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QuickBooks Online vs. QuickBooks Desktop For Therapists

QuickBooks for Therapists

Tag: Bookkeeping FAQ

QuickBooks Online vs. QuickBooks Desktop For Therapists

by Alicia Bishop

I highly recommend using QuickBooks for your private practice bookkeeping because it makes your life so much easier, and your bookkeeping beautiful! But, one of the decisions you need to make is whether you want the Desktop or Online version of QuickBooks.

The main difference is that QuickBooks Online is cloud-based and you can access it from anywhere, while QuickBooks Desktop is installed onto a computer and can only be accessed from that computer.

I know, I know it sounds technical. But there are other differences between them that you need to think about before choosing what’s the best fit for you and your private practice. But I’m breaking it down to help you out!

Here’s what you need to know:

Price

The pricing structures are different because QuickBooks Desktop is done on licensing and a yearly subscription. While QuickBooks Online is done on a monthly subscription, you can pay for QuickBooks Online as an annual subscription fee as well to save some money!

QuickBooks Online

Starts at about $20 per month depending on your plan (without payroll)

QuickBooks Desktop

Starts at about $299.95 paid yearly for one user (without payroll)

Features

Both options share the basic accounting functionality, but the overall features of each, are very different and play an important role in which you decide to use for your private practice:

QuickBooks Online

  • Access from anywhere and any device (hello sofa bookkeeping!) 
  • A lot of automation to make your life easier
  • Monthly pricing; so less of a price commitment
  • No software updates or back-up’s
  • Easily share online access with multiple users
  • Let’s be honest – it’s the 21st century – online is just more modern!

QuickBooks Desktop 

  • Access only from where it’s downloaded
  • Lead management and sales orders included
  • Can use it when you’re offline
  • Important to always make back-ups of your data
  • Not easily shareable with others like bookkeeper or CPA to give them access to data
  • Have to update the software each year

QuickBooks for Therapists: Which should you get?

I will always recommend QuickBooks Online versus QuickBooks Desktop for all my therapists and private practice owners.

Why though? In full transparency, like I mentioned above – it’s the 21st century… cloud and online is just the way things ‘happen’ now. More specifically, though, QuickBooks Online is so much more versatile than Desktop, and it works perfectly for all of TBK’s clients (so therapists and private practice owners).

With online, you’re not tied to just that home computer desk to do your books. You can access it from any device. This also means you have more flexibility with your bookkeeper and tax professional. With online, you simply invite them via email to look at your books. And that means they can instantly access your books from their own devices/office, etc. With Desktop, they have to physically come to your computer, or you have to create and download a backup of the Desktop files, send them the file, make sure they can access the file, etc, etc.

Or you can setup and pay for a software for them to ‘remote in’ and view your computer. It’s cumbersome, to say the least. With Desktop, there is also a lot more manual data entry versus being able to sync accounts and have it automatically pull the data in from those accounts so you can get to work immediately on the data entry.

And lastly, the big one for me, I absolutely LOVE knowing my financials and data are backed up into the cloud.. because if my office burns down, gets broken into, or my computer crashes…. I don’t lose years and years of data and pertinent information!

If you’d rather not even deal with the headache of choosing and setting the software up or managing your bookkeeping, we at Therapeutic Bookkeeping can do all of those things for you! Therapeutic Bookkeeping is a virtual accounting firm working exclusively with therapists all across the United States!

Also, if you’re not quite ready for a full blown accounting software, a spreadsheet can work great, too! I created one specifically for therapists in private practice and you can find it in The Bookkeeping Cure™️ for Therapists!

Which QuickBooks Software Subscription Is Best for My Practice?

by Alicia Bishop

QuickBooks Online is an excellent tool to keep on top of your bookkeeping for your private practice. But which QBO subscription is the best choice?

The short answer: The Quickbooks Online ‘Essentials’ subscription. 

It’s almost always the best fit for my clients because it has all the features you’ll need, including:

  • Connect your business bank accounts to the software to automatically sync your transactions
  • Enhanced reporting so you can create beautifully customized financial reports (something you don’t get with the Simple Start or Self-Employed plans.)
  • It supports up to 3 users on the account; so you, your bookkeeper, and your tax professional #DreamTeam (plus you have total control on what users ‘see’ and ‘access’ with the ability to set access levels!)

For therapists and private practice owners that are serious about their bookkeeping, keeping that income and those expenses organized, and making tax time a breeze, QuickBooks Online Essentials is a great fit!

