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Cover PLEASE PRINT AND READ THESE INSTRUCTIONS BEFORE RUNNING PC-TAX85 PC-TAX85 Program Description and Operations Guide Version 85.1 25 December 1985 (c) Copyright 1984, 1985, 1986 by James T. Demberger 7280 60th Avenue North St Petersburg, FL 33709 813-546-1182 CompuServe 74425,1642 The Source BDY570 This is a user supported program. If you use PC-TAX85 and find it of value, your contribution ($25 suggested) will be appreciated. You are encouraged to copy and share this program with other users so long as the program is not distributed in modified form and this notice is not bypassed or removed. DISCLAIMER The author of this document and the associated programs is not liable or responsible for any consequences which may result from the use of the program or documentation. If there is any question regarding the tax liability indicated on any of the forms or schedules produced by the program advice should be obtained from a competent legal or professional source. TABLE OF CONTENTS Page Subject 1 Overview and Hardware 3 Input Subroutine 4 System Setup 5 Initial Run Instructions 8 Routine Run Instructions 10 Miscellaneous 11 Common File 11 Copying MTX Files 12 Process Functions 13 Line Specific Instructions 16 Tax Planning - What If Style 17 Forms and Schedules for IRS Tax Returns 18 Print on Form 1040 19 Photocopying Form 1040 20 Program Modifications 21 Modifications (if any) A1 PC-TAX85 Files B1 Common File Totals and Data Page 1 Overview and Hardware PC-TAX85 does all the calculations for and prints forms and schedules for IRS 1040 Income Tax Returns for 1985. The program will process and print a Form 1040 and Schedules A, B, C, D, E, F, G, SE, and W and Forms 2106, 2441, 3468, 4562 and 6251 that may be used as attachments to the Form 1040. Totals are generally transferred from form to form when required. Tax due is computed based on a table that is a part of the PC-TAX85 system. The program provides direct access to any line on any of the forms or schedules for entry, change or deletion. The PC-TAX85 program will run on a IBM PC, PC-XT, PC-AT or PCJr with at least 256K bytes of memory. One diskette drive, either a monochrome or color display, and an 80 column printer are required. See System Setup for information regarding use on a system with only one diskette drive or with a fixed disk. PC-TAX 85 is run from the DOS Ready prompt by keying [dr:]PC-TAX85 and pressing the Enter key. PC-TAX85 is a relatively large program; if you are using diskette drives, there will be a delay while the program is loaded. PC-TAX85 will display a prompt for entry of a letter for the default drive for system files used by the program. After entry of a letter for the default drive, two system files are read into memory. The program then displays a menu of the forms and schedules that permits selection of the forms and schedules to be processed. After selection of a form or schedule, the necessary files are read into memory under control of a process menu. Since a Common file with names and totals must be in memory before processing forms or schedules, the program will first select this file automatically from the Forms and Schedules Menu and then select the Load (read) function from the Process Menu. Other functions that may be selected from the Process Menu are Change to enter or change data or amounts, Print for display or printing of forms and schedules, and Save for writing changed data back to disk. All required calculations (or recalculations) are done prior to the display or printing of a form or schedule. The process menu also has options to return to the Forms and Schedules menu and to end the program. After the names/totals file has been read into memory the usual sequence of operation is as follows: Step 1 Select a form or schedule to be processed. Step 2 Load file for selected form or schedule into memory. Step 3 Change or enter data and/or amounts. Step 4 Print or display form or schedule. Step 5 Save file for selected form or schedule back to disk(ette). Step 6 Select option to return to Step 1. Page 2 A line index number is assigned to each line on each of the IRS forms and schedules for use by PC-TAX85. The line index numbers have no direct relationship to the actual IRS line numbers shown on forms and schedules. More than one line index number may be used for a single IRS line since some of the lines on forms and schedules require the entry of more than one data field. Throughout these instructions, line index numbers will be shown with square brackets, as an example, [14]. Line numbers with no brackets refer to IRS line numbers. Change codes are printed to the right of the line index numbers. These codes and their meanings are: B Both the description and amount fields may be entered or changed. A Only the amount field may be entered or changed. D Only the description field may be entered or changed. N No changes are permitted. The change code is displayed as a part of the prompt to change or enter a line indicating what changes are allowed. The line that follows line 13 [27] of Schedule A is an example of a line with the B code; PC-TAX85 will display prompts to change both the description and amount fields for line [27]. Schedule A line 2a [4] has an A code and the only prompt for entry or change will be for the amount field. The name and address of the person that corresponds to the amount entry on line 11b [22] is entered on line [24]; there will be a prompt for changing only the description field since line [24] has D code. The N code is used for lines where the amount field is computed by the program or for title and descriptive lines. Line index numbers and change codes are shown on work copies of the forms and schedules printed by the PC-TAX85 program. Since these line index numbers and change codes have no meaning to the IRS, they are omitted when printing the copies of the forms and schedules that you send to the IRS. Users of PC-TAX84 should note the following changes that have been made in PC-TAX85: a. Program can be run from and use files on drives A thru F. The program will run from diskette, fixed or electronic (RAM) disk. b. An Auto Print process has been added; any or all of the forms and schedules may be printed or displayed in any order and in work or IRS format as a single process step. c. Program prompts for entry of descriptive fields and amounts only when and as required; lines that can not be changed are displayed. d. Forms 2106, 3468 and 6251 