support One new screen that does not directly reflect a specific form is screen K1G which is used to enter global supplemental information for all Schedule K 1s in an 1120S or 1065 return Prior to 2009 screen K1S was used to enter supplemental informa tion for all partners or shareholders or for specific partners or share NEW FOR holders In 2009 screen K1G is used to enter information that 70 0g applies to all partners or shareholders Use screen K1S to enter data for a specific shareholder or partner To access screen K18S go to the K1 screen for a partner or shareholder and click the Supplemental Info hyperlink at the top of the screen For tax year 2009 Drake is supporting the following forms for the entity packages Table 14 1 New Forms in Drake for Tax Year 2009 Available in Form Packages Form 1118 Foreign Tax Credit 1120 990 Form 3115 Application For Change in Accounting Method 1120 1120S 1065 990 Form 4720 Return of Certain Excise Tax
266. e basis worksheet with a particular K 1 issued to the taxpayer Schedule K 1 for 1065 S55 PARTNERS IN GRIME CLEANING SERVIC ts A zdr st w ric f gt Passive Activity No Partnership ID number wine rt Figure 3 8 Tabs on the K1P screen for an individual 1040 return Creating and Opening Returns When you enter an ID number SSN or EIN in the Open Create a New Return dia log box the software searches both current and prior year files If it finds a client record in the prior year files only you are given the opportunity to update the record from the previous year s Drake Software into this year s program See Updating Cli ent Files on page 70 to perform an update Tax Year 2009 57 Creating and Opening Returns Drake Software User s Manual Creating a Return To create a return in Drake 1 From the Home window click Open New or File gt Open Create Returns or se click CTRL O In the Open Create a New Return box enter the ID number of the new return Click OK Click Yes when asked if you want to create a new return Open New In the New Return dialog box select the return type and enter a client name lal LE a ll Click OK Data entry screen 1 for the new return is displayed You might be required to verify the ID number for a new return Ver NOTES ification is required for all Pay Per Return PPR clients The Name Entry section is displayed only if the D
267. e changed from within a return Table 2 19 Penalty amp Interest Options that Can Be Changed on the Fly Global Setting Available Overrides Calculation of penalty If global option is selected it can be suppressed for a single and interest on all returns return If the global option is not selected it can be forced for a single return Interest rates Penalty and interest amounts can be entered manually for a sin gle return to override program calculations based on updated and or manually entered interest rates in Setup gt Options Use the override fields on the LATE screen in data entry to override established defaults For more on the setting up the global option in Options Setup and on using the LATE screen see Features for Late Filed Returns on page 163 46 Tax Year 2009 Drake Software User s Manual Making Changes on the Fly Listing a Different Firm Preparer or ERO on a Return By default the program prints the information shown in Table 2 20 on the return Table 2 20 Firm Preparer and ERO Data that Can Be Changed on the Fly Information Description Firm Firm 1 from Firm Setup first firm entered in Setup gt Firm s Preparer Preparer who fills out the return entered in Setup gt Preparer s ERO ERO from Setup gt ERO appears on Form 8879 IRS e file Signa ture Authorization To override any of these defaults for a return go to screen 1 of the return In the Return Optio
268. e completed automatically based on the ZIP code entered Show notes reminders to preparer Show all notes and reminders from the NOTE and PAD screens every time when opening a return you open a client file that contains notes or reminders Verify SSN when creating new return Require double entry of SSN or EIN helping eliminate erroneous entries Tax Year 2009 23 Software Setup Drake Software User s Manual Table 2 5 Options Setup Data Entry Option Description 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 return Automatically enter the firm number and preparer number where required on data entry screens Magnify data entry Enlarge the active field for easier reading Activate W2 wage and federal with holding verification fields To ensure accuracy of data entry your firm can require that amounts for wages and federal taxes withheld are entered twice on the W2 screen Language for menus and data entry screens Choose between English and Spanish Language for field specific help in data entry Choose between English and Spanish Letter case for data entry Choose between all uppercase letters and mixed case Override Field Indicator Format override fields in data entry see Override
269. e default view print mode consists of five main components e A toolbar includes many of the options that Drake clients are accustomed to see ing in View Print mode click an icon to activate it See item 1 in Figure 6 5 174 Tax Year 2009 Drake Software User s Manual Viewing and Printing a Return e A viewing tool allows zooming and scrolling See item 2 in Figure 6 5 e Category tabs group documents within a return select a tab to view all documents within the listed category on the tab See item 3 in Figure 6 5 e A tree view showing all documents in a return can be expanded or collapsed See item 4 in Figure 6 5 e A viewing panel displays the selected document See item 5 in Figure 6 5 gt be So OF a all ue 7 7 1 Npata Entry Print Setup Email Refresh Basic View Help Exit Select Forms to View Print 2 Q Q Q All Forms Sets EF Federal Worksheets Miscellaneous Notes Message 3 le _ Federal Departne stot the Treas try Ine real Revenge Se mie Form 1040 U S Individual Income Tax Return Label For the year Jan 1 Dec 31 2009 of other tu year beginahg 2009 erdhg f OMB No 1545 0074 utah Your Tistacme and lata Lastrame Your soctal secari sumber DAWH GREEN 400 00 1001 Majohtretur spouse s Mrstaame anc Initial Lastiane ee lastractions on page 14 Use he FS bel emer Spouse s soctal security number Home ackiress imber and steed M
270. e 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 preparer name or click the name and click Select Selected preparers are listed in the Preparers in Security Group column You do not have to assign preparers when creating a group Assign NOTE preparers at any time by returning to the Group Security dialog box or by selecting Setup gt Preparer s gt Security from the Drake Home window 6 Click Save 18 Tax Year 2009 Drake Software User s Manual Group Security Reports Print Other Preparer Setup Features ar Schedule Print Kd Search Tax Year 2009 Software Setup 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 The Group Security feature allows you to view and print two reports related to group security settings a Group Security report and a Group Preparers report e Group Security report Lists group security settings for each group Groups are listed in order of creation with default groups first e Group Preparers report List all groups and their assigned preparers Reports are presented using the Report Viewer whic
271. e file pick up any new acknowledgements and process the acknowledgements in one step Transmit return data to Drake for multi office Web reports Select this option to have the Client Status Manager CSM data sent auto matically to the Multi Office Manager MOM during the EF process State EF Choose to suppress e filing of all state returns or select states to suppress while other state returns remain eligible 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 in the EF selection report Admin To access the Administrative Options tab the 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 Description Use Customized Data Entry Menu 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 Cu
272. e folders Working With Files in the DDM Once the cabinets drawers and folders are established in the DDM you can begin adding files The DDM supports many file types and allows you to import or scan files Tax Year 2009 313 Document Manager Drake Software User s Manual into the DDM or link to a file outside of the DDM Once added to a folder files are listed in the right pane of the DDM window NOTE Files can be added to the DDM from the toolbar or through the DDM s Documents gt Add Document menu Importing a To import a file into the DDM File 1 Select the folder where the document will be stored Browse to and select the desired document Click Save The DDM copies the document into the selected folder Import gx 2 From the toolbar click Import 3 4 Scanning a Scan documents into the DDM using a flat bed or document feeder scanner A flat File bed scanner scans one page at a time creating a separate PDF for each page A docu ment feeder scanner scans multiple pages and makes one document of many pages NOTE See Compatible Scanners following for scanners that have been reviewed and found to be compatible with the 2009 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
273. e generated explanations are 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 time scheduled and 2 the new times scheduled for all other appointments To undo batch generated appointments go to the Appointment NOTE Scheduler and select Batch Appts gt Undo Batch generated Appointments and click Yes The batch generated appointments will be removed from the current year s schedule Entering Ifan appointment conflicts with another you are asked if you want to save it anyway Overlapping If Yes the calendar displays a Multiple Appts note as shown in Figure 4 17 Appts l a Figure 4 17 Example of Multiple Appts notification To view the multiple appointments scheduled double click the Multiple Appts row Appointments are shown in the Open Appointment grid To view appointment details double click an appointment Tax Year 2009 83 Scheduler Drake Software User s Manual Finding Next To locate the next available appointment time in the Scheduler Available Appointment 1 From the Appointment Detail dialog box click Find Next Appt 2 Choose a preparer from the Preparer drop list or select Any Preparer Select a Starting Date and an Ending Date The program searches all times Find Next Appt p EER within the specified date range 4 optional Specify a day
274. e notes for component P2 124 08 06 2009 Update to mailing addresses for Andover service center closing 123 08 12 2009 Update to AL message pages Also requires AL state update 122 08 12 2009 Release notes for component P2 121 06 27 2009 Ma nigliesanmeriagematdatean sd AES 54 din agai adi Die nla es ie gti OBC ates Figure 11 2 Release note data 264 Tax Year 2009 Drake Software User s Manual Update Manager To view a release note double click the desired row Notes are displayed in the Report Viewer from which you can print or export the notes as desired For more informa tion on the Report Viewer see Report Viewer on page 299 NOTE Release notes can also be viewed from the Drake Home window by selecting Help gt Check Installation Automatic Updates Updates to the program can be performed automatically based on the update options you ve selected If you choose to have automatic updates you can indicate what time of day you want the updates to occur You also have the option of not having auto matic updates NOTE Automatic updates are not set by default To view or change your automatic updates status 1 From the Home window select Tools gt Update Manager The Update Manager dialog box is displayed Figure 11 1 on page 264 2 Click Auto Update Settings The Automatic Update Manager dialog box is dis played Figure 11 3 Drake 2009 Update Manager Updating 2009 Drake Software on Drive C Drake
275. e online EF database toolbar click MOM to view report criteria filters Figure 7 12 Tax Year 2009 205 Copying EF Data Drake Software User s Manual Return Status All Return Type All J Preparer v EFIN kk ALL v Run Report Figure 7 12 Multi Office Manager MOM filters 2 Select an option from each filter and click Run Report The report displays all of the data columns available in the CSM Scroll down or across the report screen to view all the available data If a report contains more than a specified number of rows the default is 25 it is pag inated Page numbers appear in the upper and lower left corners The number of rows displayed per page can be changed via the Rows Per Page drop list above the report e To print the report click the printer icon Only the data on the screen is printed e To sort data based on the column selected click a column header e To view e filing details for a particular return click the record s ID number i e To export the report into an Excel file click the Excel icon You are asked whether you want to open or save the file Click Open or Save as desired If you click Open you will have another opportunity to save it from within Excel 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
276. e 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 4 Instep 2 enter a Client ID Number SSN or EIN i 1 Import File Name C Documents and Settings esutton Desktop Perl 0406 txt 2 Client ID Number DN Figure 11 12 Step 2 Enter SSN or EIN 5 The program searches for a Drake file with the same EIN SSN e Ifno Drake file is found with that EIN SSN you are prompted to choose a Business Type Make your selection from the Business Type drop list Figure 11 13 then click Next 1 Import File Name C Documents and Settings esutton Desktop Perl 0406 txt 2 Client ID Number 400000000 3 Business Type E Corporation 1120 S Corporation 11205 Partnership 1065 Tax Exempt 990 Sole Proprietor 1040 eA EOT ea a E wel 9 go Figure 11 13 Step 3 Choose one of the business types listed e Ifa Drake file already exists you re asked to confirm the business type Click Yes to proceed 6 Click Finish to import the QuickBooks file into the Drake file 278 Tax Year 2009 Drake Software User s Manual Letters After importing the QuickBooks files enter Inventory amounts and details for Other Deductions and items requiring details on the return N If the QuickBooks file type does not match you are prompted to UTE convert the QuickBooks file while importing for example if there is a QuickBooks S corporation
277. e 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 Select the applicable box on the HOME screen to carry the applicable information 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 check the Recently widowed taxpayer eligible for MFJ exclusion box in the Miscellaneous section of the HOME screen If the First Time Homebuyer Credit is being taken on Form 5405 for the residence check the Form 5405 box Figure 5 19 Form 5405 Information Form 5405 First Time Homebuyer Credit was taken on this home Year home purchased Amount of credit taken Sata aes NOTE Complete the lines below ONLY if the fields above do not have prior year data or you want to override the amount of credit taken in the prior year Original credit from Form 5405 Line 6 Amt of credit previously recaptured Figure 5 19 Form 5405 Information box on HOME screen The software calculates the recapture of any outstanding installment payments related to Form 5405 the year the house is sold Click F1 in this box for more information Co
278. eated as the taxpayer s qualifying CHI 0 cccccssssssssssssocoseceseeceeeesesseeseteeeee Figure 5 51 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 51 Questions 10 11 and 13 can be left blank if this box is selected EIC Preparer Checklist Screen codes 8867 EIC IRS due diligence rules require that the preparer 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 Parts I HI and IV are located on the 8867 screen The 8867 screen allows preparers to electronically track data NOTE related to IRS due diligence requirements for Form 8867 In the event of a due diligence audit it provides an electronic record cor responding 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 140 Because a thorough interview is necessary to ensure that all information is gathered about income deductions credits etc a comprehensive interview process
279. ebt Screen code 99C Use the 99C screen to enter data from Form 1099 C Cancellation of Debt From the For drop list at the top of the 99C screen select 1040 to indicate a non business debt Select one of the other available choices as applicable to indicate a business debt The For list selections along with the line on the tax return where the cancelled debt amount flows are shown in Table 5 4 Table 5 4 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 income line 4835 Form 4835 Other income line 982 Form 982 Total amount of discharged indebtedness excluded from gross income line Foreign Earned Income Enter foreign earned income amounts on the applicable income screen W2 C FEC etc see Foreign Employers on page 91 Foreign earned income is calculated into the total income line of Form 1040 Tax Year 2009 117 Educator Expenses Drake Software User s Manual Excluding Ifthe taxpayer qualifies for the foreign earned income exclusion use the 2555 screen Foreign accessible from the Other 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 F
280. ed to activate this option Letter Options Select the result letter templates to be used for each package Include privacy letter with returns Select this option to print the privacy disclosure letter with every return Include engagement letter with returns Select this option to print engagement letters for all packages when the return is calculated At the end of the letter template are spaces for client and preparer signatures New in 2009 engagement letters can be produced prior to comple tion of the return using Tools gt Letters gt Letters Include customized supplemen tal letter with returns Print a customized letter that can be used for various purposes See Table 2 14 on page 37 Include K1 letter with returns Print the cover letter for individual K 1s partnership S corp and fiduciary pack ages only Referral coupons Enter the number of sheets per return or the coupon amount NOTE To override the default letter for an individual client see Overriding Letters Setup on page 49 Tax Year 2009 Drake Software User s Manual Optional Items on Return Software Setup Options under the Optional Items on Return tab are described in Table 2 9 Table 2 9 Options Setup Optional Items on Return Option Date on return Description The default is the current date To change this date enter the required date on the PRNT screen If desired select to print
281. ed Asset Manager see Fixed Asset Manager on page 300 and can be used in reports The Land cost field on the 4562 screen is for the cost basis of the land The amount entered here should not be included in the cost basis of the asset For example if the purchase price including the land was 100 000 and the cost of the land was 10 000 you would enter 10 000 in the Land cost field and 90 000 in the asset Cost Basis field at the top of the screen Depreciating Home Used for Business 152 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 Tax Year 2009 Drake Software User s Manual Depreciation main home mark Main home for Form 8829 in the Other Information section on the left side of the 4562 screen Amortization Enter amortization codes in the Amortization Code field 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 5 000 deduction State specific Depreciation Information All States For state specific depreciation information complete the applicable State Asset Type ITC Code and State basis if different fields ensuring that all state rules and guidelines are followed Note that State basis if different is an override field The default basis is the Cost Basis from the top of the 4562 s
282. ed with the current date For more on keywords see Appendix C Text in black text is displayed exactly as it will be printed in the output of the letter Conditional paragraphs like keywords contain angle brackets Each conditional paragraph actually consists of a starting tag keyword the conditional text and an ending tag Both the starting and ending tags end with the word Paragraph The enclosed conditional text is printed only if a particular situation applies in that let ter For example the conditional paragraph below is generated only if the taxpayer who has a balance due is paper filing and has selected not to pay by direct debit 35 Software Setup Paragraph Nesting Client Communica tions Editor 36 Drake Software User s Manual Text is generated only if this condition applies Include your payment and Form 1040 V with your return For faster processing and to prevent errors 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 Figure 2 18 Conditional paragraph Many conditional paragraphs are nested within larger ones Different nesting levels are indicated by different colors In Figure 2 19 the Federal No Dir Debit Paper Paragraph from
283. ee the margin change both in View mode and on the printed letter Naming a Each template has an assigned name see Table 2 14 To assign a new name Template 1 From the Client Communications Editor click Open and select a letter Press CTRL N to 2 Click Setup gt Rename Letter uickly access the 3 A Baname Letter 3 Enter a new name in the Rename Letter dialog box and click OK dialog box The new name is displayed in the Client Communications Editor title bar Restoring a To restore a template to its original default format open the template and select Template Setup gt Restore Original Letter Viewing The Preview feature allows you to open View Print mode and view a sample letter for Letters for one of the four categories of returns Sample Return Letter for e filed return with balance due e Letter for paper filed return with balance due Tax Year 2009 39 Software Setup Color Setup Drake Software User s Manual Letter for e filed return with refund Letter for paper filed return with refund Bringing To replace a current year template with a prior year letter Forward a Template Program Colors Use Define Custom Colors to create a new color 40 Data Entry Colors 1 oo POD From the Client Communications Editor click Open and select the letter to replace Go to Setup gt Update Prior Year Letter and click OK Select the drive of the Drake program that contains the prior year le
284. eens 300 Client Status Manager CSM Reports 0 0 0 ccc cent n nent eens 303 Hash Totals sfc nenun a anon etna ated tan ddet ad ethwnde dan oe ke Merdete deen deeedas 303 Suite ProdUCtS yee re en a pr melee Anaa 305 Document Manager 0 cette ene ene been e eens 305 Tax Planner 4 2 4 1 dior age ea weckundtbal eck Gh aile nackte a ile ok mabe LANs eb carn eis Bob ace O 318 Chent Write Up errr 264 604 peier ib he EEE bid webb edie ladda ae be bddeeiadiwieie hes etls 322 New Features in Other Packages sseeeeeeeeeeeeeeeeeeeeeeeeeneeeeneeeeees 323 Entity Packages o0u ntoshcurdeoa wes ndee Gate couaiy nue how bane obs We Peds Mee eed Woo ad eee 323 Fiduciary 1041 Package 1 nen e ete e teen ene e ene 331 Estate 706 Packages ec 6 ce0iae renere EO EET eO KEETE ba ETE E EE E ET i ebied ks 332 Appendix A Preseason Checklist cccccceceeeeeeeeeeeeeeeeeeeeeeseneeeeeeeeeees A 1 Appendix B E filing Overview ssssssssssssnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn nennen B 1 Appendix C KeyWords secccssscisiscctisssssdctionsniniininsweweniccosaceaviviiesaciccdesesdeobs C 1 Appendix D Acronyms amp Abbreviations cccccccssssseeeeeeeeeeeeeeeeenees D 1 Appendix E State E filing Mandates cccccseeseeeeeeeeeeeeeeeeeeeeeeeees E 1 Appendix F Addenda Pages for 2009 cccccccceeeeseeeeeeseeeeeeeeeeeeeeees F 1 EES cs E E E E S vii vi Tax Year 2009 1 Introduction Welcome to th
285. elf 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 year the COMP screen already contains data If not the screen must be completed manually for an accurate comparison When a return is generated the COMPARE worksheet displays the data comparisons Tax Year 2009 Drake Software User s Manual Other Special Features in Data Entry Miscellaneous Codes The Miscellaneous Codes fields on screen 1 are for use in tracking returns and creat ing customized reports For example you might decide to use Mise Code 1 to track the different ways that clients learned of your service For each return you might enter Ad Flyer Referral etc whichever is applicable into the Code 1 field Later when designing a report of all clients in the Report Manager you would select Misc Code 1 as one of the columns The report displays the information from the Misc Code 1 field on screen 1 for each client and you would be able to see at a glance which clients were referred which responded to an advertisement or flyer etc NOTE To create customized drop lists for miscellaneous code fields see Customized Drop Lists on page 30 Notes about the Return Screen code Use the NOTE screen to ensure that specific reminders in the forms of notes and EF NOTE messages appear for specific returns By default all notes from the NOTE screen are
286. ellaneous Codes Arrows indicate lt _ drop lists User defined codes established in Setup gt Options Figure 2 12 Screen 1 drop lists and user defined miscellaneous codes The instructions below explain how to create the drop list like the one in Figure 2 12 To create a drop list 1 From the Home window select Setup gt Options gt Administrative Options tab 2 Click the second Customize button Figure 2 13 Data Entry Customization Options V Use Customized data entry selection menu Customize Customize user defined data enty fields z Customize N Figure 2 13 Customize user defined data entry fields Tax Year 2009 Drake Software User s Manual Software Setup 3 Inthe Customizable Dropdowns in Data Entry dialog box double click a field such as the Miscellaneous Code 2 field to customize or select a field and click Edit The Edit Entries dialog box opens 4 Enter a Code eight or fewer characters and Description 25 or fewer characters in the Add Entry fields Figure 2 14 Selected Entry _ m a ea Add Entry Code BUSREF Description Business Referral Figure 2 14 Enter code and description in the Add Entry fields 5 Click Add 6 Repeat the previous two steps for additional drop list items When added items are displayed in the Entry List on the left side of the dialog box Figure 2 15 Entry List L Edit BUSREF Business Referral WOMREF Word of Mout
287. en you have selected the report you wish to run click View Report to continue Client Reports EF Bank Reports Scheduler Reports New Clients Preparer Call List Weekly Preparer Appointments Call List for all Preparers My Reports Other Report Options Sample Report List of New clients Portrait New Clients Taxpayer Name Taxpayer ID Phone Daytime Phone Evening Phone Cell Email Help New Report Edit 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 right click it and choose Delete Report from the right click menu Sample Report Window Before generating a report you can preview the report title and column headers to see how the report fits 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 1 From the Home window select Reports gt Report Manager 2 Click to expand any category Categories have a or to their left reports do not 3 Select a report to preview As shown in Figure 12 1 the report title and column headings are displayed The dis play reflects changes as report details are updated The Sample Report box also indicates a report layout of Portrait Landscape or Potentially too wid
288. energy efficiency and the products that qualify visit the U S Department of Energy s Web site A link to this site is available on the 5695 screen Passive Activity Credits New in 2009 the Passive Activity Credit Carryover PACR screen allows you to enter passive activity credit amounts in a central location in the software Previously passive activity credit information was entered on individual credit screens This enhancement streamlines data entry and increases the number of passive credit carry forward 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 42 accessible from the first Credits tab PACR Passive Activity Credit Carryover TSJ z ST z For z MFC E Form Amount Form Amount r z E i lc Ce TS lO SS E X X lc oe aW oF F Figure 5 42 PACR screen new in 2009 2 Select a screen from the For drop list to indicate the screen with which the credit carryforward should be associated N If the return has multiple screens for the form selected in the For DTE drop list use the multi form code MFC text box See Associating One Screen with Another on page 64 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 carr
289. ening Phone Cell Email Figure 12 2 Report Editor Step 1 window for formatting reports 5 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 the Sample Report box 6 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 selecting or ordering the keywords Columns are established from the Report Editor Step 1 window Note that the col umns currently appearing in the selected report are listed in the Selected Report Col umns box 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 display a tooltip description of the item 292 Tax Year 2009 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
290. ent Request 148 161 196 Form RRB 1099R railroad benefits 116 Form SSA 1099 Social Security Benefits Statement 116 Form W 2 Wage and Tax Statement 25 91 93 Form W 2G Gambling Income and Loss 117 Form W 4 Employee s Withholding Allowance Certifi cate 162 Form W 7 Application for IRS Individual Taxpayer Iden tification Number ITIN 161 forms blank 268 order of in printing 183 properties of 182 forms based data entry 286 forums 248 frequently asked questions see FAQs front office mode in Scheduler 76 G gains capital 99 grid data entry activating globally 24 using 60 group sales 153 group security settings 17 H heads down data entry about 74 macro for 34 toggling to basic data entry 74 health insurance COBRA 133 self employed 121 health savings accounts HSAs 117 hierarchies online EF database 203 home residence conversion to business use 103 credit for first time buyers 142 depreciation of 156 energy credits 129 months in 90 office 155 sale of 102 using the HOME screen 102 Home window in Drake 53 Hope credit 123 Tax Year 2009 Drake Software User s Manual Housing and Economic Recovery Act 142 imperfect returns 28 195 importing see also exporting files into the DDM 314 Kiddie Tax data 133 QuickBooks data 277 Schedule D data 99 index file repair 270 indirect expenses on Schedule E 108 inheritance 99 installing DDM 305 Drake tax software 7 1
291. eport box To assign a new title and description to a report 1 From the Home window click Reports gt Report Manager to open the Report Manager Figure 12 1 on page 290 2 Click to expand any category Categories have a or to their left reports do not Select the report to use as a template 9 4 Click Edit Report The Report Editor Step 1 window is opened Figure 12 2 Tax Year 2009 291 Setting Up a Report Drake Software User s Manual Drake 2009 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 New Clients Report Description j List of New clients Select Report Columns Categories Available Columns Selected Report Columns All Categories Appointment Date a Taxpayer Name Appointment Type Select gt Taxpayer ID City Phone Daytime t Phone Evening Client Type E Phone Cel Comments Durati Email uration lt lt Unselect All Email Group Meeting Phone Cell Phone Daytime Sample Report Portrait New Clients Taxpayer Hame Taxpayer ID Phone Daytime Phone Ev
292. eporting features you must use the data entry screens mentioned in Table 9 2 See Chapter 12 Reports for information on using reports in Drake 236 Tax Year 2009 Drake Software User s Manual Exporting CSM Data Generating a CSM Report To generate a report from the CSM X 1 Select Reports Select a report from the drop list in the CSM Reports dialog box Depending on your selection you could be prompted to enter dates select preparers or provide other information to narrow the scope of the report Reports 3 Click Report The report data is displayed in the Report Viewer Print the report export the report into another program or customize the report dis play For information on using the Report Viewer see Report Viewer on page 299 Exporting CSM Data a To export CSM data into Notepad or CSV format suitable for Microsoft Excel and y Microsoft Access click Export in the CSM toolbar A worksheet of the data is Export opened automatically Admin only Features The following CSM features are available only to users with administrative rights 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 Record To view a deleted record click Filters gt Display Deleted Records NOTE To delete a client file from Dr
293. equired e Implement the plan Although you and your client are responsible for imple menting the plan the Group is available throughout implementation and will con tinue to be available for follow up In addition to helping you guide your clients the Drake Advisory Group can be a sig nificant revenue source for your business because you can charge consulting fees for both your work and the time the Group spends on each case generally four to ten times the number of hours as an accounting firm For more information on how the Group works and how you can work with its experts to benefit your clients call 828 488 1950 extension 203 or go to DrakeSoft ware 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 N All Drake windows except the data entry screens have a clickable Help icon or but ton for accessing the Drake Help System a searchable Drake encyclopedia pe 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
294. er is added to the Available Filters and can be edited Viewing a Report from the Report Manager Report Viewer Tax Year 2009 To view a report from the Report Manager 1 2 3 Locate and select the report in the report tree Click View Report If a Basic Search Conditions box appears make any desired changes and click Continue If a previously saved version of the report is detected you are prompted to e Click Yes to create the report again using the most current data e Click No to open the previously saved report If you clicked Yes a Basic Search Condition box might appear Make any desired changes and click Continue Wait for the program to search the records for data matching the report criteria The report is displayed in the Report Viewer All reports in Drake are accessible through the Report Viewer To view a saved report 1 2 TIP 3 From the Home window select Reports gt Report Viewer Select a report in the Report Viewer window Click column headers to sort the list in ascending or descending order Click View to display the report on the screen 299 Depreciation List Drake Software User s Manual From this point you can print the report export it or change the font You can also scroll through multiple page reports by using the arrow keys at the top of the viewer To perform a task click the applicable icon Figure 12 9 lt wo Q 10 Print Export First Previo
295. er retrieval Use the Edit EIN Database tool to add edit or delete an employer s information Adding or Editing Employer Information To add an employer to the EIN database 1 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 Aa o 5 Click Save Click New if adding or Edit if editing Modify or complete the fields in the Edit EIN Employer Listing dialog box Tax Year 2009 283 Install State Programs Drake Software User s Manual Deleting Employer Information To delete employer data from the EIN database 1 2 3 4 From the Home window go to Tools gt Edit EIN Database Enter or select the EIN to delete or begin typing the name of the employer and select it when it appears in the list below Click Delete Click Yes when prompted to confirm the deletion Click Exit to close the EIN Employer Database dialog box Printing a List of EINs To print a list of EINs from the EIN database 1 Print 2 Print D eg From the Home window go to Tools gt Edit EIN Database Click Print The Print EIN Employer Listing dialog box displays sorting options Select to sort the list by EIN Company Name City State or Zip Code Click OK A preview of the list is displayed in the Report Viewer Click Print to open the Print Drake Report dia
296. erfect return election in data entry Activates Imperfect Return Election check box on EF screen in data entry Allow selection for EF from the Cal culations 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 automatic transmission of Check Print records Allows program to notify you before it transmits the Check Print records Tax Year 2009 28A ADDENDUM Drake Software User s Manual Table 1 1 Options Setup EF Option Description E mail 9325 Notice to Taxpayer Have Form 9325 Acknowledgment and General Information for Taxpayers automatic from Drake Processing Who File Returns Electronically automatically e mailed to taxpayer when Center return is accepted E mail address must be present on screen 1 ERO SSN Indicator Choose a preparer number Paid Preparer or None Override the choice in data entry 228B Tax Year 2009 Drake Software User s Manual Index Symbols adjustment fields 63 override fields 63 A ABC voice files 205 accessing see also opening appointments 54 recent returns 54 state returns in data entry 68 acknowledgments acks Fees to ACH 223 codes for 193 194 e filing overview Appendix B notification of 54 processing 192 193 activating automatic program upd
297. ergy Efficient Appliance Credit 8910 Form 8910 Alternative Motor Vehicle Credit 8911 Form 8911 Alternative Fuel Vehicle Refueling Property Credit 8912 Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds 8930 Form 8930 Qualified Disaster Recovery Assistance Retirement Plan Distribu tions and Repayments 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 Retirement See Retirement Income 1099 R etc on page 104 for information on entering data related to retirement income and taxes Advance EIC Payments Enter advance EIC payments from Form W 2 in Box 9 of the W2 screen This amount flows to the Advance EIC payments line of Form 1040 Household Employment Taxes Screen code H Use screen H accessible from the Taxes tab for Schedule H Household Employment Taxes Other Taxes Screens for the following other forms are available under the Taxes tab in Drake Table 5 9 Other Tax Forms That Can Be Calculated in Drake Screen Form and Tax Form 4137 Form 4137 Tax on Tips 4970 Form 4970 Tax on Accumulation Distribution of Trusts 132 Tax Year 2009 Drake Software User s Manual Other Taxes Table 5 9 Other Tax Forms That Can Be Calculated in Drake a Seti Form and Tax
298. eries You can also make a group meeting recurring TES If you accessed the Appointment Scheduler from data entry the program will return you to data entry whenever you close the Appointment Scheduler 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 preparer or to press Shift or Ctrl while selecting Preparer s Figure 4 15 Multiple preparers selected for a group meeting To clear a selection click the preparer s name a second time NOTE In order to save the appointment a client name must be entered Batch New in 2009 the batch appointment generator reviews client and recurring appoint Appointment ments from the previous tax year and creates new appointments in the current year s Generator Scheduler You can set workday and holiday information that will roll forward or backward to an available appointment date N This feature is available for users with administrative rights UTE Appointments marked private see For an Individual are excluded from the batch process To set up appointments using the batch appointment generator 1th 1 From the Appointment Scheduler click the Batch Appts icon and select Gener 307 ate Batch Appointments The Batch Appointment dialog box is displayed Batch
299. es State Package Tax Type Description New Jersey S corporation OtherTax1 Composite Partnership OtherTax1 NJ 1065 OtherTax2 Composite Fiduciary OtherTax1 Composite New York Individual OtherTax1 IT 204 LL OtherTax2 MTA C MCTMT Corporation OtherTax1 CT3M 4M Partnership OtherTax1 IT 204 LL New York City Individual OtherTax1 NYC 1127 NYC Employment Ohio Individual OtherTax1 School District Pennsylvania Individual OtherTax1 Property Tax Rebate OtherTax2 RCT 101 single member LLCs Partnership OtherTax1 20S65 OtherTax2 NR Composite S corporation OtherTax1 20S65 OtherTax2 NR Composite Rhode Island S Corporation OtherTax1 Composite Partnership OtherTax1 Composite Fiduciary OtherTax1 Composite Tennessee Individual OtherTax1 Franchise and Excise Tax OtherTax2 Interest and Dividends Corporation OtherTax1 Franchise and Excise Tax S corporation OtherTax1 Franchise and Excise Tax Partnership OtherTax1 Franchise and Excise Tax OtherTax2 Interest and Dividends Fiduciary OtherTax2 Interest and Dividends Estate OtherTax1 Estate Tax Tax Year 2009 Drake Software User s Manual Appendix C Keywords Table C 1 Letter Keywords Other Tax Types for State Packages State Package Tax Type Description Texas S corporation OtherTax1 Franchise Partnership OtherTax1 Franchise Individual OtherTax1 Franchise Corporation OtherTax1 Franchise Fiduciary OtherTax1
300. es and check the status of each IRS Service Center To access your online EF database from within the software Tax Year 2009 201 Online EF Database Drake Software User s Manual 1 From the Home window click Support If you are already in the EF database w click F10 Online DB Enter your EFIN and password and click Log In 3 Go to My Account gt EF Database 4 Enter your EFIN and password again and click Login Support 2 By default the database displays information for the current tax year To view another tax year select the year from the drop list near the top right corner of the page Above the tax year drop list is the SSN Lastname Lookup field To find information on a specific return enter the SSN or last name in this field and click Go Most of the buttons at the top of the online EF database screen are for viewing and running reports Reports available are listed in Table 7 5 Table 7 5 Reports Available from the Online EF Database Category Description Returns Pending accepted and rejected federal and state returns extensions Bank Products Loan status original 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 Summary reports by date EFIN preparer and ZIP code plus a sum mary of all returns bank products and preparer fees Tools 94x reports for Client Write Up users
301. es screen A now has data fields for a new motor vehicle purchased after February 16 2009 Fields are Vehicle pur 2009 chase price Total taxes paid and Tax on first 49 500 of pur chase price Forcing Ifscreen A has been completed for a return the software determines which is more Schedule A advantageous for the taxpayer itemizing deductions or taking the standard deduc tion To force either type of deduction mark one of the Force boxes at the top of screen A Figure 5 39 Force itemized Force standard Figure 5 39 Boxes at the top of screen A Printing If screen A has been completed for a return Schedule A will be generated even if Itemized the standard deduction is being taken You can set up the option to have the software Deductions generate Schedule A only when it is required To do so go to Setup gt Options gt Form amp Schedule Options tab and select Print Schedule A only when required Mortgage Use the Interest You Paid section of screen A to enter mortgage interest not reported Interest Paid on Form 1098 Mortgage Interest Statement For mortgage interest that is reported on Form 1098 use the 1098 screen N If using the 1098 screen to report interest from Form 1098 do not UTE enter an amount in the Home mortgage interest and points reported on Form 1098 field under Interest You Paid on screen A Form 1098 C Enter amounts from Form 1098 C Contribution of Motor Vehicles Boats amp Air planes on ei
