Tax filing can be free and simple, or it can require professional help costing hundreds of dollars. Making the right choice can save you money—or save you from costly mistakes.
The DIY Path
When DIY Works Great
Your taxes are probably simple if you have:
- W-2 income only (traditional employment)
- Standard deduction (most people)
- No self-employment income
- Basic investment accounts (401k, IRA)
- Maybe student loan interest or mortgage interest
Cost: $0-150 depending on software
DIY Software Options
Free:
- IRS Free File (income under $79,000)
- Cash App Taxes (any income)
- Credit Karma Tax / TurboTax Free (simple returns)
Paid ($30-150):
- TurboTax (most popular, easy interface)
- H&R Block
- TaxAct (budget option)
- FreeTaxUSA (solid budget choice)
When You Need Professional Help
Situations That Benefit from a CPA
Self-Employment:
- Business expenses and deductions
- Quarterly estimated taxes
- Home office deduction
- Vehicle deductions
- Self-employment tax strategies
Significant Investments:
- Large capital gains/losses
- Stock options or RSUs
- K-1 income (partnerships)
- Rental property
- Complex investment portfolios
Life Changes:
- Marriage or divorce
- Death of spouse
- Starting or selling a business
- Large inheritance
- Moving between states
- First year of homeownership
Complex Situations:
- Multiple state returns
- Foreign income or assets
- IRS notices or audits
- Back taxes owed
- Significant crypto transactions
Types of Tax Professionals
Enrolled Agents (EAs)
- IRS-licensed tax specialists
- Can represent you in audits
- Often cheaper than CPAs
- Cost: $150-400/return
CPAs (Certified Public Accountants)
- Broader financial training
- Can provide year-round advice
- Best for complex business situations
- Cost: $300-1,000+/return
Tax Attorneys
- For legal tax issues
- IRS disputes and negotiations
- Estate planning
- Cost: $300-500/hour
Tax Preparers (Chains)
- H&R Block, Jackson Hewitt
- Seasonal employees with basic training
- Good for moderately complex returns
- Cost: $150-400/return
Pro Tip
For most people who need help, an Enrolled Agent offers the best value—expert knowledge at lower cost than CPAs.
The Real Cost Comparison
DIY
- Cost: $0-100
- Time: 2-8 hours
- Risk: Potential missed deductions, errors
Professional
- Cost: $200-600+ (basic to complex)
- Time: 1-2 hours gathering documents
- Benefit: Expertise, audit support, peace of mind
The Hidden Costs of DIY Mistakes
- Missed deductions can cost hundreds to thousands
- Errors trigger IRS notices and corrections
- Penalties for significant mistakes
The Hidden Costs of Professional Help
- May not be worth it for simple returns
- Not all preparers are equally competent
- Still requires your time gathering documents
Decision Framework
Choose DIY If:
- ✓ W-2 employee with single employer
- ✓ Taking standard deduction
- ✓ No side income or rental property
- ✓ Comfortable with technology
- ✓ Willing to read instructions carefully
Choose Professional If:
- ✓ Self-employed or significant side income
- ✓ Own rental property
- ✓ Had major life changes this year
- ✓ Received IRS notice
- ✓ Have complex investments
- ✓ Value time over money
Hybrid Approach
Do simple years yourself. Use a professional for complex years or every 3-5 years for a "checkup" to ensure you're not missing opportunities.
Finding a Good Tax Professional
Red Flags
- Promises unusually large refunds
- Fees based on refund size
- Won't sign the return
- Recommends aggressive positions
- No credentials or references
Good Signs
- EA or CPA credentials
- Year-round availability (not just tax season)
- Asks detailed questions about your situation
- Explains their recommendations
- Provides written engagement letter
Where to Find Them
- Referrals from friends/family
- IRS directory of EAs
- State CPA societies
- NAPFA (financial planners)
The Bottom Line
Simple tax situations (W-2, standard deduction) can easily be handled with free or cheap software. Complex situations (self-employment, real estate, life changes) benefit from professional help. When in doubt, a one-time professional review can catch issues and give you confidence going forward.