added for 1985 returns. Page 3 Input Subroutine PC-TAX85 uses an input subroutine that has some of the entry and edit functions of a word processor or text editor. In most cases, an option character or field is displayed for the default value of a prompts. Press the Enter key if the default value represents the action to be taken or the line or amount field does not have to be changed. To change the value of the displayed prompt, key in the desired characters or digits at the flashing cursor. The keyboard is set to lower case and numeric shift when a prompt is displayed. The Help Prompt option displays and prints the information in the next paragraph. Prompts and text lines displayed or entered for all forms and schedules may be changed or edited by use of the following keys: Control Keys for Edit or Input of Displayed Prompts Tab (Left & Right Arrows) Pressing the tab key retains the character at the cursor position and moves the cursor one position to the right. Backspace (Large Left Arrow) Moves the cursor one position to left. Del + Shift Press the Del key while holding a shift key then press one of the keys 1 thru 9 to enter the number of characters to be deleted. Ins + Shift Press the Ins key while holding a shift key to turn on or to turn off insert mode. Enter Key Enters the character or characters displayed by the prompt including those to the right of the cursor. Enter key + Shift Enters only those characters to the left of the cursor position. Escape Key The entry in progress is cancelled and the program returns to the start of the function in progress or to the last menu in use. End + Shift Cancels any changes and displays the prompt as it was prior to any changes. The Escape key can be used at any time when input is expected. If you should press the wrong key and get into a function where you don't want to be, just press the Escape key to return to the Process Menu. Prompts for entry of most amount fields are displayed as if they are dollar amount fields with a decimal point and two digits to the right of the decimal point. You may enter dollar amounts with or without comma punctuation for thousands of dollars. The decimal point and the zeros to the right of the decimal point need not be entered for whole dollar amounts. The program uses white letters on a blue background for prompts when the color display is used. The cursor position is indicated by a flashing character or by a flashing underscore. As characters or spaces are entered, the blue background changes to the normal black background. Page 4 System Setup The standard PC-TAX85 distribution diskette is formatted as a double sided diskette with 80 tracks and 9 sectors per track (360 KB). For users who have single-sided diskette drives, an alternate flippy-floppy distribution diskette is available. The flippy-floppy diskette has both sides of the diskette formatted as if they were separate single-sided diskettes with 40 tracks of 8 sectors (2 x 160 KB). Either diskette will work with DOS 2.* or 3.* or later versions of DOS. The flippy-floppy diskette has the PC-TAX85.EXE file on the B side; all of the other files are on the A side. All the files on the distribution diskette, except the documentation file PC-TAX85.DOC, should be copied to a formatted work diskette. If you have a two drive system, use the following copy commands to copy the files from the distribution diskette in drive A to your work diskette in drive B. COPY A:*.T85 B: COPY A:*.M85 B: COPY A:*.EXE B: If you have a PCJr with a single diskette drive, use the same copy commands except do not key B: for the copy to drive. If you have a system with a fixed disk, key C:[\subdir] instead of B: for the copy to drive. Appendix A list the files that are copied to the work disk(ette). After making your work copy, put the distribution diskette in a safe place for backup. The section Copying MTX Files gives further inform- ation regarding copying and renaming the PC-TAX85 files when multiple returns are to be prepared. To run PC-TAX85 form an electronic or RAM disk create a batch file as shown below. Using the batch file RAMTAX85 to run PC-TAX85 will insure that any changed files are copied back to the work disk(ette). COPY CON A:RAMTAX85.BAT COPY A:*.T85 C: COPY A:MTX*.* C: A:PC-TAX85 COPY C:*.M85 A: ERASE C:*.T85 ERASE C:MTX*.* (Press F6 key) There is no need to copy the *.T85 files back to the work disk(ette) since these files are not changed when you run PC-TAX85. Statements for the batch file assume that the RAM disk is assigned as drive C and the work diskette is in drive A. Page 5 Initial Run Instructions Place the work diskette in drive A and from the DOS ready prompt key PC-TAX85 and press the Enter key. After the program loads, the following prompt for entry of the default drive letter will be display: Enter a default drive A thru F for PC-TAX85 files. D Press the A key to assign the A drive as the default drive for the PC-TAX85 files. The program will attempt to load the PC-TXDAT.T85 and PC-TXTBL.T85 files from the default drive. If either of these files is not found on the default drive a message "No file *.T85 on drive *" will be displayed and the select drive prompt will be redisplayed. The message "Corrupt *.T85 file" will be displayed if the check sum computed as a file is loaded is incorrect. A successful load of these files is indicated by the display of the title screen and the "Press any key to continue" prompt. Press any key and the title screen will be replaced by the following message and prompt: Instructions for PC-TAX85 are in the file PC-TAX85.DOC Do you want BEEP to sound when input is required? Y/n Y Do you want to see Help Prompt display? y/N N Press the Enter key to default to BEEP for input. If you find the BEEP distracting, you can press the N key for subsequent runs. For the present, press the Enter key to respond to the Help Prompt display. PC-TAX85 uses two menus to control the processing for all forms and schedules. The first of these menus is used to select a form or schedule or to select one of the auxiliary files or functions. FORMS and SCHEDULES MENU Process Segment - Form **** Files in Memory MTX*****.*** MTX*****.*** Schedules Forms Functions A Schedule A 1 Form 1040 M Common File B Schedule B 2 Form 2106 X End Program C Schedule C 3 Form 2441 H Help Prompt D Schedule D 4 Form 3468 I Ap'val Form E Schedule E 5 Form 4562 O Order Form F Schedule F 6 Form 6251 P Auto Print G Schedule G 7 WS line 17 S Schedule SE 8 WS line 20 W Schedule W 9 WS line 21 Press a letter/number key to select _ Page 6 The second menu controls the loading, saving, data entry (Change) and processing (Print) of the files for each form and schedule, the Common File and the auxiliary forms. PROCESS MENU Process Segment - Form **** Files in Memory MTX*****.