302. es 990 Form 5471 Information Return of U S Persons with Respect to 1120 990 Certain Foreign Corporations Form 8716 Election to Have a Tax Year Other Than a Required 1120 1120S 1065 Tax Year Form 8925 Report of Employer Owned Life Insurance Contracts 1120 1120S 1065 990 Detailed instructions for completing these forms will be provided in the manual sup plements to be published in spring 2010 General information on each new form in Drake is provided in the following sections Form 1118 Preparers can now use Drake to complete and submit Form 1118 Foreign Tax Credit Form 1118 can be e filed with 1120 returns It is not e fileable in the 990 package 326 Tax Year 2009 Drake Software User s Manual Form 3115 Tax Year 2009 NOTE Entity Packages A completed Form 1118 is required for each separate country and category of income The Foreign Tax Credit screens are located under the first Credits tab in the 1120 package and under the Form 990T tab in the 990 package They are listed in Table 14 2 Table 14 2 Screens and Schedules for Form 1118 Screen Form Contents 1118 General information plus fields for Schedules A Income Loss Before Adjust ments B Foreign Tax Credit G Reductions of Taxes Paid Accrued or Deemed Paid and Reduction of Oil and Gas Extraction Taxes 18B Parts Il and III of Schedule B Foreign Tax Credit 18C Schedules C Tax Deemed Paid by Dom
303. es information about an open screen in data entry To access screen help click the Screen Help button at the top right corner of the screen Figure 10 12 press CTRL ALT or select Screen Help from the right click menu Tax Year 2009 251 Interactive Support Drake Software User s Manual Te g 1 Wages tips 2 Federal tax wih 35750 1209 4 3 Soc Sec wages 4 Soc Sec wih 35750 2217 lt 5 Medicare wages 6 Medicare tax wih a oda 2 35750 Pci Ree p RE ae e pa PE NAN Figure 10 12 Screen Help button for W2 screen In most cases a window similar to the field help window Figure 10 11 displays the screen help Some screen helps include links to form instructions and RIA Check point s Form Line Finder See RIA Checkpoint following RIA RIA Checkpoint is an independent tax research tool for advanced research by tax pro Checkpoint fessionals To access Checkpoint from the Home window click the Research button or select Help gt RIA Tax Research The RIA page provides access to the following e Extensive Federal Tax Handbook with answers to hundreds of tax questions e Public domain materials including federal tax case law and IRS rulings and mem oranda some of which date back to 1860 e A Weekly Alert Newsletter for staying on top of fast breaking developments e RIA Tax Return Guides containing the latest data available for individual corpo rate partnership and estate returns Guides are linked
304. esesteeee r E Force Schedule SE to print Figure 5 37 Override SE printing for taxpayer left box or spouse right box 120 Tax Year 2009 Drake Software User s Manual Self Employment Adjustments Church Church income should be coded on the W 2 W2 screen as C or P Any income Income entered in the Wages of church employee field of the SE screen will be added to the W 2 amount For more information on entering data for clergy see Clergy Expenses on page 119 and Ministerial Income Allocation on page 124 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 calculations 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 p
305. estic Corporation Filing Return D Taxes Deemed Paid by First and Second Tier Foreign Corporations under Section 902 b and E Taxes Deemed Paid by Certain Third Fourth and Fifth Tier Corporations under Section 902 b H1 Part of Schedule H Apportionment of Deductions Not Definitely Allocable H2 Part Il of Schedule H Apportionment of Deductions Not Definitely Allocable 18J Schedule J Adjustments to Separate Limitation Income Loss 18K Schedule K Foreign Tax Carryover Reconciliation Schedule A7 Other income statement for Schedule A column 7 GEA Attachment screen for supplemental information and general explanations CCS Currency Conversion Statement RRE Annual Recapture Revocable Election for Schedule J Detailed instructions for completing Form 1118 will be provided in the 1120 and 990 manual supplements Form 3115 Application for Change in Accounting Method is an application to the IRS to change either an entity s overall accounting method or the accounting treat ment of any item Drake customers can now fill out and e file certain Forms 3115 and related schedules and attachments for corporate 1120 S corporation 1120S part nership 1065 and tax exempt organization 990 returns Several screens may be required for completing Form 3115 These screens listed below are accessible from the Change in Accounting Method box which is located under the Other Forms tab of the Data Entry Menu e Screen 3
306. et WK_ 2119 is generated with the return when the HOME screen is used It consists of up to three pages e Worksheet 1 Adjusted Basis of Home Sold e Worksheet 2 Gain or Loss Exclusion and Taxable Gain on Sale of Home 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 contains data when generated with the return Data entered in the Date home was purchased field Basis of Home fields and Form 5405 check box 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 Tax Year 2009 Drake Software User s Manual Sales of Assets Schedule D Section 121 Calculation Conversion to Business Use Exclusion for Surviving Spouse First Time Homebuyer Credit 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 fiv
307. et and install DDM updates 1 From the DDM menu bar select File gt Update Manager The DDM Update Manager dialog box is displayed 2 Click Update to initiate the connection to Drake and check for needed updates 3 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 NOTES If an error or unexpected occurrence keeps you from installing found updates contact Drake Support at 828 524 8020 for assistance 307 Document Manager Drake Software User s Manual Setting up the DDM 308 Technical Require ments File Structure amp Doc Mar Review the following information before beginning work in the DDM The DDM takes up very little disk space but you may require more space to store your 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 Am
308. etup N 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 when Drake is installed You do not have to add or set up a printer in Drake if the printer is already set up in Windows Printer TES settings are carried forward automatically each year If a printer is no longer installed in Windows it still appears in Drake To remove the printer from Drake go to Setup gt Printing gt Printer Setup and click Reset This action removes all printers and re adds all the available printers automatically Editing To edit settings for the printer used for printing tax returns Printer Settings 1 From the Drake Home window go to Setup gt Printing gt Printer Setup 2 Enter setup changes as needed Details on each tab are provided in Table 2 15 3 Click Save Table 2 15 Printing Setup Tab Field Description F5 General 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 for Tax Forms r eS a aaa
309. eturn is transmitted after April 15 the requested payment date cannot be later than the current date Required A Withdrawal selection item 1 in Figure 5 56 is required if the program is to Information direct tax authorities to electronically withdraw funds from the taxpayer s account Tax Year 2009 145 Third Party Designee Drake Software User s Manual Account 1 Account number Type of account sid Po I Checking Savings Repeat Account Information Checking Savings Federal Federal payment amount Requested payment date Daytime phone number Payment is for M 1040 f 4868 2350 Federal 1040 ES First Quarter Second Quarter Third Quarter Fourth Quarter Withdraw the following quarterly payments Payment Amount Pamo Daa cones State State payment amount Figure 5 56 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 56 Finally the PMT screen must indicate the return to which the payment data applies item 3 in Figure 5 56 Mark the box of the applicable return type Withdrawal All states require that only one account be designated for direct debit of funds To
310. eturn prior to amending The Archive Manager is accessible from both Basic and Enhanced modes 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 Print mode select Archive gt Archive Client Return or select J Archive gt Archive Manager and click the Archive icon in the Archive Man ager toolbar 2 Inthe Archive Client Return dialog box enter a description of the archived file Figure 6 16 and click OK Archive Archive Client Return Please enter a description for the archived file The description is used in the Document Manager and in the Archive Manager to help identify specific archives Enter a description for the archived file Ex Original Return before Amending Amended Return prior to review Figure 6 16 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 Figure 6 17 aJo On Restore Archive Delete Print Help Exit Archive Description Date User Name Original Return Before Amending 10 28 2008 08 34 14 4M NROGERS Amended Return prior to review 10 28 2008 08 49 18 4M NN ce ale statin A Aidt R aan Ben thin n ates adnate Figure 6 17 Archive list The DDM and Archive Manager use your description to help iden NOTE tify specific archives The program creates an arc
311. ew start time Select the time to be displayed when the calendar is opened Default calendar 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 78 Tax Year 2009 Drake Software User s Manual Scheduler Establishing Daily Schedules Setup Calendar Settings Calendar Colors Tax Year 2009 The Scheduler allows you to view at a glance the planned daily schedules of selected preparers including the times they are scheduled to be in the office To establish a preparer s daily schedule in the Scheduler 1 Click Setup The Scheduler Setup dialog box is displayed 2 Under the General tab select a preparer from the Open Setup Schedule for drop list The Setup Schedule dialog box is opened for the selected preparer 3 From the Select day list select a day of the week 4 Choose the In and Out times for that day As times are selected they appear on the schedule grid 5 Repeat for each day of the week Or to apply the selected times for every day of the week at once click Apply to All 6 Click Save In preparer schedule the rows indicating a preparer s out times will be shaded a dif Ja 6 ferent c
312. f Form 1040 Click the LOSS hyperlink 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 three columns shown in Figure 5 62 Amount Available Used Prior from Carryforward to 2009 Used in 2009 1990 1991 a n aa a oe Tepsa treet samga EE MOT eet A rt i a ir an tn poe 2006 2007 2008 Figure 5 62 LOSS screen columns for NOL carryback carryforward Never add a LOSS screen for a current year NOL The program carries forward any current year NOL and displays the carryforward on the WK_CARRY worksheet The results of your data entry are NOTES reflected on the WK_NOL worksheet To have the program calculate whether there is a NOL for the cur rent year go to the NOL screen and select Calculate 1045 page 2 ONLY See NOL Carryovers on Form 1045 following Tax Year 2009 157 Election Options Drake Software User s Manual NOL Carryovers on Form 1045 Screen code NOL NOL Carryforward Only Figuring AMT 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 Note that the Schedule A fields are override fields Entries override NOTES system calculations for Schedule A To calculate only page 2 of Form
313. f 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 7 1 directory tree and described in the following list All Forms Sets EF Figure 7 1 View mode EF related documents include EF messages and an EF status page e EFSTATUS The FF status page shows transmission options piggyback state returns to be transmitted with the federal return and any additional state returns to be transmitted It also states whether any federal EF messages were generated e MESSAGES EF messages are generated only if issues within the return cause it to be ineligible for e filing Messages include error codes descriptions of the issues and identification of fields that must be verified NOTE Error codes above 5000 are Drake error codes All other codes are federal or state error codes Eliminating All EF message pages must be eliminated before a return can be eligible for e filing A EF Message return with an EF message page cannot be e filed Pages To eliminate an EF message page Tax Year 2009 189 E filing a Return Drake Software User s Manual S 1 Calculate the return and go
314. file to import into a Drake C corp file Letters The Letters tool allows you to print batches of certain client letters at a time The let ters available for batch printing listed in Table 11 2 are those that do not typically accompany a tax return Table 11 2 Letters Available from Tools gt Letters gt Letters Type of Letter Suggested Purpose of Letter Post season letter Thank clients for their business remind them that you are available for additional tax preparation assistance Pre season letter Make contact with last year s clients encourage clients to use organizers Estimate payment reminder Remind current year clients that estimate payments are due provide instructions for sending payments Appointment reminder Set up current year appointments with prior year clients EF status letter Provide acknowledgment status of e filed return Engagement letter new in 2009 Enter into contract with clients to prepare their tax return You can also use the Letters tool to print batches of pre addressed mailing labels envelopes and postcards The information provided here applies to letters that can be printed in batches For more information on the other types of letters avail able in Drake see Introduction to Letters in Drake on page 35 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 in
315. for State Programs F _ 5 aths determined by configuration selected above Path for 2008 Data H DRAKEOS DT ES Path for 2007 Data H ADRAKEO7ADTSA Path for Print File H DRAKEOS PFY Shared drive letter for all other shared files EF Firm Pricing Letters etc optional GF Figure 2 4 Steps 3 4 and 5 6 Click OK The program is now set up to share client files and if selected share other files EF Pricing Letters etc M H RT NT Do not change the Directories Paths settings during tax season If a change is necessary contact Drake Support 12 Tax Year 2009 Drake Software User s Manual Software Setup Software Setup Perform setup procedures after installing the software and before attempting to pre pare or e file returns Some setup procedures are required others are optional Table 2 3 Setup Procedures Required and Optional Required Setup Procedure Optional Setup Procedures Firm s See Firm Setup on page 13 Options See Options Setup on page 23 ERO See ERO Setup on page 15 Pricing See Pricing Setup on page 32 Preparer See Preparer Setup on page 16 Macros See Macros Setup on page 33 Directories Paths See Directories and Paths Letters See Introduction to Letters in Setup on page 21 Drake on page 35 Pay Per Return See Pay Per Return Setup Colors See Color Setup on page 40 PPR Clien
316. form name the form appears in the pane on the right side of the win dow Choose which forms you wish to print from the list by marking the box to the left of the form name 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 176 Tax Year 2009 Drake Software User s Manual Tree View Directory Viewing Panel Viewing and Printing a Return All Forms Sets Cr Federal Worksheets Miscellaneous z MESSAGES EFSTATUS 9325 Figure 6 7 If the EF tab is selected only the EF specific documents are shown in tree view Category tabs and descriptions are provided in Table 6 2 Table 6 2 Category Tabs and Descriptions Tab Items Shown in Tree View All Forms Every form generated during production of the return 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 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 returns Gift tax Form
317. formation This action does not create a client file in Drake the information is used for the engagement letter only Printing Letters To print one or more letters 1 From the Home window go to Tools gt Letters gt Letters 2 From the Client Letters dialog box select a letter type Figure 11 14 Tax Year 2009 279 Letters Drake Software User s Manual Select letter to print for clients Post season for 2009 Clients Pre season for 2008 Clients Individual Estimate Payment Reminder for 2010 Scheduled Appointment Reminder for 2009 Clients EF Status for 2009 Clients Engagement Letter eeee Figure 11 14 Letter choices in Client Letters dialog box 9 Click Next to open the Client Selection dialog box 4 Complete one of the following e Printa 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 296 Click Next for Basic Search Conditions Click Continue to Scan Client Files Click Print 5 Click Next 6 If printing a batch of letters Click Continue to scan the client files 7 Click Print Mailing Labels To print mailing labels 1 Ensure that label sheets are loaded correctly into the printer 2 From the Home win
318. from another computer to this one and then click OK to close the warning box Buttons for Step 1 and Step 2 appear See Figure 11 4 Click Get Updates From Drive Step 2 Browse to the location of the storage device Select PATCHLIST TXT and click OK Click Install Updates and wait for the updates to be installed NONA You can remove the media storage device once the updates have been installed Download Fonts Special software based fonts or soft fonts are required for printing tax forms Because most laser printers do not come with these fonts installed you might have to download them to the printer s memory each time the printer is turned on Drake includes downloadable software fonts that work with HP compatible laser printers and allow preparers to produce federal and state tax forms By default fonts are down loaded with each print job If the printer is turned off however the fonts must be downloaded manually whenever the printer is turned back on To manually download fonts 1 From the Home window go to Tools gt Download Fonts 2 Click Download The Download Fonts dialog box is opened 3 Click Download As downloading proceeds the font download status is shown 4 Click Exit when the download is complete NOTE 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 268
319. g a Report Format 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 291 for more information To create a new report format 1 From the Home window click Report gt Report Manager to open the Report Manager See Figure 12 1 on page 290 2 Click New Report 3 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 4 Click OK to open the Report Editor Step 1 window 5 Using the instructions in Setting Up a Report on page 291 as a guideline enter the report formatting and filtering information 6 Click Save Deleting a Report Tax Year 2009 Only a report in the My Reports category can be deleted To delete a report 295 Filter Manager 3 4 5 Drake Software User s Manual From the Home window click Report gt Report Manager to open the Report Manager See Figure 12 1 on page 290 Click to expand any category Categories have a or to their left reports do not Select single click the report to delete Click Delete Report Click Yes when prompted to confirm the deletion If you have run the report you are asked if yo
320. g mandate requires tax preparers filing more than 100 individual income tax returns to do so electronically beginning January 1 2008 as authorized by Louisi ana Revised Statute 47 1520 The e filing requirement will be phased in as follows E 1 Appendix E State E filing Mandates Drake Software User s Manual E 2 Maine Maryland Massachu setts e For returns due on or after January 1 2008 30 percent of the authorized individ ual income tax returns must be e filed e For returns due on or after January 1 2010 60 percent must be e filed e For returns due on or after January 1 2012 90 percent must be filed e filed R S 48 77 A was enacted to dedicate percentages of the sales tax collections from motor vehicle leases and rentals to the Transportation Trust Fund beginning July 1 2008 This information is not separately reported on the sales tax return and there is no space to add the lines to the current tax return Mandated e filing for motor vehicle leasing and renting dealers was selected because it is the most cost effective means to obtain the required sales tax data Maine Rule 104 states that for returns filed in calendar year 2010 or any subsequent year if the tax return preparer filed more than 50 individual tax returns eligible for e filing in the previous year the preparer is required to e file all original Maine tax returns For employers with 50 or more employees with Maine withholding after 2008
321. g questions to ensure that the necessary conditions for printing checks have been met 226 Tax Year 2009 Drake Software User s Manual Troubleshooting Check Printing e Is the correct printer selected Go to Setup gt Printing gt Printer Setup then 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 1 From the Home window go to Setup gt Printing gt Printer Setup 2 Select the F8 Edit Printer Settings tab 3 Select the printer being used to print the checks Once a printer is selected all other fields are activated 4 Enter a number in the Check Adjustment Vertical field Each whole number represents a fourth of a line Enter a positive number 1 to move the check down a fourth of a line text will show up higher on the check Enter a negative number 1 to move the check up a fourth of a line text will show up lower Remember to click Update before closing the Edit Printer Settings window If the text is showing up too far to the left or right you may have to ad
322. g the busi ness percentage of expenses and taking deductions The remaining percentage of taxes entered is carried to Schedule A A taxpayer with more than 10 use of a rental can take expenses up to NOTES the amount gained regardless of percent use With 50 use for example the system does not calculate 50 of expenses it instead calculates the gain and takes expenses up to that gain If the If multi dwelling unit box is marked a worksheet is produced for each property that lists expense types and divides expense amounts into personal rental and total amounts Direct and New in 2009 you can have the program take both direct and indirect expenses into Indirect account when calculating a return for a taxpayer who occupies one unit of a multi Expenses dwelling property while renting out the others N Direct expenses are those that affect only the rental units Indirect UTE expenses are those that affect both the rental units and the tax payer s dwelling Indirect expenses can also be personal expenses Enter expense amounts using the columns on screen E Figure 5 26 Direct Indirect Expenses Expenses By ASINI lee scence ee 6 Auto amp travel 7 Cleaning amp maintenance 8 Commissions a 9 TINSUPANCE sann Ar T a O E E E E E Figure 5 26 New in 2009 Columns for Direct Expenses and Indirect Expenses 108 Tax Year 2009 Drake Software User s Manual Supplemental Income NOTE If
323. gain or click Item Detail to return to full screen mode To delete a row in grid data entry select a row number and click Delete or press CTRL D At the prompt click Yes 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 _ FirstName LastName SSN__ Relationship _ Date of Birth _ Child Care 1 ELLA 400001001 DAUGHTER 10312002 2 THEO 400001003 SON 12042008 New Record Ee as SO ee OTe en ee OO a ee sey Oe Le Leena Figure 3 12 Existing Forms List Tax Year 2009 Drake Software User s Manual Data Entry 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 N An Existing Forms List does not appear if grid data is the estab UTE lished default in Options Setup Disable the default from the Data Entry tab in Options Setup Multiple Many clients require multiple instances forms like Form W 2 In most cases press Instances of PAGE Down to open a new screen and enter data for another form a Form Some forms have more than one page or screen If you are in a multiple screen form use the hyperlinks provided to go to the next page If no hyperlinks are pro vided 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
324. ginal return and the new return In the future when you enter the SSN to open a return you will be asked which return you wish to open When you use other features of the program where SSNs are entered such as in the Client Selection dialog box in Tools gt Letters gt Letters you will be prompted to indicate which return the program should use Importing Data from QuickBooks Two main steps must be taken to import client data from QuickBooks into Drake 1 preparing the QuickBooks file and 2 performing the import Always back up Drake files and the QuickBooks files prior to importing client files Tax Year 2009 277 File Maintenance Drake Software User s Manual Preparing a Before you can import QuickBooks files into Drake Software you must first place the QuickBooks QuickBooks files into an import file inside QuickBooks To create the import file from inside QuickBooks Select Report gt Accountant amp Taxes gt Income Tax Summary Click Print to open the Print dialog box Select the option button to the left of FILE Select ASCII text file Press Print Pe w Pa Enter a file name of eight characters or fewer with no spaces Importing To import data from a QuickBooks import file into Drake Software QuickBooks Data 1 From the Home window select Tools gt File Maintenance gt QuickBooks Import 2 Click Next 3 In step 1 enter the name of the import file created from QuickBooks or click the button to th
325. h Referral Remove Move Up A natan adinim adatan ation can i taatia coal Figure 2 15 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 15 e Removing a listed item Select an item and click Remove See Figure 2 15 e Editing a listed item Double click an item The Selected Entry box see Figure 2 14 is activated with the item properties Make changes and click Save Tax Year 2009 31 Software Setup Drake Software User s Manual Click Save Changes to save your changes and exit the Edit Entries dialog box Drop lists can also be created for the Adjustments and Payments NOTES field of the BILL screen When viewing a customized drop list in data entry click F1 to see the item descriptions Pricing Setup You can set Drake up to calculate the prices to charge your clients and generate the cli ent s bill with the return Use Pricing Setup to enter prices Prices can be defined for each form and on some forms for each item You can also enter minimum and maxi mum charges for a completed return NOTE Establish bank product a
326. h allows options for printing and exporting the reports To access reports click Print in the Group Security toolbar The program 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 features available under Setup gt Preparer s are the ability to create a pre parer s daily schedule the ability to print a list of preparer names entered into the pro gram and the ability to run a search on preparer names entered into the program To access these features use the following procedures To create a preparer s daily schedule From the Drake Home window go to Setup gt Preparer s Select a preparer and click Edit Preparer Click Schedule Select day and in and out times Click Apply to All or Clear All as needed Click Save IAU NS See Scheduler on page 76 for more information on using the Drake Scheduler To print a list of preparers entered into the program 1 From the Drake Home window go to Setup gt Preparer s 2 Click Print The Report Viewer displays the current preparer listing 3 Click Print and then click Print again 4 Click Exit to close the Report Viewer Click Exit again to close Preparer Setup See Report Viewer on page 299 for more on using the Drake Report Viewer To search for preparers entered into the prog
327. he Wages salaries tips etc line of Form 1040 with the notation DCB Ineligible Filing Statuses A taxpayer with a filing status of 3 Married Filing Separately 6 Taxpayer did not live with spouse even one day of the year or 7 Taxpayer did not live with spouse the last six months of the year on screen 1 is not eligible for the childcare credit Carryover from Prior Year If there is a carryover of childcare credit from the prior year enter the amounts and create a statement listing the circumstances and amounts Use statement number 47 For more information on adding an unformatted statement in Drake see Unformatted Schedules on page 168 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 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 NOTES Schedule 3 Credit for the Elderly or the Disabled for Form 1040A Filers is obsolete in tax year 2009 Form 1040A filers must now use Schedule R Credit for the Elderly or the Disabled This is han dled automatically by the program 128 Tax Year 2009 Drake Software User s Manual Home Energy Credits 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
328. he F and 4835 screens See Auto Expenses on page 155 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 114 Tax Year 2009 Drake Software User s Manual Unemployment Compensation The program s default accounting method is cash Select Accrual if the taxpayer s The program s default position for at risk investments is that all investments are at The program s default position for material participation is that the taxpayer materi ally participated in the current year If the taxpayer did not materially participate Screen F Defaults accounting method is not cash risk If this is not true for your client select Some investment is NOT at risk select Did NOT materially participate option 1099 PATR Enter the distribution amount from Form 1099 PATR Taxable Distributions Received from Cooperatives in the Co op total distributions field on Screen F Form 4835 Farm Rental Income and Expenses Screen code 4835 Form 4835 is for individual returns only and is not available for the 1041 package Estates and trusts must file Schedule E Part I to report rental income and expenses from crop and livestock shares Farm Asset Depreciation Use the 4562 screen Depreciation Detail to create depreciation schedules for Schedule F and Form 4835 For more on depreciation see Depreciation on
329. he Method field If this option is selected the amount of calculated depreciation based on the three year period will flow to the Other depreciation line of Form 4562 Business The default business percent use is 100 Enter a number in this field only if business Use percent use for the asset is not 100 If business use dropped to 50 or less complete the Business use field and select the Recapture box under Other Information The program recaptures any excess 150 Tax Year 2009 Drake Software User s Manual Depreciation section 179 or depreciation and carries it to Form 4797 Part IV and to the Other income line on the form being associated with the 4562 screen N EXP cannot be the selected method if the Recapture box is DTE marked The Method field must contain an acceptable IRS method for the recapture to be calculated correctly Listed A selection in the Listed Prop Type field is required for an asset that could be used Property for personal entertainment recreation or amusement purposes An entry here lists the Type asset as Listed property on Form 4562 Depreciation limitations could apply Prior The prior depreciation amount in this field is carried from the previous year if the Depreciation information is available Otherwise enter this information directly Section 179 Expensing Drake calculates the amount up to the established current year limit for all properties expensed under the section 179
330. he return in data entry Click Exit to close the Client Quick View window CSM Reports Seven predefined status and financial reports are available in the CSM Reports are displayed in the Report Viewer Data can be exported from the Report Viewer Table 9 2 CSM reports Report Title 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 RAL Bonu etc and client payments from the BILL screen in data entry Cash Receipts Report lists cash amounts received from bank deposits only The data Bank Deposits 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 TRAC screen which is automatically set when you select a status of Complete To manually set the completion date log in as an administrative user and enter a Date Complete on the TRAC 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 r
331. her forms W 2 Schedule C 1099 Schedule B etc Click the States tab in data entry to view a list of states Click any state from the list or enter the two letter state code in the selector field to access the Data Entry Menu for that state It is not necessary to return to the States tab to enter a new state code Access city screens by entering a city code into the selector field Another option is to open a state menu then click the Cities tab if available Cities are listed with their two letter codes Practice Returns and Test Returns 68 Practice returns are available on the Drake Support site to help new Drake Software clients become more familiar with how data is entered in Drake For more information on how practice returns can help you see Practice Returns on page 246 Test returns are located on the software CD The SSNs for these returns begin with 400 00 and consist of various forms and schedules to show how different tax scenarios are prepared in Drake To open a test return type a test SSN in the Open Returns window and press ENTER Test returns can be used to test e filing Test returns with SSNs from 400 00 1001 through 400 00 1005 are eligible for e file testing Tax Year 2009 4 Preseason Preparation This chapter provides instructions for bringing forward information from last year printing proformas or organizers for clients mailing preseason materials setting up schedules and learning to use the
332. hive file name beginning with Archive followed by the date time stamp Exam ple Archive 20091015153145 indicates October 15 2009 20091015 at 3 31 45 153145 in the afternoon Tax Year 2009 185 Archive Manager Drake Software User s Manual Deleting an Archive To delete an archive of a return from the Archive Manager 1 From View Print mode of the return select Archive gt Archive Manager 6 2 Click the row of the archive to delete 3 Click Delete You are prompted to confirm the deletion 4 Click Yes to delete the file from the archive Delete Once deleted the previously archived file cannot be recovered Restoring an Archive When you restore an archive you replace the open version of a return with an archived version Drake recommends that you preserve the existing client data before restoring an older version of a return A built in prompt will suggest that you archive the latest version of a return before restoring an older version To restore an archive 3 1 From View Print mode of the return select Archive gt Archive Manager Tmi Click the row of the archive to restore 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
333. hroughout this chapter NOTE For more information about e Collect call Drake s e Collect support line at 828 349 5505 or visit www epsfinancial net About e Collect e Collect is a simple convenient way to offer your clients a deposit account and pro cess your tax preparation fees This product receives your client s refund via direct deposit routes your fees into your bank and disburses your client s remaining funds using one of three available methods e Collect allows two offerings Tax Year 2009 209 About the El Visa Prepaid Card Program Drake Software User s Manual e e Collect Elite This level of the program provides your client with three dis bursement options E1 Card See About the El Visa Prepaid Card Program following for more information on how the E1 Card works 5 e Direct Direct deposit into taxpayer s personal bank account 10 e Check A check printed at your office 20 e e Collect Basic This level of the program provides only the e Direct option With e Collect Basic tax preparers can avoid having to handle E1 Card stock or checks This product is available to certain taxpayers who are 18 are older To use e Collect the refund amount must be larger than the sum of the preparer fees service bureau fees and any Drake fees For more information on qualifying for the E1 Card visit epsfinancial net or call Drake s support line at 828 349 5505 To set
334. husetts Forms 1 and 1 NR PY including those e filed during the previous calendar year are required to use electronic means to file all personal income tax returns unless the tax payer specifically directs on the paper form that filing be on paper The threshold is reduced to 100 returns for tax years beginning on or after January 1 2005 The pre parer must continue using electronic means to file returns in all subsequent years unless the preparer completed no more than 25 original individual income tax returns during the previous calendar year Tax Year 2009 Drake Software User s Manual Appendix E State E filing Mandates Michigan Minnesota Nebraska New Jersey New Mexico New York Tax Year 2009 IIT 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 producing software for professional tax preparers must support e file for all Michigan income tax forms that are included in the tax preparation software package SBT Treasury mandates e filing of Single Business Tax SBT returns Software developers have been advised they must support e file for all SBT forms included in their tax preparation software Therefore all eligible SBT returns prepared using soft ware must be e filed MBT The e file mandate for SBT is being continued for software developers support ing the Michigan Business Tax MBT effective
335. ialog box is displayed Figure 2 24 Preparer EE Federal poo State oo K1 jo Pricing Apply to this retum Apply to all returns Form Price 50 00 Item Price Not available JV Include on the Bill Figure 2 24 Pricing on the fly section of the Properties dialog box 9 Edit the description of the form and edit the price listed per form 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 48 Tax Year 2009 Drake Software User s Manual Making Changes on the Fly NOTE For pricing on the fly changes to take effect on the bill the return must be recalculated Overriding Letters Setup Default Result Letter Tax Year 2009 Letters options and defaults can be set from both Setup gt Options gt Optional Docu ments tab and Setup gt Letters Use the LTR screen to override these global options on a per return basis Access this screen from the Other Forms tab or type LTR into the selector field and press ENTER The LTR screen allows you to make the following changes to the letters in a return e Have a result letter other than the default printed with the return e Enter a personalized letter greeting e Add a custom paragraph In addition it provides these override options e Force print a letter
336. ible forms 198 Schedules C and C EZ 98 state tax returns 197 suppressing 28 test returns 68 test transmissions 188 transmitting a return 192 troubleshooting 191 194 EFINs obtaining 188 setting up multiple 203 EFSTATUS page 189 EIN database about 63 283 editing 282 updating from prior year 71 EITC see Earned Income Credit election options 158 160 electronic funds withdrawal see direct debit games of skill 117 payment options 145 return originator see ERO Electronic Training Center ETC 242 247 e mail address books 256 broadcast 252 checking during EF transmission 29 Form 9325 to taxpayer 28 in View Print 180 notification of new 54 program in Drake 252 259 sending a client file return to Drake 254 to Drake Support 5 employee business expenses 118 Employer Identification Numbers security of 254 employer information in EIN database 283 employers foreign 91 who use Talx W 2 eXpress 93 encryption of SSNs EINs 254 engagment letters 26 xi Index enhanced view print mode 174 180 enrolled agents 16 envelopes 26 45 282 ERC Electronic Refund Check 214 ERD Electronic Refund Deposit 214 ERO Electronic Return Originator applying for status 188 opting out of bank products 218 overriding defaults 47 setup 15 187 SSN indicator setting 28 error messages audible notification of 24 estate returns 277 332 Estimated 134 estimated payment coversheet 26 estimated tax adjustments ET
337. ication 131 Form 8611 Recapture of Low Income Housing Credit 133 Form 8615 Kiddie Tax 133 Form 8633 IRS e file Application 188 Form 8801 Credit for Prior Year Minimum Tax Individ uals Estates and Trusts 131 142 Form 8812 Additional Child Tax Credit 142 Form 8814 Parents Election to Report Child s Income 133 Form 8815 Exclusion of Interest from Series EE and I U S Savings Bonds Issued After 1989 162 Form 8820 Orphan Drug Credit 131 xiii Index Form 8822 Change of Address 162 Form 8826 Disabled Access Credit 131 Form 8828 Recapture of Federal Mortgage Subsidy 162 Form 8829 Expenses for Business Use of Your Home 155 Form 8834 Qualified Electric Vehicle Credit 131 Form 8835 Renewable Electricity Refined Coal and In dian Coal Production Credit 131 Form 8839 Qualified Adoption Expenses 131 Form 8844 Empowerment Zone and Renewal Community Employment Credit 131 Form 8845 Indian Employment Credit 131 Form 8846 Credit for Employer Social Security and Medi care Taxes Paid on Certain Employee Tips 131 Form 8857 Request for Innocent Spouse Relief 161 Form 8859 D C First Time Homebuyer Credit 131 Form 8862 Information to Claim Earned Income Credit After Disallowance 162 Form 8863 Education Credits 123 Form 8864 Bio diesel and Renewable Diesel Fuels Credit 131 Form 8866 Interest Computation Under the Look Back Method 162 Form 8867 EIC Preparer Check
338. ication discussed in RAL Appli cation on page 213 Tax Year 2009 Drake Software User s Manual Preparing to Offer Bank Products Drake Application To offer a banking option through Drake you must annually submit a banking appli cation through Drake Drake will then transmit the application to the applicable bank for review To complete and submit a bank application 1 Ca From the Home window click Support or open a Web browser and go to Drake Support com Enter your EFIN and Drake password Select My Account gt Bank Application Select to create a new application new TY2009 and click Go to Main Bank App Page Make a selection from the New Bank list Selections include the available banks and e Collect Click Edit App for Main EFIN Complete the application Fields in bold text indicate required information Click Proceed to Confirmation You can now view or print the application as desired If necessary go back to make changes Select the Confirmation box and then click Submit Application To add additional offices to your application you must first visit our Service Bureau Portal and complete the information there If using Chase Republic River City or Santa Barbara you will have an opportunity near the end of the application to enroll in the E1 NOTES Visa Prepaid Card program which allows you to offer the E1 Card as an additional disbursement method in conjunction with your cho se
