User's Manual - Drake Software

Educator Expenses
Drake Software User’s Manual
Foreign Earned Income
Enter foreign earned income amounts on the applicable income screen (W2, C, FEC,
etc.; see “Foreign Employers” on page 102). Foreign earned income is calculated into
the “total income” line of Form 1040.
Excluding
Foreign
Income
If the taxpayer qualifies for the foreign earned income exclusion, use the 2555 screen
(accessible from the Other Forms tab) to complete Form 2555, Foreign Earned
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.
NOTES
Foreign income must be included in total income (via a W-2, Schedule
C, etc.,) before it is excluded from total income using Form 2555.
The 2555 screen consists of five screens or “pages,” accessible by
clicking the links at the top of the screen. To create a new, second 2555
screen, press PAGE DOWN.
Educator Expenses
Screen code: 4 Enter educator expenses in the Educator expenses field on screen 4.
Employee Business Expenses
Screen code: 2106 Use the 2106 screen, accessible from the General tab, to enter data for Form 2106,
Employee Business Expenses.
NOTE
The 2106 screen expense flows to the Job Expenses and Certain
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 5-32).
Figure 5-32: On the 2106 screen, use both the Meals/entertainment and
DOT meals subject to 80% limit fields as appropriate.
134 Tax Year 2012