*** MTX*****.*** L Load S Save P Print C Change M Forms and Sch Menu X End Program Press a letter key for function _ The Common File must be loaded into memory before any of the forms or schedules can be processed. This file has entries or records for names, addresses, etc. that are common to all the forms and schedules and the totals from forms and schedules that are transferred to other forms and schedules. The program will automatically select the Common File from the Forms and Schedules Menu then display the Process Menu and automatically select the Load function. The Load function displays the following prompts; press the Enter key for both of these prompts (letter for default drive will be displayed by the Enter drive prompt): Enter drive A Enter File Extension M85 The message "Loading D:MTXCOMN .M85 file" will be displayed. After the file is loaded, the Process Menu is displayed. Each time you run PC-TAX85 this sequence of operations will take place up to this point. Subsequent operations may be selected based on what operation or function you want to do. For the present, press the M key to return to the Forms and Schedules Menu and then press the Y key in response to the following prompt: Did you Save the Common File back to diskette? y/N N The next step is to print work copies, showing line index numbers, of the forms and schedules. When the Forms and Schedules Menu is displayed, setup and ready your printer with at least 27 sheets of 8 1/2 inch paper. Press the P key for the Auto Print function and the following prompts will be displayed: (next page) Page 7 Enter letter/number for Forms/Schedules 1ABCDEFGSW23456789 Display or Printer D/p P Left margin spaces? 3 3 Work or IRS format? W/i W Enter drive A Enter File Extension M85 You may enter the letters and numbers of just the forms and schedules you need or print all of them using the default sequence. The titles of all forms and schedules are given below to aid in selection. # Form Title 1 - Form 1040 - U.S. Individual Income Tax Return A - Schedule A - Itemized Deductions B - Schedule B - Interest and Dividend Income C - Schedule C - Profit (or Loss) from Business or Profession D - Schedule D - Capital Gains and Losses & Reconcil. Forms 1099-B E - Schedule E - Supplemental Income (Rentals, Partnerships, etc.) F - Schedule F - Farm Income and Expenses G - Schedule G - Income Averaging S - Schedule SE - Social Security Self-Employment Tax W - Schedule W - Deduction for Married Couple When Both Work 2 - Form 2106 - Employee Business Expenses 3 - Form 2441 - Credit for Child and Dependent Care Expenses 4 - Form 3468 - Computation of Investment Credit 5 - Form 4562 - Depreciation and Amortization 6 - Form 6251 - Alternative Minimum Tax Computation 7 - WS line 17 - Worksheet on Pension, Annuity Income and Rollovers 8 - WS line 20 - Worksheet on Unemployment Compensation (Insurance) 9 - WS line 21 - Worksheet on Social Security Benefits Press the P key for the Display or Printer prompt and press the letter key for the drive that has the PC-TAX85 files. Press the Enter key for the other prompts. Now you can sit back and watch as PC-TAX85 loads the files for each form and schedule and prints the work sheets. Some error messages will be displayed while the forms and schedules are being printed when the program fails to find required entries; for example, a filing status entry from Form 1040 must be in the Common File when processing Schedules A, D and G. The Forms and Schedules Menu will be displayed after the work sheets have all been printed. Page 8 Routine Run Instructions Put the PC-TAX85 work diskette in drive A or B or from the DOS ready prompt, key the drive letter for the fixed or RAM drive that has the work files for PC-TAX85. Key [dr:]PC-TAX85 and press the Enter key. Respond to the prompts displayed by the program thru the point where the Common File has been loaded into memory. If the Common File is a new file for which the names, addresses, etc. have not been entered, see appendix B for instruction regarding entering this data. Once the names, etc., have been entered, you will have no further need to do anything to the Common File other than to load it into memory at the start of a run and to save it back out to diskette at the end of run. Press the M key to display the Forms and Schedules Menu then press the 1 key for Form 1040. The initial display of the Process Menu after a form or schedule is selected will automatically select the Load function. Enter the drive letter and file extension or press the Enter key. After the file has been loaded, press the C key and make changes where applicable to line numbers 1 thru 6e ([3] thru [21]). Enter the the number of dependent children on line 6c [15] and 6d [17] and the children's names on lines [16] and [18]. Enter the number of other dependents on line 6e [19] and the information required for these dependents on lines [20] and [21]. Enter your wages (or a reasonable estimate) for line 7 [24]. After these entries have been made press the Escape key to display the Process Menu. Press the P key then the Enter key. Your 1040 form will scroll up the display. After the display of the 1040 has finished, press the P key but this time take the printer option by changing the D default to a P. After the form has been printed, you can enter additional data for the Form 1040 or save the file out to diskette then return to Schedules and Forms Menu and select some other form or schedule. ALWAYS SELECT THE S OPTION AND SAVE THE IN MEMORY FILE BEFORE SELECTING THE M OPTION IF YOU HAVE MADE ANY CHANGES OR ENTRIES. The following prompts will be displayed when you select the Save option if there is a file with the same extension on the selected drive: Do you want this file to REPLACE the file on drive ? y/N y AGAIN - Do you want this file to REPLACE the file on drive ? y/N y You must press the Y key in response to both prompts in order to Save the changed file since the file to be replaced might have entries that you do not want to lose. If this is the case, press the N key or Enter key, reselect the Save option then use a different drive or file extension. A message "NEW FILE WILL BE CREATED" will be displayed rather than the two REPLACE prompts when there is