339. ides the screen 5 amount If a taxpayer is applying an overpayment to the 2010 estimated tax it is necessary to indicate how that overpayment should be applied on the estimate vouchers You can do this by selecting an OP code on either the ES screen or screen 1 see Figure 5 48 NOTE If a code is selected on both the ES screen and screen 1 the pro gram uses the override code from screen 1 Select an overpayment code from the OP Code drop list Codes are described in Table 5 11 Code descriptions can also be viewed by pressing F1 in an OP Code field Table 5 11 Overpayment Codes in Drake OP Code Description blank Does not apply overpayment to 2010 refund entirely A Applies the overpayment to the vouchers in order until it is completely applied Applies overpayment to first voucher and refunds the remainder R E Makes the estimate equal to the overpayment 0 Applies the overpayment to the 2010 estimate but does not print any vouchers 4 Applies the overpayment to all four vouchers equally 137 Estimated Taxes Drake Software User s Manual Underpayment of Estimated Tax By default the software calculates the estimated tax penalty but it does not generate Form 2210 unless there is an underpayment and the form is required If the form is required mark the reason for the requirement in the top left corner of the 2210 screen This default setting can be disabled for all returns in Options Setup or
340. ields for indicating how much of a property was used for Usage personal purposes 107 Supplemental Income Drake Software User s Manual 2 Ifproperty is used for personal purposes atleast 10 or 14 days enter personal If multi dwelling unit and taxpayer occupies part enter occupied by taxpayer This is your main home or second home Figure 5 25 Item 2 of screen E When completing these fields described in the following list use whole numbers for percentages For example enter 50 to indicate 50 usage e If property is used Enter the percentage if any of personal use of the rental portion of the property If the property was used for personal purposes dur ing the current year for more than either 14 days or 10 of the total days it was rented to others at a fair market rate enter the percentage of whichever is greater e If multi dwelling unit If the 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 will cause the software to take indirect expenses into account when calculating the return see Direct and Indirect Expenses following 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 will be carried to Schedule A The program uses the percentages entered when calculatin
341. igure 5 66 Complete the Date return was filed text box Figure 5 66 If this field is blank the program uses the Date balance paid entry from the 2210 screen by default Failure to file penalty Failure to pay penalty NROIGSR asa ser here Figure 5 66 The LATE screen accessible from the Taxes tab Other LATE You can also use the LATE screen to override these additional default settings 164 Screen Features 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 66 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 66 for that return Due date of return An entry here overrides the default of April 15 of the year the return is due An override would be necessary for a special circumstance Tax Year 2009 Drake Software User s Manual Features for Late Filed Returns such as for returns affected by disasters or other IRS extended due date occur rences e Date balance paid if different An entry overrides the calculated balance due Interest Ifthe global option is se
342. iled 2 From the Other Forms tab click Extension Forms 4868 amp 2350 3 Make the applicable selection from the 4868 drop list if filing Form 4868 or the 2350 drop list if filing Form 2350 Selections are described in Table 5 19 Table 5 19 Extension Forms Screen Selections for Forms 4868 and 2350 Code Description X Produces Form 4868 or Form 2350 whichever is selected Produces Form 4868 and indicates the amount of payment being sent A Produces Form 2350 Firm information rather than taxpayer information is printed on the return label section B Produces Form 2350 Taxpayer s name and address are printed at the bottom of the form P Produces Form 2350 Taxpayer s name preparer s name and firm address are printed at the bottom 4 Enter all applicable information For further instructions click the Screen Help button in the title bar of the screen If e filing an extension application complete the EXT screen and then select the applicable form number on the EF screen accessible from the General tab For more information on the EF screen see EF Override Options in Data Entry on page 196 159 Special Returns Drake Software User s Manual 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
343. in PDF and Word format on your Drake CD Consents must be signed by the taxpayer and spouse if applicable before applying for the E1 Card using Drake If using the E1 Card in conjunction with Chase Republic River NOTE City or Santa Barbara the USE and DISC screens must be com pleted for the bank and the E1 Consent and Disclosure screens must be completed for the E1 Card 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 It is normally posted on the Thursday of the following week if the return is sent by noon Thursday e Ifthe bank declines a RAL it flips the RAL to a non loan product 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 Your system picks up any new bank acks whenever you initiate a connection transmit or
344. in the Fed tax and State tax fields of screen 1 Figure 5 50 on page 138 To override an amount shown enter a new amount Based on this amount program calculations determine whether the taxpayer should receive the underpayment penalty 138 Tax Year 2009 Drake Software User s Manual Making Work Pay Schedule M Income and payments are split equally among the four quarters If NOTE these figures must be adjusted enter the payment amounts on the 2210 screen An entry on the 2210 screen overrides the equivalent entry made on the ES Estimated Taxes screen Estimated Tax Penalty The program automatically calculates estimated tax penalty and displays the calcula tion on the Estimated tax penalty line of Form 1040 To override the system calcula tion use the Estimated tax penalty field on screen 5 NOTE For information on calculating interest and penalty amounts for future years see Penalty and Interest Calculation on page 163 Making Work Pay Schedule M New in 2009 the IRS has introduced Schedule M Making Work Pay and Government Retiree Credits In Drake use screen M to enter Schedule M data for both the taxpayer and spouse For further guidance see the field level help in Drake or refer to the IRS instructions Earned Income Credit EIC The IRS requires that certain questions be addressed on a tax return for a taxpayer to receive EIC These questions are located in the following locations within Drake e E
345. in the View Print Mode Color Configuration dialog box 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 Tax Year 2009 In Enhanced View Print elect Setup gt Form Order to open the Sort Form Order dialog box Figure 6 15 183 Setting Up View Print Options Drake Software User s Manual Drake 2009 Sort Form Order 1040 Series Federal gt Save Normal Default C Client Set C K1 Set C EF Signature Set Preparer Set Cancel Estimate Extension Set C Federal Set Help _ 209 Messages Page a gt 300 Notes Page Exit __ 289 EF Status C 97 Form 1040x Reset D 1 Form 1040NR gt 2 Form 1040 _ 3 Form 10404 gt 4 Form 1040E2 gt 5 Form 2210 C 91 Form 2210 O 6 Form 2210F Y 7 Schedule amp O 8 Schedule B O 9 Schedule C C 10 Schedule C EZ D 11 Schedule D O 13 Schedule E gt 14 Schedule E 15 Schedule F 16 Schedule R 171 Schedule SF Instructions Click and Drag the form names to put them in the desired order Figure 6 15 Sort Form Order dialog box 2 Select the printing set to which to apply the order changes Default is Normal 3 Click and drag the form names to put them in the desired order The document at the top of the list if it has
346. inacanestbenatecedeceaanaans 69 Priory car Updat S ia n2 cowed ge care eae ied ee ae eed pala Races wee Cae whe dene EREE R 69 Organizers and Proforma o4 5 id 0 805 04 4s Fi daa soba dew ka de bane aah ede ee Salas 72 SCHEGUICE rs a0 deattg toch be dom Seer deta Brae el ald tae 4 alone bear Waleed A a Ble es E ae lea hdl Aaa ale whee ae 76 E filing Preparation 7s goss cidere e h8 5 cea RANT Ce ded de wee ek Coe eee she ek dene 86 Return Preparato aici cistins ssticcsssiedincnwendsrestaanendibiimaasia ranean 87 Taxpayer Demographics 1 0 0 eet e eee teen enna 87 Exemptions sesi sa nce ph endee drsesgi gues A dead AG Daeg aeew Aes Bodies Ha eenCe shee due EE EEEN 89 Personal Service Income W 2 1099 MISC 2 0 0 ccc ce teen een ene e nen 90 Passive and Investment Income 1099 DIV etc 2 0 cee ene enn eens 94 Taxable Refund ome tossud t biden see dad a a td soma Ea daawd aide waded dean 96 ANMOD 5 eeraa oda Bogie a a a ssid weds bs uae Gee Geddes dae Au na dred Sas ke ae a 97 Self Employment Income Schedule C 2 0 0 0 0 ccc nce e teen e eens 97 Sales of ASSets mrri 400 26 pati is Gare ha bad eek A eat bo epee etd Ba a ein De 99 Retirement Income 1099 R etc 2 eee eee nen tenet eens 104 Supplemental Income cii sses pees He reds Hawi d eee EIR EAEE hd enn ede mi sae en 106 Farm Incom s 3 24s sucdu des cedadesd cod Gene oa ea bee OOk Oda eh eee ed eee ew eed ess 114 Unemployment Compensation 0 0 0 0 eee een nent
347. income 43504 PRatentisitae artes au cenceinns A a eitine a 6646 T Parent s tax computed I using either Schedule D Or a i i ii wa f Figure 5 45 Parent information has been imported into dependent s 8615 screen Estimated Taxes This section focuses on the following information in Drake e Estimated taxes paid in 2009 e Estimated payments for 2010 e Estimated tax adjustments e Application of 2009 overpayments to 2010 e Underpayment of estimated tax Estimated Taxes Paid in 2009 Drake offers several ways to enter estimated tax amounts that were applied from the 2008 tax return and paid in 2009 The preferred method is to enter quarterly and total amounts on the ES screen You can also enter the total amount on screen 5 or use the 2210 screen for underpayment of estimated tax 2009 Use screen 5 to directly enter the amount of estimated taxes paid in 2009 The pro Payments on gram assumes that the payments were made in four equal amounts on the standard Screen 5 estimate due dates Note that the Estimated tax payments field is an adjustment field if 2009 payment amounts are entered on both screen 5 and the ES screen they will be combined during calculation and the sum shown on Form 1040 134 Tax Year 2009 Drake Software User s Manual Estimated Taxes 2009 Use the ES screen to enter by quarter the 2008 overpayment and the estimated taxes Payments on paidin 2009 The program applies the standard estimate payment date
348. inheritance If VARIOUS the program treats the item as a long term gain 99 Sales of Assets Drake Software User s Manual e Date Sold Ifa single date does not apply type BANKRUPT or WORTHLSS as applicable NOTE If Date Sold is BANKRUPT the return must be paper filed VARIOUS and WORTHLSS entered as dates are acceptable for e filing e Sales Price Enter the sale amount If only the gain amount is available enter the gain amount and leave Cost or Basis blank e Cost or Basis Enter the cost or basis If only the loss amount is available enter the loss amount and leave Sales Price blank e AMT Cost Basis Enter the AMT cost or basis of the item here but only if it is different from the regular tax cost or basis e S L From the dates entered Drake determines if an item is long term or short term If no specific dates select S or L to force short term or long term e Misc Press F1 to access codes Check with states for codes that are required for state purposes only Screen D2 Screen D2 has fields for short term gains losses from other sources long term gains Carryovers amp losses from other sources loss carryovers from the prior year and capital gain tax Other computation If Drake was used for the taxpayer last year the gains losses and carry Entries over fields are updated automatically otherwise data must be entered manually If amounts to be entered on screen D2 differ due to AMT enter the
349. 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 Tax Year 2009 55 General Navigation Drake Software User s Manual 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 ALT 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 consist of two or more key names connected by a plus sign Press and hold down one key then press a second key Key combi nations are shown to the right of each menu item Figure 3 4 Drake 2009 Tax Software G EF Tools Reports Last Year Data Setup r Open Create Returns Ctril O Calculate Ctrl C Print Ctrl P ven 2 View Ctrl Forms Based Data Entr Quick Estimator PAE Be Prntiview Exit Esc Logout Preparer YOUNG JOHN 4 MCGILLICUDDY FELIX 5 EDWARDS CLEMENT amp KATH ead m im lead im m gt EO RANE E A AN M 4 f f Figure 3 4 Key combinations Screen Hyperlinks Drake data entry
350. ion for Extension of Time to File U S Income Tax Return e Form 9465 Installment Agreement Request Tax Year 2009 Drake Software User s Manual Depreciation e Form 56 Notice Concerning Fiduciary Relationship Note that the electronic signature form is required with Form 4868 only if making a payment For Forms 4868 and 2350 the program produces Form 8878 IRS e file Sig nature Authorization for Form 4868 or Form 2350 NOTE Prior year AGI amounts are required to e file Forms 2350 9465 and 56 Enter this information on the PIN screen Special Conditions Power of Ifthe return is being signed by someone with Power of Attorney for the taxpayer indi Attorney cate this information on the MISC screen and enter the name of the person signing Because Form 2848 is not e filable a transmittal Form 8453 is produced with the paper document indicator marked for Form 2848 NOTE Form 2848 itself is not printed automatically it must be completed on the 2848 screen in order to be generated with the return Taxpayer Ifthe taxpayer is signing the return for the spouse mark the box in the Signing for Signing for Spouse section of the MISC screen and provide an explanation using the SCH screen Spouse See Unformatted Schedules on page 168 A statement number is indicated in the spouse s signature box of the printed return Depreciation Form 4562 Depreciation and Amortization is used to claim deductions for deprecia tion and amo
351. ion inpe space below Click OK to lt Custom Status 7 gt continue lt Custom Status 8 gt lt Custom Status 9 gt Awaiting Payment 0 lt Custom Status 10 gt Select status to OK Cancel customize Help OK Cancel Figure 9 2 Creating custom statuses 232 Tax Year 2009 Drake Software User s Manual Setting Statuses 3 Click Edit 4 Enter a status description in the Status Description text box Figure 9 2 5 Click OK To restore all original statuses click Reset Setting Statuses Set return statuses at any time during the return preparation cycle A status can be set from within the CSM or from data entry For consistent and valid CSM status reports set statuses for each stage of a return You can ensure that the CSM Status column is always correct Tip From the Drake Home window go to Setup gt Options Under the Calculation amp View Print tab select Auto calculate tax return when exiting data entry Setting a Status from the CSM To set the status of a return from within the CSM 3g 1 Right click a return record in the Client Status Manager list 2 Select Set Client Status A status list is displayed 3 Select a return status from the list csM The status is updated in the Status column Setting a Status from Data Entry To set the status of a return from within data entry click the CSM button from the amp Data Entry Menu toolbar to display a status list and then se
352. ional 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 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 New security and encryption features have been implemented to pro tect your files Because client files are no longer listed by SSN or EIN NEW FOR but with a random code number in the Drake DT folder you must 7009 attach files to e mails using one of the procedures described here Returns can now be e mailed directly from Enhanced View Print mode For more information see E mailing from View Print on page 180 254 Tax Year 2009 Drake Software User s Manual Interactive Support From Data To e mail a client data file directly from data entry Entry 1 In Drake open the return you want to transmit x 2 Click Email The Compose Message window shows the client s data file attached to the message Figure 10 14 Email Drake 2009 Email
353. ions 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 Tax Year 2009 Drake Software User s Manual Retirement Income 1099 R etc NOTE If a 1099 R was not received for a pension annuity or IRA distribution the return cannot be e filed Substitute To file a substitute 1099 R Form 4852 refer to Substitute W 2 1099 R on 1099 R page 92 Rollover of Ifa 1099 R distribution should be excluded from income because it was rolled over Pensions into another qualified plan indicate this using the Exclude from income drop list on Annuities the 1099 screen under the Rollover Information heading see Figure 5 21 Rollover Information Exclude from income rolled over into another qualified plan Partial rollover amount Figure 5 21 Selections for rolled over 1099 R distribution Select S if the distribution was rolled over into the same type of account Select X if it was rolled over into another plan If S is selected the word ROLLOVER is dis played on Pensions and annuities line of Form 1040 501 c 18 Contributions Enter contributions to a 501 c 18 pension plan on screen 4 but do not include amounts that have been assigned Code H elective deferrals to a section 501 c 18 D tax exempt organizati
354. ip and fiduciary packages only Grantor Trust Statement Cover letter for grantor trust statement fiduciary package only Letters Setup Use the Client Communications Editor to edit letter templates set up the letterhead for letters and client bills and preview letters Editing a_ To edit a letter Letter Template Tax Year 2009 1 From the Home window go to Setup gt Letters 37 Software Setup Drake Software User s Manual The Client 2 Inthe Client Communications Editor window click Open and select a package Communications i ditor is opened to and letter to edit The right pane displays the selected template rib inter letter i e To edit the letter contents add edit or delete text as you would in a program Wen ree oma 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 then locate and double click a keyword or paragraph from the left pane To delete a keyword or conditional paragraph select it in the letter template and press DELETE CTRL X deletes a 3 Click Save selected item N The Client Communications Editor does not allow you to save any UTE letter in which text within angle brackets in other words the names of keywords or conditional paragraphs has been changed Setting Up Arrange
355. ipt of a tax return use Form 4506 T available in Drake at Tools gt Blank Forms or call 800 829 1040 8857 Form 8857 Request for Innocent Spouse Relief If question 3 on this screen is answered Yes do not file Form 8857 File Form 8379 instead 9465 Form 9465 Installment Agreement Request Form 9465 is e filable if the taxpayer uses direct debit to pay Otherwise this form must be paper filed If e filing a PIN is required indicate Form 9465 and enter prior year AGI on the PIN screen W7 Form W 7 Application for IRS Individual Tax This form is not e filable payer Identification Number ITIN Statements and Claims Table 5 21 lists additional screens for statement and claim forms Table 5 21 Statement and Claim Forms Available from Other Forms Tab in Drake Screen Form Notes 2120 Form 2120 Multiple Support Declaration 8332 Form 8332 Release of Claim to Exemption for Child of Divorced or Separated Parents 1310 Form 1310 Statement of Person Claiming If anything other than box C is selected in Part of Refund Due a Deceased Taxpayer the screen or if box 2a is selected in Part Il the return cannot be e filed Tax Year 2009 161 Requests Claims and Other Forms Drake Software User s Manual Table 5 21 Statement and Claim Forms Available from Other Forms Tab in Drake Screen Form Notes 2848 Form 2848 Power of Attorney and Declaration This form is not e fi
356. is Worksheet screens These are accessed from either the K1P or K1S screen as shown in the Figure 5 31 example Schedule K 1 for 1065 7 1065K1 1 12 1065K113 20 Basis Worksheet Basis Worksheet continued TS Jr sr Z c Passive Activity No amp Partnership ID number Seen A OS gp ee So a Figure 5 31 Tabs for basis worksheets on the K1P screen N If you calculate a return with K 1 information but you have not DTE entered anything on the Basis Worksheet screens the program generates a note advising you to do so How the Once it is able to calculate the adjusted basis the program takes steps based on calcu Calculation is ation results 112 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 just as they have done in the past and the software 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 114 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 32 shows the adjusted ba
357. is produced with a return only if it is required To have the pro Returns gram print Form 6251 for all returns go to Setup gt Options gt Forms amp Schedule Options and clear the Print Form 6251 only when required check box Foreign Tax Credit If the amount of foreign tax credit FTC is less than 300 600 for married filing jointly and no Form 1116 is required you can enter this amount directly into the For eign Tax Credit field on screen 5 See Figure 5 40 pate MR fe tt n ANIA tam wee eee TB Credits Teng siete ft Other Taxes 57 RRTAtax on unreported RRTA tip income 60 Excess Golden Parachute payments is RA aain iaa chr aai a a a MO rT ion Ana Figure 5 40 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 an 1116 screen is to be linked with an INT or DIV screen for foreign interest and dividends enter an FTC code into the FTC box Enter this same number on the INT or DIV screen For more on entering foreign interests and dividends see Foreign Interest and Dividends on page 95 126 Tax Year 2009 Drake Software User s Manual Child and Dependent Care Expenses Credit Required Statements A statement may be required with Form 1116 Fields that might require statements on the 1116 include the
358. it can be changed for a single return in the 2210 Options section of screen 1 Figure 5 50 2210 Options 221 Core e 2008 Fed tax 2008 State tax Figure 5 50 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 12 2210 Codes in Drake 2210 Code Program Action blank Uses the default setting in Setup gt Options gt Form amp Schedule Options tab X Calculates the estimated penalty produces Form 2210 if necessary Because this is the default setting you should select X only if the default setting has been glo bally disabled in Setup gt Options P Calculates the estimated penalty produces Form 2210 even if not required F Calculates the estimated penalty produces Form 2210F if necessary Because this is the default setting you should select F only if the default setting has been globally disabled in Setup gt Options G Calculates the estimated penalty produces Form 2210F even if not required Does not calculate the estimated penalty If this option is chosen no form for underpayment of estimated tax is generated with the return NOTE The program does not produce Form 2210 if the return is ineligible for e filing Prior Year Ifa return is updated from the previous year the program displays the prior year tax Tax by default
359. it is opened in a browser window 2 Use the navigation buttons in the top 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 click Launch Exam to begin the test Submit your score upon completion of the test 244 Tax Year 2009 Drake Software User s Manual Online Support N Click Tax Law Updates to view any changes in the tax laws since UTE the tax courses were published Click Tax Desk Reference to view Drake s 2009 Desk Reference CPE Credits To earn CPE credits for taking a tax course in Drake ETC you must score 80 or higher on the course exam and submit a course evaluation After completing all units of a course click Launch Exam on the Tax Courses page for that course After passing the exam with a score of 80 or higher click Launch Evaluation Once you have completed and submitted the evaluation you will be able to print a CPE certificate To re print a CPE certificate click Report Card in the Drake ETC sidebar Scroll to the bottom of the Report Card window to the CPE NOTES Credits 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 from the Support Web page select Training Tools gt
360. item 1 search fields item 2 and suggested articles item 3 We suggest beginning your queries by viewing the Latest Articles those most recently added to the KB Hot Topics those receiving the most hits and Top 10 Frequently Asked Questions see item 3 in Figure 10 1 Next search for specific articles questions or terms using the four tabs listed in Table 10 1 240 Tax Year 2009 Drake Software User s Manual Online Support Searching the KB Browsing the KB Tax Year 2009 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 over two dozen folders of tax software topics and 17 folders of CWU 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 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 Descripti
361. itional files See Attaching NOTES Other Types of Files on page 256 If you changed the password for e mailing a PDF document Drake Support will need the new password in order to open the file Setting Up View Print Options Set up options for form properties colors and printing order You can also access other utilities within Drake using the Setup feature 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 return To access this feature in Enhanced View Print click the document whose property setup you want to view and then select Setup gt Form Properties Setting Form Colors Enhanced Mode 182 Colors can be customized in both Basic and Enhanced View Print The Form Color Background Color and Text Data Color can each be changed in Enhanced View Print mode Drake default colors for these three items as shown in Figure 6 14 are black white and red respectively Tax Year 2009 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
362. just 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 8 7 Reprint Not Allowed Too Late The Check on this record was originally printed on 11 05 2009 IF you have the check listed in YOUR possession you may reprint the check by clicking Ok and then pressing F5 Check Number 00503300 Check Date 11 05 2009 Check Amount 925 00 Figure 8 7 Reprint Not Allowed If this happens click OK then press F5 on the keyboard You will be asked if you have the prior check in hand A prior check must be physically in your 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 check Contact your RAL bank for additional assistance Tax Year 2009 227 Cancellations Tracking and Post Season Procedures Drake Software User s Manual Misfeeds and Paper Jams Ifa check is damaged and rendered unusable during printing write VOID on the face of the original check and reprint the check using the procedure in Reprinting Checks on page 225 If you accidentally print a check on something other than the check stock such as a blank sheet of paper reprint the check Guarantee that the original check printed wi
363. ksheet generated when the return is calculated 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 For tax year 2009 any prior year unallowed losses must be manually entered into the Prior year carryover losses and deductions column which spans the Basis Work Loss Allocation a Taking the total losses b percentage c Multiplying the loss al to the return Once these calculations are complete e e Prior Year Unallowed Losses sheet screen see Figure 5 33 and Basis Worksheet continued screens After 2009 the program will automatically update these fields using the previous year s disal lowed losses and deductions Tax Year 2009 113 Farm Income Drake Software User s Manual 46 applied gains etess Carrent yaf 1086 anid weadctions a Prior year Current year Allowable carryover losses and losses and losses and deductions deductions in deductions current year Losses and Deductions a b d 9a Ordinary losses from trade or bUSINeSS usssssssssssssersrer b Netlosses from rental real estate activities c Netlosses from other rental activities d Net short term capital losses d Netlong term capital lasses e Other portfolio losses f Netlosses under Sec
364. l Extension 12 Individual Amended Personalizq en E E a N a a sm E cmt E stalin tentan OT e ron Figure 2 25 Selecting the Spanish letter as the default letter for a return LTR screen N To change the default letter for all returns go to Setup gt Options gt DTE Optional Documents tab and select a letter 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 return go to the LTR screen and enter a new greeting in the Personalized letter greeting text box To begin the greeting with Dear enter it along with the name in NOTE the Personalized letter greeting field To have all letters for a pack age type begin with Dear or another greeting of your choice make the change in the actual template in Setup gt Letters Adding a To add a custom paragraph to an individual letter write the paragraph in the Custom Custom Paragraph text box of the LTR screen By default the paragraph is printed at the bot Paragraph tom of the letter To have a custom paragraph appear somewhere else within the letter 1 From the Drake Home window go to Setup gt Letters 2 Click Open and select the package and letter to be generated for the client 3 Place the cursor on the line where you want the custom paragraph to appear 4 Click the plus sign next to Miscellaneous
365. l colors GeneratIneome adjustments Credits Credit C Self Employed Income F FarmiCo Op Income J Farmer s Income Averaging 4835 Farm Rental Income 6198 Amount Not at Risk FS ne andar nol alien a Figure 3 15 The C screen under the Income tab has a field flagged for all new returns To flag one or more fields in all returns 1 From the Home window select Setup gt Options gt Administrative Options 2 Select Use Customized Flagged Fields on all Returns 3 Click Flag to open a dialog box with buttons for all Drake packages Figure 3 16 i E 1120 Corporate 11205 Sub S 1065 Partnership 1041 Fiduciary 990 Tax Exempt 706 Estate Exit Figure 3 16 Flag Fields for Review dialog box 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 5 Select a screen to open it 6 Choose one of the following options Tax Year 2009 Drake Software User s Manual Data Entry e Flag a field for a screen Click the fields to flag or right click a field and select Flag Field For Review When Screen Is Created The field is flagged with the word Screen e Flag a field for all new returns Right click a field and select Flag For Review When Return is Created The field is flagged with the word Return as shown in the example in Figure 3 17 a B Business code D Employer ID Figure 3 1
366. l eee ees cieewla eer ned Geeteehs 126 Child and Dependent Care Expenses Credit 0 ccc cect eee e nen ees 127 Elderly Disabled Credit 2 0 0 een nnn nen n teen e eens 128 Home Energy Credits ceter eda etek Oa wat nla cela gala Bh dee we band thle bonded AE baa dane 129 Passive Activity Credits 0 0 0 een e tnt e nent eee e eens 129 Child Fax Cred itise t 5 3 6 ds0 5 6 hot ded a do dood woh be age hha wed ad warded dew wot Padang 130 Other Credits cs reai iin Cw d ipai a Wh Rea oe ee dead daw OAS Ske dhs Ae Goon Hoa Gees 131 Unreported Social Security and Medicare Tax 0 cece ene eee eens 132 Additional Tax on Retirement 00 0 ccc ttt n tbe e teen eee 132 Advance EIC Payments 2 500 daacei beet ned ikr E deka eb bh pe weed mee Reeth es Reeds 132 Household Employment Taxes 0 ccc eee eee ttn nent eens 132 Other Takeke aces u dna hese i ucoasi che a che Bh e Be Ch Gees Ges eee Gov edek Het ened Beaks 132 Estimated Taxes sini kc ntewiee dave 2a Whee E E Veen heeded eed Eade tamene ew eee 134 Making Work Pay Schedule M 0 ccc eee nen tenet eens 139 Earned Income Credit EIC 0 0 een eee a n tent eens 139 Additional Child Tax Credit and Combat Pay 0 0c ccc cnet teens 142 Other Payments apicar oh hae deh Bawa ie eG Noted eel ea dia aaah a aera eae bboed Bawa 142 First Time Homebuyer Credit 0 0 eee nent enn e eens 142 Direct Deposits 4 3 6 c26 0 o4 50Ga E aai a E soe aan eee bo
367. l for tracking workflow within an office It displays various types of data including client ID number and client name return type preparer name client status and the starting and completion dates for each return The CSM can be used for searching viewing organizing and printing data Accessing the CSM The CSM is accessible from the Drake Home window Choose one of the following methods to open the CSM 3g e Click the CSM icon in the toolbar e Select Reports gt Client Status Manager e Press CTRL L on your keyboard CSM e Use the Personal Client Manager New in 2009 see Personal Client Manager on page 54 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 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 Tax Year 2009 231 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 l New Client In Progress EF Pending EF Accepted Printed Status Statu
368. lable of Representative 8275 Form 8275 Disclosure Statement To print Form 8275 R select 8275 R at the top of Form 8275 R Regulation Disclosure Statement the screen 8379 Form 8379 Injured Spouse Allocation 8594 Form 8594 Asset Acquisition Statement 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 8914 Form 8914 Exemption Amount for Taxpayers An SSN or ITIN for the displaced person is required Housing Midwestern Displaced Individuals in order to claim an exemption amount NOTE cable code under Combat Other Forms To claim tax forgiveness for death in a combat zone or as a result of a terrorist or military action go to the MISC screen and select the appli Zone Press F1 for more information Table 5 22 lists screens for other forms available under the Other Forms tab Table 5 22 Other Forms Available from Other Forms Tab in Drake Screen Form Notes W4 Form W 4 Employee s Withholding 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 Inte
369. lacement up Printing Sets The Printing Sets feature allows you to print multiple sets of returns for different pur poses To define printing sets 1 From the Drake Home window go to Setup gt Printing gt Printer Setup Sets log box 42 2 Click the Sets button at the bottom of the window to open the Copies Per Set dia Tax Year 2009 Drake Software User s Manual Software Setup 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 Ext Client Preparer Federal a jf zz 3 1 i Update Figure 2 22 Example Three copies of Schedule C for client 6 Click Save then click OK Repeat this procedure for other forms as needed Changing Making Sets changes on the fly modifies settings globally not just on a per return Print Sets for basis If you change your Sets settings on the fly you change those settings for all a Single ae Ret rn future set printing To change or add print settings on the fly without entering Printer Setup complete the f
370. lar line Repeat for other lines 4 Once yov ve filled in all return data click Exit to close the form Note that the same toolbar from data entry is available in forms based data entry Quick Estimator Use the Quick Estimator to quickly calculate results for an individual 1040 return M p l RTANT Do not e file or mail the return generated in the Quick Estimator to the IRS or an amended return will be required PPR clients A return created in the Quick Estimator counts as one PPR return To use the Quick Estimator Shortcut Press 1 From the Home window select File gt Quick Estimator CTRL Q to open ae 5 A Quick Estimator 2 Enter or select an SSN If an existing return is selected the Quick Estimator will not override previous entries 3 Enter all applicable information for the return Press F1 in an individual field for help on that field 4 Press ESC to save the data exit the screen and view the return or click the X in the upper right corner of the screen Depending upon your setup options you may be able to click CTRL C to calculate or CTRL V to calculate and view Please note the following points when using the Quick Estimator e Because the total of interest dividends and other income are entered in one field Int div other income the bank product and preparer fees might not be accu rately reflected on the bill The income could be overestimated or underestimated e The Quick Estimator produ
371. le as a PDF file to a selected DDM client folder See Document Manager on page 305 319 Tax Planner Case Options yg Directories and Paths Drake Software User s Manual 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 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 Entering Data Using Worksheets 320 To begin working in the Tax Planner 1 ad Open the Planner using one of the methods described in Opening the Tax Plan ner on page 318 Tax data automatically fills the planner for the current year In the Case Selector select the number of years or cases to use If you have already selected a default number the Case Selector does not appear Click OK Begin entering or changing data to reflect the changes being planned or consid ered by the client See Entering Data on page 320 Note that the data in subse quent years adjusts to your entries Click Save Planner gt Save or Save Planner gt Save As and select a name and location for the file Files are saved as DTP files unless you specify otherwise The following sections describe a
372. lect Report Columns section of the Report Editor Step 1 dialog box lists keywords for each column category Figure C 2 shows the keywords for the Return Results category Select Report Columns Categories Available Columns Return Results AGI Alimony Received Select gt Alt Min Tax Applied lt Unselect Balance Due Child Care Credit lt lt Unselect All Child Tax Credit Child Tax Credit Additional Dividends Ordinary Total Educator Expense Selected Report Columns Taxpayer ID Taxpayer Name Return Type Phone Number Taxpayer Cell Phone Figure C 2 Keywords are listed under available columns To view a keyword description click the keyword and then place the mouse pointer over it A keyword description appears as shown in Figure C 3 Select Report Columns i Categories Return Results Child Care Credit Child Tax Credit Child Tax Credit Additional Dividends Ordinary Total Educator Expense a 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 2009 C 1 Appendix C Keywords Drake Software User s Manual Letter Keywords Letter keywords appear as bracketed phrases within the letter templates of the Client Communications Editor Figure C 4 p EASE Cauet aay wo mays Bette yourapp atiti aate w you netat re Please bring all tax rel
373. lect a return status from zk 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 From the Home window click Last Year Data gt Update 2008 to 2009 and update the return The client s record goes into the 2009 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 ele 7 ps ena Open The return is opened to the General tab in data entry When you exit the return entry you are brought back to the CSM Tax Year 2009 233 Customizing the Display Drake Software User s Manual To create a return from within the CSM 1 Click the arrow next to the Open button and select New Client 2 Enter the SSN or EIN for the return in the Open Client File dialog box 3 Press Open then click Yes Shortcut Press CTRL N to open the Open Client File dialog box 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 To customize the CSM display 1 Click Customize In the Column Layo
374. lected See Figure 5 64 e Section 4 For Part IV V only This section must be completed only if item IV or V was selected See Figure 5 64 The program generates only those pages of the form that are applicable For example if Owned Jointly IID 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 64 and page 3 covers only jointly owned accounts Page contains taxpayer data Section 4 applies to either signature but no financial interest IV or NOTE consolidated report V If IV is selected and a First name is entered on line 36 the nine digit Account owner ID number from line 35 will be printed as an SSN If 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 and interest Penalty and Interest Calculation Global Option Tax Year 2009 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
375. lected the program bases its penalty and interest calculations Rates onthe interest rate for the quarter You can override program calculations by manually entering penalty or interest amounts on the LATE screen You can also manually enter interest rates in Setup gt Options Manually Drake automatically updates quarterly interest rates for the current and following year Entering as they are announced by the IRS For tax year 2009 for example interest rates will Rates be updated for 2009 and 2010 After 2010 quarterly rates must be manually entered in the 2009 program for late returns for tax year 2009 To enter quarterly rates manually 1 From the Home window select Setup gt Options gt Optional Items on Return 2 Enter the available rates for each applicable quarter Figure 5 67 Percentages should be entered using four digits with the last two digits coming after the deci mal for example you would enter 1 5 as 01 50 Interest and Penalty Calculation IV Automatically calculate penalties and interest on returns filed after the due date based on interest rates below Formats must be entered as For example 1 5 would be entered as 01 50 4 15 6 30 10 00 00 77 9 30 11 00 00 10 1 12 31 12 00 00 7 1 9 30 10 00 00 10A 12 31 11 00 00 14 3 31713 00 00 10 1 12 31 10 0000 171 331712 foo 41 6730713 0o00 1 1 3 31 11 00 00 4 1 6730712 00 00 7 1 9 30 13 00 00 41 6301 o 771 930712 foo 10 1 12 3113 0
