While I was on the phone the other day with the Intuit account rep registering my copies of the versions of QuickBooks 2005 that I was installing on my main computer, we were discussing the online version that they have been pushing me to recommend for the past few years.

I mentioned that one of my biggest reservations about this program was the inability to roll the data back from the online version to the desktop version if that need were to arise or if the client wanted to convert completely to a self contained desktop version of the program. I have considered this to be holding the client a kind of prisoner to their online service because converting to in-house would require a lot of re-entering of data. He told me that they have recently added the capability to export out some of the data, such as customer lists, back to the desktop programs.

On Thanksgiving, while Sherry was outside working on the logs on our main house, I spent a little time going over the features of the online QB program in more detail than I had previously. I was going to try converting one of my company files to online, enter some data and then try to convert it back to desktop and see how much of the new stuff was retained. However, as I was reading the FAQs and poking around the program, I saw enough other problems with the service that I didn’t see a need to spend any more time on the data conversion issue.

Overall, I have to say that I’m not very impressed with what can be done with the online version of QB or the cost of using it. Unless the convenience of enabling multiple persons to have immediate access to the company data files without having to send them back and forth is critical, I would stick with the desktop version.

There are three big reasons for avoiding this that I don’t recall addressing in previous discussions of the online QB service.

Multiple Companies – With the desktop version of the program, you can use it to work with as many company files as you want. Since most of my clients have at least one corporation in addition to their personal 1040 files, that’s at least two company files they need to maintain on a regular basis. Some clients have a multitude of corporations, partnerships, LLCs, and trusts to keep track of. With the desktop version, the client only has to buy one copy of the program, which could be less than $100 for a Basic upgrade. With the online version, pricing starts at $19.95 per month for the first company file plus another $7.95 if you want to use Classes, which is another of my big complaints. You then need to set up a subscription for each other company file you want to maintain. They do offer a 20% discount on the additional company files; but this could still add up to quite a lot of money. For example, an individual with one corporation would have to pay over $50 per month for the online service with the Class feature in each company file. That’s over $600 per year; much higher than just buying even the fancier versions (Pro or Premier) of the desktop program. It would cost a small fortune for those folks who have a dozen or more company files to work with.

Classes – I will be writing another article soon on the importance of using some of the features in QB to better maintain your records and make it easier for your tax preparer. One of the most useful features is the Classes, which I have discussed on several occasions and have always included in my Quicken and QuickBooks tips. Each Class corresponds with a tax return schedule and it makes my tax prep work go so much faster when it is used properly. Why this isn’t part of the basic online service escapes me because it is a critical feature. It’s simply ridiculous to charge extra for this. Not having the Classes feature was one of the reasons I gave a thumbs down to the new Simple Start version of QuickBooks in my review of it last month.

Independence – As much as I love the various online services that are available and the ability to do more and more things all the time from the comfort of my desk, another very scary aspect of relying on an online QuickBooks program is the unreliability of our internet connection. Using the DirecWay satellite service, the only high speed service we can use here in the boonies, we are knocked off constantly when it’s cloudy, rainy, foggy, and even when the sky is perfectly clear. The thought of not being able to access my QB for several hours, or even days, at a time is unthinkable. I have no separate checkbooks for our companies. QuickBooks is our checkbooks. So, unless you have 100% reliable internet service, I would be very cautious about converting to the online QB.

Congress’ overstuffed turkey

Bush, Republicans Sign Up for World’s Largest Credit Card

Sandra Bullock Sought Advice of Tax Scammer – One of the repercussions of the prosecution of promoters of illegal tax evasion schemes is the requirement to divulge their client list to the government, which then goes after them.  In some cases, those names are also made public.  

Centrists and conservatives join forces for fiscal restraint

IRS Chief Pleads for Bigger Budget

IRS Audits More of the Wealthy and Fewer Small Companies

Seven Ways to Save on Taxes (Just Don’t Wait Until 2005)

Nonprofits Get Caught in the IRS’s Sights

Another Omnibus Spending Bill Loaded with Pork – And the GOP is still considered the party of fiscal restraint and limited government?

Tax Fraud and the Medical Profession

IRS’s Recap of the Newest Tax Laws

Conrad Seeks Answers on Return Disclosure Language – It’s CYA time in the halls of power in DC. It must have been an immaculate conception because everyone is denying paternity.

The state and local tax deduction may not be around much longer.

Retirement isn’t just a date. It’s a new life.

Leading Foe of Income Tax Is Arrested After Car Chase – Another casualty of that idiot Joe Banister, who was also finally arrested for his part in this illegal tax evasion scam. 

Investment Tax Cuts Pushed as Bush Eyes Tax Reform

GOP Constituencies Split on Tax Change – It’s the same old divide and conquer strategy against tax reform that I’ve mentioned several times.

Privacy Concerns in Spending Bill – I’m glad to see that this issue has been receiving so much press.  Hopefully, it will prevent further attempts of this kind.

Istook Denies Inserting Taxpayer Privacy Measure in Omnibus Funding Bill – Lots of finger pointing over who was the culprit responsible for trying to slip the invasion of privacy power into the legislation. Maybe it was Santa’s elves, so they can check and see who is naughty and nice.  

Borrowers Find System Open to Conflicts, Manipulation – Another illustration of how much the deck is stacked against the small investor in the big stock and bond markets.  People rely on the allegedly independent credit rating firms to assess the potential risk; yet they don’t seem to be as accurate as is needed for a safe and well reasoned investment decision.

Be Happy, Put Retirement Fears to Rest

Congress Approves Omnibus Appropriations Bill Despite Disclosure Glitch – The most interesting part of this news story is this: 

The section would have allowed “agents” designated by the chair of either chamber’s Appropriations Committee “access to Internal Revenue Service facilities and any tax returns or return information contained therein.”

For anyone who remembers how Presidents Nixon and Clinton used the IRS to attack and persecute their political enemies, this kind of thing isn’t a positive addition to the tax code and it should frighten anyone concerned about privacy that such language is being sneaked into legislation.