When is it worth hiring someone else to do your taxes? (2024)

FAQs

When is it worth hiring someone else to do your taxes? ›

If you have "a complicated tax situation with dependents, investments, or significant assets or charitable contributions," then hiring a professional might be helpful, said Business Insider. That is because "the more transactions you have, the more things you need to take into consideration."

If you're confident about your ability to understand the tax code, then doing your own is a smart way to save. If not, it's probably time to pony up the cash and hire an expert. Ultimately, you have to weigh the value of your time and money against your peace of mind.

Let's say you had a change in your work, bought a home, got married or had a baby. Each of those life changes can mean new forms to complete, new credits and deductions to consider. With so much change, you might have a lot of tax filing questions. That might be when you decide you should pay someone to do your taxes.

Paying a tax professional is also wise if you now receive income from many different sources, have investment losses you need help dealing with, received an inheritance, or settled an estate. Any one of these can lead to more deductions or credits for you, tax preparers say.

Filing your taxes can feel like a chore, so you might be tempted to outsource the labor to a tax professional. This will save you time and potential headaches, plus having a pro do your taxes can help ensure everything in your return is accurate.

The Bottom Line. Individuals with a single employer and few investments may save money by preparing their taxes. Those with business income or rental properties will find hiring an accountant worth their peace of mind and potential tax savings.

Make sure you work with someone you can trust. You will be giving this person access to a lot of sensitive personal information, so choose a tax professional carefully. The IRS has a directory of verified tax preparers that may help you find a verified tax preparer in your area.

If you're comfortable preparing your own taxes, you can use Free File Fillable Forms, regardless of your income, to file your tax returns either by mail or online.

Is it worth going to a tax preparer? ›

Just knowing that a professional is handling your taxes reduces stress. Making mistakes can be very costly. In terms of missed deductions or triggering an IRS letter or audit; a tax professional can help eliminate errors and ensure your returns are prepared correctly. You benefit with money-saving tax planning.

CPA's Experience and Reputation

Experience and specialization also play crucial roles in determining the average cost of tax preparation by CPA. A CPA with a robust track record or specialized knowledge in areas like international tax law or estate planning may command higher fees.

Tax preparers focus on communicating with tax authorities, reviewing tax codes and filing tax paperwork. The primary difference between these careers is that CPAs offer a wider range of services outside of tax preparation.

Certified public accountants: Use the CPA Verify tool or check with your state's board of accountancy. Tax attorney: Contact your state's bar association.

For example, California and Oregon have stringent requirements for tax preparers, including exams, registration, and continuing education. These regulations are designed to protect consumers by ensuring that tax preparers are knowledgeable and qualified.

It might be worth reaching out to a tax professional if: You are using itemized deductions but aren't sure about the qualifications and limitations of those deductions. You're not sure if you're making the most of your itemized deductions. You own a business.

Since a tax pro is less likely to make mistakes on a return and is more likely to know which deductions and credits you're eligible for, hiring someone to prepare and file your tax return can make you less likely to be audited.

Joint filers receive one of the largest standard deductions each year. This lets couples deduct a significant amount when they calculate their taxable income. Couples who file together can often more easily qualify for various tax credits, like: Earned Income Tax Credit.