This page intentionally left blank. - Drake Software Support

Educator ExpensesDrake Software User’s ManualExcludingForeignIncomeIf the taxpayer qualifies for the foreign earned income exclusion, use the 2555 screen(accessible from the Other tab) to complete Form 2555, Foreign Earned Income. Theincome from the 2555 screen flows to the 1040 as a negative number; in other words,it is subtracted (excluded) from the total income shown on line 22 of Form 1040._NOTESForeign income must be included in total income (via a W-2, ScheduleC, etc.,) before it is excluded from total income using Form 2555.The 2555 screen consists of five screens or “pages.” Press PAGEDOWN to proceed to the next “page” of the 2555 screen. To create anew, second 2555 screen for the spouse, press CTRL+PAGE DOWN.Educator ExpensesScreen code: 4According to the IRS, educators might be able to deduct some expenses paid for purchasesof books and classroom supplies, even if deductions are not itemized. In Drake,enter educator expenses in the Educator expenses field on screen 4.Employee Business ExpensesScreen code: 2106 Use the 2106 screen, accessible from the General tab, to enter data for Form 2106,Employee Business Expenses._NOTEThe 2106 screen expense flows to Job Expenses and Certain MiscellaneousDeductions on Schedule A and not directly to Form 1040.Meals and EntertainmentDepartment of Transportation (DOT) workers are allowed to claim 75% of the costs ofmeals as a business expense rather than the standard 50%. To calculate the allowedamount properly, enter the total expense in the Meals/entertainment field of the 2106screen and enter the amount attributable to DOT hours of service rules for meals in theDOT meals subject to 75% limit field. (See Figure 5-28.)Multiple 2106 FormsFigure 5-28: On the 2106 screen, use both the Meals/entertainment andDOT meals subject to 75% limit fields as appropriate.If 2106 screens are entered for both the taxpayer and the spouse, the taxpayer’s 2106screen must be entered first (because the taxpayer is listed first on the return) or thereturn will receive a reject code after it is transmitted.110 Tax Year 2008