376. lick Delete in the Appointment Detail toolbar Q Delete Click Yes to confirm the deletion Click OK to return to the Appointment Scheduler RON Searching Appointments Find Find scheduled appointments by searching keywords from the Appointment Details Scheduled information for all clients To search for a client s appointment in the Scheduler Appointment 1 Open the Scheduler and click Search Appts to open the Scheduler Search 84 Tax Year 2009 Drake Software User s Manual Scheduler 2 Enter one or more keywords in the Enter Search Terms field The program will search all Appointment Detail information for these keywords 3 Select a date from the Start at this Date drop list The program searches for all appointments scheduled for that date and after 4 Click Search Results are displayed in the Scheduler Search window as shown in the example in Figure 4 18 Drake 2009 Scheduler Search Enter Search Terms 400001 002 Start at this Date 8 25 2009 Date Name ID Number Prep Name Time 01 15 2010 JEREMY MCCLURE 400001002 nrogers 1 00 PM 01 29 2010 JEREMY MCCLURE 400001002 rogers 3 00 PM Figure 4 18 Scheduler search results Double click an appointment row to view appointment details Creating Appointment Reports Q Reports Tax Year 2009 The Scheduler works with the Reports feature in Drake to provide reports based on preparer appointment data To generate a Scheduler repo
377. list 140 Form 8874 New Markets Credit 131 Form 8879 IRS e file Signature Authorization 148 Form 8880 Credit for Qualified Retirement Savings Con tributions 130 Form 8880 Retirement Savings Credit 131 Form 8881 Credit for Small Employer Pension Plan Star tup Costs 131 Form 8882 Credit for Employer Provided Childcare Facil ities and Services 131 Form 8885 Health Coverage Tax Credit 131 142 Form 8888 Direct Deposit of Refund to More Than One Account 143 Form 8889 Health Savings Accounts 119 Form 8896 Low Sulfur Diesel Fuel Production Credit 131 Form 8903 Domestic Production Activities Deduction 123 Form 8907 Nonconventional Source Fuel Credit 132 Form 8908 Energy Efficient Home Credit 132 Form 8909 Energy Efficient Appliance Credit 132 Form 8910 Alternative Motor Vehicle Credit 132 Form 8911 Alternative Fuel Vehicle Refueling Property Credit 132 Form 8912 Credit for Clean Renewable Energy and Gulf Tax Credit Bonds 132 Form 8914 Exemption Amount for Taxpayers Housing Midwestern Displaced Individuals 162 Form 8917 Tuition and Fees Deduction 123 Form 8919 Uncollected Social Security and Medicare Tax on Wages 132 xiv Drake Software User s Manual Form 8930 Qualified Disaster Recovery Assistance Re tirement Plan Distributions and Repayments 132 Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically 28 Form 9465 Installment Agreem
378. ll not be cashed If the check is still usable you can reload and reprint it When you get to the Check Print Options dialog box make sure the check number displayed matches the number on the next check to be printed If it doesn t you can use the procedure described in Resetting Check Numbers on page 226 Use a voided check return list available as VOID_CK PG in Tools NOTE gt 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 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 To cancel a loan that has been accepted by the RAL bank some EROs must print complete sign and submit to Drake a loan cancellation request available in Tools gt Blank Forms as CANCEL PG If the check has already been printed the voided original must accompany this form If no check has been printed indicate this on the form with the ERO s initials If required to submit this document send the completed form and cancelled check as applicable to Drake Software Loan Cancellations 235 East Palmer Street Franklin NC 28734 Note that Drake does not accept faxed copies of checks M p l RTANT A loan cannot be cancelled if a
379. llowance is provided enter the amount with the amount of Actual Expenses for Utilities Finally enter the Fair Rental Value of the housing used If a 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 Screen codes A 4952 8283 124 Based on its calculations the program determines whether to apply the standard deduction or to generate Schedule A Itemized Deductions for a taxpayer If your cli ent is itemizing deductions enter descriptions and amounts on one of the following screens as applicable e Screen A for Schedule A Itemized Deductions e 4952 screen for Form 4952 Investment Interest Expense Deduction e 8283 screen for Form 8283 Noncash Charitable Contributions Access screen A from the General tab Access screens 4952 and 8283 from the Addi tional Itemized Deductions section of the Adjustments tab The program includes self employment losses when calculating the NOTE standard deduction To override this default per the Briggs court case go to the MISC screen and select Standard deduction by Briggs case method located in the Dependent filer special situ ation box Tax Year 2009 Drake Software User s Manual Standard and Itemized Deductions Schedule A Screen code A Use screen A to enter data for Schedule A Itemized Deductions NEW FOR To reflect IRS chang
380. log box Click Print NOTE Export EIN data to another program if desired From the Report Viewer click the down arrow on the Export icon and select a for mat If you click the Export icon not the arrow the program auto matically exports the data into Excel Install State Programs Use Install State Programs to install or repair state program files This can be done by accessing the Internet the latest CD or any drive location that has the needed pro gram files For networked offices sharing information all users must close Drake before installing state programs To install state programs 1 2 284 From the Home window select Tools gt Install State Programs The Install State Programs dialog box is displayed Choose to install state programs from a computer drive or from the Internet If the selected location has state files available those files are displayed in States Avail able panel If the States Available panel remains empty select another location Selectthe location ofthe state installation files Install State s from this Drive FADRAKE09 7 C Install State s from the Internet Figure 11 15 Install state programs from computer CD or Internet Tax Year 2009 Drake Software User s Manual Scheduler 3 Choose states to be installed 4 Click Install The progress bar identifies the states being retrieved and installed Tip Check for updates after installing state programs to ensu
381. m 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 101 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 2009 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 158 154 Tax Year 2009 Drake Software User s Manual Auto Expenses Auto Expenses Screen code AUTO The Auto Expense Worksheet AUTO screen accessible from the Adjustments tab is used for calculating automobile expenses related to certain types of income The program calculates the mileage rate automatically 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
382. m 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 Wizard The Setup Wizard will guide you through entering basic information The first section is required for basic return preparation and electronic filing The second section is recommended to enhance your tax preparation business M Donot show Setup Wizard at program startup Required Completed M Setup Firms Enter information about your company M Setup ERO Enter information required for electronic filing R ater Ka tenn BP a we ws aT a Figure 2 2 Setup Wizard the green check marks indicates a setup item is complete You are not required to use the Setup Wizard To keep the Wizard from opening at program startup select Do not show Setup Wizard at startup See Figure 2 2 Click Help gt Setup Wizard to return to the Setup Wizard at any time Click Exit to close it Running Drake on a Network Your network s designated server should meet the following minimum specifications e Windows 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 N Your office s network must be properly configured for Drake to run DTE correctly Drake cannot provide technic
383. m under the AMT if Different column For information on override fields press F1 in a selected field Schedule D Imports Use the Schedule D Import tool to import capital gain and loss transaction data from an Excel or other worksheet into Drake Create a Before you can use the Schedule D Import tool you must have a worksheet containing Worksheet the transaction data This worksheet should be saved as a Microsoft Excel TAB or CSV file Columns must match those on screen D as shown in Figure 5 17 A B G D M F G H l J K L 1 TSJ F State City Description Acquired Sold Sales Price Cost Basis AMT Cost Basis S L Misc 2 DEE eN e a O OOE E T E Y OEN OOO AN E E EOE O P dhe bpamrninn Figure 5 17 Screen D fields as columns in an Excel worksheet N If you are using a worksheet you created last year you must add a DTE column for AMT Cost Basis Note that this column must be placed between the Cost Basis and S L columns Importing To import the information Saved Data 1 Open the client s file to the Data Entry Menu and click Import gt Schedule D Import from the toolbar The Schedule D Import instructions are displayed 2 Click Next to open the Schedule D Import dialog box 100 Tax Year 2009 Drake Software User s Manual Sales of Assets A w 7 8 Click the button to the right of the 1 Import File Name field Locate and select the file to be imported Click Open
384. made in verifying the taxpayer s information These screens are supplemental to the required EIC Preparer Checklist 8867 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 Print mode See Options Setup on page 23 See Screen Help FAQs and online help for further information and links to IRS doc uments and other resources relating to EIC M H RTANT 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 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 fulfilling these requirements but it cannot replace the knowledge a preparer applies to each taxpayer s situation EIC and Combat Pay Screen code 8812 Tax Year 2009 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 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
385. mas Wages tips other compensation Federal income tax withheld Social Security wages Social Security tax withheld Medicare wages and tips Medicare tax withheld Social Security tips AE VEE N n R O Sahn Figure 4 4 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 5 Proformas are designed to be internal documents and can be used during the interview process 2009 Form W 2 Wage and Tax Statement Adwanced EIC gt n a ee my Figure 4 5 Sample of W 2 page from a proforma Blank proformas and organizers can be viewed and printed from Tools gt Blank Forms See Printing Organizers and Proformas for Clients on page 74 for informa tion on printing an organizer or proforma for selected clients Entering Information from Proformas Use proformas during the interview process or have a data entry operator enter tax information from proformas following the interview Each sheet in a proforma has special codes printed on the left side of the page For example Figure 4 5 shows that the proforma code for the W2 screen is 2 6 As an alternative to the screen code of W2 the data entry operator or tax preparer can use the screen s proforma code 2 6 To access a screen by entering its proforma code 1 From the Data Entry
386. mber DCN to every calculated return Every return created after the first return is assigned a DCN in sequential order starting with 01001 01001 01002 01003 etc If an office is not networked and uses multiple workstations for data entry each workstation must adjust its DCN counter M H l RTANT Stagger the starting DCNs before creating 2009 returns To stagger the DCNs complete the following steps on each workstation 1 From the Home window go to Setup gt Firm s 2 Double click the firm or select it and click Edit Firm The bottom half of Firm Setup becomes active 3 Change the DCN Serial Number Figure 7 4 Drake suggests choosing starting DCNs that are at least 2 000 numbers apart Tooo mom State ID Number rs p EFIN 000000 DCN Serial Number 03000 Non Paid Prep Figure 7 4 DCN Serial Number field in Firm Setup 4 Click Save to save changes or click Cancel to exit without saving changes Depending on the amount chosen to stagger the numbers each workstation now pro duces DCNs based on a different starting number For example if you chose to stagger by 2 000 with the first computer starting at 01000 the second computer would start at Tax Year 2009 Drake Software User s Manual E filing a Return 03000 the third at 05000 and so on In this case each computer can process 2 000 returns before duplicating a DCN M p l RTANT Be careful if changing DCNs after tax season begins and returns Changing a
387. menenr errr errr 1 About Your Drake Software User s Manual 00 0000 ccc cnet eee en ene 1 IRS Changes amp Requirements c 0 6 6600 wot ena ek node Nw a die dpe dace eae dene ea 1 What s New in Drake for 2009 0 nent tenn teen e eens 2 Contacting Drake Support sc errea Raw Yale Wadd da Ath Sen wack Shae wed 8 dy ea doe abe wien dad ln 5 lnstallation amp Setup scsissiicscsnsccccnnccctsscnnnnsceenntstntensansnersixnnnntecstenstaccssteniawietes 7 System Requirements 0 eee 7 Installation sess iors cox cha noia EN A ee be ed Bed heed Roe E AN ele E ee 8 Running Drake on a Network 0 eee t eee teen enn eae 10 Software SetuP eie ereet e e PA nek de net hese hee bey a Rede Rha Ria de eek ede 13 Making Changes on the Fly 0 ccc ce cent nent e teen ent e rarene 44 BAUS cece Ea epee 53 Logging mand Outs i eccceees rerent inet Ee AREER EERE ME LAR ERR Ee Ramee ede ied EEE ER 53 The Home Window wes cc beetere ba cere nese beh ES eka a eda a waren cared bas 53 General Navi gatlOMs es xiii mde eine che EE dain ead Saree d Aare eRe a eee Oe ben a whee wR Waele Ade 55 Creating and Opening Returns 1 0 2 ence e teen e een e nee 57 D ta Baty es geuri ei dca E tk edie E ee pad end Grong ed BALA Sd RA ele pede We etn epee Boe eats 59 About State Returns 2 eee een ene AAE RAAR 68 Practice Returns and Test Returns 1 0 eee E nent nena 68 Preseason PIO DALAM ON iis veccctccntsxivessunccdieanancmetssans benst
388. ments for 2009 include new and extended credits changes to the Earned Income Credit EIC changes in the definition of a qualifying child the expiration of the Recovery Rebate Credit the extension of the First Time Homebuyer Credit and the expiration of cer tain tax benefits for Midwestern disaster areas Many but not all of these changes are What s New in Drake for 2009 Drake Software User s Manual the result of the American Recovery and Reinvestment Act ARRA which was passed in February 2009 Each year your tax software is updated to incorporate the latest tax law changes and requirements and 2009 is no different Some changes to the software will be obvious such as the addition of screen M for the new Schedule M Making Work Pay Credit and a Child 3 column on screen EIC1 EIC due diligence since EIC can now be received for up to three qualifying children In addition you might see new NOTES and EF messages related to these new laws For a complete list of what s new and different in IRS regulations for the 2009 tax year see the 1040 instructions at the IRS Web site www irs gov What s New in Drake for 2009 Each year Drake strives to offer the most efficient and comprehensive tax software in the industry while staying current with the latest technology Described here are just a few of the enhancements you might enjoy this year Personal Client Manager Preparer Notes and Privacy The Drake Home windo
389. mplete the override fields in the this section only if the residence was not calculated in a prior version of Drake Press F1 in either of these fields for further information Like Kind Exchanges Screen code 4562 Tax Year 2009 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 Open the 4562 Depreciation Detail screen for the asset that the taxpayer traded or gave up 103 Retirement Income 1099 R etc Drake Software User s Manual Screen code 8824 Screen code 2 Make an on screen notation to indicate that the asset was traded for example type an A before the description in the Description field 3 Open the 8824 Like Kind Exchanges screen and complete the fields for the like kind exchange 4 Calculate the return In View Print mode view Form 8824 and note the amount calculated for the Basis of like kind property received line Generally this amount becomes the adjusted basis of the new asset unless an additional amount was incurred in obtaining it 5 Open the 4562 screen for the new asset In the Description field make a notation to indicate that the asset was traded 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 sc
390. mum 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 depreciation schedule for this year Optional worksheets Produce all optional worksheets associated with a return W2 1099R forms Produce and display in View Print mode all W 2 forms with the return Print two W2 1099Rs per page If return has more than one W 2 or 1099R form print two per page Carryover worksheet Produce any carryover worksheets associated with the return Print Page 2 of Schedule K 1 Produce and print page 2 of Schedule K 1 for 1120S 1065 and 1041 1040A EZ suppress Automatically suppress Form 1040A or 1040EZ Form 1045 page 2 NOL Automatically produce Form 1045 page 2 if the return has NOL Select to turn ON ___list if greater than Produce lists of these forms when the selected number in the drop list is exceeded NOTE Many settings can be adjusted on the fly from the PRNT screen See Making Changes on the Fly on page 44 Tax Year 2009 25 Software Setup Drake Software User s Manual 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 addres
391. n 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 5 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 5 Tax Year Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Basic Tax Course 2009 Tax Year gt Course Basic Tax Course x Basic Tax Course Introduction Launch Course Filing Status Launch Course Dependents Launch Course Exemptions and Standard Deductions Income Child and Dependent Care Credit KKK lt Maat pred INCOME Credis aa nen agit SO tin a Ce cae Figure 10 5 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 N Click System Requirements on the Tax Courses page to ensure DTE that your system supports the tax course programs Make sure your speaker volume is turned on in order to hear the audio To open a unit 1 Click Launch Course for the selected unit See Figure 10 5 The un
392. n Income Tax Return r Single and Joint Filers r Single and Joint Filers Nonresident Income Tax Return Nonresident Income Tax Return Nonresident Income Tax Return ae Return Descriptions Return 0 0 0 az Return Nonresident Income Tax Return U S Self Employment Tax Return U S Self Employment Tax Return U S Self Employment Tax Return U S Self Employment Tax Return Individual Payment Voucher Tax Packages View Print Exit Figure 11 6 Blank Forms window 2 Click a form category in the left pane default is Federal Click a column 3 Click a tab to select a tax package from the right pane default is Individual header to sort F A forms in ascending 4 Scroll through the form list to locate a form Forms are listed in numerical then a dee alphabetical order 5 Select a form and click View or Print IMPORTANT Tax Year 2009 IRS Revenue Procedure 96 48 requires that a copy of the Paper work Reduction Act Notice be distributed with federal tax forms When providing a blank copy of a federal form to a client you must include a copy of the notice To access it go to Tools gt Blank Forms and select Federal Under the Individual tab select PAPERWRK PG 269 Repair Index Files Drake Software User s Manual 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 ro
393. n the IRS master file e A dependent s SSN or name on Form 1040 does not match the SSN or name on the IRS master file N To file an imperfect return you must set up the program to allow for DTE imperfect returns To do so go to Setup gt Options Under the EF tab select Allow imperfect return election in data entry To e file an imperfect return 1 Open the return and go to the EF screen in data entry 2 Under Additional Options select Imperfect return election 3 Calculate the return Drake displays a NOTES page indicating the return is imperfect The IRS gives condi tional acceptance but an E ack is still returned Processing an imperfect return can take up to six weeks 195 EF Override Options in Data Entry Drake Software User s Manual N Because IRS acceptance is not guaranteed for an imperfect return UTE no piggyback returns or bank products can be e filed with an imper fect return EF Override Options in Data Entry By default the program e files all eligible federal and state forms when you transmit returns The EF Selection Screen allows you to override the program defaults on a per return basis Marking Ready for EF At the top of the EF screen is a Ready for EF drop list If the option is selected in Setup you must select Ready for EF before the return is put into the send queue for e filing even if it is otherwise eligible and ready to go Because you must manually indicate that e
394. n Drake Bank Application Form Chase CH_APPL PG through CH_APPL PG4 4 pages Republic RB_APPL PG through RB_APPL PG7 7 pages RCB RCB_APPL PG through RCB_APPL PG5 5 pages Santa Barbara SB_APPL PG through SB_APPL PG4 4 pages 213 Using Banking Options in Drake Drake Software User s Manual If a taxpayer opts for e Collect the following will be generated with the return e 7216 documents if the electronic signature option is used e ECOL LD equivalent of the RAL_INFO page for traditional bank products e Applicable disclosure documents Banks typically have specific minimum and maximum refund requirements For more information consult the bank application N Do not confuse the RAL Application with the bank application that UTE an ERO must fill out online for Drake For more on the Drake bank application see Preparing to Offer Bank Products on page 216 Service Bureau Requirements If your firm collects tax returns for e filing from outside companies or individuals it might be considered a service bureau Service bureaus can be required to provide additional information when applying for banking services A preparer or firm can be considered a service bureau if e The preparer accepts returns from other businesses that the preparer does not own e A preparer issues Form 1099 for contract labor at other locations e A preparer contracts with another to provide e filing and banking options e A preparer issue
395. n Tax Credit tss zl Type of income taxed Resident county Na a u a Figure 5 14 FTC field at top of 1116 screen The program uses this FTC number to associate the 1116 screen with the other screens and calculate the correct information for Form 1116 By default Form 1116 is generated with the return if any data is entered into the Form 1116 FTC Information fields If these fields include data but a Form 1116 is not required and you don t want one generated select 1116 NOT required See Figure 5 13 to view the check box as it appears on the DIV screen For more on Form 1116 in Drake see Passive Activity Credits on page 129 Taxable Refunds Screen code 99G Screen code 3 96 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 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 Tax Year 2009 Drake Software User
396. n bank You will be required to agree to the terms listed If offering e Collect or the E1 Card program go to epsfinancial net to access and download additional information e Collect and E1 Card program participants are also required to complete compliance train ing through the EPS Web site Once you have submitted the application Drake forwards your application to the appropriate bank You can check the status of your application by returning to this Web site 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 complete any additional agreements Setting Up and Accessing Banking Options Tax Year 2009 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 2 3 From the Home window select Setup gt Firm s Double click the firm or select a row and click Edit Firm Under Banking Information Figure 8 3 select your chosen banking option and enter additional information as necessary 217 Preparing to Offer Bank Products Drake Software User s Manual Banking Information Select Bank Santa Barbara Bank amp Trust Republic Bank amp Trust Company River City Bank e Collect Figure 8 3 Bank selection drop list in Setup gt Firm s Options are described in Table 8 4 Table 8 4 Options under Ba
397. n troubleshooting bank products tax law research and much more To access the KB go to the Drake Support site and select Resources gt Knowledge Bases From the list of Knowledge Bases displayed click the Knowledge Base you want to view Drake Software or Client Write Up By default the Search tab for the selected KB is displayed Figure 10 1 ESI Search for articles Search 2 Search using l All Words xl Search within l All Knowledgebase s xl Search Advanced Search Latest Articles Hot Topics 5 Quickbooks 2009 I Yet Available CWU 5 08 03 09 Broadcast Drake Software Webi 5 Could Not Create Transmit File 5 Print or Copy a Drake Data Entry Screen 5 Multiple States Do Not Appear on 1040 5 07 27 09 Broadcast 2009 Update Schools 4 Error 57 with System Suite 7 Installed 5 How to Set Up and Print Vendor Checks cul 5 Summary of Backup Methods in Drake Cli 4 Changing File Types 4 1040 Estimate Letter to Print 4 Optional Update CD Service with Renewal 4 October 15 Extension Deadline for Returns 5 One Form 8866 Can Be E filed Per Return 4 Line 11 of WK_CGTAX Missing 5 Cannot Add Federal Form to State Print Set 5 RIA Menu Opens FT Folder 5 2009 CWU Update 26 07 29 09 4 09 29 08 Broadcast RIA Training 5 State Wage Reports That Are Available in C Top 10 Frequently Asked Questions 5 CWU Why do I get a malicious script error when trying to update Figure 10 1 KB tabs
398. n viewing and eliminating EF messages see E filing a Return on page 189 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 Print mode The Fee Type and Amount columns see Figure 6 2 list the preparer e filing and bank fee amounts charged To have the fee type and amount displayed here the option must be selected from Setup gt Options gt Calculation amp View Print Fee breakdowns appear on the BILL page in View Print mode Calculation Details Tax Year 2009 The Details tab displays return amounts in an easy to read format Figure 6 4 173 Viewing and Printing a Return Drake Software User s Manual Summary Details Federal Ba WA GaN oo a oes ses eee ce eee eke ee ees 1400 r EE a hater Soc EEA ters ersvais ways SE oe nied 21000 Maa aA A aa AA EE 22400 FE shia aw lw ENIE E CEEA EEEF E ET 648 ees ates aye el aia ers aera e aermta are ete ere oe alae ee ae ees 0 TA a TEPPERS TELTE SAFAREE TELTIS 0 O aaa ENEA a 1343 Connecticut Adjusted Gross Income 22400 Income Allocable to the State 22400 ERR 3 dic ia vaste disva cera avSrwi a a 010 8 ore e TAa 271 Balance Due 271 MEN aa Sheva ase aire aia tw a Sue ae ease a ark ale a 22400 PE BCMED RG ai
399. names e depreciation e ages e filing statuses e addresses e dependent names e business names e installment sales e ID numbers occupations You have the option of manually selecting other data to bring forward M p 0 RTANT To ensure that files are updated according to your clients needs update returns individually as you meet with your clients Drake does not recommend updating all returns in a package at once Update To update an individual return Returns Individually 1 Open the return in Drake 2009 An Individual Update Options dialog box lists all options for updating Figure 4 2 Drake 2009 Individual 1040 Update Options Update Options First PLEASE read manual section on UPDATING before continuing Second BACKUP your 2008 data files just in case In addition to the standard update information you may update the following Additional Update Options O Just those returns that were altered in Prior Year Data Entry amp Cale Schedule 4 Descriptions Schedule B Descriptions Schedule C Other Expenses Descriptions Schedule E Other Expenses Descriptions Schedule F Other Expenses Descriptions W 2 Alpha Information 1099 Alpha Information 1099 R 1099 M and 1099 RRB 2441 Child Care Provider Names and SSNs Update DD Direct Deposit Information O Update Misc Codes on Screen 1 Name and Address screen CO Update Prior Year Tax Preparation Fee to the MISC Screen O Update SCH Unformatted Schedule screen
400. nd e filing fees 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 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 16 hs SFomise geo o ei ty am LOL fo tre a wr ee Fy zare ide s FOS fiy 1 oy se fy a 4 d siey senim Mii ptim enan a Category Per Item Charges v M Include on Bill Update C All Forms Worksheets Statements Per Item Charges Miscellaneous ae Number Form Name Form Description Perltem PerForm Pages 0001 Form 1040NR U S Individual Nonresident Income Tax Return N A 0 00 4 x 0002 Form 1040 U S Individual Income Tax Return N A 0 00 2 x J 0003 orm 10404 U S Individual Income Tax Return N A 0 00 2 x A a A A A E E AA Figure 2 16 New in 2009 Tabs allow you to view categories of documents that can be priced Use the scroll bar 3 Select a form in the grid and press ENTER or arrow keys to aa wget ER P find forms Pouble 4 optional Edit the Form Description This description is printed on the client bill click a form to if Include on Bill is selected Do not edit the form name select it quickly 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 IfPer Item pricing is allowed the price entered will a
401. ndent screens or 4562 detail screens press the march to move from one screen to the next NEXTTAB 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 one linked screen to the previous linked screen For instance for clients who receive a K 1 from a partnership press the macro and go from the Basis Worksheet screen to the 1065 K1 1 12 screen 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 34 Tax Year 2009 Drake Software User s Manual Software Setup Introduction to Letters in Drake Parts of a Letter Tax Year 2009 The letters 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
402. ndow 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 RIA online tax research To set up your firm as an ERO in Drake From the Drake Home window go to Setup gt ERO Enter General Information for the ERO Shaded text boxes indicate required information for e filing Under Connection Settings choose a connection setting The default is Always use my existing internet connection this setting works for most computers Contact Drake Support if you have trouble connecting to Drake If applicable select Advanced Options Transfer my files using Default is HTTPS Most computers transmit using this protocol My machine uses a firewall FTP users only Most machines using trans fer protocols of Regular FTP or WinSock FTP require that the My machine uses a firewall use Passive FTP to define port range box be selected This option uses a defined port range to transfer files If your firm is a service bureau complete the Service Bureau Information fields See Service Bureau Requirements on page 214 If applicable enter in the Disclosure or Use of Tax Information text box the name of the service bureau franchisor to which tax information must be disclosed in order to apply for loan products The field facilitates compliance with IRS Regulation 7216 see Taxpayer
403. nformation pertains to bank screens only For information on filling out e Collect screens see Using e Collect and E1 Card Screens in Data Entry on page 221 The Drake program has a separate screen for each of Drake s four 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 fields that are found on all bank screens in Drake You can view any bank screen at any time Just type the bank code NOTE into the selector field and press ENTER For e Collect and E1 Card data entry instructions see Using e Collect and E1 Card Screens in Data Entry on page 221 219 Using Bank Screens in Data Entry Drake Software User s Manual Select Product In the top left corner of each bank screen are the bank product selections Click a product box to select it If adding a state bank product select the state Verify ID The ID Verification section contains override fields for information entered on screen 1 Demographics This section is required and must be verified by the preparer N If the taxpayer s address differs from the one entered on screen 1 DTE or if the screen 1 address is a P O box enter a physical address on the bank screen to help avoid delays in processing the applica
404. ng Prep Fees Deposited Preparer fees have been deposited State acknowledgment codes are not listed here as codes and processing times vary Tax Year 2009 193 E filing a Return Trouble shooting Acks Staggering 194 DCNs Drake Software User s Manual Described below are some troubleshooting steps for commonly received acks A B ack typically occurs if program updates are missing If you received a B ack download and install the latest updates see Update Manager on page 263 and then recalculate the return and re transmit An R ack indicates that the return has been rejected and includes a reject code show ing the reason for the rejection Look up reject codes in the EF database see Reject Code Lookup on page 200 address the issue and re transmit Be sure to download and install the latest updates see Update Manager on page 263 and check your Drake e mail for new tax developments A D ack occurs if a submitted return is a duplicate of a previously filed return or DCN Check the EF database to see if the return has been transmitted more than once If it was accepted previously you do not have to re transmit it N D acks could be caused by transmitting from multiple computers DTE from a peer to peer network no dedicated server or if DCNs are not sufficiently staggered See Staggering DCNs following Each computer assigns a Document Control Nu
405. ng 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 54 Preparer Login Preparer ID Password Login Figure 3 1 Preparer Login box on Drake login window N If logging in for the first time after installation enter ADMIN this item UTE is not 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 completely click Exit then Yes The Home Window The Drake Home window Figure 3 2 has the following features e Menu bar and toolbar These tools allow you to accomplish tasks in the pro gram items 1 and 2 in Figure 3 2 Tax Year 2009 53 The Home Window Drake Software User s Manual e Recent Returns Lists the last nine returns opened in the program for easy access item 3 in Figure 3 2 e Appointments Shows the preparer s schedule and provides a link to the Scheduler item 4 in Figure 3 2 e Notifications Lists any e mail messages that must be downloaded updates that must be installed or acknowledgments that must be processed item 5 in Figure 3 2 e Status bar Provides system and update information item 6 in Figure 3 2 D Drake 2009 Tax Software i EF Tool
406. nking Information in Setup gt Firm s Item in Setup Document RAL etc Prep Fee all banks Description Fee to charge clients for preparing bank documents Electronic Filing Fee Chase RCB Santa Barbara Fee to charge clients for e filing their returns Do not allow EF Fee override on Bank screen Chase RCB Mark this box to prevent preparers from changing the e filing fees Transmission Software Fee Add On Chase RB RCB and Santa Barbara Allows you to charge an extra fee of up to 30 in addi tion to the 2 Drake transmission fee This add on fee deducted from the taxpayer s refund is held for you by Drake in a separate bank account The balance of this account will be distributed directly back to you ona monthly basis during tax season and mid November for after season balances Check boxes RCB approved my office for the SuperRAL Withhold ing Bypass Option CounterRAL RCB only Check the applicable boxes to indicate which products have been approved for your office by River City Bank e Collect Basic Check this box if using e Collect Basic see About e Collect on page 209 e Collect Elite Check this box if using e Collect Elite see About e Col lect on page 209 4 Click Save IMPORTANT Check with your bank for limitations on bank product and e filing fees before setting up a new firm Once an amount is set and a bank application has been crea
407. notification messages To view the Setup menu go to the Home window in Drake and select Help gt E mail 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 following options 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 040 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 available To keep the Report Complete window from being opened when compiling a Report Generated Recipient List select the Hide Report Message for Report Generated Recipient List To suppress the Open Attachment warning when you open an e mail mes sage that contains an attachment select the Hide Attachment Open Warn ing check box Click Save when finished NOTE Setup options are not available if you access the e mail program from within data entry 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
408. ns dialog boxes appear Select additional options and click Process 1040 1120 1120S 1065 etc to proceed In the Options dialog box you can click Test Print to test print a N DTES proforma or organizer In the Batch Printing dialog box you can click Detail to preview the documents to be printed Preseason letters can also be printed in batches apart from profor mas and organizers See Letters on page 279 The Drake Scheduler which is used to set up appointments for preparers has been redesigned for 2009 The new capabilities are described in Table 4 1 Table 4 1 Scheduler New Features in 2009 New Feature Description Batch appointment generator Brings client appointments forward from the previous year to the current year Improved Find Next Appoint You can now find the next available appointment for any ment capability preparer within a specified date and time range Printing and exporting data for This option is available by clicking Print or Export from specified time and date ranges the Appointment Scheduler Accessing the Appointment Ability to open the Appointment Scheduler from within a Scheduler from data entry return in data entry When the Appointment Scheduler is closed the program returns you to data entry Scheduler Modes Preparer Mode Front Office 76 Mode The Scheduler offers two levels of access Preparer mode and Front Office mode Using Preparer mode
409. ns section select a firm preparer number or name and ERO Return Options FI Eea EP Preparer ov Data Entry paa N ERO TAEA Eaj Fe Figure 2 23 Setup override fields on screen 1 Ifa field is blank the program uses the default setting Select NONE if you want nothing printed on the applicable line on the return The Data Entry field is for tracking purposes only NOTES A firm or preparer must be entered in Firm or Preparer Setup in order to show up as an option in the override drop lists on screen 1 Overriding The PREP screen in data entry allows you to override the following data for a return Other Preparer Third party designee See Third Party Designee on page 146 Information Federal preparer information if the firm is not set up in Firm Setup e State preparer information if the firm is not set up in Firm Setup This screen has a field for the preparer s alternative PIN You can also select not to print the preparer s information on the letter bill or summary NOTE The alternative PIN must match the one created in Setup gt Preparers Overriding the Bill Amount Standard rates must be established in Pricing Setup but you can change the billing amount for a return either by overriding the total or by adjusting individual amounts Tax Year 2009 47 Making Changes on the Fly Drake Software User s Manual Overriding To override the total
410. nstead Regardless of the structure you choose cabinets are required for storing drawers and folders To create a cabinet in the DDM A 1 Click New Cabinet 2 Enter a cabinet name in the Input dialog box New Cabinet 3 Click OK The new cabinet appears in the left pane Repeat these steps as needed to create more cabinets N File cabinets cannot be stored inside other file cabinets Each UTE cabinet is for Level 1 storage Drawers are for Level 2 storage and folders are for Level 3 storage DDM Add drawers to cabinets for file storage The Drake filing system uses drawers labeled Drawers 0 9 and A Z To add a drawer to a cabinet 1 Highlight the cabinet you want to use 2 Click New Drawer 3 Enter a drawer name in the Input dialog box New Drawer Click OK The new drawer appears in the left pane Repeat these steps as needed to create more drawers DDM Folders 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 New Folder Repeat these steps as needed to create mor
411. nter the city and country in the Employers city 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 6 yay UT al an an Put mie oye ed mi oY e as PEPE LEPEU ai c Employer s name address city state ZIP code 3 2 RUE MOUFFETTE PARIS FRANCE ba Incare of address continuation og Note Theemblover s complete inforuhtionis a Figure 5 6 Entering foreign employer information on W2 screen Tax Year 2009 91 Personal Service Income W 2 1099 MISC Drake Software User s Manual Screen code FEC If no W 2 was issued by a foreign employer use the Foreign Employer Compensa tion screen accessible from the General tab to enter employee employer and income information NOTE For information on the foreign income exclusion Form 2555 see Excluding Foreign Income on page 118 Statutory Because all statutory employees must file Schedule C for expenses related to W 2 Employees income a W2 screen and a C screen must be created for a statutory employee To indicate a statutory employee on a tax return Screen code W2 1 On the W2 screen for the employee select Stat employee line 13 2 On the C screen for the employee select Statutory employee OR qualified joint venture Screen code C 3 On the W2 screen select the associated Schedule C from the F code list
412. nths in Home field on screen 2 only if the depen dent did not live with the taxpayer for all 12 months If 0 months are selected for a son or daughter the dependent is classified as one who did not live with the taxpayer due to divorce or separation If 0 is selected for another type of dependent parent grandchild etc the program classifies them as Other Dependent regardless of the relationship To override these classifications select the applicable boxes in the Additional Information section at the bottom of screen 2 See Additional Dependent Information Claiming a Dependent for Split Returns MFS Married If taxpayers are married and you plan to split the return to see if filing separately Filing Separately would be more beneficial than filing jointly use the TSJ drop list on screen 2 to assign T Taxpayer the dependent information to the correct person A TSJ code should also be selected if Spog the state has an MFS combined option The program default is T Belongs to the Pri p mary Taxpayer TSJ State x State codes Figure 5 4 Fields for TSJ State and State codes Entering State Data for a Dependent Select a state from the State drop list Figure 5 4 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