I also need to say one thing. If you’re thinking about QuickBooks Self-Employed, DON’T DO IT! I know it’s cheap, but it’s not for you. QBSE is designed for ‘side gigs and freelancers’. Even if you’re just seeing clients on the side, it still doesn’t have the full-blown accounting functions you need. And if you ever decide to upgrade to the better subscription levels, you cannot migrate ANY of your data over to your upgraded account! (Just to name a few cons!)

If you’re not quite ready for a full blown accounting software, a spreadsheet can work great, too! I created one specifically for therapists in private practice and you can find it in The Bookkeeping Cure™️ for Therapists!

If you’d rather not even deal with the headache of choosing and setting the software up or managing your bookkeeping, we at Therapeutic Bookkeeping can do all of those things for you! Therapeutic Bookkeeping is a virtual accounting firm working exclusively with therapists all across the United States!

Can I be on payroll if I’m an LLC filing as an LLC?

by Alicia Bishop

Despite all your hard work, there’s something you need to know about an LLC having employees and being on payroll.

Not all LLCs are created equal! And depending on the filing status of your LLC, will determine how/if you should have payroll.

And you need to decide which one you need to be taxed as. So let me break down the different filing statuses of an LLC:

  • Sole proprietorship (single-member LLC) – cannot have employees, only members. 
  • Partnership (multi-member LLC) – same as above.
  • Corporation (single or multi-member LLC) – these can have employees.

Sole proprietorship and partnership LLCs are pass-through business entities and the business members will benefit from pass-through taxation: (taxation that enables the profits and losses to be passed on to the members.) 

With me still? 

Once profits/losses are passed through, they must be reported to the IRS in the following ways:  

  • For a single-member LLC, it goes on the owner’s personal federal tax returns on Schedule C to Tax Income Form 1040. 
  • For a partnership LLC, it means filing an information return on Form 1065 and then a Schedule K-1 that shows the share of the profit/loss of the partnership for each partner. This K-1 is filed with each partner’s individual return and shown on Form 1040.

Since these two filing statuses can’t have employees, there are no wages for LLC members and owners and no contributions for health insurance systems or social security that are withheld.

So basically, you can’t be on payroll in this type of LLC and you must pay the so-called “self-employment taxes” on your share of profits directly to an IRS. 

However, if you decide to file Form 8832, you can request the LLC be treated as a corporation. That way you can be treated as an employee, be on payroll and receive W-2 income.

 

Can QuickBooks File My Taxes For Me?

by Alicia Bishop

QuickBooks and taxes are in a bit of a ‘it’s complicated’ relationship, and it’s something I get asked about a lot!

We all want to make filing taxes easier but can QuickBooks do it for you?

QuickBooks is an excellent piece of software that helps private practices and other small businesses in bookkeeping and monitoring cash flow. Butttt, it can’t file your taxes FOR YOU (sorry!)

That’s the quick answer…

But, there are some ways that QuickBooks can HELP you file your taxes. Here’s how:

QuickBooks is a bookkeeping solution that keeps track of your income and expenses. It helps you keep everything in order so that when tax time rolls around you can easily hand it off to a tax professional to save time and money with filing.

Is there another software that can help file taxes?

Since you brought it up, there is a second option from Inuit (the same people who make QuickBooks). TurboTax is a program that works with QuickBooks and lets you take the information from your bookkeeping and import, and print your W-2, W-3, 1099, and 1096 Forms. That said, I HIGHLY suggest you make the investment to have a professional prep and file your taxes. Mistakes made will be more costly to you that it would have been had you just hired a professional in the first place. And more often than not, when clients come to us with previous taxes that they ‘filed themselves’, we end up having to amend and re-do them to fix the mistakes. Just sayin’.

Soooo in summary: QuickBooks can’t FILE your taxes but it can help you around tax time. 

A non-boring bookkeeping newsletter?! Is that even possible?! Of course it is with a little TBK attitude added!

Are you a therapist needing all the bookkeeping resources and tips you can get for your practice, that don’t make you want to fall asleep?! We’ve got you covered! Subscribe to our non-boring newsletter, and we’ll send you all of our best bookkeeping resources for you and your private practice, without spamming your inbox!

Psst…. if you have any bookkeeping resources or topics you’d just love for your private practice… shoot us an e-mail and we’ll add it to the list!