no file with the same extension on the selected drive. Page 9 There is no need to save the Common File to diskette until you have completed all the processing of the files for forms and schedules. Continue to experiment and practice with the various functions until you are not surprised by what happens when you make some particular entry. So long as you save the file for a form or schedule back out to diskette before loading in another file, you will not lose any of the data that you have keyed in. Page 10 Miscellaneous Correct totals for the Form 1040 require that forms and schedules be processed in a certain sequence. Perform the print function for all forms and schedules you need except 1040 and Schedule A. Perform a preliminary print function for Form 1040 to get the totals from the front of the Form 1040 into Common File. Process the Work Sheets (if used) then make another print run of the Form 1040. Now print Schedule A to get Itemized Deduction into the Common File. Now make a final print run of the Form 1040. The Display option may be used on the preliminary runs since the only reason for "printing" is to perform all the total calculations. You can use the Auto Print process to process the forms and schedules in a specific sequence. For example, you might key the key BCDE1A1G at the Enter selection letter/number prompt to print or display Schedules B, C, D and E, preliminary 1040, Schedule A, Form 1040, Schedule G and Form 1040. If there is a possibility that you can use income averaging, process all the other forms and schedules, including Form 1040, before entering the data for and processing Schedule G. If you qualify for income averaging and the tax amount on Schedule G is less than the tax amount from the Tax Table or from Schedules X,Y & Z, the tax amount from Schedule G will be transferred to line 75 [38] of Form 1040. PC-TAX85 performs limit checking only for those lines where a form or schedule has an explicit printed limit. You can enter some obviously incorrect data that will not be rejected by the program. For example, there is no warning if you enter an IRA deduction far in excess of the permitted amount. Check the data on all your forms and schedules using the printed IRS instructions for each form and schedule. All forms and schedules permit entry and printing of dollar amounts up to $999,999.99. The input subroutine will accept amount entries with comma punctuation for thousands of dollars. Totals up to $999,999.99 are printed correctly; larger totals will cause misalignment of the printed amount columns. Since any significant change to the forms and schedules might result in a form or schedule that would not be acceptable to the Internal Revenue Service, all entries or changes are controlled thru the use of change codes D, A or B and input prompts. In a few cases, the change codes and prompts might prevent entry of notes or comments that might be necessary and acceptable so far as the IRS is concerned. A free format input prompt is available for any line with change codes D, A or B. This free format input prompt is displayed when a line number, preceded or followed by a minus sign, is entered for the line number select prompt. After using free form input for a line, display or print the form with this line to be sure that what you entered is displayed or printed as you meant for it to be printed or displayed. You may not have any need for some of the forms and schedules. If you do not have any business (income), you can erase both the MTXSCHC.M85 and DTXSCHC.T85 files. Selection of a form or schedule for which the MTX file has been deleted will result in the display of "No File MTX*****.*** on drive *". Page 11 Common File PC-TAX85 maintains a file of data that is used by all forms and schedules. The Common File has names, Social Security numbers, etc., that are used in the heading of each form and schedule and the totals that are transferred from one form or schedule to other forms or schedules. The entries in the Common File for names, etc. should be made before processing forms or schedules. The transfer totals are retrieved from or placed in the in-memory Common file as the calcula- tions for the forms and schedules are done. The calculations are performed when the Print function is selected. Appendix B lists all the totals that are transferred thru the Common File and the totals that are NOT transferred thru the Common File. This appendix also covers totals which may require special treatment. Copying MTX Files The master MTX***** files have a file extension .M85. You can copy these files using other file extensions to create a set of files for as many returns as you should care to process. Initials may be used as an easy-to-remember file extension. For example, the following copy commands might be used if you are filing separate returns: COPY A:*.M85 A:*.HIM COPY A:*.M85 A:*.HER The program will initially show .M85 as the file extension when the prompt for entry of a file extension is displayed. After entering HIS or HER, future displays will show the extension that was keyed. Use a .HIM and a .HER extension for two MTXSCHSE files if you are filing a joint return and both have self-employed income. After running both of the files, add the amounts on line 14 [24] of both schedules and use the change option to enter the total on line [22] of the Common File. Each time either of the MTXSCHSE files are processed, the total in the Common file will be reset and it will be necessary to reenter the total. The name and SSN for each Schedule SE must be changed in the Common file before processing the two files. Two or more Schedules C and E may be required if you have two businesses or you have more than three rental or royalty properties. If you require multiple forms for these Schedules, use the procedure as outlined for Schedule SE for changing names and entering totals in the Common file. The number of sets of MTX files that you can use is limited only by available diskette (or disk) space. In addition, you can copy or save individual MTX files with different extensions and then select these files for processing. The work copy of a Form 1040 shows the file extension and the date and time that each of the other forms or schedules was processed. See Tax Planning - What If? for additional information regarding use of files with different extensions for tax planning. Page 12 Process Functions L Load The program prompts for entry of a drive letter and file extension. The program looks for the file on