413. ntity 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 now 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 142 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 130 Tax Year 2009 Drake Software User s Manual Other Credits Table 5 8 lists all credit forms not mentioned previously for which Drake provides screens If no screen is available for a credit form most forms can be found at Tools gt Blank Forms Tax Year 2009 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 67
414. ntry Menu press ESC TIP Use CTRL N to toggle between heads down and data entry modes Printing Organizers and Proformas for Clients 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 74 Tax Year 2009 Drake Software User s Manual Organizers and Proformas e Enter the client s SSN or EIN and press Add Client Repeat for additional cli ents then click Next and wait for the program to scan the client files See Filter e Click Next and select filtering and sorting options as desired Click Next pale OFOG again Modify filtering criteria from the Basic Search Conditions dialog box on using filters then click Continue and wait for the program to scan the client files 3 When the Options dialog box is opened Figure 4 9 select the desired options Drake 2009 Individual 1040 Organizer Options Proforma Organizer Options Please select the desired options from the list below You will be allowed to select specific forms for printing after the Proformas Organizers have been prepared Click Process 1040 to continue Additonal Proforma Organizer Options a O Print Organizer even if printed before O Just those retums that were calculated in 2008 O Print Sch A always O Print INT always O Print Div always O Include Sch D Blank Form O Include Form 4684 Blank Form O Include
415. nts are carried forward each DTE year Go to Last Year Data gt Update Settings 2008 to 2009 and select Preparer Schedules To schedule an appointment for a preparer 1 Open the Scheduler using one of the following methods From the Home window select Tools gt Scheduler From the Home window click the Scheduler icon 2 Click New Appt or double click an appointment time in the schedule grid The Appointment Detail dialog box is displayed If you accessed Appointment New Appt 80 Tax Year 2009 Drake Software User s Manual Scheduler Tax Year 2009 Detail by double clicking a time in the schedule grid the Appointment Detail is opened to that date and time Figure 4 14 Drake 2009 Appointment Detail Z NS a o Q y BDB Find Next Appt Save Delete Lookup Data Entry Help Exit Date 2 18 2009 v Time 09 30 AM Duration 15 SSN EIN 1490001005 Client Type Returning 7 Appointment Type ndividual v Name CARTER ROBINSON Street 7842 WEEPING WILLOW LN City Audubon ST NJ ZIP 08106 Phone Day 201 555 1111 Evening Cell Ext Ext Email Comments M Add Reminder I Private Appointment Recurring Appointment Figure 4 14 Appointment Detail dialog box 3 Select the Date Time and Duration of the appointment if necessary 4 Complete the applicable client information fields If a client record already exists in Drake enter the SSN EIN and press TAB The program au
416. o a K1 screen or export K 1 information from a pass through entity into an individual return Accessing New in 2009 two screens are required for completing all Schedule K 1 items From K 1 Data the Data Entry Menu the first page of the selected K1 screen is displayed Fields Schedule K 1 for 1065 i 1065K1 1 12 1065 K1 13 20 Basis Worksheet Basis Worksheet continued ts Ezr s vlc z Passive Activity NO Partnership ID number 001122334 s RattnprsplanemsemattrcngBSCEURE 6 COLA SALES o annit EPS satel ta Figure 5 28 In this example the program is opened to the first page of the K1P screen As shown in Figure 5 28 the first page of the K1P screen has fields for lines 1 through 12 of Schedule K 1 The second page covers lines 13 through 20 To go to Tax Year 2009 109 Supplemental Income Activity Types Drake Software User s Manual the second page click the blue hyperlink for the second page On the K1P screen click 1065 K1 13 20 The K1 E and 4835 screens feature an Activity Type drop list for designating an activity as passive or non passive A selection from this list controls what income data if any goes to Form 8582 Passive Activity Loss Limitations Available activity types are described in Table 5 2 Table 5 2 Activity Type Selections for K1 E and 4835 screens Activity Type Description A Active Rental Real Estate Activity is a rental real estate a
417. o prevent a watermark from printing clear this box F7 Options PCL Soft Font Many printers require soft fonts to be downloaded to the printer used to set up advanced Option before the tax forms can be printed Select the desired down printing options not related to loading option a specific printer Letterhead Print letters from a tray other than the one used for tax forms Source Tray Classic Print For preparers who prefer Basic View See Enhanced View Mode Print Mode on page 174 Drake s Classic Print mode will be displayed when in Print mode F8 Edit Printer Settings used to edit print settings for a selected printer Select Printer Select the printer to activate the fields below Printer Type Select the printer type from the drop list DPI Override Change the dots per inch DPI setting GDI Win Select this option to use GDI print drivers instead of PCL You dows Printer must select this option to print special fonts on letters GDI printing is generally slower than PCL printing Adjust Margin Select this option if printed forms are running off the lower edge of the paper Check Adjust ment Verti cal 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 p
418. o the Attachments return as a statement Type of attachment options are shown in Table 5 23 Table 5 23 Attachment Types and How They Appear in View Print Mode er View Type Description f yP p 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 168 Tax Year 2009 Drake Software User s Manual Other Special Features in Data Entry Table 5 23 Attachment Types and How They Appear in View Print Mode er View T Description ype escriptio Print R Explanation for certain regulatory elections where no official IRS REG_NOTE form is designed for that purpose blank Statement to be added to the return STATMENT Title A title is required for each unformatted statement to be attached to the return Statement Each statement should be assigned a unique number Statement numbers can be a Number maximum of three characters Note that some statements are generated automatically with the number already assigned Verify this by reviewing the calculated return If a required statement has not been created yet the required statement number is dis played on the applicable line of the form in View mode Figure 5 70 we Ee ee ee A Check iting ia is compensation for personal services as an em
419. o the IRS or to Drake Sup port and the transmission of returns to your customers safer For more informa tion see E mail Program on page 252 Tax Year 2009 Drake Software User s Manual What s New in Drake for 2009 Federal State Facts Page The Federal State Facts page on the Drake Support site includes more information than ever before including IRS drain times and transmission chart and federal forms that are eligible for e file Also included is information on state e filing requirements and mandates payments and deposits due dates penalties extensions and amended returns plus form instructions shipment letters and a link to the states taxing author ities Web sites See Federal State Facts on page 247 Update Manager The procedure for downloading and installing updates and the procedure for schedul ing automatic updates have been simplified and streamlined for 2009 See Update Manager on page 263 Drake Document Manager DDM New in 2009 the DDM has its own update manager which allows you to check for download and install DDM updates in a few simple steps The DDM backup restore option provides the ability to back up folders to and restore them from a specified location Other new features include the ability to copy DDM files directly to a CD the ability to add custom folders for new clients and the ability to password protect the entire DDM For more information see Chapter
420. oad Fonts 225cs sch0iG oad Shae es a n a eee eRe a a a E ea NE 268 Blank Forms s 28 c003 20 eo N Es awh RSs eee Od Ge na OO Eek wee dee eet beeen atbies beter 268 Tax Year 2009 v Table of Contents Drake Software User s Manual Repair Index Piles sx 3 x ee seat oe a yeas BW E EE Soh Wie end SIR a Ee ied Seip Rive AR eration WEB ean 270 File Maintenance recreere erento ea EEE SE a ene ede ae eeea anna es 270 Detters 2cSe bbs des ned ped hea bee EA br vale ee ee EE EGR ee eas bea eed Rea eee ee 279 AMOTtIzation cvs cen dea ee Cea a OR Pad CONG ENE HONS COS COSY Cede obey Cees eee era cede 282 EIN Database isis ns kad cat Won ed a Maat a mul We Uh a My h guinea ew 283 Install State Programs 1 eee tent nent eens 284 SCheGUuler siaii dda dg dee deh oc baked ee ba hh ob ooo ed went wee bode 285 Forms Based Data Entry 0 0 eee nnn e teen nee e teen nee 286 Quick Estimator joie Sh a doa Mice Abs 8 dee Ned ed dad ad Gad thc LoD a GAR nes eRe abcd 286 REPONS orire ereinen 289 Report Manager s oeesesii meri weal Sk coe e e E E E A e ea 4 a eae eae ee ea ce aT 289 Setting Up a Report sossen a eea SPE Es E e e E ek A E N E Redes 291 Filter Manager iwc ics pus ends eia nii E EAE E E EA E E E eE E A ETE T EE TE geen 296 Report View 4 Sa ea deb Gone a E G A E Gide GE E na EAR Gude A E E A 299 Depreciation List 2 4 04 400 6 4 5486 04 20000 02Io 4a RIM E hdd wees Deed dh aa 300 Fixed Asset Manager 20 ccc net n eee e ene nent
421. ocess Processing acknowledgments box displays progress This data is copied to the EF database for later access See EF Database on page 199 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 7 1 Re send any return that receives a B ack Table 7 1 Drake Acknowledgment Codes Code Description P Tax return transmitted successfully to Drake Return is being processed T TEST return transmitted successfully to Drake B Bad transmission IRS acknowledgment codes are shown in Table 7 2 IRS acknowledgments are usu ally processed within 24 hours Table 7 2 IRS Acknowledgment Codes Code Description A Tax return has been accepted by the IRS 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 195 Bank acknowledgments are shown in Table 7 3 Bank acknowledgments are usually processed within hours of IRS acknowledgments depending on volume Table 7 3 Bank Acknowledgment Codes Code Description Bank Product Accepted Bank product application has been approved Bank Product Rejected Bank product application has been rejected Check Print Checks are available for printi
422. ode use the Special processing code drop list N E T ee Ce manar i Tae Anama Aan ei aiim a Best time to call Evening Print on return B E mailitext msg Dependent Presidential Tl Blind I Stateside military of another campaign address Special processing code for active military cccccccccccssseeeeeeeesseeees 14998 NEW HEIGHTS ROAD otc Clee ossaa e SBS Ain an nn asebaiAPS nance Figure 5 1 Select applicable boxes and select military code if applicable Entering Residency Information To search codes CTRL SHIFT S Enter the taxpayer s address and state residency information in the area below the tax payer and spouse columns If a taxpayer is a part year PY resident of the state in the address select PY from the Resident state drop list The Resident City field is activated if a city return is required Press F1 in this field to access city codes To suppress a state return altogether select 0 from the Resident state drop list By default the program completes the City and State fields once the ZIP code is entered To suppress this feature go to Setup gt NOTES Options gt Data Entry tab If the taxpayer has a foreign mailing address or telephone number enter that information on the MISC screen Indicating a Deceased Taxpayer 88 If the primary taxpayer is deceased 1 Enter the date of death in the taxpayer s Date of death field
423. of another preparer on the list Add Preparer to Security Group Add preparer to a pre established security group See Setting Up Group Security following Front Office Employee can access the Scheduler only Administrator Employee can access all parts of the program including administrative only features Administrative Users Only To remove security rights from all preparers other than Remove Rights administrative users go to Setup gt Preparers and click Remove Rights To remove rights for an individual employee set that person s security to Allow No Options Setting Up New in 2009 the Group Security feature allows an administrative user to apply secu rity settings to a group of preparers You can create as many security groups as needed but a preparer can belong to only one security group at a time If you assign a preparer to more than one group the preparer is removed from his or her current group and added to the new one Group Security To apply group security Tax Year 2009 17 Software Setup Drake Software User s Manual 1 From the Drake Home window go to Setup gt Preparers B 2 Click Group Security to open the Group Security dialog box Three security levels are available by default rairai 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
424. og box These label printing options are designed for use with a dedicated NOTE label maker such as the DYMO LabelWriter 400 Label Printer Data can be printed on any label size but DYMO Label Writer labels size 30252 are recommended because they work well for folder and mailing labels Size 30252 labels are included in the DYMO printer starter kit Tax Year 2009 Drake Software User s Manual ADDENDUM This page intentionally left blank Tax Year 2009 281B Drake Software User s Manual ADDENDUM This document is an addendum to the Drake User s Manual for tax year 2009 The contents of this document have been incorporated into the online manual If you have printed the manual and wish to insert this material into your printed copy use the page numbers provided below as a guide to where addenda pages should be inserted Custom Paragraph Choose to have a custom paragraph printed on the bill Select a location then write the paragraph in the supplied text box Description 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 E filing Options under the EF tab are described in Table 1 1 Some of these options can be a
425. ok dialog box 33 3 Click Import Sa 4 From the Import Address Book File window browse to the address book file and double click it or select it and click Open 5 Click OK Import NOTE To delete an address from the Local Address Book select it and click Delete Report The Report Generated Recipient List option allows you to run a customized report Generated from your client and EF data to generate a list of e mail addresses The keywords Recipient selected during the query are then used to create an e mail message Keywords List inserted into the body of the e mail message are filled with the client s information 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 Te e Click To in the New Message window and click the Create Report Gener ated Recipient List link n e Click the arrow next to the To icon and select Report Generated List amp 7 The Report Manager window is displayed 4 Create a report that includes only those clients who fit the criteria for the e mail list For example if you want to include only those clients who have filed an extension you would create an Extensions report For details on creating reports see Chapter 12 Reports 5 View the report and then click OK to close the Report Complete window To keep the Report Complete window from opening
426. ollowing steps while in Enhanced View Print 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 Settings are applied universally Pricing can also be changed using this option NOTE If using Basic View access this feature by right clicking a form in Basic View and selecting Properties Setting a Print Use this option to indicate the order in which forms are printed ii From the Drake Home window go to Setup gt Printing gt Printer Setup 2 Click Set Form Order to open the Sort Form Order window 3 Select a package series and choose a set type Normal Default is the established IRS order 4 Forms are listed with their order number in parentheses to the left To change the sequence in which the forms are printed click and drag form names until the forms are listed in the desired order 5 Click Save NOTE To back up the print order and restore to another machine choose to back up the setup files from Tools gt File Maintenance gt Backup Tax Year 2009 43 Making Changes on the Fly Drake Software User s Manual Document The DDM isa stand alone application that can be integrated with Drake Software Manager For details see Chapter 13 Suite Products DDM Setup To implement the Drake file structure 1 From the Home window go to Setup gt Printing gt Document Manager
427. olor from the rows indicating the preparer s in times Calendar viewing options are shown in the Calendar Settings section of the Calen dars tab of the Scheduler Setup dialog box Figure 4 12 Calendar Settings Calendar view start time Current Time z Default calendar tab displayed at login Selected Date Calendars in my view I7 M Weekly M Preparer Figure 4 12 Calendar Settings section under Calendars tab These features are described with the Scheduler Setup features in Table 4 2 on page 78 For more information click the Help icon in the Scheduler To change the default colors displayed in the Scheduler calendar 1 In the Scheduler Setup dialog box select the Calendars tab Default colors are displayed under Colors Colors Use application default colors Use custom created colors Scheduler grid background color Preparer scheduled start time color Single appointment color BE E Multiple appointment color Figure 4 13 Colors section under Calendar tab in Scheduler Setup 2 Click a color to open the Color dialog box for that color a 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 79 Scheduler Drake Software User s Manual Printing and Exporting Preparer Schedules The program allows you to print or export to an Excel fil
428. om the DDM menu bar click Setup gt Options The Document Manager Setup Options dialog box is opened Figure 13 4 310 Tax Year 2009 Drake Software User s Manual Document Manager es 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 Build index when DDM starts Edit list of Common Documents Edit Common Reset list of Common Documents Reset Ces Figure 13 4 Options for commonly scanned documents in Document Manager Setup Options 2 Click Edit Common A txt file lists the default common document names Default names are W 2 Social Security Card and Driver s License In the exam ple in Figure 13 5 the user has added Birth Certificate to the default list E common txt Notepad File Edit Format View Help Add Common Document Names on separate lines then save close this file w 2 Social security card Driver s License Birth certificate J e T N E O T E E E e e E TE a Figure 13 5 Common document names user has added Birth Certificate 3 Add or edit names as desired 4 Click File gt Save or press CTRL S to save your changes 5 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 See Scanning a File on page 314 N To reset the c
429. ommon document names list to the default names DTE provided in the program click Reset in the Document Manager Setup Options dialog box The DDM Window The DDM consists of the file structure tree on the left side a list of files in the selected folder on the right and a menu bar and toolbar at the top Tax Year 2009 311 Document Manager Drake Software User s Manual ey Drake Document Manager See TEETE 24 4A 0B i Ee Backup Copy Cut Paste Import Link File ESEA Email Drag Help Fra DocumentName Type LastModified D sus OF 7216 Consentto Disclosure Final pdfFile 11 17 2008 17 52 23 R L HEUREUX LOUIS C 3 Tax ei File structure File s in selected folder LA 565 PARTNERSHIP Figure 13 6 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 or keys on the numbers pad of your keyboard Navigating Select a folder to view a list of its files The DDM displays document names types dates modified and descriptions Click column headers to sort by columns Like 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
430. on 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 Query 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 opens that article Matches to your keywords are highlighted The Browse tab lists all available topics as folders with all articles on each topic stored within the folders Select Client Write Up or Drake Software click a folder to see a list of articles and click an article to open it Figure 10 2 Client Write Up KB e Drake Software KB Banking Folders oO Broadcast Emails Connections Authentication Failed When Trying to Transmit Internet Connection is Not Present Error When Em Articles within a AOL Unable to Detect Dialup Connection f AOL Browser Message Idle 20 Minutes 0 der L ajii Cant gonest io Dike san nanait tennata Aa re Figure 10 2 Some folders and articles within the Browse tab newly organized for 200
431. on about the taxpayer the firm and fees distribution The F4 Reject Code Lookup tab is a search tool for accessing and understanding IRS reject codes To look up an IRS reject code for a federal return 1 From the Drake Home window select EF gt Search EF Database and click the F4 Reject Code Lookup tab Figure 7 10 2 Select a federal return type 1040 1120 1120S 1065 or 1041 Enter the reject code in the Reject Code field 4 Click Go The IRS explanation of the code is displayed in the lower box Figure 7 10 a Tax Year 2009 Drake Software User s Manual Online EF Database 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 o 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 LL amelie T te eb app ations MDO aa a ee eo Figure 7 10 Looking up 1040 reject code on Reject Code Lookup tab 5 optional Click Print to print the code explanation
432. on plan in box 12 of the W 2 Those amounts are carried automatically from the W2 screen to Form 1040 IRA Contributions For traditional IRA contributions use the 8606 screen which addresses Part I of IRS Form 8606 Nondeductible IRAs For Roth IRA contributions use the ROTH screen which addresses Parts II and III of Form 8606 Deductible IRA contributions are calculated from the 8606 screen and displayed on the IRA deduction line of Form 1040 If an amount is entered into the Deductible IRA field on screen 4 it is combined with the amount from the 8606 screen If the taxpayer is covered by a pension plan use the 8606 screen instead of screen 4 If the program determines that the contribution amount exceeds the maximum allowed it generates a NOTES page with the return NOTE If Form 8606 is not required but you want to generate it anyway go to the 8606 screen and select Print the 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 22 Tax Year 2009 105 Supplemental Income Drake Software User s Manual Form 8606 Nondeductible IRA Contributions IRA Basis amp Nontaxable IRA Distributions Part Il Conversions from Traditional IRAs to ROTH IRAs 16 Amount of your traditional IRA converted to a ROtH IRA c ccccccccccessseesssessssessssessssesssseesssesssessssuessssesnsecsssecssseees
433. 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 65 163 Features for Late Filed Returns On the Fly Option 3 Drake Software User s Manual r Interest and Penalty Calculation Automatically calculate penalties and interest on returns filed after the due date based on interest rates below Formats must be entered as For example 1 5 would be entered as 01 50 415 6 3010 oppo 741 930711 ooon 10 4 12 31 12 ooo 7 1 9 30 10 foooo 10 1 12 31 11 00 00 1 1 3 31 13 foooo 10 1 12 31 10 00 00 1 1 3 31 12 ooo 4 1 6 30 13 ooo 1 4 3 31 11 00 00 4 1 6230 12 00 00 7 1 9 3013 00 00 41 6301 jao 7 1 9 302 foo 10 1 12 31 13 ong Figure 5 65 Interest and Penalty Calculation section Setup gt Options gt Optional Items on Return Click OK The program will now calculate penalties and interest on all late returns calculated The per return option can be used if the global option shown in Figure 5 65 is not 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 screen accessible from the Taxes tab Mark the Calculate penalties and interest on this return box F
434. ong the benefits of integrating the DDM with the tax software e The DDM s default file structure contains a Clients filing cabinet drawers labeled 0 9 and A Z folders in each drawer for each client labeled by last name or business name a Tax subfolder and a 2009 subfolder Figure 13 2 h ago Fite et A ire a V a g w a x Y YEAGER HARDWARE 2 YOUNG JOHN 611611 2 Tax 2009 WB YOUNG REGINALD 2 o 2 a S e nn all T Figure 13 2 Each drawer contains a client folder Subfolders are titled Tax and 2009 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 a client folder is automatically cre ated 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 2010 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 See Figure 13 3 The default location is the DRAKEDDM folder in the same drive as Drake09 If this location is incorrect click Search and click Yes when the program displays the correct location 2 Select Allow Drake to se
435. ons Summary Individual Diagnostic Summary appears as SUMMARY under Mis cellaneous tab in View Print mode Compare Tax Return Comparison compares current year return with returns from the two prior years and appears as COMPARE under Miscella neous tab in View Print mode See Comparing Data on page 166 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 Worksheet showing the depreciation to be carried forward to the next Depreciation List year Overriding Other Setup Options Envelope Coversheets Filing Instructions Dates on the Return Tax Year 2009 When a return is generated Drake prints envelope coversheets if selected for mailing with copies of the return to the taxpayer and tax authorities Default settings for enve lope coversheets are set in Setup gt Options gt Optional Documents tab Use the PRNT screen to override coversheet options for a single return When a return is generated Drake prints federal and state filing instructions Default settings are established from Setup gt Options gt Optional Documents tab Use the PRNT screen to override the default and force or suppress the filing instructions Use the PRNT screen to override the date shown on the return and the due date shown on the letter and filing instructions These changes cannot be
436. options Coordinates Specify the top left position of the LOGO and FIRM INFORMATION Bitmap Path Filename Either key the path filename OR Browse Letter Bill Indicators Coordinates Use Logo on Letters Left most Column For Logo 8 Use Firm Info on Letters Top most Row For Logo 3 F Use Logo on Bill Left mast Column For Firm Info 25 I Use Firm Info on Bill Top most Row For Firm Info 4 Bitmap Path Filename Path Filename for Bitmap Logo Browse DRAKEOS CFSLOGO BMP Note Leave blank for no logo To print a logo a full path and filename are required Left Margin Adjustment Enter a value to increase the left margin for all letters Note Values are in inches and may be entered in 1 10th ol cl increments Entering 0 will use the default margins Figure 2 21 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 enter 1 to adjust the margin one tenth of an inch to the right see example in Figure 2 21 N An entry of 0 will use the default margins The program does not UTE accept negative numbers or numbers with two decimal values such as 1 25 3 Click OK The appearance of the margin in the letter template will not change however when a letter is generated with a return you ll be able to s
437. or have a P O bow see page 14 You must enter otemse E 2300 FIRST TEST STREET your ssn above ee E chy tw Of postotiice stv and ZIP oxk mor hae a bre hyn akiress see page we LLLLLLA gg Miscellaneous Checking a box below will not Presidential SAN FRANCISCO CA 94102 change your tax or refund Election Campaign gt Check here if you or your spouse if filing jointly want 3 to go to this fund see page 14 gt x You Ol Spouse A Single 4 _ Heatortovse tors with qualtt iag person See page 15 ithe Filing oo f tallying person k achikibitrotyour cepe nck at ener the Status Married filing jointly even if only one had income chlbfs name here cido Marrkd Tihg separat ly Ever spouse s SSN above gt ove bor and Til name bere 5 _Joualitying widower with dependent child see page 16 s 6a X Yourself If someone can claim you as a dependent do not check box 6a Bows checked Exemptions o Ga and 6b CATI akr Dependents Depernck ats Depiets METIN Am a who pea Lu pane ERS ee es prance L No Forms Selected Figure 6 5 Enhanced View These five components are described in the following sections a soy NOTE Basic mode the View and Print screens used prior to 2008 is available for those who prefer it see Table 6 1 Toolbar The View Print toolbar consists of the buttons described in Table 6 1 Table 6 1 Enhanced View Print Toolbar Button Description
438. or one of these states Foreign To indicate that an account entered is a foreign account mark the applicable box in the Accounts Foreign Account State purposes ONLY section at the bottom of the screen 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 To pay a balance due with a debit card or credit card use the Drake e Payment Center at www 1040paytax com MasterCard Visa or Discover Electronic Funds Withdrawal Direct Debit Screen code PMT Use the PMT screen accessible from the General tab to indicate that the balance due funds are to be electronically withdrawn direct debited from the taxpayer s account NEW FOR You can now indicate for state purposes if a bank account that has been entered into the DD or PMT screen is a foreign account To do 7 0g so select one of the Account boxes the box at the bottom of the DD or PMT screen as applicable Program By default the program indicates that the entire balance due the Amount You Owe Defaults and section of Form 1040 is to be electronically withdrawn on the return due date unless Overrides otherwise indicated using the override fields for each account entered See Federal override fields in Figure 5 56 If the return is e filed on or before April 15 the requested payment date cannot be later than April 15 If the r
439. ore All Files in Folder or Restore Select Files in Folder Click Restore This button is not activated until a restore location is entered Click Exit when restoration is complete If you do not have Windows XP or Windows 7 and want to back up your data on CD you must use your CD burner software not the NOTES Drake Backup tool to perform the backup For assistance with using a CD RW refer to your CD writer soft ware user manual Automated Backup 272 Use the automated backup feature to have the program automatically back up client setup and system files at a specified time each day Two types of backups are avail able a full backup backs up all selected files and an incremental backup backs up only those files that have changed since the last backup To activate automatic backup 1 2 From the Home window select Tools gt File Maintenance gt Backup Click Automatic at the bottom of the Backup dialog box shown in Figure 11 7 The Automatic Backup Settings dialog box is displayed Figure 11 8 Drake 2009 Automatic Backup Settings Automatic Backup Settings These settings affect the automatic backup program Please select a time and location to backup your files as well as which file types you would like to back up F Activate Automatic Backups Backup Operation Select Files to Back Up Select time to perform E Client Files 1040 1120 automatic backup 11205 1165 etc 1 00 AM z Select backup t
440. oreign income must be included in total income via a W 2 Sched ule 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 hyperlinks at the top of the screen To create a new sec ond 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 N The 2106 screen expense flows to the Job Expenses and Certain DTE Miscellaneous Deductions section of Schedule A It does not flow directly to Form 1040 Meals and Entertainment Department of Transportation DOT workers are allowed to claim 80 rather than the standard 50 of the costs of meals as a business expense To calculate the allowed amount properly enter the total expense in the Meals entertainment field of the 2106 screen and enter the amount attributable to DOT hours of service rules for meals in the DOT meals subject to 80 limit field Figure 5 35 di anan a ME a ae ihe TR Ce EON pak ai Travel away from home 4a Other business expens aiis A Nation T T T a RT tn an AT N Figure 5 35 On the 2106 screen use both the Meals entertainment and DOT meals subject to 80 limit fields as appropriate Multiple 2106 Forms If 2106 screen
441. ormally 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 Tax Year 2009 Drake Software User s Manual Net Operating Losses Net Operating Losses This section explains how to enter carrybacks and carryforwards of net operating losses NOLs in Drake Carrybacks from Future Years Screen code 3 Enter NOL carryback amounts from future years on screen 3 in the NOL field Figure 5 61 This field can also be used to amend the current year amount or to adjust carryback amounts calculated from the LOSS screen pon Net Tallio an socra securi equivalent Tier benedtS received tor sug ites Pe ye re Note Program will figure taxable portion of 2009 SS benefits 21 Other income Real estate tax recovery Personal property rental income LEE Te WINNINGS eicae Figure 5 61 NOL carryback field on screen 3 An amount entered here flows to the Other income line o
442. orms 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 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 then print Screen code Electronic Signatures To obtain electronic consent the taxpayer and spouse DISC if MFJ must enter their names and the date onto the DISC screen in Drake for banks and e Collect or the E1 Consent to Disclosure screen for the E1 Card accessible as a link from any bank screen not required if using e Collect Once the required fields on the applicable screen are completed the Consent to Disclo sure of Tax Return Information will be generated with the return N These forms for e Collect products can also be printed from Tools DTE gt Blank Forms Form filenames are E1_7216D PG for E1 Card and EC_7216D PG for e Collect Consentto The Consent to Disclosure of Tax Return Information to service bureaus and fran Disclos ure chisors is required for all returns not just bank product returns prepared by firms that Service are part of a service bureau or franchise The form is similar to the disclosure form for Bureaus banks
443. ort Client Data Files or Export EF Data Files e Ifyou chose Export Client Data Files the path for client export is displayed Change the default path as needed e Ifyou chose Export EF Data Files the file and path names are displayed Change the default path as needed 274 Tax Year 2009 Drake Software User s Manual File Maintenance 3 4 5 6 optional Click Export to CSV Comma Separated Values to export the data to CSV spreadsheet format optional Click Include Test Returns to include Drake test returns in the export Click OK Click Exit when export is complete Password Protecting Client Files The Password Protect tool protects files from unauthorized access A protected file cannot be opened in data entry until unlocked with a password M p l RT A NT Drake cannot recover a password assigned to a file If passwords are forgotten all the data in the client file is permanently lost Write down the password and keep it in a secure location To password protect a file 1 oN NONA From the Home window select Tools gt File Maintenance gt Password Protect Files Enter the SSN or EIN of the client file to password protect Enter an eight character password in the Enter the Password field Passwords are case sensitive and can consist of any combination of letters and numbers Re enter the password in the next field to confirm it Click OK Click Yes to continue Click Exit To remove
444. ot included Activate imperfect return election in a bank product entered on the current return Activates Imperfect Return Election check box on EF screen in data entry data entry Allow selection for EF from the Cal culations 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 automatic transmission of Check Print records Allows program to notify you before it transmits the Check Print records E mail 9325 Notice to Taxpayer automatic from Drake Processing Center Have Form 9325 Acknowledgment and General Information for Taxpayers Who File Returns Electronically automatically e mailed to taxpayer when return is accepted E mail address must be present on screen 1 ERO SSN Indicator Choose a preparer number Paid Preparer or None Override the choice in data entry Tax Year 2009 Drake Software User s Manual Option Check for email during EF transmit receive Software Setup Table 2 11 Options Setup EF Description Select this option to have the program check for e mail received every time you transmit returns or pick up acknowledgements Combine EF steps Select Transmit Post Acks Select this option to combine all steps of e filing Click OK or press Esc on selected returns to
445. ounting Method In subsequent years only the 52 53 week tax year check box on screen 1 must be marked the program automatically updates the dates and ELEC screen information Short Year New in 2009 Drake now allows you to e file a return that is classified as a short year Returns return An entity may have a short year return if changing accounting periods with IRS approval Form 3115 or if this is its first or last year in business and the tax year is not a full year To indicate a short year return go to screen 1 In the If not a calendar year section enter the Fiscal year beginning and a Fiscal year ending dates Even if the entity uses a calendar year the fiscal year fields must be completed to indicate a short year return If filing a short year 1120 or 1120S return go to the ELEC screen NOTES and select an explanation from the drop list provided The explana tion will be displayed at the top of the first page of the generated tax return If you do not select an explanation an EF message will be generated with the return For more information on short year explanations see IRS Publication 4163 Inactive Entities that are inactive but are still required to file returns may e file inactive returns Returns in Drake To indicate that a return is inactive 1 Go to the PRNT screen accessible from the General tab 2 Under Items to Print mark the Print inactive return box Tax Year 2009 325 Entity Packages Drake Softwar
446. oup 17 levels online EF database 204 of client files 275 preparer 16 selecting a filing status 87 self employment see also Schedule C Profit or Loss From Business adjustments 120 121 clergy see clergy foreign income 118 tax 120 service bureaus 214 sets printing 179 setup procedures 13 44 Setup Wizard 10 sharing files 21 shipment letters 5 shortcut keys 56 60 xix Index Social Security benefits 116 Social Security Numbers applying one number to two returns 277 changing 273 mismatch on W 2 92 printing on bill 27 replacement by PTIN 16 security of 254 test returns 68 verifying 23 Social Security numbers Pay Per Return PPR 21 soft fonts 42 268 software updates 266 Spanish result letters 49 screens 24 splitting a return MFJ to MFS 65 SSN see Social Security Numbers ST field 64 staggering DCNs 194 state see also state programs see also state returns FAQ screens 207 mandates Appendix E state programs downloading prior year 249 setting paths 22 setup options 28 state returns accessing 68 e filing 207 statutory employees 92 stolen checks 226 storing files in the DDM 313 315 print files 25 student loan interest deduction 122 Super RAL 214 supplemental income 106 112 support see Drake Support suppressing documents on the fly 44 e filing of a return on the fly 196 e filing of returns globally 28 EIC calculations 142 Form 1116 Foreign Tax Credit 96 forms options for 25 system requiremen
447. ox enter credit card and address information Enter the number of returns to purchase Click Purchase Directories and Paths Setup Sharing Files on a Network Tax Year 2009 Use Directories and Paths Setup to manage the locations for data access and storage From the Home window go to Setup gt Directories Paths After completing the screen click OK Information on screens is provided in the following sections Directories Paths settings must be configured before you begin NOTE using the program These settings should not be changed during tax season For details on setting network configurations see Run ning Drake on a Network on page 10 For assistance contact your office IT professional or Drake Support Share only the Drake client files among the computers on your network or share all of the Drake files with your network recommended 1 2 From a workstation not the server go to the Drake Home window and then to Setup gt Directories Paths To share just the client files For item 3b mark the This is a workstation box and then choose a drive for sharing client files In Figure 2 8 the user has selected the F drive 21 Software Setup Drake Software User s Manual e Click OK Configuration Choose the appropriate Configuration below Important If necessary consult with your technician or contact Drake Support for assistance These settings should not be changed during the sea
448. oxes for Options electing certain optional ways of treating some income and exclusion amounts Extension Ifa six month extension is being requested for a 1040 and a 709 return no separate Request for extension request is required Form 4868 covers extension requests for both returns Form 709 For more information see Extensions on page 159 160 Tax Year 2009 Drake Software User s Manual Requests Claims and Other Forms 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 Web site 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 Applications and Requests Table 5 20 lists additional screens for application and request forms Table 5 20 Application and Request Forms Available from Other Forms Tab in Drake Screen Form Notes 970 Form 970 Application to Use LIFO Inventory Method 1045 Form 1045 Application for Tentative Refund Press PAGE DOWN to access the NOL screen This form is not e filable See Net Operating Losses on page 157 for more on the NOL screen 4506 Form 4506 Request for Copy of Tax Return To request a transcr
449. p Backup Restore Manager Select the Backup or Restore location and options needed This may take a few minutes You may minimize this window and continue working When the backup restore process is complete you will be notified ay Backup Restore Location F Backup Backup Name JAN 10142009 Selected Folder AMY S FILES WAN Estimated Backup Size 0 1MB Free Space 98 5GB Entire DDM C Restore Help Start Close Figure 13 1 DDM Backup Restore Manager 3 optional If you don t want to use the default Backup Restore Location click the Backup Restore Location button and specify a new location 4 optional If you don t 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 the system incorporates a sequential identifier by default 5 Click Start to begin the backup process NOTE If you want to back up the entire DDM select Entire DDM in the Backup Restore Manager dialog box before clicking Start 306 Tax Year 2009 Drake Software User s Manual Document Manager Estimated Backup Size amp Free Space Restoring Contents Because the backup process 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 As shown in
