User's Manual - Drake Software

Standard and Itemized Deductions
Drake Software User’s Manual
Ministerial Income Allocation
Use the CLGY screen for taxpayers with housing allowance in the form of a parsonage
or rental, or a parsonage allowance from the church (generally reported on the W-
2, box 14). The CLGY screen allows the following items to be calculated:
• Percentage of tax-free income to be applied to Schedule C expenses marked with
business code 813000
• Percentage of tax-free income to be applied to Form 2106 expenses (The Pastor -
Carry 2106 amount to CLGY worksheet check box must be marked on screen
2106.)
• Appropriate self-employment income to flow to the Schedule SE
Rental/
Parsonage
Allowance
Parsonage
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 separate
utility allowance is provided, enter the amount of the allowance in the Utility allowance
field and the actual utility expenses in the Actual expenses for utilities field.
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 of the allowance in the Utility allowance field and the
actual utility expenses in the Actual expenses for utilities field.
Standard and Itemized Deductions
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 client
is itemizing deductions, enter descriptions and amounts on one of the following
screens, as applicable:
Screen codes:
A, 4952, 8283
• Screen A (for Schedule A, Itemized Deductions)
• 4952 screen (for Form 4952, Investment Interest Expense Deduction)
• 8283 screen (for Form 8283, Noncash Charitable Contributions)
Access screen A from the General tab. Access screens 4952 and 8283 from the Additional
Itemized Deductions section of the Adjustments tab.
NOTE
The program includes self-employment losses when calculating the
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 situation box.
Schedule A
Screen code: A
Generating
Schedule A
Use screen A to enter data for Schedule A, Itemized Deductions.
If screen A has been completed for a return, the software determines which is more
advantageous for the taxpayer—itemizing, or taking the standard deduction. To select
one or the other, mark the applicable Force box at the top of screen A (Figure 5-34 on
page 141).
140 Tax Year 2012