the drive specified; if not found on that drive, a file not found message will be displayed. S Save The program prompts for entry of a drive and file extension. If the specified drive already has a file with the same file extension, the program will prompt twice for confirmation that you want to replace the old file with the in-memory file. P Print The option displays or prints a form or schedule after perform- ing all of the calculations required for totals, table look-up, etc. C Change This option displays prompts for entry of line index numbers and the change or entry of the descriptive fields and amounts. M Forms and Sch Menu This option displays the Forms and Schedules Menu after a prompt is displayed reminding you to save the in-memory file out to diskette. X End Program This option will display messages and prompts that remind you to save the last file processed and the Common File to diskette before actually ending the program with a return to DOS. Selection of the M and X options of the Process Menu and the X option of the Forms and Schedules Menu will result in a display of either one or both of the following prompts: Did you save the Schedule - file back to diskette? y/N N Did you save the Common File file back to diskette? y/N N You must press the Y key in response to both of these prompts; pressing any other key will result in the redisplay of the menu. In some cases, there may not have been any changes made to the file and it will not be necessary to save the file back to diskette; press the Y key to go on to the Forms and Schedule Menu display. If you have not saved the file(s) back to diskette, press the Enter key and the program will redisplay the Process Menu. Select the Save function to save the last file processed and/or the Common File back to diskette. The second line of both menus shows the program segment and the data files currently in use. The program will display an error message if program segment name does not match the in use data file name when you attempt to save, print or change a file. After selection of a form or schedule, the program displays the Process Menu and makes an automatic selection of the Load function. This automatic selection of the Load function is also made when the program prompts for the initial Load of the Common File. Any subsequent selection of the Common File does not result in the automatic selection of the Load function. WARNING - do NOT select the Load function for a Common File unless you have used the Save function to save the in memory Common File back out to diskette. Should you do a Load of the Common file without saving the in memory Common File to diskette, you may lose some new transfer totals. These totals can be recalculated by reprocessing the forms or schedule that generated the new totals. Page 13 Line Specific Instructions Form 1040 Line 6c,6d [15,17] Enter number of children on lines [15] and [17] with names on lines [16] and [18]. Line 6e [19] Enter number of other dependents on line [19] with names on lines [20] and [21]. Line 7 [24] Do NOT include amount from line 10 [13], Form 2106 in the amount on line 7 [24]. PC-TAX85 transfers amount from line 10 [13]. Form 2106 to line [23]; this amount is included in the total on line 23 [45]. The amounts on line [23] and line 7 [24] are totaled on line 7 [24] when printing a Form 1040 using IRS format. Line 9 [26] Users must enter an amount for 9b Exclusion if the amount for 9a Dividends is greater than zero. Line 34a thru 34e [60 thru 65] See pages 12 and 22, IRS Instructions for Form 1040. Use the Change function and select line [61] if you need to enter an amount from either work sheet on page 13, IRS Instructions for Form 1040. The amount from the work sheet entered when line [61] is selected is stored by PC-TAX85 on line [58]. A warning message is displayed if two or more of the following lines have amounts greater than zero: [58], [60], [64]. Line 38 [69 thru 72] The program interpolates the tax amount from a single table equivalent to both the Tax Table and Tax Rate Schedules XYZ. This table has only 51 lines while the IRS table has approximate 1000 lines. Taxes calculated by PC-TAX85 may not agree with the taxes from the table since the program must interpolate between brackets that are much larger than the $50.00 brackets used in the IRS table. The difference will probably not exceed $1.00; you must check the calculated tax with the amount from the IRS table and use the amount from the table for your actual return. Should the computed tax differ from the tax from the tables, subtract the computed tax from the tax from the table. Process the 1040 and enter the plus or minus amount when the prompt "Adjust tax amount? +/-" is displayed. The adjustment amount is stored on line [78]. Schedule A Lines 2c,9,13,15b,22 Amount entries for these other lines are totaled and transferred to the appropriate lines [6,17,26,34,46] by PC-TAX85. Line 24,25,26 [53,54,55] If line 25 is more than line 24, see pages 13 and 22, IRS Instructions for Form 1040 and instructions for line 34a thru 34e, Form 1040. Page 14 Schedule B Line 6 [38] Schedule B line 6 and Schedule D line 15 must be the same if both Schedule B and Schedule D are used. If Schedule D is not used, 40% of Schedule B line 6 is transferred to Form 1040 line 14. Schedule C Lines A,B,C,D [3 thru 7] Select Change function and enter or edit lines [3 thru 7] as appropriate. Schedule D Lines 1b,9 [5 thru 16,25 thru 36] PC-TAX85 will not accept a date acquired (column (b)) that does not precede a date sold (column (c)). Column (f) Loss and column (g) Gain is calculated based on the entries in column (d) Sale Price and column (e) Cost Price. The total for all the entries in column (d) Sale Price must be to the amount entered on line 1a [3] and on line 37 [82]. Line 15 [42] See line 6 [38], Schedule B. Schedule E Part V Depreciation from Part V is NOT transferred to line 19, Part I by PC-TAX85. Schedule F Schedule G Lines 20,21,22,25,26 [24,25,26,30,31] Schedule G requires calculation of taxes using Tax Rate Schedules XYZ even if your taxable income is below $50,000. Since the table used by PC-TAX85 is based on the IRS tax table for incomes below $50,000, tax calculations for Schedule G are only valid if your taxable income exceeds $50,000. The IRS Tax Tables and Schedules XYZ do not agree for taxable income below $50,000. For example, the tax on an income of $25,600 for filing status 2 is $3,612 from the Tax Table and $3,605.60 from Schedules XYZ. If the amount