450. page 149 Unemployment Compensation Use screen 3 to enter full unemployment compensation for the current year Enter prior year amounts elsewhere in Drake as shown in Table 5 3 Table 5 3 Entering Unemployment Compensation in Drake Unemployment Compensation Where to Enter in Drake Information from 1099 G Screen 99G Fields As applicable Any prior year amounts repaid See Pub 17 for guidance Screen A Field Other not subject to 2 limit Prior year supplemental employer provided amounts repaid Screen 4 Field Repaid sub pay previously reported Enter the repaid amount Current year total Screen 3 Field Unemployment compensation received adjust ment field added to 99G amount Current year repaid Screen 3 Field Portion of above unemployment repaid in 2009 Note that the Unemployment compensation received field on screen 3 is an adjust ment field Any amount entered in this field is added to the amounts from the 99G Tax Year 2009 115 Social Security and Railroad Benefits Drake Software User s Manual screen and carried to the Unemployment compensation line of Form 1040 Do not duplicate the 99G entries on screen 3 Social Security and Railroad Benefits Use the SSA and RRB screens to enter information from the SSA 1099 and RRB 1099R forms respectively Screen 3 includes fields for related data if no 1099 is used SSA 1099 Screen code SSA Use the
451. payment 138 unformatted schedule 168 colors in data entry 40 in view print mode basic and enhanced 182 comparing current to prior year 26 network options 11 two versions of a return 166 configuring colors in basic mode 183 data path settings 23 DDM 310 directories and paths 21 hierarchies in the online EF database 203 Consent to Use and Disclosure of Tax Return Information IRS Reg 7216 15 211 213 contact lists 205 conversions 249 copying DDM files 317 EF data 206 updates 266 coversheets 26 CPE credits 245 creating see also opening amended returns 159 appointment reports 85 archived returns 185 CSM reports 237 Tax Year 2009 Index EF reports 201 ETC accounts 242 filters 298 key combinations 33 macros 33 miscellaneous codes 29 30 preparer schedules 79 reports 291 returns 58 update profiles 23 credit card as electronic payment option 145 credits see also individual credit and form names child and dependent care 127 child tax 130 education 123 elderly disabled 128 foreign tax 126 home energy 129 retirement savings contributions 130 crop income for Form 1041 115 insurance 126 CSM see Client Status Manager Ctrl W detail worksheets 66 67 custom folders in DDM 309 custom paragraphs 28 50 customized supplemental letter 26 customizing colors 40 182 CSM display 234 data entry menu 29 drop lists 30 fields on BILL screen 29 flagged fields 29 greetings in letters 50 letter
452. plete the check register as each check is written and ensure that this infor mation is available at all times and is not available from any other source Drake rec ommends that your office keep this check register in a three ring binder along with the computer generated check registers described previously Resetting Check Numbers Occasionally you might have to reset the check range Follow the process outlined in Printing Checks for Bank Products on page 224 When you get to the Check Print Options dialog box click Setup Checks to access the feature for resetting check range Lost Stolen Checks If you do not physically possess a check that must be reissued for example if a check is lost missing or stolen follow your bank s procedures for a lost or stolen check Do not reprint the check If a check is lost or stolen go to Tools gt Blank Forms and print the lost check affida 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 followin
453. ployee your total Ee eee y Figure 5 70 Statement indications on Form 1116 Foreign Tax Credit compensation from all sources is 250 000 or more and you used an alternative basis to determine its source see instructions K STATEMENT 4N Deductions and losses Caution See pages 14 and 15 of the instructions 2 Expenses definitely related to the income on line 1a attach statement 1 223 Sap Progeta shaje ofgthersteductio Nik N HAL Once the statement is created the program assigns it a number in ascending order as shown in Figure 5 71 H G_ Er Wie 1a i Comper Abn Ter p rsonat oiaenaninst aii ini services as an employee your total compensation from all sources is 250 000 or more and you used an alternative basis to determine its source see instructions Deductions and losses Caution See pages 14 and 15 Statement 2 of the instructions 2 Expenses definitely related to the income on line 1a attach statement ieee 1 223 aa After hang ot oian h ag a aa Figure 5 71 Statement indications on Form 1116 Foreign Tax Credit In house To indicate that an SCH screen should be an in house note and not sent to the IRS Note select In house Note at the bottom of the SCH screen Tax Year 2009 169 Other Special Features in Data Entry Return Tracking Drake Software User s Manual Screen code Use the Return Tracking TRAC screen to track
454. port or both e Copies Select the number of copies to print Tax Year 2009 321 Client Write Up Drake Software User s Manual TIP To save your printing options as the default click Save Selection 3 optional Click Print Preview to preview your selection Use the scroll bar to view additional pages 4 Click Print Backing Up To back up or restore Tax Planner files amp Restoring Files 1 Click Backup Restore from the Tax Planner toolbar al 2 Select Backup or Restore 9 Choose a backup or restore location or browse to the location A 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 940 941 943 944 941 SS 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
455. pply 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 16 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 individual returns that require them For more information see Overriding the Bill Amount on page 47 32 Tax Year 2009 Drake Software User s Manual Software Setup Minimum amp Maximum Fees Use the scroll bar or arrow keys to find forms 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 o Double click a row and enter the fee Repeat for the other form if desired 4 Click Update and then click Save Tip If incorrect charges are generated on bills check the minimum and maximum fees to see if the settings are affecting the totals Macros Setup Using Macros Creating New Macros To access a list of macros in data entry press CTRL SHIFT M 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 a
456. preparing and e filing returns If data is inaccu rate or missing tax returns could be e filed with incorrect information Tax Year 2009 13 Software Setup Drake Software User s Manual Adding a_ To add a firm in Firm Setup Firm 1 From the Drake Home window go to Setup gt Firm s 2 Click Add to activate the bottom half of the Firm Setup window oH 3 Enter your firm s general and banking information Shaded fields must be com pleted for e filing e General Information Enter all applicable contact information A DCN Serial Number is assigned to each return based on the firm s EFIN and DCN If two returns have the same DCN the IRS rejects one of the returns To avoid duplications the DCNs are automatically advanced for each return calculated Offices that use multiple computers that are not networked must stagger the DCNs to avoid duplication For instructions on staggering DCNs see Staggering DCNs on page 194 M P l RTA NT Stagger DCNs before creating 2009 returns Non Paid Prep If the firm is not a paid preparer enter a non paid code here Acceptable codes are VI VITA VT VITA T TE TCE X IP IRS PREPARED AND IR IRS REVIEWED Banking Information Select a bank and enter all applicable information Fees are charged in addition to those set by the bank and are included in the client bill For more on available options see Table 8 4 Options under Banking Information
457. printing options shown in the Print dialog box 6 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 View Print 1 Open View Print mode for a return The All Forms tab is shown by default 2 Click a form or document name to display it in the viewer pane In the example in Figure 6 10 the 1040 form is selected for viewing All Forms Sets EF 4 Figure 6 10 Click the form to view 179 E mailing from View Print Drake Software User s Manual Shortcut Click 3 Click the arrow next to the Print icon and then click the Quick Print selection CTRL Q to print the form in view or press CTRL Q othe Figure 6 11 Click the arrow next to the Print icon to see print options 4 optional Select any printing options shown in the Print dialog box 5 Click Print again E mailing from View Print New in 2009 you can e mail tax returns directly from both Basic and Enhanced View Print 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 NOTE Even though you must open a specific return to indicate your set tings those settings will apply for all e mailed return
458. program s field level helps have been revised to include details about what figures are being overridden or adjusted New E filing Features Drake now provides the ability to e file short year returns inactive returns and returns for entities using a 52 53 week year This capability is available in the corporation S corporation and partnership packages Revised INT DIV Screens for 1041 The interest INT and dividend DIV screens in the 1041 package have been updated to reflect the equivalent screens in Tax Year 2009 Drake Software User s Manual Contacting Drake Support the 1040 package For information on using these screens see Schedule B Inter est and Ordinary Dividends on page 94 and Foreign Interest and Dividends on page 95 of this manual Form 706 QDT Drake s 706 package now includes screens for completing Form 706 QDT U S Estate Tax Return for Qualified Domestic Trusts More information on using these screens will be provided in the 706 manual supple ment to be published on the Drake Support site in spring 2010 For more information on these features and for a list of new forms that can be com pleted in Drake for tax year 2009 see Chapter 14 New Features in Other Packages Contacting Drake Support In addition to the manual on screen Help and online resources Drake offers unparal leled telephone and e mail support Use one of the following methods to consult a member of the Drake
459. r Figure 2 26 Select EF to force a letter to be printed as ifthe return is eligible for e file From Setup gt Options gt Optional Documents tab you can select to have the cus tomized supplemental letter engagement letter and privacy policy letter printed with all returns To override the established defaults go to the LTR screen and select Yes or No for the desired letter types In the Figure 2 26 example the user has selected not to have the engagement letter printed for the client For the 1120S 1065 and 1041 packages you can print K 1 letters NOTE on the fly 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 Tax Year 2009 The EF screen in data entry allows you to suppress federal and state e filing on a per return basis The program default in Setup gt Options gt EF tab is that all eligible forms will be e filed For more information on the EF screen see EF Override Options in Data Entry on page 196 51 Making Changes on the Fly Drake Software User s Manual This page intentionally left blank 52 Tax Year 2009 3 Basics To open the 2009 program double click the Drake 2009 icon on your desktop In py addition to the Preparer Login box Figure 3 1 the login window displays update DRAKE 2009 information system and drive information and the current date Loggi
460. r Postcards printer has this capability before using this function in the program Always test print an envelope before printing an entire batch To print addresses on postcards 7 8 Amortization Ensure that the postcards are loaded properly into the printer From the Home window go to Tools gt Letters gt Postcards Select filtering and sorting options from the Postcard Filter Selection box Ifa more complex filter is needed click Edit Filters See Filter Manager on page 296 Click Next Modify the Basic Search Conditions as needed then click Continue For more on basic search conditions see Search Conditions on page 296 From the Postcards dialog box update the postcard formatting as needed Click Help for more on individual fields Click Finish Set printer options in the Print dialog box as needed then click Print The Amortization tool prepares loan repayment schedules for various loan scenarios To prepare a loan repayment schedule 1 2 3 282 From the Home window select Tools gt Amortization Enter a Schedule Title to display at the top of the amortization schedule Complete all other applicable fields Fields are described in Table 11 4 Tax Year 2009 Drake Software User s Manual Calculate EIN Database 4 Click Calculate The program creates the amortization schedule To print the schedule click Print To save it for later viewing using Reports gt
461. r 2009 3 What s New in Drake for 2009 Drake Software User s Manual Basis Worksheets The Drake program can now track adjusted basis limit losses and store and update loss carryforwards for 1040 returns that have partner ship or S corporation K1 screens Screens for this are available from the K1 screens For more information see Tracking Adjusted Basis on page 112 State K 1 Capability If state K 1 amounts differ from federal K 1 amounts you can now indicate the different state amounts on the K1P K1S and K1F screens so that the correct amounts flow to the correct federal and state forms See State K 1 Amounts If Different on page 110 Schedule E Allocation Drake now allocates rental and personal use portions of multi dwelling units on screen E In addition you can differentiate between direct costs and indirect costs See Schedule E on page 107 Passive Activity Credit Calculations The Passive Activity Credit Carryover PACR screen streamlines data entry and increases the number of passive credit carryforward amounts that can be updated from year to year This feature affects individual 1040 and fiduciary 1041 returns that require passive activity credit calculations for Form 8582 CR Passive Activity Credit Limitations and Form 3800 General Business Credit See Passive Activity Credits on page 129 Filing Status Optimization Report Also known as the MFJ MFS Report this report sho
462. r a client to be notified E1 PRN Apply for E1 Card E1 Consent 222 Screens when funds are loaded If there is no entry e mail or cell phone on either screen E1 or 1 the program uses the equivalent entry if avail able for the spouse as entered on screen 1 If the program cannot find a client e mail address or cell phone number the taxpayer will not be notified automatically when funds are loaded As Step 2 of the process enter your PRN Payment Reference Number as shown in the window of your card envelope Enter it a second time for verification purposes As the final step in the E1 Card application process click the Apply for E1 Card but ton to retrieve the account information including the application results and card RTN account number necessary from the card processor The data retrieved allows Drake to know whether the card has been approved and in which account the refund must be placed 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 Apply for E1 Card again to reapply The E1 consent screens serve as the USE and DISC screens respectively for the E1 Card Both the Consent to Use and Consent to Disclosure screens are accessible from Tax Year 2009 Drake Software User s Manual Bank Product Transmission any bank screen and are also accessible
463. r code Select Client Labels from the right click menu Click Options in the lower right corner of the Client Labels dialog box Put a check mark in the box for Do Not Show Label Preview Window Drake 2009 Labels Options toj E Client Address Folder Labels Other Options Name Format V Do Not Show Label Preview Window l Lastname Firstname This is for labels printed where on IV Firstname Lastname screen preview is not already available Save Cancel Figure 1 1 Select Do Not Show Label Preview Window from the Labels Options dialog box Click Save In the upper left corner of the Client Labels dialog box choose Folder Label Name client s name only Former Label Name ID client s name and SSN EIN Client Address Label client s name and address Click Print beneath the Preview pane Select the label printer from the Print dialog box Choose the number of copies to print 10 Click Print to print the label Another option available is to create a custom label to print 1 O N From the Data Entry Menu right click somewhere on the screen not on a screen name or code Select Client Labels from the right click menu Click Custom Label in the lower right corner of the Client Labels dialog box Type a name press ENTER type an address press ENTER and type a city state and ZIP code Click Preview to view the Label Preview window or click Print to open the Print Labels dial
464. r displaying Active Students Inactive Students or All Students Figure 10 8 EN Firstname userName Password admin Report Card ibas anny hens moe beget eens No Edit Report Card 8 ny Re bedor Yes Edit Report Card Sipp te O upe He een No Edit ROOR ML AL BPISIOD a ADE ont MORRO nM VOR ay ger ADA a lia Figure 10 8 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 To log out of Drake ETC click Log Out You are returned to the ETC login page Federal State Facts Tax Year 2009 The Federal State facts pages have been redesigned for 2009 The federal side still has data on IRS drain times and reject codes lists of forms eligible for e filing Drake message pages and transmission times The state pages now provide data on e filing tax forms payments and deposits due dates penalties and extensions You can also access state shipment letters form instructions and update notes As EF packages are approved that information will be added to the state pages There are also links to the Drake Forums see Drake Forums following and state taxing authority Web sites 247 Online Support Drake Software User s Manual Year State California State of California Franchise Tax Board 2009 x E file Packages Available E file Requirements Due Dates Payments and
465. ram 1 From the Drake Home window go to Setup gt Preparer s 2 Click Search 3 Enter preparer information in the Find Preparer Record box As you type the software locates and highlights the record 4 Click Close Click Exit to close Preparer Setup 19 Software Setup Drake Software User s Manual Pay Per Return Setup PPR Clients Only The Pay Per Return PPR version of Drake Software comes with fifteen PPRs These returns must be activated before you can use them To activate PPRs 1 From the Drake Home window go to Setup gt Pay Per Return The Pay Per Return dialog box shows the PPRs available for your firm s EFIN and for the computer items 1 and 2 in Figure 2 7 Ordering and Activating PPR Returns The Pay Per Return option allows a limited number of tax returns to be printed Once a tax return has been printed it may be re printed as many times as needed without charge Once all PPRs have been used this screen may be used to purchase additional returns For This EFIN DS4113 Total Returns Purchased 15 Total Returns Activated 0 Total Returns Remaining 15 or this Computer Total Returns Activated 0 Total Returns Used 0 Total Returns Remaining 0 Random Code 8c7a 0f1b 1e10 Activation 3 Step 1 Enter the Number of Returns to Activate on this Computer ig 9 Step 2 Retrieve Online Approval Code from Drake Get Code Approval Code from Drake Confirm
466. ram uses the federal K 1 amounts for both federal and state in cal culations New in 2009 if the state K 1 amounts differ from the federal you can man ually enter the state amounts in the State column of a K1 screen Figure 5 29 Amounts from K 1 Federal Ordinary income lOSS cc cecseeseeeeeee 2 Rental real estate income loss 3 Other rental income loss 4 Interestincome 5a Ordinary dividends Figure 5 29 Some of the Federal and State K 1 columns from screen K1S Tax Year 2009 Drake Software User s Manual Supplemental Income In some cases an entity will issue Schedule K 1 forms for multiple states requiring 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 2 From the first page of the screen press PAGE DOWN to start a new screen 3 Inthe F text box at the top of the screen type 0 zero to exclude the information on this screen from the federal return See Figure 5 30 4 Select a state from the ST drop list In Figure 5 30 below Louisiana has been selected See Figure 5 30 Schedule K 1 for 1120S 1120S K1 1 11 11205 K1 12 17 Basis Worksheet sian TS S corporation ID number
467. re 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 Table 2 13 Macro Symbols Symbol Action lt 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 gt Move cursor forward one field If the gt symbol is inserted in front of the selected data in a macro the program
468. re provided in Table 10 4 Table 10 4 Contacting Drake Support Department Contact Accounting Accounting Drake Software com E filing EF DrakeSoftware com Support General Support Drake Software com 828 524 8020 Support State specific XXstate DrakeSoftware com Replace XX with state abbre viation Examples nystate DrakeSoftware com for New York dcstate DrakeSoftware com for District of Columbia Conversions Support Support DrakeSoftware com 828 349 5546 Client Write Up Support Client wu DrakeSoftware com 828 349 5547 e Collect E1 Card Support epsfinancial net Support epsfinancial net 828 349 5505 Fax Get answers to software questions using the fax cover letter provided on the following page Drake replies to faxes with faxes not phone calls 260 Tax Year 2009 Drake Software User s Manual Fax Cover Letter for Support Fax Cover Letter for Support Name Company Name EFIN Phone Number Fax Number To department or individual Computer Operating System select one U Windows 2000 O Windows Vista UL Windows NT U Windows ME O WindowsXP U Windows 7 Are you working on a Network UL Yes LJ No If this fax is concerning a prior year Drake Program Year program what year Give us a brief description of the situation Tax Year 2009 261 Fax Cover Letter for Support Drake Software User s Manual This page intentionally left blank 262 Tax Year 2009 1 1 Tools This chapter covers the various
469. re that you have the most up to date information Repairing State Program Files Scheduler Ifthe state program files currently on your computer or server are already more recent than the state program files you have chosen to install the current files will not be 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 76 Tax Rates for Ohio and Pennsylvania Cities About PA Cities Tax Year 2009 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 details 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 2 Selecta 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 The inclusion of Pennsylvania municipalities is new in 2009 The PA editor is designed for local city forms not including Philadelphia and Pittsburgh tax forms The default address from the database is
470. reens might be A Ford F150 and A Chevy Blazer This notation makes the traded assets easier to identify 6 Enter any increase in basis as the beginning cost The depreciation 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 Retirement Income 1099 R etc 1099 R Items Not Reported on 104 1099 R 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 New in 2009 the 1099 screen consists of two screens 1099 R and Special Tax Treat ments The Special Tax Treatments screen has fields for the Simplified General Rule Worksheet qualified charitable distributions HSA funding distributions public safety officers and disaster relief To access the Special Tax Treatments screen from the 1099 screen click the Special Tax Treatments hyperlink 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 20 DS Aged nem cain Figure 5 20 Adjustment fields for IRA and pension distribut
471. refer to each property not each Schedule E Tax Year 2009 Drake Software User s Manual Data Entry Splitting a When you split a joint return in Drake the program calculates three returns one for Joint Return married filing jointly MFJ and two for married filing separately MFS NEW FOR You can now choose from multiple MFS categories when splitting a return and you can choose how to treat deductions if there is a Sched 2009 ule A In addition the split feature now provides a detailed Filing Status Optimization Report for each version of the calculated return 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 filing See EF Override Options in Data Entry on page 196 To split a joint return 1 Open the return 2 Choose one of the following options aje e To compare returns for two individuals who lived together for the entire year Sree 24 click the Split button or press CTRL S e To compare returns for two individuals who did not live 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 NOTE specified on screen A whether to force itemized or force standard yo
472. 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 if you want to assign fil ters to the report The program stores the modified report under My Reports N New reports overwrite existing reports of identical output names in UTE the Report View Print Utility To have multiple versions of one report you must rename the newer output file Assigning Filters Filtering allows you to limit what information is included in the report by screening out unwanted data and including only the remaining information With the many fil ters available and the ability to create your own filters and add conditions to each fil ter the output options for your report are almost endless Choose a filter from one of Drake s many pre defined filter choices You can edit an existing filter to meet other selected criteria Existing To assign a filter to a report Filters 1 From the Report Editor Step 1 window see Figure 12 2 on page 292 click Next The Report Editor Step 2 window is opened Figure 12 3 Drake 2009 Report Editor Step 2 Filtering of Reports Select a Filter to use for this report The Filter allows to the user to limit the information that is included in the report If you need to edit or create a filter click Edit Filters below Select any additonal options to apply to
473. ress CTRL SHIFT SPACE Tax Year 2009 61 Data Entry 62 Flagging Fields Globally Drake Software User s Manual 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 one of two types 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 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 verified If there is no Schedule C the program does not require verification of globally flagged fields for screen C e New Returns When a field is flagged for all new returns an unverified flag produces an EF message page whether or not the screen has been opened for the return In the above example an EF message would be created even if no Sched ule C was present in the 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 15 default is green Once the field has been verified the highlighted tab and screen names go back to their origina
474. rest from Series EE and U S Savings Bonds Issued After 1989 8822 Form 8822 Change of Address This form is not e filable 8828 Form 8828 Recapture of Federal Mortgage Subsidy 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 162 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 Tax Year 2009 Drake Software User s Manual Features for Late Filed Returns 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 64 For Part M Owned Separately Il M Owned Jointly dp I Signature but no financial interest V M Consolidated report Vy BNET eC a Ce ee ee ka ee Cerne Tene Figure 5 64 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 se
475. rity Number State code generally a drop list at the top of an applicable screen S corporation Test transmission Taxpayer or Spouse Taxpayer or Spouse or Joint Truth in Lending Agreement 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 2009 Drake Software User s Manual Appendix E State E filing Mandates Appendix E State E filing Mandates Alabama California Connecticut Florida Indiana Kansas Louisiana Tax Year 2009 State e filing mandates for tax year 2009 as collected from state tax authority publi cations are provided below Tax preparers who prepare more than 50 individual returns for the preceding taxable year are required to e file all of their current year individual returns Tax Preparers who prepare 125 or more acceptable original corporate partnership income tax returns using tax preparation software in calendar year 2009 and 50 or more acceptable corporate partnership returns must e file all corporate or partnership returns California law requires tax preparers who prepare more than 100 individual state income tax returns annually and who prepare one or more using tax preparation soft ware to e file all individual income tax returns A 50 per return penalty may be assessed for each return filed on paper that should have been e filed Connecticut
476. rm 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 NOTE flow to the Payments from line of Form 1040 Be aware that no other documentation justifying the forced amount is automatically included with the return First Time Homebuyer Credit Screen code 5405 142 The Housing and Economic Recovery Act of 2008 gave certain first time homebuyers a temporary refundable tax credit In 2009 this credit was extended and expanded for homes purchased in 2009 Use the 5405 screen accessible from the Credits tab to enter data for Form 5405 First Time Homebuyer Credit Tax Year 2009 Drake Software User s Manual Direct Deposit Due Diligence for First Time Homebuyer Credit New in 2009 your office can require that a due diligence screen be completed for returns with Form 5405 First Time Homebuyer Credit To apply this requirement a user with administrative 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 completed on an applicable return the program generates an EF mes
477. rm Rental Income and Expenses 115 Form 4852 Substitute for Form W 2 or Form 1099 R 105 Form 4868 Application for Automatic Extension 148 159 Form 4952 Investment Interest Expense Deduction 124 125 Form 4970 Tax on Accumulation Distribution of Trusts 132 Form 4972 Tax on Lump Sum Distributions 133 Form 5405 First Time Homebuyer Credit 4 103 142 Form 5695 Residential Energy Credits 129 Form 5884 Work Opportunity Credit 131 Form 5884 A Credits for Affected Midwestern Disaster Area Employers 131 Form 6198 At Risk Limitations 98 107 Form 6251 Alternative Minimum Tax Individual 25 126 Form 6252 Installment Sale Income 101 154 Form 6478 Credit for Alcohol Used as Fuel 131 Form 6765 Credit for Increasing Research Activities 131 Form 8275 Disclosure Statement 162 Form 8275 R Regulation Disclosure Statement 162 Form 8283 Noncash Charitable Contributions 124 125 Form 8332 Release of Claim to Exemption for Child of Divorced or Separated Parents 161 Form 8379 Injured Spouse Allocation 162 Form 8396 Mortgage Interest Credit 131 Form 8453 U S Individual Income Tax Transmittal for an IRS e file Return 198 Form 8582 Passive Activity Loss Limitations 98 107 110 Form 8582 CR Passive Activity Credit Limitations 130 Form 8586 Low Income Housing Credit 131 Form 8594 Asset Acquisition Statement Under Section 1060 162 Form 8609 Low Income Housing Credit Allocation and Certif
478. rms or an employer issued an incorrect form Form 4852 is not generally filed before April 15 Screen code 4852 Use the 4852 screen accessible from the Other 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 92 Tax Year 2009 Drake Software User s Manual Personal Service Income W 2 1099 MISC W 2 Import _ If your client is an employee of a company that uses Talx W 2 eXpress that client s W 2 can be downloaded directly into Drake See the Drake Support site My Account gt W2 Block 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 Tee 1 From the Data Entry Menu of the client s return click Import gt W2 Import Tnport 2 Inthe W2 Download dialog box select Taxpayer or Spouse as applicable The EZE name and SSN of the selection is displayed below the Taxpayer Spouse drop list Schedule D Import Drake 2009 W2 Download 0 Taxpayer Spouse EES DAWN GREEN 400001001 me Download Progress Figure 5 8 Name and SSN appear in W 2 Download dialog box 3 Enter the client s PIN supplied by the employer N In some cases you can contact the employer and get the format for DTE the PINs for instance if the company uses the last four digits of the employee s SSN but a preparer cannot get the PIN itself 4
479. rn Figure 5 2 shows the default screen 2 in Drake Grid data entry can NOTE also be used for entering dependent information To switch to and from grid data entry mode press F3 To have grid data entry as the screen default go to Setup gt Options gt Data Entry tab and select Dependent screen for grid data entry Information is saved automatically when you exit a screen Note that the number of dependents entered is shown under the General tab of the Data Entry Menu General Income Adjustments C 1 Name and Address 3 Income 4 Adjustments B Payments Figure 5 3 Number of Dependent screens that contain data Screen 2 contains fields for other dependent related data such as for education credits and the Earned Income Credit EIC For education credits see Education Expenses on page 122 For Child Tax Credit see Child and Dependent Care Expenses Credit on page 127 For EIC and related due diligence requirements see Earned Income Credit EIC on page 139 Entering Dependent Last Names By default the taxpayer s last name is used for all dependents Complete the Last Name field on screen 2 only if the dependent s last name differs from the taxpayer s Tax Year 2009 89 Personal Service Income W 2 1099 MISC Drake Software User s Manual Selecting Months in Home By default the program calculates the return as if a dependent lived with the taxpayer for the entire year Complete the Mo
480. rt 1 Open the Scheduler and click Reports 2 Set the report s date range by selecting a Beginning Date and an Ending Date 3 Select a report type Report types are listed in Table 4 3 Table 4 3 Scheduler Report Types Scheduler Report Description Call List for All Preparers 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 indi cator preparer s name and client s e mail address New Client List 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 a preparer select a preparer name from the drop list Data types include appointment time client name client SSN duration of appointment client phone and new client indicator 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 85 E filing Preparation Drake Software User s Manual 4 optional Select Include Client SSN EINs on report to have the client s SSN EINs included on the report Clear the check box it is selected by default to omit this information 5 Click View The Report Viewer displays the generated report
481. rtization to elect to expense certain property under section 179 and to indicate automobile and other listed property use for business investment purposes Where the Information Flows Data entered on the 4562 screen flows to the applicable sections of Form 4562 The information is also used to calculate data for other related forms and schedules Form 4562 Because the data entered into the 4562 screen flows to Form 4562 you should not have to use screens 6 7 8 and 9 4562 Parts 1 through 5c unless entering a pre pre pared return with no supporting documentation Data also flows as applicable from the 4562 screen to Form 4797 Sales of Business Assets and Form 3468 Investment Tax Credit Depreciation Screen 4562 is used to create depreciation or amortization schedules for Schedules A Schedules C E and F and Forms 2106 4835 and 8829 Depreciation data is also used for the Auto Expense Worksheets for Schedules C E and F and Form 4835 To create an auto worksheet see Auto Expenses on Tax Year 2009 149 Depreciation Drake Software User s Manual page 155 To associate a depreciable asset with another screen in Drake see Associ ating One Screen with Another on page 64 T Click the Form 4562 hyperlink or press CTRL W inside the Depreci IP ation 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
482. ry 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 is displayed when you open a return It comprises a toolbar tabs screen codes and names the selector field and the status bar See Figure 3 10 Drake 2009 Data Entry 400002345 SAMPLE ELLA os Sak A oa amp Calculate View Split Doc Mar Tax Planner Import CSM Email Tool bar Perform tasks and access program features Tabs Access data entry screens by category General income Adjustments Credits Credits Taxes Other Forms Miscellaneous States Name and Address A Itemized Deductions Schedule Dependents STAX Sales Tax Worksheet Income 2106 Employee Business Expense Adjustments Earned Income Credit Payments 8867 EIC Paid Preparer s Checklist Estimated Taxes EIC1 EIC Due Diligence Qualifying Child Data entry screens Click a Child Care Credit ElC2 EIC Due Diligence Income screen name to open it Making Work Pay Credit EIC Due Diligence Head of Household EIC Due Diligence Additional Notes Wages Gambling Income e 1099 R Retirement Chase RAL or Bonu 1099 DI Dividend Income Consent to Use of Tax Return Info 10
483. ry dividends that are U S Government dividends can be expressed as either Dividends amounts or percentages Figure 5 10 Amount Percent Percent of lines 1 and 2 that are nominee dividends and capital gains Dividends included in Box 1a that are NOT taxable on the state oe or Dividends included in Box 1a that are US Government dividends eee or Da NOLinelude the US Government dividend ertion on the AiThsaxable onishat a WROD d scmeagontm nadir aai Figure 5 10 Enter portions of ordinary line 1a dividends as amounts or as percentages of the total 94 Tax Year 2009 Drake Software User s Manual Passive and Investment Income 1099 DIV etc Schedule B Some taxpayers with bank or other financial accounts in foreign countries must file Part IIl Schedule B regardless of the income amount This data is entered in the Schedule B Part III section of the INT screen along with other Schedule B data Figure 5 11 Schedule B Part lll Foreign Account Questions Enter on the first 1099 INT only zl Foreign bank account z Foreign trust Foreign country Figure 5 11 Schedule B Part III fields on INT screen N The Foreign bank account and Foreign trust items must be DTE 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
484. s 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 Open any return 2 Click View or Print to access View Print mode J 3 Click the arrow on the Email button and select E Mail Setup 4 Inthe 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 5 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 It is not recommended that you enter a default To address If an address is entered in the To field every return e mailed through NDIS View erintmode will he sant ta thataddress If entering multiple addresses use a semicolon as a separator between addresses 6 Make any changes to the default message 180 Tax Year 2009 Drake Software User s Manual E mailing from View Print 7 Press Save Or click Exit to leave the Email Setup without saving any changes 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 View Print mode 1 Open the return 2 Click View or Print to access View Print mode 3 Selec
485. s If any of these ES Screen dates are different enter the correct date in the applicable override field Estimated Taxes Paid in 2009 Federal Date paid Amount paid Overpayment RODS A TONNIE A lt from 2008 1st Quarter 2nd Quarter kg 3rd Quarter 4th Quarter E fo Ability to enter ji t varying amounts for quarterly Date fields are payments override fields Figure 5 46 Entering estimated taxes paid in 2009 Estimated Payments for 2010 Estimated payments for 2010 are shown on the payment vouchers in View Print mode All Forms Sets EF Figure 5 47 ES vouchers as they appear in the View Print directory NOTE Make estimated tax payments by debit card or credit card E Drake e Payment Center at www 1040paytax com MasterCard Visa or Discover E mail reminders can also be set up for the taxpayer on this Web site Printing Drake calculates the balance due and generates payment vouchers Form 1040 V but Estimate it does not generate estimate vouchers by default To have the program print estimate Vouchers vouchers you must indicate this manually You can do this in one of two ways e a e Select an estimate ES code on the ES screen shown at left e Select an ES code at the bottom of screen 1 Figure 5 48 Fed ST Estimated Tax z x Overpayment code z Invoice Number Fee Override regan E ES ae T tmp tote Figure 5 48 Estimated Tax ES code overrides on
486. s 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 year s return and past 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 each return Federal filing instructions Displays detailed federal filing information including the date to file form to be filed address to file and payment amount The instructions are listed as FILEINST PG in View mode Activated by default Clear to disable or use the PRNT screen to activate or disable on the fly 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 the fly Envelope Sheet 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 mark
487. s 36 miscellaneous code fields 29 report filters 294 security settings 17 D data entry bank screens in 219 basics of 59 68 colors 41 customizing 29 EF override options in 196 forms based 286 grid 24 60 89 150 heads down 74 help resources within 251 maximizing screens 23 Index menu 59 practice returns 246 printing client labels from 281 screen captures 67 setting CSM statuses from 233 setup options 23 Spanish 24 special features in 166 170 upper mixed case 24 date shown on return 27 45 DCNs Document Control Numbers assignment of 14 changing 195 staggering 194 DDM see Document Manager debit card as electronic payment option 145 debt cancellation 117 deceased taxpayer 88 deductions claiming for depreciation 149 domestic production activities 123 foreign tax credit 127 itemizing 124 126 on a split return 65 printing Schedule A 125 section 179 expensing 151 self employed health insurance 121 tuition and fees 123 deleted files in the CSM 236 deleting see also editing appointments 84 archived returns 186 checks 224 CSM records 237 duplicate entries from the CSM 237 e mail messages 254 employer data 284 files from Drake 275 firm information 14 flags 61 records from CSM display 237 reports from My Reports 295 reports from online EF database 203 rows in grid data entry 60 screens in Drake 60 text from letter templates 38 update files 274 dependent of another 88 dependents child care expenses
