DIY Taxes vs. Hiring a CPA: Which Option Is Right for You?

Tax season brings a common dilemma for individuals and business owners alike: Should you file your taxes yourself or hire a Certified Public Accountant (CPA)? With the proliferation of tax software and online platforms, the DIY route may seem appealing—especially if your tax situation appears simple. However, working with a seasoned CPA can uncover savings opportunities, ensure accuracy, and help you avoid costly mistakes.

We’ll break down the pros and cons of both options to help you determine which is right for you.

The Case for DIY Taxes

1. Cost Savings

One of the most compelling reasons people choose to file taxes on their own is to save money. Tax preparation software is relatively inexpensive, ranging from free to around $150 depending on your needs. If you have a simple tax return—no dependents, no itemized deductions, and one source of income—this can be a reasonable approach.

2. Convenience and Speed

Filing online can be quick and convenient. Most tax software programs are intuitive and walk you through the process step by step. Many even allow you to file your state and federal taxes in under an hour if you have all your documents ready.

3. Control and Visibility

Filing taxes yourself gives you greater insight into your financial picture. You’ll understand how your income, deductions, and credits affect your tax liability. For people who enjoy being hands-on with their finances, this can be empowering.

The Risks of DIY Taxes

While there are advantages, DIY taxes are not without risk.

1. Human Error

Even with software assistance, mistakes can happen—especially if you’re unfamiliar with tax laws. Incorrectly entering figures, misclassifying income, or failing to claim eligible deductions could result in overpaying or underpaying your taxes.

2. Limited Support for Complex Situations

If your tax situation includes rental properties, business income, capital gains, or cryptocurrency transactions, software can fall short. While some platforms offer support, it often costs extra and still doesn’t match the depth of knowledge and strategic guidance a CPA provides.

3. Audits and Legal Risk

If you are audited by the IRS, having a CPA who understands your return and can represent you is invaluable. DIY filers are more likely to struggle through the audit process alone or pay significantly more later for professional help.

The Case for Hiring a CPA

1. Expert Knowledge and Strategy

A CPA brings extensive knowledge of federal, state, and local tax laws. We don’t just fill out forms—we strategize to minimize your tax liability and uncover deductions you may not know exist. This is particularly important for business owners, investors, and high-net-worth individuals.

2. Time Savings

Filing taxes can be time-consuming, especially if you have multiple income sources, itemized deductions, or business expenses. A CPA takes this burden off your shoulders so you can focus on your work or personal life without the stress of tax season.

3. Accuracy and Peace of Mind

CPAs go through rigorous training and certification, ensuring accuracy and compliance. When you hire a CPA, you’re not just paying for a service—you’re investing in peace of mind that your return is correct and optimized.

4. Audit Support

If the IRS flags your return, a CPA can represent you and respond to the audit on your behalf. This is one of the most significant advantages of having professional tax representation.

5. Long-Term Planning

Unlike tax software, a CPA can help you plan for the future. Whether it’s retirement planning, business growth strategies, or estate tax considerations, working with a CPA provides year-round financial insight—not just during tax season.

When DIY Might Be Enough

Filing taxes yourself may be the right fit if:

• You’re a W-2 employee with no dependents or major deductions.
• You have a straightforward return and are comfortable with technology.
• You don’t mind spending the time to research and double-check your work.
• You’re not worried about maximizing deductions or strategizing for next year.

When Hiring a CPA Makes Sense

Hiring a CPA is likely the smarter choice if:

• You’re self-employed or own a business.
• You earn income from multiple states or sources.
• You have rental properties, investments, or retirement accounts.
• You want to proactively reduce your future tax liability.
• You’ve experienced a major life event (marriage, divorce, inheritance, etc.).
• You want personalized guidance and year-round financial planning.

The Hidden Costs of “Cheap” Filing

It’s easy to be lured in by the low price of DIY tax software. But if you miss a deduction, underreport income, or trigger an audit, those savings can evaporate quickly. Even a small error can lead to IRS penalties, interest charges, or delays in your refund.

When you consider the potential financial consequences, working with a CPA often pays for itself.

Real-World Example

Let’s say you run a small freelance business on the side. You use a tax software and input your 1099 income, but you forget to claim several deductible business expenses like your home office, phone bill, and mileage. You could be leaving thousands of dollars in deductions on the table. A CPA, however, would know to ask the right questions to ensure those deductions are claimed, reducing your taxable income and possibly increasing your refund.

Value Beyond Tax Season

At SD Bookkeeping by Paul Anderson, we don’t just prepare taxes—we help clients understand their finances, maximize deductions, and prepare for the future. Whether it’s quarterly planning, budgeting, or responding to tax law changes, we’re your long-term financial partner.

When you build a relationship with a CPA, you gain a trusted advisor who can help guide your financial journey through every life event and business milestone.

How We Can Help

At SD Bookkeeping by Paul Anderson, we proudly serve San Diego with top-ranked, personalized bookkeeping, accounting, and tax services. Whether you’re a first-time filer, small business owner, or someone with complex finances, we make the process stress-free, accurate, and strategic. Unlike cookie-cutter software, we tailor our services to fit your unique situation—and we’re here year-round, not just during tax season.

If you’re unsure whether DIY or professional help is right for you, let’s talk. We offer consultations to evaluate your situation and recommend the best course of action. Our goal is not just to prepare your taxes but to help you thrive financially, now and in the future.