on line 8, 10, 16, 17 or 19 of Schedule G is less than $50,000, you will have to calculate the tax from Schedules XYZ for the tax to be entered on lines 20, 21, 22, 25 and 26. After entering the calculated tax amounts on these lines, print the Schedule G and press the Y key for the "Bypass tax calculation? y/N prompt. Schedule SE Lines 1,2,4,6 [3,4,8,10] PC-TAX85 does not transfer any income to these lines. Schedule SE cannot be processed unless you have indicated either the Regular or Optional Method in response to the prompt displayed when entering names, etc. for the Common File. The program sets lines in Part II to zero if the Regular method is used; it sets lines in Part I to zero if the Optional Method is used. Page 15 Schedule W Lines 1,2,4 [3,4,7] PC-TAX85 does not transfer any income to these lines. Form 2106 Line 1,15,22 [4,31,39] Warning message is displayed if the amount on both lines 15 [31] and 22 [39] is greater than zero and neither amount is transferred to line 1 [4]. Form 2441 Lines 4a,4b [7,8] PC-TAX85 does not transfer any income to these lines. Form 3468 Form 4562 Lines 10,11,12 [70,72,74], Section C Select Change function and edit Yes's and No's to spaces as appropriate. Form 6251 Work Sheet Line 17 Work Sheet Line 20 Work Sheet Line 21 Approval Form Some of the prompts displayed when processing other forms and schedules are bypassed or modified when processing the Approval Form. Since no entries are required for this form, there is no Change processing and it follows that there is no need to save the file back to diskette. Selection of the End program option while this form is in memory results in passing control to the Common File Process Menu. This form will not be required if you should decide to copy the information from forms and schedules printed by PC-TAX85 to printed forms and schedules provided by the IRS. Order Form/Questionnaire Comments regarding prompts, changes and saving the Approval Form also apply to the Order Form/Questionnaire. Please return a copy of this form if you use (or attempt to use) PC-TAX85 even if you do not order the program or choose to make a contribution. Your comments will be considered when PC-TAX85 is revised to PC-TAX86. Page 16 Tax Planning - What If? PC-TAX85 can be used for the "what if" style of tax planning since loading, changing and displaying files for forms and schedule takes little time or effort. Using the Auto Print process, a new total for your taxes due can be obtained in a few minutes if you want to see the effect of, for example, a larger IRA deduction or an increase or decrease in capital gains or losses. You can set up tax planning files without having to enter any data by loading in and then saving, with a new file extension, a set of your existing MTX files. These new planning files can then be changed and processed without messing up the entries and totals for your original files. In most cases, after making planning or what if entries you will process, with the display option, a Form 1040. If you like what is displayed, use the print option to make a printed copy. Processing each of the forms and schedules is the usual method of getting transfer totals or amounts into the Common File. In addition, you can enter totals or amounts into the Common File with the Change option. Entering totals in the Common File without actually processing each form or schedule represented by a total permits a "quick and dirty" method for getting the "bottom line" for a Form 1040. Do not enter totals in the Common File that has totals for your actual forms and schedules; use a different file extension for the Common File with the totals that you have entered with the Change option. Page 17 Forms and Schedules for Your Tax Return While the Form 1040 printed by PC-TAX85 is a very close facsimile of the IRS Form 1040, this form CAN NOT be used as your return. PC-TAX85 has an option to print entries and amounts on the front and back of a printed IRS Form 1040. You can use one of the following methods to prepare a Form 1040 that can be used for your 1040 return. a) Copy the entries from a Form 1040 printed with the IRS format option to the front and back of the Form 1040 that is a part of the Instructions for preparing Form 1040 booklet that you received from IRS or some other printed Form 1040. b) Use the IRS format option and the Use printed IRS form option to "fill in the blanks" on the front and back of a printed Form 1040. See the section Print on Form 1040 for a suggested method of printing on both the front and back of an IRS Form 1040. c) Use the IRS format option and the Use printed IRS form option to print the "fill in the blanks" data on blank continuous forms then photo- copy the data together with a foil or transparency of the front and back of a printed Form 1040. See the section Photocopying Form 1040 for additional information regarding this method. Schedules A, B, C, D, E, F, G, SE and W and Forms 2106, 2441, 3468, 4562 and 6251 printed by PC-TAX85 using the IRS print option may be used as attachments to your Form 1040. Forms and schedules should be printed with a left and right margin of .6 or .7 inch (6 or 7 spaces). The "Left margin spaces? 3" prompt permits shifting the print line right by 1 to 5 spaces. The top line for forms and schedules should be printed on the fourth line (1/2 inch) down from the perforations between pages. These forms and schedules must be printed on a type of paper specified in Revenue Procedure 85-3 (Publication 1167 (Rev 1-85). This procedure specifies use of 8 1/2 by 11 inch paper (9 1/2 by 11 before removing the detachable pinfeed strips) with a thickness of at least .003 of an inch. The paper must be lined, black or colored lines from margin to margin every 1/3 of an inch; or color-barred paper, alternating 1/2 inch color tinted stripes and 1/2 inch white stripes. The lined paper may be a special order item, it is not available from any of the usual sources of stock computer paper. 