488. s Manual Alimony N A flagged Taxable refund field indicates that the displayed amount DTE was carried forward from a prior year return To clear the field press F4 if the amount is correct or enter a new amount 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 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 64 Program Defaults for Screen C The program s default accounting method is cash Select Accrual or Other as appli cable for accounting methods other than cash If Other include a description The program s default position for material participation is that the taxpayer materi ally participated in the business If the taxpayer did not materially participate select the Did NOT materially participate option The program s default inventory valuation method is cost If the valuation method is not cost select the correct method under Part III Cost of Goods Sold The program s default position for at risk investments is that all investments are at risk If this
489. s Reports Last Year Data Setup Help E IDOL DoK g Qpen New Calculate Print Support Help Research CSM Scheduler Recent Returns Key Print View Personal Client Manager Exit SAMPLE ELLA J Client Name MCCLURE JEREMY SAMPLE ELLA B 1040 WRITERS NETWORK OF FRAN MCCLURE JEREMY A 1040 WRITERS NETWORK OF FRANKLINTON 990 Wels ASU LRA ROGERS THE COMPTON ROGERS TRUST 1041 SUMMERLIN HERBERT amp JA SUMMERLIN HERBERT amp JAN 1040 T amp L CRAWFISH FARM T amp L CRAWFISH FARM 1065 ED S EATS ED S EATS 11205 HARRIMAN ANGELA B 1040 HARRIMAN ANGELA BUTCHER GEORGE amp KRISTIN 1040 BUTCHER GEORGE amp KRIST ESTATE OF JACOB MARLEY 1041 MONK STEVEN amp MEGHANN 1040 Appointments 3 Open Scheduler SAFE HAVEN OF GREENVILLE 990 L E L E ttt BALDWIN MARY 706 RICHLAND TOWING 11208 LISA S CUT N CURL 1120 EARL T SCHAFFER TRUST 1041 WILHAM amp WILHAM LLC 1065 A amp T SHUTTLES 1120 5471 CORPORATION 1120 JONES JOHN B 706 FAWLEY JUDE amp BRIDESHEAD SUE 1040 Notifications New Client New Client New Client New Client n Progress New Client New Client New Client n Progress In Progress n Progress In Progress In Progress n Progress In Progress n Progress In Progress n Progress In Progress n Progress Type Status Started Cor A 11 02 2009 13 0 11 02 2009 13 0 11 02 2009 13 0 11 02 2009 13 0 11 02 2009 13 0 11 02 2009 13 0 11 02 2009 13 0 11 02 2009
490. s Status Status Status Figure 9 1 Some statuses are set automatically as the return is processed Predefined Statuses Table 9 1 displays the predefined statuses in the CSM Note that some are set automat ically while others must be set manually Table 9 1 Predefined Statuses in the CSM Set Automatically Set Manually New Client EF Pending Printed Complete On Hold Signed In Progress EF Accepted Under Extension Under Review Delivered Set statuses manually as appropriate Note that the program never automatically assigns a return a status of Complete Custom Statuses Define up to 10 custom statuses Custom statuses must be set and changed manually We recommend creating custom statuses before tax season begins To define a custom status in the Client Status Manager A 1 Click Customize 2 Under Status Settings select a status placeholder to rename Figure 9 2 Customize Drake 2009 Customize Display Status Settings The Status Settings tab allows the user to modify the Status Descriptions that are available in Data Entry and the Client Status Manager To change a Status Description select the Status from the list and click Edit eves Column Layout Gaius Seting status description Status Descriptions Under Extension On Hold z Under Review Edit Signed Delivered Drake 2009 Status Description Enter the Status descript
491. s W 2s to a non employee who performs functions as a preparer Your firm is not a service bureau if it issues W 2s to employees who are under direct control of the firm and collect returns at the other locations Types of Products 214 Traditional bank products include Refund Anticipation Loans RALs Instant RALs IRALs and certain non loan products Table 8 3 Your client must understand that RAL and IRAL checks are loans not actual refunds Explain the loan cost APR and any other disclosures 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 services Table 8 3 Available Bank Products in Drake Tax Year 2009 Bank Instant RALs RALs Non Loan Products Chase First Advance RAL RAL Bonu Republic No instant RAL RAL ERC Electronic Refund Check offered ERD Electronic Refund Deposit RCB Real Time Loan RAL Super RAL ERC RET Refund Electronic Transfer Direct Deposit Santa Barbara RT Refund Transfer RT Direct Tax Year 2009 Drake Software User s Manual Using Banking Options in Drake For specific details regarding each bank product go to the Drake Support site Support DrakeSoftware com and select Partner Programs gt Bank Partners M p RT ANT A bank product option cannot be added once the IRS has IRALS RALs Non Loan Products acknowledged the return To qualify for
492. s are entered for both the taxpayer and the spouse the primary tax payer s 2106 screen must be entered first because the taxpayer is listed first on the return or the return will receive a reject code after it is transmitted 118 Tax Year 2009 Drake Software User s Manual Health Savings Account HSA Deduction Clergy Expenses If the taxpayer is a member of the clergy select P from the F code drop list at the top of the 2106 screen Form 2106 Employee Business Expenses TS z F Z ST v City Select Form Type X P Pastor using this arries 2106 amount to CLGY worksheet c 0 Exclude from Federal fe Se rr I AORO AS Mileage information continued sayeth a a BP a ae e enrm E N E ey E Figure 5 36 Select P to indicate clergy If P is selected the program carries the employee business expenses to the clergy worksheets WK_CLGY1 and WK_CLGY2 when the return is generated See Min isterial Income Allocation on page 124 for more on data entry for clergy Directing Data Entry to Form 2106 To associate the data from a 2106 screen to that of another screen such as the 4562 screen for depreciation or the 8829 screen for business use of home 1 On the 2106 screen select T for taxpayer or S for spouse as applicable 2 Go to the screen to be linked to the 2106 data 3 From the For drop list select 2106 Use the Multi form code field as needed See Associating One Screen with Another
493. s ia 55a adn s 5 0 30 15 40a Sid 5 aw s 5 4 id 3 08 e are Sloe 22400 PIE faa o s ars aaa Sta aos fora te wea e s eo Sia sate seimai n 271 Mal MR 5a 2 a wiera sia aie eerd SS ea eS Sie a aa ia Seater 271 NU aT hte ct tats nn gin natin P Figure 6 4 Calculation Details tab Click Print at the bottom of the Details window to print the details displayed Viewing and Printing a Return NEW FOR When printing to Drake PDF you can now password protect the PDF 2009 documents See Printing to Drake PDF on page 178 View or print a return from either the Home window without opening a return or from within a return To view or print a return from a data entry screen click View or Print If results are first displayed in Calculation Results click Continue to proceed To view or print one or more returns from the Home window Shortcut Press 1 Click the View or Print icon or select File gt View or File gt Print from the EVON AE menu bar The Return Selector lists all recently calculated returns available for viewing or printing 2 Select one or more returns by clicking the box next to each return 3 Click View or Print Depending on your setup options Calculation Results could be NOTE opened at this point click Continue to proceed To change this option go to Setup gt Options Calculation and View Print and select or clear Pause option for calculation Enhanced View Print Mode Enhanced View Print th
494. s process has been completed at each workstation that will be using Drake 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 the server or on a workstation and must be done only once To set up directories and paths 1 From the Drake Home window select Setup gt Directories Paths 2 Select 2 Software installed only on Server Setup Directories and Paths Select the appropriate configuration for your office setup below It is not recommended that these ___settings are changed during the season Configuration Choose the appropriate Configuration below Important If necessary consult with your technician or contact Drake Support for assistance These settings should not be changed during the season unless instructed to do so by Drake Support ne computer n E Network Options 2 Software installed only on Server preferred network setup V N WClient link installed on workstations 3 Software installed on server and workstations secondary network setup 5 aie pai This uate ord andigate sawer divest foxgsiogscliant files lem aam aie Figure 2 3 Select network option 2 3 Click OK The server only system is now in place Tax Year 2009 11 Running Drake on a Network Drake Software User s Manual All Using the instructions in Installation on page 8 install Drake onto each workstation Workstations A single workst
495. s to Drake e Retrieves acknowledgements of the transmitted files e Checks for Drake e mail if this option is selected see note following e Logs out of Drake Transmission notes appear in the Communications box of the Transmit Receive window as transmission progresses When transmission is complete all returns trans mitted through Drake are forwarded to the correct IRS processing center 6 Click Exit to close the Transmit Receive box NOTE To have the system check for Drake e mail during transmission go to Setup gt Options gt EF tab and select Check for email during EF transmit receive To check for acknowledgments without transmitting any files to Drake go to EF gt Transmit Receive and click Acks Only The program checks for federal and state acknowledgments bank product acknowledgments and check authorizations Once the acknowledgments are received click Exit See Step 4 Process Acknowl edgments following for more information on acknowledgments Tax Year 2009 Drake Software User s Manual E filing a Return Step 4 Process Acknowledgments When Drake receives your transmission it immediately sends you a one letter acknowledgment or ack When the IRS Submission Processing Center receives the return it sends an ack to Drake which you can pick up along with any bank and state city acks by logging in to Drake Ack To process acks go to the Home window and select EF gt Process Acks The Pr
496. sage upon calculation and the return cannot be e filed until the screen is completed N Also from Setup gt Options gt Administrative Options tab an DTE administrator can set the global option to print all EIC and Form 5405 due diligence documents Screen code To access due diligence questions for the First Time Homebuyer Credit go to screen HBDD HBDD accessible from the first Credits tab Direct Deposit Screen codes DD Use the DD screen accessible from the General tab to indicate that a refund is to be 8888 deposited directly into the taxpayer s account The DD screen contains fields for completing IRS Form 8888 N Direct Deposit of Refund to More Than One Account TES This section refers to refunds that are not in the form of bank prod ucts Enter account information for bank products on the applicable bank screen See Additional Product Offerings on page 220 Required Information The name of the financial institution the bank s routing number RTN the client s account number and the type of account checking or savings are required The RTN Account number and Type of account information must be entered twice Figure 5 52 or an EF message is generated and the return cannot be e filed Name of financial institution RTN Account number Type of account M Checking M Savings Repeat account information M Checking Savings Figure 5 52 Repeat account information for RTN account number and type of
497. screen accessible from the Income tab to enter depreciation data Enter each asset on a separate 4562 screen To open a new screen press PAGE DOWN To ensure the accuracy of future calculations it is important to complete each 4562 screen correctly the first year an asset is entered NOTE 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 60 Required Required fields on the 4562 screen are described in Table 5 16 Fields Table 5 16 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 64 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 depreciation method the useful life recovery period entered in the Life field is used to calcu late depreciation adjustments for Form 6251 AMT See Section NOTES 179 Expensing on page 151 for more on section 179 New in 2009 the SFT Software S L 3 years option has been added to t
498. screens Self Employment Adjustments Table 5 5 lists screens in Drake for entering adjustments to self employment income Table 5 5 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 income should be entered directly on the SE screen Short or Depending upon the employment terms the taxpayer must complete a short Schedule Long SE S page 1 or long Schedule SE page 2 Schedule SE Drake determines the form required and processes it accordingly To force the long form select a Force Schedule SE box in the bottom section of the SE screen Force Schedule SE page 2 instead Of page 1 o ecccccccsscsscccsceccccecessscessesssssssesssssssssssseesesesececcececece
499. seeeseeees Rechatactanzatons ennn AT RA basis PoTOreCONarS ON ennie eaei E Aeee AAA N AA A eia Pail Risrihutions fron Roth IRAS ga sinade Agh eE aO a a E oaa D EA Figure 5 22 ROTH screen field for amount to be transferred to a Roth IRA This amount is carried to the appropriate line of Form 8606 IRA Penalty Computations Carrying 1099 R Data to Form 5329 Exception Numbers IRA penalties are calculated using data entered on the 5329 screen Form 5329 Addi tional Taxes on Qualified Plans Including IRAs and Other Tax Favored Accounts It might not be necessary to enter data directly onto the 5329 screen If a distribution code of 1 Early premature distribution no known exception has been entered in Box 7 of the W2 screen you can force the distribution amount from a 1099 R to flow to Form 5329 and have the taxable amount of the distribution subject to the 10 pen alty To do so go to the desired 1099 screen and select the applicable box under Addi tional Information for this Distribution Figure 5 23 Additional Information for this Distribution I 1099 R for disability M Ifso reported as wages onthe 1040 SCH l Carrythis entryto Form 5329 and compute 10 penalty Exclude from income reported on Form 4972 Exclude from income reported on Form 8606 Firstyearof ROTH contribution Was this 1099 R altered or handwritten Figure 5 23 Select box to carry 1099 R data to Form
500. sheet totals are highlighted in blue e Tax Planner Worksheets To access an additional tab or worksheet for a form or line double click the shaded cell Making Each numerical column in the Tax Planner has an Adjustment column to the right of Adjustments it Use this column to enter dollar amounts or percentages by which to adjust the amounts Default is dollar amount to use a percentage enter the number with a per cent symbol See Figure 13 14 To decrease an amount enter a negative number or percentage by entering a minus sign in front of the amount for example 5 or 5 in the Adjustment column Income Items 2007 Adjustment 2009 Adjustment 2010 Adjustment 2011 Wages 60 000 1200 61 200 K 50 J 30 600 Nontaxable combat pay Taxable interest Nontaxable interest Dividends Qualified dividends Figure 13 14 Adjustments To apply an adjustment to all future years or cases right click the cell with the adjust ment and select Carry Adjustment Across Running To access reports click Reports from the Tax Planner toolbar and select to print a Reports Detailed or Summary Report Standard charts and graphics are also available Printing a To print Tax Planner data Tax Planner 1 Click Print Planner 2 Inthe Print Selector select your printing options e Sheet Selection Sheets pertain to specific tabs in the Tax Planner e Report Selection Select Summary Report Detailed Re
501. 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 13 these screens contain interview questions and fields that must be com pleted if required by selections made in Setup regarding EIC Tax Year 2009 Drake Software User s Manual Don t know Drake Software User s Manual Earned Income Credit EIC Table 5 13 EIC Due Diligence Screens Screen igs Screen Name Description Code EIC1 EIC Due Diligence Qualifying Child Screen contains questions pertaining to the age relation 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
502. sis fields for a partnership Tax Year 2009 Drake Software User s Manual Partner Basis 1 2a b Cash contribution Adjusted basis of property contributed Partnership interest acquired other than Increase for excess depletion adjustme Gain from 179 asset disposition d 3j 3I Debt Basis 4 amp 7 A Partner s share of partnership liabilities B Partner s share of partnership liabilities 6 Withdrawals distributions Adjusted basis from preceding yeat Galniracognized a A O N EL eea E E E E A ere trecstecstssssteerttrerteres Supplemental Income by cash or property WM PEA AEA SENS A e E E E EA A A E A NTT from prior year Figure 5 32 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 NOTE losses and deduct for this column begi continues to the Ba Data flows directly from the two K1 screens into the Current year ions column shown in Figure 5 33 Data entry ns on the first Basis Worksheet screen and sis Worksheet continued screen Calculating Loss allocation percentage is calculated by and deductions allowed Dividing them by the total losses and deductions to figure the loss allocation location percentage by each category of loss applicable The product flows to the Allowed Losses and Deductions in Current Year col umn of the adjusted basis wor
503. software See Appendix A Preseason Checklist for a convenient list of preseason tasks to consider as you get ready for tax season Prior Year Updates If your firm used Drake last year you can save time by updating prior year returns settings letters and EIN data Before updating you should 1 back up your files and 2 ensure that your program s 2008 data path points to your firm s 2008 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 2008 Data field Figure 4 1 a s Ahan _ Pi P p AE E E fabian cat OT fet et Atna a Paths Drive Letter for State Programs MZ r Paths determined by configuration selected above dmin O de F Path for 2009 Data RAKE TAH Path for 2008 Data k TAH Path for Print File RAKE Shared drive letter for all other shared files EF Firm Pricing Letters etc optional Y Help OK Cancel Figure 4 1 Ensure that Path for 2008 Data field is correct If the correct path is not displayed click the Admin Override check box to acti vate the field Make the necessary changes and click OK Tax Year 2009 69 Prior Year Updates Drake Software User s Manual Updating Client Files Save time by updating prior year returns in the 2009 program By default the follow ing information is brought forward from the prior year program e
504. son unless instructed to do so by Drake Support al Network Options r N WClient link installed on workstations 3 Software installed on server and workstations secondary network setup z 3b This is a workstation W Indicate server drive letter for sharing client files v To access all other shared files on a server EF Firm Pricing Letters etc select appropriate shared drive letter in Admin override section below Figure 2 8 Example of selected shared drive 3 To share all Drake files Setup EF configurations letters and acknowledgments e In the Paths section at the bottom of the Directories and Paths Setup win dow select Admin Override See Figure 2 9 e Choose a Shared Drive Letter In Figure 2 9 the user has chosen to share all the files on the F drive a 7 e ai a Soinen TE e amna iai er wretcene r Paths Drive Letter for State Programs Me Paths determined by configuration selected above Admin Override IV Path for 2008 Data DRAKEOS DT H Path for 2007 Data DRAKEO DT MAN Path for Print File DRAKEOS PF Shared drive letter for all other shared files EF Firm Pricing Letters etc optional Cr D Figure 2 9 Sharing all files e Click OK M p l RTANT Once a shared drive letter is set do not change it unless Drake Support instructs you to do so Changing a drive letter during tax season can cause problems in file storage and e file processing Setting State To
505. stomized Drop Lists on page 30 Use Customized Flagged Fields on all Returns Select this box click Flag and select a package type When the Data Entry Menu is opened click the desired screen and click each field to flag Click a field a second time to clear it Click Esc to save your changes Note This option is available for federal packages only Do not clear Admin flags when data is updated from prior year Flags set globally last year will still be set globally after updating data from Last Year Data gt Update from 2009 to 2010 Print due diligence documents Print due diligence documents generated from the EIC1 EIC2 EIC3 EIC4 and 5405 screens Require applicable due diligence screens to be completed Require that applicable fields on the EIC1 EIC2 EIC3 EIC4 and 5405 screens be completed before the return can be e filed Enable logged in preparer s Per sonal Client Manager Display the Personal Client Manager on the Drake Home window for the logged in preparer check box is marked by default Display Update Availability to Select which preparer groups can view update availability Selections are Administrators users with administrative rights All preparers or No one A selection of No one turns off the user notification feature Tax Year 2009 29 Software Setup Locking Screens Customized Drop Lists 30 Drake Software User s Manual An administrator can
506. student accounts and begin Account tracking student progress With their own user names and passwords students can log in to ETC on their own N The CTEC fields in the Admin and student account sign up pages UTE apply to California preparers who want to receive CTEC approved credit Admin accounts are created using the Need to sign up section of the Drake ETC home page Figure 10 3 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 3 Need to sign up section of ETC Home page 242 Tax Year 2009 Drake Software User s Manual Online Support To create an Admin account 1 If you are a new Drake customer select Yes and click Submit 2 In the following window enter your EFIN and Drake password the password from your packing slip and click Submit 3 Complete all applicable fields To have CPE credit for completing an ETC tax course select Yes from the CPE drop list 4 Click Save Information N If you are not a Drake customer but are visiting the ETC home DTE page go to the Need to sign up section select No and click Submit Next follow the directions on the screen Creating an To create an ETC student account log in to ETC See Logging In following click ETC Student the Administration link and click Add New Student After completing all applica Account ble fields click Save Inform
507. suf ficient disk space the backup will be stopped and you will receive a message stating that disk space was insufficient Automatic backup has now been activated The backup icon is added to the system tray at the bottom of your screen You can click this icon to view your last automatic backup information H GB wy 6 10Pm Figure 11 9 Automated backup icon in system tray The automated backup program is also added to the Startup menu and will continue to be in operation after the machine is rebooted There are two ways to turn off automatic backup Go to Tools gt File Maintenance gt Backup click the Automatic button and clear the Activate Automatic Backups check box Click the icon in the system tray see Figure 11 9 click Stop and click OK Changing a Client s ID Number Tax Year 2009 Changing a client s SSN or EIN in the program requires more than simply making the change in data entry To change a client s SSN or EIN in the software 1 2 3 From the Home window select Tools gt File Maintenance gt Change SSNs on File In the Current SSN EIN on file box enter the ID number without spaces dashes or additional characters that is currently in the system In the New SSN EIN for file box enter the new ID number 273 File Maintenance Drake Software User s Manual 4 Click OK 5 Click Exit 6 Repair the index files See Repair Index Files on page 239 NOTE PPR clients
508. t 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 select Select Form from the right click menu 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 12 showing the default password The default password consists of the first four letters of the client last name or entity name and the last five numbers of the SSN or EIN as shown in the example in Figure 6 12 Drake 2009 Password Protect PDF Attachment x 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 SN Please select a password for the PDF attachment Joart76665 OK Cancel Figure 6 12 Password Protect PDF Attachment dialog box N You are allowed to replace the default password with a new one DTE however if you do this be sure to write the password down so you don t forget it Drake cannot recover a lost password 5 Click OK The e mail message opens in the desired e mail program with the selected return 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 M P l RTANT The client must know this p
509. t up Document Manager client folders Recom mended If this box is not marked you must specify the location where the DDM should store any printed return or scanned document Tax Year 2009 Drake Software User s Manual Document Manager DDM Security at Startup Tax Year 2009 3 optional To add a custom folder in addition to the default folders e Enter a custom folder name e Indicate where the custom folder should be stored in each client s main folder or in each client s 2009 folder See Figure 13 6 and Figure 13 7 for examples of folders in the file structure 4 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 Security at Startup following 5 Click Save and then click OK Custom folders are new in 2009 If a custom folder is added it will appear in the specified folders for all new clients in 2009 NOTES If the Drake file structure is introduced into an existing system the Drake structure is added to the existing system The Drake struc ture does not overwrite it DDM users with administrative rights can establish change and remove passwords required to open the DDM To establish a password for opening the DDM 1 From the Home window go to Setup gt Printing gt Document Manager 2 Enter a password in the top text box of the DDM Password section Figure 13 3 Passwords are
510. t was forfeited due to early withdrawal while screen 4 asks for the actual amount of the penalty IRA Withdrawal Penalty Screen code 5329 Use the 5329 screen to calculate what penalties apply regarding IRA withdrawals N Exception numbers 01 and 06 Part I line 2 apply only to distributions DTE from qualified employee plans not to those from IRAs annuities or modified endowment contracts For more on IRA penalty computations see IRA Penalty Computations on page 106 Alimony Paid Enter details about alimony paid in the Alimony fields on screen 4 IRA Adjustments To enter IRA adjustments see Retirement Income 1099 R etc on page 104 Student Loan Interest Deduction Enter student loan interest deduction amounts Form 1098 E Student Loan Interest Statement into the Student loan interest deduction field on screen 4 Education Expenses Screen codes Entry fields for Form 8863 Education Credits and Form 8917 Tuition and Fees 8917 8863 Deduction are located on the same screen which can be accessed from either the Adjustments tab for the 8917 or the second Credits tab for the 8863 If education credits are to be filed with one state and tuition and fees deductions with another select the applicable states from the ST drop lists in each section of the 8863 8917 screen 122 Tax Year 2009 Drake Software User s Manual Domestic Production Activities Deduction Tuition and Fees Deduction Use the
511. tal Adjustments Enter a positive number Each number refers to a column If you enter a 2 printing will begin two columns into the label Click Finish after the program has scanned the files Click Print NOTE The Mailing Labels tool can also be used to run reports See Chapter 12 Reports Drake provides a convenient way to print a mailing or folder label from data entry To print a single label 1 N ai a oO nN Ensure that the label printer is installed properly per the manufacturer s instruc tions and that the label sheet is properly loaded In data entry go to screen 1 of the open return Right click on the screen not a field and select Client Labels gt Name Format from the right click menu Select the name format LastName FirstName or FirstName LastName Right click on the screen not a field again and select Client Labels Choose from the following label types e Mailing Label e Folder Label SSN EIN Name or Name only Click Continue from the Preview Label window Select the label printer from the Print Labels dialog box Choose the number of copies to print 0 Click Print to print the label 281 ADDENDUM 281A Drake Software User s Manual To keep the Preview Label window from being opened each time you print a label from data entry follow these steps 1 9 7 8 9 From the Data Entry Menu right click somewhere on the screen not on a screen name o
512. tate or Heir See Figure 11 11 4 Click OK 5 When the conversion is complete click Exit Estate and You can use a single SSN for two return types when a taxpayer requires a Form 1040 Qualified and one of the two return types listed below Heir Returns e Form 706 U S Estate and Generation Skipping Transfer Tax Return e Form 706 A U S Additional Estate Tax Return An SSN must already be associated with a return in the software before it can be assigned to a second return type To assign a single SSN to multiple returns 1 From the Home window select Tools gt File Maintenance gt Change File Type 2 Inthe Enter SSN EIN to convert dialog box enter the SSN to be assigned to a new return type 3 Click OK The available return types are displayed In Figure 11 11 the selected return is a 1040 so that option is disabled Note that the 706 and 706 A options are in the right hand column Enter SSN EIN to convert foo tt tt ttst S Convert this file ta F Individual 1040 C Fiduciary 1041 C Estate 706 Corporate 1120 Partnership 1065 C Sub S Corp 11205 C TaxExempt 990 400001001 File Type is Individual 1040 Select the type of return to convert to Figure 11 11 Available return types are displayed 4 Click an option to select it then click OK 5 When asked if you want to keep the original return in addition to the new return click Yes 6 Click OK The SSN is now applied to both the ori
513. tax professional can or must begin e filing Mandates don t apply to taxpayers e filing their own returns Some states with mandates have their own application process for EROs and tax preparers who offer bank products These processes and the rules and regulations pertaining to e filing vary from state to state The FAQ screen in data entry includes links to state e filing information and informa tion on individual state requirements are available at Support DrakeSoftware com For more Drake resources see Chapter 10 Resources and Support 207 About State Filing Drake Software User s Manual This page intentionally left blank 208 Tax Year 2009 8 Banking For tax year 2008 Drake worked in conjunction with the banks listed in Table 8 1 to provide taxpayers access to bank products Table 8 1 Drake Banking Partners Bank Phone Web Site Chase 800 766 7405 www chasetrp com Republic Bank amp Trust RB 866 491 1040 www republicre fund com River City Bank RCB 888 820 7848 www rcbral com Santa Barbara Tax Products Group LLC 800 779 7228 www sbbtral com For tax year 2009 Drake preparers have two new banking options e Collect and the EI Visa Prepaid Card program both offered through EPS Financial LLC The abil ity to use these products is fully integrated into your Drake tax software program Information on these exciting new opportunities is provided in the following two sec tions and t
514. te sold field This causes the program to stop calculating depreciation Complete a 4797 screen for the asset indicating with a Y just above the Part IV heading on the screen that the sale is also reported on Form 6252 Complete a 6252 screen for the asset 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 subsequent years As an alternative and only if the current year is not the year of sale NOTE 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 Tax Year 2009 101 Sales of Assets Drake Software User s Manual 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 e Unrecaptured Section 1
515. te 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 54 An amount entered here overrides the calculated refund amount Figure 5 54 An amount entered in the Federal deposit amount field overrides the calculated refund amount Because not all states support multi account direct deposit the State deposit amount field Figure 5 54 is inactive by default Direct Deposit of State or City Refund Multiple State Refunds 144 To have a state or city refund deposited into an account select the state abbreviation from the State City selection field for the account If this field is left blank no state refund will be deposited into the account Federal selection Figure 5 55 State City selection drop list If the taxpayer receives refunds for more than one state or city return and wants to deposit refunds into separate accounts indicate this on the DD screen by choosing a code from the State City selection drop list for each account Figure 5 55 To have Tax Year 2009 Drake Software User s Manual Electronic Payment Options the refunds from all eligible state returns deposited into one account select A from the State City selection drop list GA ME Georgia and Maine have unique requirements for direct deposit Note the fields at the Refunds bottom of the DD screen if e filing a return f
516. ted the amount should never be changed The banks closely monitor the amounts charged for application fees Once a banking option is selected and saved you can access it from data entry In the Electronic Filing and Banking section of the General tab click the bank s name 218 Tax Year 2009 Drake Software User s Manual Using Bank Screens in Data Entry iling and Bank USE Consentto Use of Tax Return Information DISC Consentto Disclosure of Tax Return Information DD Direct Deposit Form 8888 PMT Electronic Funds Withdrawal PIN 8879 8878 e file Signature EF EF Options Override Figure 8 4 Electronic Filing and Banking section of General tab in data entry Alternately you can type BANK BNK or the bank code into the selector field and press ENTER Codes are e CHAS Chase e RCB River City Bank e RB Republic Bank e SB Santa Barbara Tax Products Group e ECOL e Collect Taxpayer Application Complete an application agreement for every taxpayer applying for one of the bank ing options available see Taxpayer Requirements on page 213 Some banks 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 Tax Year 2009 The following i
517. tep 2 window Figure 12 3 on page 293 Select a filter from the Filter Selection drop list Click Edit Filters to open the Filter Manager window Figure 12 5 The filter you selected is highlighted Filter Manager The Filter Manager allows you to customize the behavior of Report Filters in the Tax Software Each Filter is defined by several Basic Search Conditions and up to 10 additional Conditions The software uses this information to narrow down or filter the resulting list of clients Select a Filter from list on the left Edit the selected Filter s properties on the right Click Save to Save the changes Available Filters Basic Search Conditions for the Selected Filter aaa this week New Filter Return Type is Any All Preparers Edit Copy Filter Rename Filter Additonal Search Conditions for the Selected Filter Add Condition Appointment Date is between 01012010 and 123 Edit Condition diii Delete Match All Conditions C Match Any Condition Figure 12 5 Filter Manager window Click Copy Filter Name the filter and click OK The new filter is highlighted Modify the Basic Search Conditions and the Additional Search Conditions for your filter as appropriate there is a limit of 10 Additional Search Conditions per filter See Search Conditions on page 296 Click Save The program returns to the Report Editor Step 2 window Click Save again to save the report To close the Report
518. teractive Support Drake 2009 Email Address Books Address Book Drake Software Support Address Book z Drake Software Support Address Book Drake Software Client Address Book Local Address Book ee TT CO RN Tall eneral lent Services F General Support General EEA A a ene a Figure 10 16 Address Book drop list Support The Drake Software Support Address Book displays general federal and state support Address Book addresses at Drake To insert an address into the To field of your message double click an e mail address and click OK Client Ifa client s e mail address is entered on screen 1 of the return 1040 package only it Address Book an 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 270 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 Local Address The Local Address Book can be filled with e mail addresses of your choice This Book option is not available when accessing the e mail program from data entry To add an address 1 From the Drake Home window click Help gt E Mail 2 From the Email Inbox window click the Address Book button to open the Edit gt Address Book di
519. ters of the client s last name and the last five numbers of the taxpayer s SSN EIN as the password This password can be changed however it s important to note that it should be something that both you and the taxpayer can remember 5 Select any other options as desired from the Print Selection dialog box 6 Click Print to open the Save As dialog box 178 Tax Year 2009 Drake Software User s Manual Viewing and Printing a Return Printing Printer Sets Quick Printing a Single Form Tax Year 2009 7 Ifnecessary assign a filename and select a location for the document default is the current year folder in the DDM 8 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 but you can override the defaults from enhanced View Print mode To print specific sets of a return from Enhanced View Print mode 1 Open View Print mode for the return The All Forms tab is displayed by default 2 Select the Sets tab All sets in the return are displayed in the tree view Figure 6 9 AllFoms Sets EF 4 Figure 6 9 Example of a return that has five printer sets ad Select the sets to print 4 Click Print to open the Print Selection dialog box If you click the arrow next to the Print icon select Print Selected Forms 5 optional Select any
520. the Home window select Reports gt Hash Totals 2 Enter the SSN or EIN of the return to check 3 Click Continue The report is displayed in the Report Viewer See Report Viewer on page 299 4 Click Exit to return to the Home window 303 Hash Totals Drake Software User s Manual This page intentionally left blank 304 Tax Year 2009 1 3 Suite Products Integrate Drake suite products with Drake tax software to run your business more effi ciently The suite includes the Drake Document Manager DDM Tax Planner and Client Write Up CWU programs These products are free of charge and are installed from your Drake Software CD This chapter focuses on the DDM and Tax Planner For CWU instruction the Client Write Up Manual is available on the Drake CD and from Support DrakeSoftware com Document Manager The DDM is installed with the tax software and can be accessed by double clicking the DDM icon on your desktop Listed below are just a few of the new DDM features DDM you will see in 2009 e DDM Backup Restore Ability to back up folders to and restore them from a specified location e DDM Updates Ability to update DDM files from within the DDM e Ability to copy files to CD Ability to copy DDM files directly to a CD e Password protection Ability to password protect the entire DDM e Custom folders Ability to add custom folders in addition to the default Tax and 2009 folders to
521. the If multi dwelling unit box is not marked the program ignores any figures entered in the Indirect Expenses column Sale of Ifa property was sold and Schedule E must be associated with data from a 4797 Property screen Form 4797 Sales of Assets use a passive activity number PAN code to tie them together To do so enter a number in the PAN box on screen E 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 27 7 Clearing atid mamtenance See pe 8 Commissions eit 9 Insurance G PMI 10 Legal and other professional fees 11 Management fees ee ee eee Te eS Figure 5 27 If the PMI box on line 9 of screen E is marked the program will display a PMI indicator on the Schedule 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 corporation income and K1F for fiduciary income Enter information directly int
522. the matching index term is displayed in the lower box To see the Help screen for a matching term double click the topic or select the topic and click Display Use the UP ARROW and DOWN ARROW on your keyboard to move from term to term The Search tab Figure 10 10 allows you to search the Help topics by keyword Enter a search term and click List Topics or press ENTER From the topics displayed dou ble click a topic to view or single click it and press ENTER You can also use the UP ARROW and DOWN ARROW on your keyboard to move from topic to topic Data Entry Help Field Level Help Screen Help Two types of help are available in data entry field help and screen help Field help provides information about a selected field To access field help click inside a field and press F1 or select View Help from the right click menu The help for the selected field is displayed as shown in the example in Figure 10 11 Drake Software Data Entry Help Date of Birth direct entry Enter the date of birth DOB in MMDDYYYY format An age may be entered if the exact DOB is wnknown however for electronic filing and bank product purposes a full DOB is required AO O nll cee cain mm E Fe a T an Figure 10 11 Example of field help Note that each help window indicates whether the field is a direct entry adjustment or override field To close a help window click the X in the top right corner or press ESC Screen help provid
523. the report and click Save Filter Selection Select a Report Filter New Clients x Edit Filters Filter Description Return Type is Any Client Type is equal to New Appointment Date is between 01012010 and 2010 1231 Additional Report Options Sort Summarize Report by this field lt None gt Summarize the Report Data E r Report output file name NewClie ee Dee Oe ee ee eee ee Oe ee les Figure 12 3 Report Editor Step 2 window top half 2 Select a pre defined or custom filter from the Filter Selection drop list Note that a Filter Description is displayed when a filter is selected Figure 12 4 Tax Year 2009 293 Setting Up a Report Customized Filters 294 3 Drake Software User s Manual Filter Selection Select a Report Filter Clients with Schedule C v Edit Filters Filter Description Return Type is 1040 Schedule C is present Figure 12 4 Filter that includes all 1040 returns with a Schedule C Click Save Use a pre defined filter as a template for creating a customized filter Be aware that changing a pre defined filter affects every report in the program that uses that filter We recommend making a custom filter or copying a filter and giving it a unique name then editing it to your specifications To customize a filter to assign to a report 1 2 After making changes in the Step 1 window Figure 12 2 on page 292 click Next to open the Report Editor S
