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DIY Filing vs Hiring a CPA

Compare DIY tax filing with hiring a CPA. Understand real costs, time savings, and when a CPA pays for itself through deductions and tax planning.

3
DIY Tax Filing wins
0
Ties
7
Hiring a CPA wins

DIY Tax Filing

Filing your own taxes using software or paper forms. Modern tax software automates calculations and provides step-by-step guidance, making self-filing accessible for most individual returns.

Hiring a CPA

Engaging a Certified Public Accountant for tax preparation, planning, and advisory services. CPAs bring expertise, professional liability coverage, and year-round tax strategy that goes beyond annual filing.

Feature-by-Feature Comparison

CategoryDIY Tax FilingHiring a CPAWinner
Average Cost$0-$130 for software$250-$500 for individual; $500-$2,000 for business
Time Required3-10 hours depending on complexity1-2 hours gathering documents for your CPA
Tax PlanningNone; software only handles the current year returnYear-round planning, estimated payments, strategy optimization
Audit ProtectionSoftware accuracy guarantee; limited representationFull audit representation; CPA can speak to IRS on your behalf
Error AccountabilityYou are fully responsible for entries and decisionsCPA carries professional liability insurance and shares responsibility
FlexibilityFile anytime, anywhere, on your own scheduleRequires scheduling; may have wait times during tax season
Learning CurveMust understand enough tax law to answer software questions correctlyCPA handles the technical knowledge; you provide the facts
Entity Structure AdviceNo guidance on business structure optimizationCan advise on LLC, S-Corp, partnership structures for tax savings
ScalabilityGets harder as your financial life becomes complexCPA handles any level of complexity
PrivacyOnly you and the software see your financial dataMust share complete financial picture with another person

The Verdict

DIY filing makes sense for employees with simple returns who want to save money and learn about their taxes. A CPA becomes a smart investment when your tax situation involves business income, multiple entities, significant investments, or major financial decisions. The right CPA often pays for themselves by finding deductions and strategies that software and self-preparation miss.

Choose DIY Tax Filing if...

W-2 employees with straightforward deductions, young professionals building financial literacy, anyone with a consistent year-over-year tax situation, and budget-conscious filers who enjoy learning about personal finance.

Choose Hiring a CPA if...

Small business owners, self-employed professionals earning $75,000+, real estate investors, high-income earners navigating AMT and NIIT, anyone experiencing a major financial event, and filers who want peace of mind and proactive tax strategy.

Frequently Asked Questions

When does a CPA pay for themselves?
A CPA typically pays for themselves when they find deductions or implement strategies that save more than their fee. Common examples include retirement plan optimization ($2,000-$10,000 in savings), entity structure changes ($3,000-$15,000), and deductions you did not know existed. If your financial situation is complex, the ROI on a good CPA is often 3x-10x their fee.
Can I use both software and a CPA?
Absolutely. Some people use tax software to prepare a draft return, then have a CPA review it for accuracy and missed deductions. This hybrid approach gives you the learning benefits of DIY filing with the safety net of professional review. Some CPAs offer review-only services at a lower rate.
How much does a CPA cost for a small business return?
Expect $500-$2,000 depending on your location, business complexity, and the number of transactions. An S-Corp return typically costs $800-$1,500. Sole proprietors with Schedule C can expect $300-$600 on top of the personal return preparation fee. Urban areas and complex situations will be on the higher end.
What questions should I ask a potential CPA?
Ask about their experience with your specific tax situation (self-employment, investments, rental properties), their fee structure (flat fee vs hourly), whether they offer year-round planning or just annual filing, their approach to aggressive vs conservative deductions, and how they handle IRS correspondence or audits.
What if I cannot afford a CPA?
Consider Volunteer Income Tax Assistance (VITA) for free preparation if your income is under $67,000. IRS Free File and FreeTaxUSA offer free or low-cost software. For specific questions, some CPAs offer one-hour consultations for $100-$200 where you can get guidance on your most pressing issues without paying for full preparation.

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