15 pound color-barred paper meets the specifications outlined in the Revenue Procedure. The Approval Form for the forms and schedules should be printed and attached to the the forms and schedules you submit as your tax return. There is a possibility that some of the IRS personnel who handle tax returns may not be aware of the approval of these computer-generated forms. The Approval Form references the IRS letter that approved use of the forms and schedules printed by PC-TAX85. Remove the perforated pin-feed strips from the forms and schedules that you send to the IRS. All the forms and schedules should be placed in sequence by the sequence number print to the right of the asterisk on the upper right corner of the forms and schedules. Page 18 Since you can print draft copies of the forms and schedules using the IRS print option on the same paper that you use for work copies, you may need no more that 20 sheets of the color-barred paper. If you have no use for color-barred paper other than for the sheets you use for your IRS return, you might want to consider the following alternative to spending $30.00 or more for a box of paper. Mail me a completed copy of the order form/questionnaire with your contribution of $25.00 or more for PC-TAX85 and I'll send 60 sheets of the color-barred paper by return mail postage paid. Unless you circle Yes for the paper on the questionnaire, I'll assume you don't need the paper. Print on Form 1040 The following instructions assume that you have picked up several of the printed IRS Form 1040's at the Post Office or some other source for IRS forms. In addition to the forms, you will need some peelable tape equivalent to 3M Scotch brand peelable transparent tape. This is not the ordinary transparent tape that tears the paper when you try to pull if off; you may have to go to an office supplies store to find the peelable tape. Make sure you have the correct Common file in memory and then load the Form 1040 file. Ready your printer with four sheets of continuous form 8 1/2 by 11 inch paper; doesn't matter whether it is lined or blank. Run the paper thru the printer far enough to permit taping the bottom of the fourth sheet to the top of the first sheet making a continuous loop of paper. Restore the printer to top of form then select the Print option. Press the P key for the Printer or Display prompt, the Enter key for the Left margin and I key for the Work or IRS copy prompts. Press the Y key for the Use printed IRS form then enter the Adjust amount or press the Enter key. Press the Y key for the Print top-of-form ruler? prompt and press the Enter key for the Print front or back of form prompt. The entries and amounts for the front of a printed Form 1040 will be printed on the loop of paper. After the front is printed, the Print top-of-form ruler and Print front or back prompts will be redisplayed; this time press the B key to print the back of the form. Repeat this same sequence of prompts to print the front and back on the remaining two pages of the loop of paper. The alignment line printed at the top of each of each page will have a decimal point (period) near the right margin. Using a ruler aligned with the vertical line that corresponds to the decimal column of the printed Form 1040, make a small mark at the top edge of both the front and back of the Form 1040. Tape the Form 1040 to the continuous loop of paper with the top edge even with the line of underscores and with the mark for the decimal column aligned with decimal point of the alignment ruler. Press the S key to skip the taped on form into position to be printed then press the F key to print the entries and amount fields on the front of the printed Form 1040. Do not press the Y key for the Print top-of-form ruler prompt when printing on a printed form. Before removing the Form 1040 from the loop of paper, check to see if taping the form on the loop a little higher or lower or a little more to the left or right will produce a better alignment of the entries and amount fields. Note how you want to move the form then print several more copies on the front side of the forms. Now you can turn the forms over and press the B key to print the back side of the forms. If any of the printed entries for names, filing status or exemptions appear to have printed incorrectly, you may need to use the Change option to adjust these entries then run several more sets of the printed Form 1040's to check the alignment. Page 19 Pick out the form with the best alignment on both the front and back for use as your return. If printing and aligning the forms on a continuous loop of paper proves to be too tedious, you might try setting your printer for friction feed and print directly on the printed Form 1040's without using the carrier loop. If neither method produces a usable Form 1040, you can copy, by hand, the entries and amount fields to a printed Form 1040 or try using the photocopy method. Photocopying Form 1040 Most printing or copying services can prepare foils or transparencies on transparent plastic film of the front and back of a printed Form 1040. Actual size foils (no reduction or enlargement) are required. Use the IRS form option and the Use printed IRS form option to print the entries and amounts for the front and back of your 1040. Lay the foil for the front of the Form 1040 on the sheet with the entries and amounts and slide it around until printed entries are in the right boxes and the decimal points are on the line between the dollars column and the cents columns. Run the foil and the printed data sheet thru a copier and see if the copy has the entries and amounts in the right places. Repeat this procedure for the back of the form. The IRS does not require that the front and back of the photocopied Form 1040 be on a single sheet of paper; front on one copy and back on another copy is acceptable. Page 20 Program Modifications Hopefully, there will be no need for any program modifications or fixes to the PC-TAX85 program. In the event that a serious problem or bug is reported, a revision of the program will be made to fix all the problems or bugs that are reported to me prior to February 7, 1986. The revision will be limited to the program and/or the documentation; there should be no need for any changes to the DTX*.* or MTX*.