524. the third etc New Perform the assigned task on a new record For example C New opens a new C screen The asterisk 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 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 PAGEDOWN 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 PAGE Gq tg Move to the previous screen in a list For instance in a return with several W2s screens Depe
525. ther screen A if less than 500 or the 8283 screen if more than 500 NEW FOR The 8283 screen now contains a separate section for entering addi 7009 tional information for vehicle donations reported on Form 1098 C Additional Itemized Deductions Screen codes Use the 4952 screen to enter data for Form 4952 Investment Interest Expense Deduc 4952 8283 tion Use the 8283 screen to enter data for Form 8283 Noncash Charitable Contribu tions Calculations from the 8283 screen flow to the Gifts by cash or check line of Schedule A There is also a direct entry field for this line on screen A Do not enter duplicate amounts Tax Year 2009 125 Alternative Minimum Tax Drake Software User s Manual NOTE When a Donee ID number is entered on the 8283 screen the pro gram automatically stores the number in the EIN database Alternative Minimum Tax Screen code 6251 Use the 6251 screen accessible from the Taxes tab to enter information for Form 6251 Alternative Minimum Tax Forcing Form 6251 Although Form 6251 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 this form 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 By default Form 6251
526. tion _ Firm Information Preparer Schedules ERO Screen Document Manager Letterhead Reports Client Status Manager Setup gt Options Pricing Federal _ Pricing State City Letters _ Form Print Order Federal Continue Exit Figure 4 3 Update Settings dialog box 3 Select the drive that stores the 2008 data to bring forward 4 Select the setting categories to bring forward All items except for previously updated items are selected by default If there is a plus sign in front of an item click the plus sign to expand that item and view or select sub items If you select an item NOTES that has sub items all the sub items are selected by default If updating Pricing setup you will be prompted to enter a percent age increase to apply per item per form or both 5 Click Continue then Confirm the selections to start the update process 6 Click Exit when the status for each item is displayed as Completed Organizers and Proformas Proformas and organizers are tools to make information and record collection and interviewing easier for both preparer and client Available for the 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 4 72 Tax Year 2009 Drake Software User s Manual Organizers and Profor
527. tion Fee Override Fields Fees to be withheld from the bank product are established in the Banking Informa tion section of Setup gt Firm s You can override these fees from the bank screen If the option to override the e filing fee has been deactivated at Setup gt Firm s this option will be unavailable on the bank screen Override the fees to be WITHHELD from the Bank Product FALE ORT NN a a 0 Electronic filing f 8 svsssssssssrsrocorsesestscstststnesastsontesensasnese T Figure 8 5 In this example the preparer has selected to waive the Tax preparation fee The Electronic filing fee field has been disabled from Setup gt Firm s Opting Out If the taxpayer wants a bank product but the spouse doesn t mark the Spouse opting out of the Bank Product box in the Opt Out section If the taxpayer opts out but the spouse doesn t mark the Taxpayer opt out box 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 An NOTES exception to this rule is Santa Barbara Be aware that not all banks allow opting out of all products offered Check with your bank for more information Additional Product Offerings Each bank screen has an Additional Product Offerings section If a taxpayer wishes to have the proceeds of the bank product deposited into an account rather than distrib uted as a check or card enter the banking information in this section
528. tion 1231 g Netlosses under Section 1256 g Netshort term capital losses not portfolio g Netlong term capital losses not portfolio g LON BHIOSSOS sares Figure 5 33 Some of the fields for shareholder s prior year unallowed losses Basis Worksheet screen Printed Basis worksheets are generated when the return is calculated A worksheet actually Worksheets consists of two pages page 1 shows the adjusted basis calculations and page 2 shows the losses and deductions calculations N You can force page 2 to be printed even if it does not contain data DTE To do so mark the Force page 2 box at the bottom of the Basis Worksheet continued screen Updating to The following basis information will be updated to the next year s software Next Year 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 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 3 ai e 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 4835 on the Crop Insurance and Disaster Payments NOTES CIDP screen The Auto Expense Worksheet AUTO screen can be applied to t
529. tner Programs to access information on Drake s bank and other partners Dnet Internet Services NELCO Solutions forms and checks and Crown Money Map financial software New in 2009 Drake clients are being offered exclusive use of the Drake Advisory Group The Group consists of retirement specialists advanced underwriters and attor neys who can help your firm assist your clients in minimizing tax on Social Security benefits estate tax planning and reduction retirement planning and business continu ation and restructuring When you work with the Group it serves as an extension of your practice Once you ve identified a need for services for example noticing that your client is paying taxes on Social Security you can launch the process of working with the Group For you as a preparer this process has three main steps 249 Software Support Drake Software User s Manual e Complete and submit questionnaire You and your client submit a simple questionnaire to the Group for review Based on that information the Group s pro fessionals develop a plan and recommendations which they will discuss at length with you clarifying details answering questions and generally reviewing the facts to finalize 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 the Group s professionals can participate in the presentation but this is not r
530. to View Print mode 2 In the left hand column of the All Forms tab click the message page to view e EF message pages are displayed in red e EF messages are listed by error codes e Unverified fields are identified after the EF messages It s easiest to view all EF messages from View Print mode but NOTE individual issues can be viewed and in some cases accessed from the Calculation Results window See Calculation Results on page 172 3 Correct the issues that are preventing e filing 4 Re calculate the return Repeat the above steps until all federal and state EF message pages are eliminated and the return is eligible for e filing Step 2 Prepare the Transmission File TIP To bypass this step select the return directly from the Calculation Results screen See Figure 7 3 on page 191 To prepare the transmission file Shortcut Press 1 From the Drake Home window select EF gt Select Returns for EF The EF peer sage Return Selector displays a list of recently calculated returns Those eligible for e Selector filing are indicated by a check box Figure 7 2 EF Return Selector The EF Return Selector allows you to select clients for Electronic 4 the Client s ID Number Double Clicking on a client will allow you to appropriate selections click Continue to complete the process ID Number Client Name Status hoe SAMPLE ELLA B No EF Doc eee MCCLURE JEREMY R No EF Doci Selected CID IEE ii
531. to everything except special Admin features If preparer data is brought forward from last year and there are preparers with any of these security levels they are automatically added to the appropriate group NOTE Click column headers to sort listing in ascending or descending order 3 Choose one of the following options e To adda group click Add Group Under Security Group General Informa tion Figure 2 14 enter a Group ID between 1 and 12 characters and a Add Group Group Description up to 70 alphanumeric characters e To add preparers to a group double click the group row near the top of the Group Security dialog box The Security Group General Information section Figure 2 6 is activated Security Group General Information Group ID MAIN OFC DE Group Description Data entry operators in who work inthe main office Security Settings Assign Preparers File EF Tools Reports LastYearData Setup Help Custom Preparer Security x nae paan Click the menu items to apply m Print security A checkmark indicates tin 1 access is allowed Remove the T View checkmark to disallow access I Forms Based Data Entry Quick Estimator lt n Ml ante nl e E E tnnn atthe matte a ae Se ee ae 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 Accessibl
532. to move from screen to screen N Data from Form 1042 S Foreign Person s U S Source Income DTE Subject to Withholding should be entered on either the 2555 screen the NR screen or in the Other income field on screen 3 Gift Tax Returns Screen code 709 Form 709 U S Gift and Generation Skipping Transfer Tax Return consists of sev eral parts and schedules all located on the 709 menu accessible from the Taxes tab Drake 2009 Data Entry 400001001 S a Fii Calculate View Print 1 General Information S A Computation of Taxable Gifts B Gifts frorn Prior Periods ATT Attached Statement ELEC Election Options for 709 ee ee ae we a ON Figure 5 63 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 These forms 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 b
533. to the Form Line Finder e The Form Line Finder for quick convenient searching of the Tax Return Guides current and archival years by form and line e Calculators to help you answer questions and provide advice to your clients RIA s 80 calculators are also great to use in conjunction with your Drake Tax Planner Broadcast E mails Broadcast e mails inform you of the latest IRS alerts or software issues They are sent during tax season to your 1040 com e mail address vour EFIN 1040 com and dur ing 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 Interactive Support Drake provides interactive support via e mail phone and fax E mail Program The Drake e mail program allows you to send and receive messages using your 1040 com e mail address Use the e mail program to send questions directly to Drake Support or to e mail your clients You can also use your Drake e mail as your every day e mail program To access Drake e mail from the Home window select Help gt E Mail From data entry click the Email icon or press F11 on your keyboard 252 Tax Year 2009 Drake Software User s Manual Interactive Support NOTE E mail addresses for Drake Support are listed in Table 10 4 on page 260 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
534. tomatically completes the Name Address Phone Client Type and Appointment Type fields If you replace data in an auto filled field in the Scheduler this infor NOTES mation is not overwritten in the client record in Drake You can also use the Lookup feature to access data for a client For more on this feature see Finding a Client Record on page 84 To access the Appointment Detail dialog box from data entry select Add Appointment from the right click menu 5 Assign the appointment to a preparer by selecting a name under Preparer s To clear a selection click the name a second time 6 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 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 7 Click Save The appointment will now be displayed on the schedule grid 81 Scheduler Drake Software User s Manual For a recurring appointment you can edit a single occurrence or N the s
535. 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 rename delete drag send e mail and link to other files Searching To find a cabinet drawer or folder in the DDM enter part of the name in the Find text box and click Find The file location is highlighted in the tree Figure 13 7 NBG res FI me tte age PCP a a Clients ome 1 fe A A amp T SHUTTLES 617000 AUSTEN PARTNERSHIP 2 Tax agen paT a a a sak Figure 13 7 Click Find to locate files that match a search term To find the next instance of the search term click Find again Repeat as needed until you find the you are looking for 312 Tax Year 2009 Drake Software User s Manual Document Manager Building A File Structure 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 DDM Cabinets are the top level of the filing structure The Drake filing system creates a Cli Cabinets ents cabinet but you can separate clients by return types and have an Individual and a Business cabinet i
536. tored in Drake09 Reports as CSV files Click OK Fixed Asset Manager Use the Fixed Asset Manager to run reports based on client assets Eight report types shown in Table 12 4 are available 300 Tax Year 2009 Drake Software User s Manual Fixed Asset Manager Table 12 4 Fixed Asset Manager Report Types Report Type Report Description Items on Report Depreciation Sched ules Depreciation list sorted by asset number assigned asset number and department number separated by a decimal example of asset number 122 01 Asset Number Description Date Acquired Date Sold Gross Sales Price Depreciation Current Cost or Other Basis Loss Gain Listings Depreciation list sorted by asset number assigned asset number and department number separated by a decimal example of asset number 122 01 Asset Number Date Placed in Service Method amp Recovery Period Business Per centage Cost Federal Basis Current Year Sec 179 Prior Year Depreciation State Depreciation Amt Depreciation Book Depreciation Tax Schedule Code Date Disposed Section 179 Assets Asset list of items expensed during the cur rent year Asset Number Department Number Asset Description and Date Placed in Service Cost Section 179 Expense Amount Prior Year Carryover and the Current Year Sec 179 deduction Dispositions Asset list of items disposed of within the cur rent year Asset Number Department Num
537. ts 7 T tax courses ETC 244 Drake Software User s Manual Tax Planner 318 322 tax returns see returns taxable distributions 116 refunds 96 test returns 68 testing e file transmission 188 printing of checks 223 third party designee 146 147 tracking adjusted basis 112 tracking return data TRAC screen 170 troubleshooting acknowledgments in e filing 194 check printing 226 228 e file transmissions 191 return selection for e filing 191 TS TSJ field 64 tutorials 245 U unemployment COBRA 133 compensation 115 unformatted schedules SCH screen 168 unlocking client files 275 Update Manager 263 updates access to 29 automatic 265 copying 266 installing 263 notification of available 54 updating CSM 235 DDM 307 from the prior year 69 72 NOTE screens from year to year 168 V verification fields see flags verifying SSNs 23 W 2 amounts 24 91 Veriscom ABC voice files 205 videos 246 viewing see also printing bank decline reasons 201 216 blank forms 268 CSM filters 235 deleted records 237 Tax Year 2009 Drake Software User s Manual earned revenue from add on fees 14 EF reports 202 in enhanced view print mode 174 177 letter keywords Appendix C loan status codes 201 216 processed acknowledgments 189 report keywords Appendix C reports 299 sample letters 39 scheduled appointments 83 tax returns 174 Vista Windows operating system 8 W W 2 import 93 watermarks on
538. ts Only on page 20 Required for PPR clients only Printing See Printing Setup on page 41 Prior year Drake clients can bring forward most required program settings from last year s program See Updating Settings on page 71 for details Logging in as an Administrative User Log in as ADMIN before entering setup information The administrative login can access the following features not available to other logins e Preparer setup security features in Setup gt Preparers e Additional features in Setup gt Firm s and Setup gt Directories Paths e Administrative options in Setup gt Options gt Administrative Options tab e Additional tracking information on the TRAC screen in data entry Setting an To set a password for the ADMIN account ADMIN Password 1 From the Drake Home window select Setup gt Preparer s Shortcut Double 2 Click the Administrator ADM row and then click Edit Preparer click the ADM row to edit it 3 Enter a password in the Password field Passwords can be up to eight characters alphabetic and or numeric and are not case sensitive 4 Re enter the password in the Password Repeated box 5 Click Save and then click Exit IM p l RTANT An ADMIN password is not required If your firm chooses to have an ADMIN password keep a record of the password Drake can not retrieve lost or forgotten ADMIN passwords Firm Setup Firm setup must be completed before
539. tter Select a prior year letter Click Continue When prompted click Yes Be sure to read through the replacement letter to ensure that the information is current Use the Color Setup feature to tailor Drake screens to meet your firm s preferences TIP If you used Drake last year consider customizing colors to make your 2009 program look different from your 2008 program If you must open the 2008 program during tax season customized colors will help you avoid entering data into the old program by accident To customize program colors 3 From the Drake Home window go to Setup gt Colors Under Program Colors choose Use Windows System Colors or Use Custom Created Colors e Windows System Colors Program screens inherit the color scheme used by the operating system e Use Custom Created Colors The Program text color and Program background color boxes to the right become available Click a box to view the Windows color palette and choose a color Click OK To change the color of a specific area in data entry 1 2 A w From the Drake Home window go to Setup gt Colors Click a color box in the Data Entry Colors box A Windows color palette is opened Select a color and click OK Once all color selections are made click OK To restore the original color settings in Setup gt Colors click Restore and then click OK Tax Year 2009 Drake Software User s Manual Software Setup Printing S
540. turns without signing on to ETC go to the Support Web site and click either Training Tools gt Practice Returns or Training Tools gt Tutorials Drake ETC offers online videos covering such subjects as basic administration set ting up the software and entering ERO firm and preparer information data entry e filing reports working with the CSM DDM and Drake Tax Planner and completing various schedules and forms in Drake To access videos in the ETC e Click Videos from the ETC sidebar menu e Choose a course from the Course drop list Drake 101 Drake Extras or Beyond the Basics e Click Launch Video to view a video Drake also offers videos CDs and DVDs of our annual Update NOTE Schools To order from the Support Web site go to Training Tools gt Videos If you re logged in to ETC you must first log off then return to the main Support Web site Tax Year 2009 Drake Software User s Manual Online Support Report Card Admin Logging Out 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 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 fo
541. tus Manager cisis vcccncticxcncivsnsusnnnisnuceceetssasnnnwrabanccesbebaasecnpretianaats 231 Accessing th CSM recirssrerir eiiie tee ele greg ES EEE REE TOE EEE EAER EE TEEN EE EE EEE 231 About Client Statuses rerio ninpri enine a E E E EE ded EEO S 231 Setting Stat se Si sereas e hacks eia e ow ARE Anar OUE E E E ETE E shew EE DA EE E EARRA 233 Adding a Client to the CSM c oenn sen score een e rire eea 233 Opening a Return from the CSM 6 ee ten eben een n en ees 233 Customizing the Display 0 0 0 naeun 234 Searching Updating and Filtering and Viewing 0 00 c eee eee ees 235 CSM REPOT paesa Ss oh ein We Bee he a aaa a a dene Gennes a gee oes Raa aa ee ees 236 Exporting CSM Datace tesic 0 8 sod ea hed hace adh ae SAR deh aw awn ee ana we oe 237 Admin only Features 0 0 ee een en ene bene nee eee e eens 237 Resources and Support i svccacscceniistannnn sevassnnnagioapaananccccancasiodaanassesssiensnad 239 Drake Software Manual 0 0 0 eee nen eden teen teen nee 239 Online SUPPOMt sche na wene oes Baek ewe h edhe we Sed be E E AE E EEE een bua gunilew Geen 240 Software Support 2 i 0 02404 diet kbd slob entdhiaeig E beweeie mene 250 Interactive SUPPOTE erresis ean HS Hee ed paw pa eer sd ode Adee saeey odes 252 Fax Cover Letter for Support 0 ee eee nnn nnn teen nee 261 NOUS e a Ganeesenuienanneaunesceessaaes 263 Update Manager ice c eice sane t tE nET E EEr E OEE EE EEE EEE bwerke dre exeehs 263 Downl
542. u tine Table 11 1 lists specific instances that could require index file repair Table 11 1 Situations that Might Require Repairing of Index Files Situation sae 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 CTRL R to open z the Repair Index 2 Inthe Repair Index Files window select the index files to repair To repair all Files window types of index files click Repair All 3 Click Continue 4 Click OK If Name Index was selected you must select a Name Index Option before clicking OK 5 When the file repair is completed click Exit to return to the Home menu NOTE Repairing the name index takes about a minute for every 2 000 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 locking and password protecting files Backing Up and Restoring Files Use the Backup and
543. u are prompted to select Itemize Standard or Optimize before proceeding 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 21 New in 2009 the MFJ MES Report button allows you to view a Filing Status Optimization Report for a selected return See About the MFJ MFS Report on page 66 SSN EIN Date Time Name FedRefund State Refund Type Status fm 400004505 _ 10 07 14 12 04 SPLITT TOM SPUIT RETURN __ 2a7 0H_ 1501 PER Mso C 400004546 10 07 14 12 04 SPLITT LOLA SPLIT RETURN 284 OH 665 PER Msg C 400004505 10 0714 1205 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 Retum s First then Click Save and View Help MFJ MFS Repo Pint Save Select All UnSelect All Exit Figure 3 21 Results for split return Tax Year 2009 65 Data Entry 66 About the MFJ MFS Report Detail Worksheet Drake Software User s Manual 3 Select files and then click MFJ MFS Report Print or Save as applicable 4 Click Exit The MFJ MFS Report button is a new feature in 2009 Click it to display View mode with the MFS_COMP and OH_COMP for Ohio returns reports visible in tree mode Select a report to view or print The report appears in the
544. u want to delete the report from the Report Viewer Click Yes or No as applicable Filter Manager The Filter Manager is used primarily in reports but is also used in other Drake func tions such as the Letters found at Tools gt Letters and the Fixed Asset Manager see Fixed Asset Manager on page 300 Access the Filter Manager from a Filter Selec tion box which is opened when you might have to narrow a selection of records To access the Filter Manager from a Filter Selection box click Edit Filters See Customized Filters on page 294 Search Conditions Use the Filter Manager to set up search conditions There are two levels of search con ditions Basic Search Conditions and Additional Search Conditions Basic Search Conditions for the Selected Filter Return Type is Any Edit Additonal Search Conditions for the Selected Filter Schedule C is present Add Condition Edit Condition Match All Conditions C Match Any Condition Figure 12 6 Basic and Additional Search Conditions boxes Basic Search Basic search conditions described in Table 12 3 refer to the most common filtering Conditions criteria Return Type s Return Result Activity and Preparer and Firm 296 Tax Year 2009 Drake Software User s Manual Filter Manager Table 12 3 Basic Search Conditions Categories Category Description Return Type s Return types to include in the report To include all return types select All Ret
545. ual is an electronic document with a comprehensive index for quickly finding the information you want You can save the manual to your desktop or print your own copy The manual is available from three locations e Drake Home window From the Home window select Help gt Drake Soft ware Online Manual to access the online version of the manual e Software CD The latest version of the manual is shipped with each CD e Support Web site Go to Support DrakeSoftware com and select Training Tools gt Manuals To purchase a printed copy of the manual 25 plus shipping go to Support Drake Software com and select Training Tools gt Manuals gt Click here to order Drake Software Manuals 239 Online Support Drake Software User s Manual Online Support Drake s Support Web site Support DrakeSoftware com offers a wealth of resources that are available 24 hours a day In addition to current tax information such as a sum mary of tax changes due to the American Recovery and Reinvestment Act of 2009 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 Articles cover such topics as Drake s tax and Client Write Up CWU software changes in state and federal tax laws tax retur
546. udes a Notes box Figure 13 11 for recording any comments To clear a Notes box select the box then select Clear Contents from the right click menu Preferences and Options Planner Preferences Planner Options G2 Send to DDM Tax Year 2009 Set planner preferences before you begin working in the Tax Planner Planner options are available for exporting data selecting case options and changing the source direc tories and paths used with the Drake program Multi year planning provides planning for up to seven years Multi case planning pro vides current year planning with up to seven user defined scenarios The Tax Planner allows you to save two planners one multi year and one multi case for each client To choose a planning preference 1 Open the Tax Planner for a client By default the planner is opened to the Client Setup tab and displays client contact information 2 Click the cell to the right of the Planning preferences cell located near the bot tom of the Contact Information box then click the arrow that appears 3 Select a planning preference 4 Click Save Planner T To save multiple planners for a client save each planner using a IP slightly different name For example Click Save Planner gt Save As then save one planner as Smith1 another as Smith2 etc The following options are available from the Tax Planner Options button e Send to DDM Select Options gt Send to DDM to save the open fi
547. ue For more information on search conditions see Search Conditions on page 296 Position the mailing labels as needed Options are described below e Number of Copies of this Label Number of labels to be printed For example if you enter a 5 five labels will be printed e Position of the first available label Position of the first label on the avail able sheet If the first label on the sheet is missing you could enter 2 to have printing begin in the position of the second label e 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 e 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 Click Finish after the program has scanned the files Click Print NOTE The Mailing Labels tool can also be used to run reports See Chapter 12 Reports Drake provides a convenient way to print a mailing or folder label from data entry To print a single label 1 Ensure that the label printer is installed properly per the manufacturer s instruc tions and that the label sheet is properly loaded In data entry go to screen 1 of the open return Right click on the screen not a field and select Client Labels gt Name Format from the right click menu Select the name format LastName FirstName or FirstNam
548. ulti form code information must be modified slightly in the case that the 8829 screen is being associated with a Form 2106 Employee Business Expenses and the spouse has a 2106 form The program numbers all taxpayer 2106 forms before num bering the spouse 2106 forms as shown in Table 5 17 Table 5 17 Screen 8829 Multi form Codes for Form 2106 Enter this If the 2106 is for code Primary taxpayer Primary taxpayer and it is the primary taxpayer s second 2106 2 Spouse and the primary taxpayer does not have a 2106 1 Spouse and the primary taxpayer does have a 2106 2 Spouse and the taxpayer has two 2106 forms 3 Depreciation of Home 156 Generally home depreciation data should be entered under Part III of the 8829 screen If the home was placed into service during the current tax year however leave Part HI blank start a 4562 screen for the home and enter the data shown in Table 5 18 Table 5 18 Screen 4562 Fields to Complete for First Year 8829 Screen For 8829 Information or Text to be Entered 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 64 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 n
549. urn Types Select Allow MFS 1040 Returns to include returns with a status of Married Filing Separate Return Result Result types of the returns to include in the report Example If Balance Due is selected only 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 5 Click Edit in the Basic Search Conditions for the Selected Filter box Select items within the main categories optional To include applicable test sample returns for example Drake returns that begin with 400 00 in the report select Allow Test Sample Returns optional To allow a user to modify conditions when running a report select Ask about the Basic Search Conditions each time the Filter is used Click OK to save the changes to the basic search conditions 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 To add a new search condition in the Filter Manager Conditions 1 2 3 Tax Year 2009 Click Add Condition
550. us Next Last Font by Page 1 of 3 Exit Print report Change font Number of Scroll from page to page in a pegs Export report to Excel a multiple page report as i CSV or Notepad Exit Report Viewer Figure 12 9 Report Viewer Options NOTE Reports exported to CSV are saved in Drake09 Reports Select a different location by browsing from the Save CSV file window Depreciation List 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 or 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 then 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 296 and click Continue 3 Choose to Print the depreciation list or to Export to File e Print Send the list to the printer When the Print dialog box is opened click Print e Export to File Depreciation lists exported to file are s
551. ut tab of the Customize Display dialog box Available Columns are listed in the left pane and Columns in Current View are listed in the right Shortcut Press CTRL D to open the Customize Display dialog box Drake 2009 Customize Display Column Layout The Column Layout tab allows the user to define the columns that appear in the Client Status Manager display To add a column select the item in the left hand list and click Select Column order can be changed by dragging an item up or down in the list Column Layout Status Settings Available Columns Filing Status Extension Bill Adjustment Description 1 Bill Adjustment Amount 1 Bill Adjustment Description 2 Bill Adjustment Amount 2 Bill Adjustment Description 3 Bill Adjustment Amount 3 Bill Payment Description 1 Bill Payment Date 1 Bill Payment Amount 1 Bill Payment Description 2 Bill Payment Date 2 Select gt Select All gt gt lt Remove lt lt Remove All Reset Columns in Current View ID Number Client Name Type Preparer Status Started Completed Last Change Changed By Refund BalDue Total Bill Bank Deposits Client Payments OK Cancel 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
552. vailable on the Drake Support site at Training Tools gt Manuals gt CWU 322 Tax Year 2009 1 4 New Features in Other Packages Chapter 5 Return Preparation focuses primarily on the 1040 package in Drake The software s other packages however have also undergone some significant enhance ments for tax year 2009 This chapter highlights and explains some of those changes More detailed information and instructions will be provided in the manual supple ments for these packages to be published in spring of 2010 Entity Packages Entity packages consist of the corporation 1120 S corporation 1120S partnership 1065 and tax exempt organization 990 packages Calculation Enhancements The following calculation enhancements have been added to the 1120 1120S and 1065 packages for tax year 2009 e Automatic carrying of some M 3 amounts e Automatic carrying of depreciation expense directly to Schedule A Cost of Goods Sold e Automatic carrying of book depreciation to Schedule L for accrual account basis entities Guide to Overrides and Adjustments The 1120 1120S and 1065 packages now include a guide to most override and adjust ment fields In the past it wasn t always clear what calculations were being overrid den or adjusted or how those changes affected the tax returns Now you can be more aware of what information you are affecting when you enter data in an override or adjustment field Tax Year 2009 32
553. ve 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 To test system transmission Shortcut CTRL S 1 From the Home window select EF gt Select Returns for EF 2 From the EF Return Selector select the EF eligible test returns to transmit M p RTANT Select only the returns in the 400 00 and 500 00 series provided in the software All other returns are processed as actual live tax returns and can result in a charge of filing fraudulent returns 3 Click Continue The Report Viewer displays the selected returns 4 Click Exit to close the Report Viewer Shortcut CTRL T 5 From the Home window select EF gt Transmit Receive 188 Tax Year 2009 Drake Software User s Manual E filing a Return 6 Click Send Receive in the Transmit Receive dialog box that is opened 7 When the process is complete go back to the Home window and select EF gt Process Acks to view acknowledgments An IRS acknowledgment of T indicates successful test transmission Transmission unsuccessful Go to Setup gt ERO and add or cor NOTE rect your ERO information if necessary and re transmit If trans mission is still unsuccessful make sure your Internet connection is working properly E filing a Return The e filing process can be said to consist o
554. ve files to F DrakeDDM Cabinet Drawer Folder Subfolder using the desired drive as a replacement for F For instance correspondence to a customer might be saved at C DrakeDDM Clients Bob s Business 2009 with C the drive letter Clients the cabinet B the drawer Bob s Business the folder and 2009 the subfolder When DDM files are password protected a password must be entered before the files can be accessed DDM passwords have an eight character limit and are case sensitive To assign a password to a file right click a file and select Password Protection Enter the password twice and click Continue To open a password protected file double click the file or select the file and click Open Enter the password and click Continue To remove or change a password 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 Tax Year 2009 Drake Software User s Manual Document Manager 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 Security at Startup on page 309 Other Tasks Other tasks that can be performed in the DDM are listed in Table 13 2 Table 13 2
555. w has three new features for 2009 The Personal Client Man ager allows you to see and access client returns and a Preparer Notes section allows you to jot down notes for later access An Enable Privacy button allows you to hide client information and preparer notes as needed For more on these enhance ments to the Home window see The Home Window starting on page 53 Hyperlinks within Screens Scheduler Many of the screens in Drake now include hyperlinks which allow for easier more concise data entry With hyperlinks you can access related screens and return to the original screen without the intermediate step of opening the Data Entry Menu For more information this new feature see Screen Hyperlinks on page 56 Changes to the Drake Appointment Scheduler this year include the ability to bring for ward client appointments from the previous year find the next available appointment for any preparer within a specified date and time range and print and export Scheduler data for specified time and date ranges In addition the Appointment Scheduler is now easily accessible from data entry For more information on these changes see Sched uler on page 76 Enhanced File Security Another level of security has been added to your clients confidential tax information Client files are no longer stored in Drake by SSN or EIN but by randomly generated code numbers making the transmission of client files t
556. ware com marketing Prepare for E Filing A 4 LJ Research and verify e file requirements Review any state e file mandates see Appendix E E Complete settings Preparer Firm and EF e filing settings in Drake LJ Send test transmissions to Drake U Access EF amp Banking Practice Access practice returns on the Drake Support site To do so click Training Tools gt Practice Returns Tax Year 2009 Drake Software User s Manual Appendix B E filing Overview Appendix B E filing Overview The flow chart on the following page shows an overview of the e filing process for most Drake preparers Included are definitions of acknowledgment codes acks Tax Year 2009 B 1 PROCESS E FILING FEDERAL RETURNS come Address the Test eee identified issue transmission eum l successful 2 D Review return to If NOT accepted l a ensure that it is B R D or X ack T ack ab ready to e file l Soe A x Drake Transmitting P T or B ack gt Beep Specs _ P ack er va acknowledgments ACCEPTED Wait for IRS ack Mark ready for EF P Transmit return A ack or E ack Drake Acknowledgement Codes nae eceive Transmit Transmit return transmitted gt If P ack Receive
557. ws whether or not married filing jointly MFJ taxpayers would benefit from filing with a married filing separately MFS status See Splitting a Joint Return on page 65 Due diligence Screens for First Time Homebuyers The IRS has begun actively conducting compliance audits of paid preparers whose clients file Form 5405 First Time Homebuyer Credit Drake has provided an additional screen the HBDD screen to help guide paid preparers regarding Form 5405 due diligence during the client interview For more information on the HBDD screen see Due Diligence for First Time Homebuyer Credit on page 143 Enhancements to Other Packages Drake has added valuable enhancements to the entity 1120 1120S 1065 and 990 fiduciary 1041 and estate 706 packages In addition to the capability for complet ing and e filing additional forms Drake offers the following enhancements this year Supplements to the Manual Last season Drake began publishing supple ments to the manual Each supplement focused on a specific package and guides were published for all entity packages These supplements will be revised for 2010 and published individually beginning in February 2010 They will be avail able at Training Tools gt Manuals on the Drake Support site Guide to Overrides and Adjustments The FAQs for the 1120 1120S and 1065 packages now offer a guide to most override and adjustment fields in these packages In addition many of the
558. yforward amounts flow to lines 3b and 4b and 1b if applicable of Form 8582 CR see Figure 2 lines 5 and or lines 29a 29 of Form 3800 and the corresponding worksheets Tax Year 2009 129 Child Tax Credit Drake Software User s Manual N Amounts on lines 3a and 4a credits from Worksheets 3 and 4 flow UTE from the screen K1P K1S etc with which the PACR screen is associated 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 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 43 shows an example from Worksheet 3 for lines 3a and 3b For Form 8582 CR Lines 3a and 3b keep for your records WORKSHEET 3 Name ELLA T SAMPLE Soolal Security No 400 00 1001 Total Credits Current Year Prior Year From Credits Unallowed Credits Form a Credit line 3a b Credit line 3b Name of Activity c Add cols a and b E amp S PARTHERSHIP 8586 I 1 500 617 2 117 Figure 5 43 Drake displays the name of the e
559. ype Setup Files Pricing Setup All files X Information Files Select a backup location System Files CSM EF al C Database IRS Bank and Scheduler Files This will not change the location of manually backed up files Free space on disk is 9 0GB Figure 11 8 Automatic Backup Settings dialog box Tax Year 2009 Drake Software User s Manual File Maintenance Disabling Automated Backup a 6 Place a check mark in the Activate Automatic Backups box In the 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 Select a 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 backup location icon and browse to a desired location In the Select Files to Back Up box choose which files should be automatically backed up e Client Files To back up client files located in the Drake09 DT folder Setup Files To back up pricing and setup information files e System Files To back up CSM EF database IRS bank and Scheduler files Click Save Click Exit to close the Backup dialog box The amount of free disk space is indicated in the lower right section NOTE of the Automated Backup Settings dialog box see Figure 11 8 If an attempt at automatic backup is ever unsuccessful due to in
560. zens and Resident Aliens Abroad Who Expect To Qualify for Special Tax Treatment e Form 1040NR U S Nonresident Alien Income Tax Return e Form 709 United States Gift and Generation Skipping Transfer Tax Return NOTE Amended returns cannot be e filed An electronic signature is required for all other returns and applications for extensions See Signing the Return on page 148 for more on electronic signatures Tax Year 2009 Drake Software User s Manual Special Returns Amended Returns Screen code X Extensions Screen code EXT E filing an Extension Tax Year 2009 The 1040X Amended Return screen has been revised in 2009 to reflect changes to the updated IRS form To create an amended 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 fill the 1040X screen with applicable data from the original return click Yes To leave the fields blank click No 4 Enter an Explanation of Changes and complete any other fields that apply 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 NOTE You can view and print the original pre amended 1040 from View Print mode See Archive Manager on page 185 To apply for an extension using Drake 1 Open the return for which an extension application is being f

- Drake Support

Contents

Download Pdf Manuals

Related Search

Related Contents