User's Manual - Drake Software

Drake Software User’s Manual
Personal Service Income (W-2, 1099-MISC)
Figure 5-6: Entering foreign employer information on W2 screen
Screen code: FEC
If no W-2 was issued by the foreign employer, use the Foreign Employer Compensation
screen, accessible from the Income tab, to enter employee, employer, and income
information.
NOTE
For information on the foreign income exclusion (Form 2555), see
“Excluding Foreign Income” on page 134.
Statutory
Employees
Because all statutory employees must file Schedule C for expenses related to W-2
income, Schedule C is created for a statutory employee.
To indicate a statutory employee and generate Schedule C:
1. Open a W2 screen for the employee, and select Stat employee (line 13).
2. From the Special tax treatment list (Figure 5-7), elect the associated Schedule C.
Figure 5-7: W-2 in this example is associated with the second (#2) Schedule C entered
The earnings amount from screen W2 flows to Schedule C, line 1c.
Corrected or
Altered W-2
Do Not
Update
ITIN on
Screen 1
Near the bottom of the W2 screen are check boxes to indicate that a W-2 was altered,
handwritten (non-standard), or corrected. Select the applicable box to indicate that a
W-2 has been changed.
New for 2012: The Do not update check box will affect the 2013 tax return. If you
select this box, next year when you update your tax returns (Last Year Data >
Update Clients 2012 to 2013) W-2 info from this year’s return will not be carried into
2013’s W2 screen.
If a taxpayer has an ITIN for screen 1, the taxpayer’s TIN from Form W-2 must be
entered in the field at the bottom of screen W2. The program does not automatically
Tax Year 2012 103