* files. Since I have no way of knowing that you are using PC-TAX85 (except for those of you who ordered a distribution diskette from me), you will have to look to the source of your copy of PC-TAX85 for information regarding any possible revision. If there is a revision, it will be available about February 15, 1985 and it will be uploaded to CompuServe and the Source shortly thereafter. Local bulletin boards and clubs that have made the original version of PC-TAX85 available should check Compu- Serve and the Source for information regarding a revision. If you want to be notified of any revision, print out the Order Form/Questionnaire, fill in your and address, check the Please send revision notice box and mail it to me together with a business size stamped self-address envelope. It it turns out that there is no revision or revision notice, I'll hold your self-addressed envelope and use it for the availability notice for PC-TAX86. Jim Demberger, 7280 60th Avenue North St Petersburg, FL 33709 813-546-1182 new 12/25/85 Page A1 PC-TAX85 Files Your work diskette should have the following files: Default Drive Files Option Drive Files DTXSCHA .T85 MTXSCHA .M85 DTXSCHB .T85 MTXSCHB .M85 DTXSCHC .T85 MTXSCHC .M85 DTXSCHD .T85 MTXSCHD .M85 DTXSCHE .T85 MTXSCHE .M85 DTXSCHF .T85 MTXSCHF .M85 DTXSCHG .T85 MTXSCHG .M85 DTXSCHSE.T85 MTXSCHSE.M85 DTXSCHW .T85 MTXSCHW .M85 DTX1040 .T85 MTX1040 .M85 DTX2106 .T85 MTX2106 .M85 DTX2441 .T85 MTX2441 .M85 DTX3468 .T85 MTX3468 .M85 DTX4562 .T85 MTX4562 .M85 DTX6251 .T85 MTX6251. M85 DTXCOMN .T85 MTXCOMN .M85 DTXWS17 .T85 MTXWS17 .M85 DTXWS20 .T85 MTXWS20 .M85 DTXWS21 .T85 MTXWS21 .M85 DTXAPVAL.T85 MTXAPVAL.M85 DTXORDRF.T85 MTXORDRF.M85 PC-TXTBL.T85 PC-TAX85.EXE PC-TXHLP.T85 PC-TXDAT.T85 The PC-TXTBL.T85 file has the amounts and the percentages that are used to compute taxes due based on taxable income and filing status. The PC-TXHLP.T85 file contains the Help Prompt instructions. The PC-TXDAT. T85 file has the character strings used to display messages and prompts. The DTX*****.T85 files contain codes that control the format of the printed forms and schedules and the prompts that are displayed for entry or change of the lines for the forms and schedules. All *.T85 files are read under program control when and as required and are of no concern to a user of PC-TAX85 except that they must be on the default drive selected when you start up the program. The DTX files must all be on the same drive however these files may be on the same or a different drive than that used for the MTX files and the .EXE program file. The MTX*****.M85 files are used to create an in memory image of the lines for each form and schedule and the entries that are made for these lines. You can load or save the MTX*.* files from or to any available drive. The program file, PC-TAX85.EXE, may be located on and run from any drive. Page B1 Common File The following totals are transferred thru the Common File from forms and schedules to other forms and schedules as shown in the following table: From Description To/Used at Form 1040 line 32/33 Adjusted Gross Income Sch A line 4 Form 2441 line 6 Form 6251 line 1 Form 1040 line 37 Taxable Income Sch D line 25c Sch G line 8 Form 1040 line 1-5 Filing Status Sch A line 25 Sch D line 25b Form 6251 line 6 1040 line 7-19/22 Gross Income WS20 line 4 1040 line 7-20b/22 Gross Income WS21 line 3 1040 line 24-29/31 Adjustments WS20 line 6 WS21 line 6 1040 line 46 Credits Form 3468 line 15 1040 line 47 Foreign Tax Credit Form 3468 line 16 1040 line 50 Credits Form 6251 line 9 Form 2106 line 9 Employee Business Expenses Form 1040 line 25 Form 2106 line 10 Employee Business Expenses Form 1040 line 7 Form 2441 line 9 Credit for C/D Care Exp Form 1040 line 41 Form 3468 line 20 Investment Credit Form 1040 line 48 Form 6251 line 12 Alternative Minimum Tax Form 1040 line 52 Sch A line 26 Itemized Deductions Form 1040 line 34a Sch A line 5 Medical/Dental Expenses Form 6251 line 2a(1) Sch A line 18 Contributions Form 6251 line 2b Sch A line 19 Casualty & Theft Loss Form 6251 line 2c Sch A line 11a/11b Interest on residence Form 6251 line 2d Sch A line 14 Other Interest Form 6251 line 2e(1) Sch B line 3 Interest Income Form 1040 line 8 Sch B line 10 Dividend Income Form 1040 line 9a Sch B line 6 Note 1 Capital Gain Distributions Sch D line 15 Form 1040 line 14 Sch C line 33 Business Income Form 1040 line 12 Sch D line 15 Note 1 Capital Gain Distributions Sch B line 6 Form 1040 line 14 Sch D line 23/25 Capital Gains/Losses Form 1040 line 13 Sch D line 22 60% Gains Deduction Form 6251 4b Sch E line 26/36 Rent and Royalty Income Form 1040 line 18 Sch F line 39 Farm Income Form 1040 line 19 Sch G line 28 Tax on Averaged Income Form 1040 line 38 Sch SE line 14 Self-employment Tax Form 1040 line 51 Sch W line 8 Deduction joint/both work Form 1040 line 30 WS17 line 2 Other pensions, etc Form 1040 line 17a WS17 line 4 Other pensions, etc Form 1040 line 17b WS20 line 1 Unemployment Comp Total Form 1040 line 20a WS20 line 2 Unemployment Comp RepaymentForm 1040 line 20a WS20 line 11 Unemployment Comp Taxable Form 1040 line 20b WS21 line 1 Social Security Form 1040 line 21a WS21 line 4 Soc Sec - Non-tax Int Inc Form 1040 line 21b WS21 line 11 Social Security Taxable Form 1040 line 21b Page B2 Note 1 Sch B line 6 and Sch D line 15 must be the same if both Sch B and Sch D are used. If Sch D is not used, 40% of Sch B line 6 is transferred to Form 1040 line 14. Totals from the work sheets for lines 17a, 17b, 20a, 20b, 21a and 21b are transferred to the Common File IF the work sheets are used. If you don't need the work sheets, you can use the Change function to enter the amounts for these lines on the appropriate lines of the Common File. Totals are NOT transferred for the lines on the following forms and schedules. Entries for the transfer to lines must be entered using the Change option of the Process Menu. From Description To Sch C line 33 Business Income/Loss Sch SE line 2 Sch C line 33 Business Income Sch W line 2 Sch F line 39 Farm Income Sch SE line 1 Sch F line 39 Farm Income Sch W line 2 Sch E Part V Depreciation Sch E line 19 Form 1040 line 7 Wages, etc Sch W line 1 Form 1040 lines 25,26,27,31 Adjustments Sch W line 4 Form 4562 line 9 Depreciation Note 1 Note 1 Depreciation from Form 4562 may have to be entered on Schedule C line 12 [35] or Schedule E line 19 [38]. Common File Name and Address Data Press the C key for the Change function then press the 1 key when the "Enter Line Index Number" prompt is displayed. As the prompts for names, addresses, etc. are displayed, replace the displayed prompts by keying your names, addresses, etc. If your filing status is 1, 4 or 5, enter spaces for the second social security number and second occupation. If you do not plan to use Schedules C or SE, press the Enter key when the prompt for entry of names for these schedules is displayed. Name(s) for Forms & Schedules except Sch C, F & SE Street Address for Form 1040 City, State, ZIP First Soc Sec Number 123-45-6789 Second Soc Sec Number 123-45-6789 First Occupation Second Occupation First P E Campaign? Y/n Second P E Campaign? Y/n Name(s) for Sch C SSN 123-45-6789 Name(s) for Sch F SSN 123-45-6789 Name(s) for Sch SE SSN 123-45-6789 Use Regular or Optional Method? R/O