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Dear Pete,
Do I need a tax preparer to help me with my taxes? My situation is rather simple, but I can’t fight the feeling that by trying to save money on fees, I’m actually missing refund opportunities. If I do opt for someone to prepare my taxes, do I need a CPA?
—Henry, Plainfield
Every year, millions of Americans sit down at their kitchen tables, open up a tax software program and spend the next three hours mumbling, “Wait … what?”
Then, at the very end of the process, when the screen finally flashes, “You’re getting a refund,” they either breathe a sigh of relief or spiral into self-doubt. Because what if they missed something? What if they could have gotten a bigger refund? What if doing it themselves just cost them more than hiring a professional in the first place?
Taxes inspire doubt like few other things in life. You don’t want to pay someone to do something you could do yourself, but you also don’t want to be the person who left money on the table because you were too stubborn to ask for help. So, how do you know if you actually need a tax preparer, or if you’re just outsourcing your anxiety?
If your tax situation is relatively simple, there’s a good chance you can handle it on your own. People with a standard W-2 job, no side income, and no rental properties are in the sweet spot for DIY tax filing. The vast majority of taxpayers take the standard deduction, which means they aren’t itemizing things like mortgage interest, charitable donations or medical expenses. If you don’t own a business, don’t have complex investments and your life looks the same as it did last year, then plugging your numbers into tax software and letting it do its thing is probably the right call. These programs are designed to walk you through each step like a tax-savvy best friend, asking the right questions and making sure you’re not overlooking any obvious deductions.
But then there’s the other side of the coin. If you have freelance or self-employment income, rental properties or investments outside of a retirement account, the complexity goes up fast. Owning a business, even a small one, opens up a world of deductions, but only if you know how to use them. A good tax professional can make sure you’re maximizing your write-offs without accidentally setting yourself up for an audit.
If you’ve got investment income, especially anything involving capital gains, tax-loss harvesting or the wild world of cryptocurrency, you might want someone who understands the tax code better than you do. And major life changes—marriage, divorce, having kids, inheriting money—can shake up your tax situation in ways that aren’t always obvious. If your financial life has shifted significantly in the last year, getting professional help at least once can ensure you’re filing correctly and not leaving money behind.
Another reason to hire a tax preparer is simply peace of mind. Some people don’t trust themselves to get it right, and that’s OK. If doing your own taxes feels like trying to defuse a bomb while blindfolded, then, yes, outsourcing the stress to a professional is worth the fee. A good tax preparer won’t just fill out the forms for you—they’ll also answer your questions and help you understand your financial picture a little better.
But does that professional need to be a CPA? Not necessarily. A CPA, or certified public accountant, is a highly trained expert in accounting and tax strategy. CPAs are invaluable if you need tax planning beyond just filing your return. If you have a complex situation, own multiple businesses, or want long-term financial guidance, a CPA is a great investment. However, for most people who just need someone to prepare their return accurately, an enrolled agent or an experienced tax preparer can do the job just fine, often for a lower fee.
For those who can’t decide, there’s always a middle ground. One great approach is to do your own taxes using software, then pay a professional to review them before you file. That way, you’re not paying full-service fees, but you still get expert eyes on your return to catch any mistakes or missed deductions. It’s a great way to save money while ensuring you’re not making any costly errors.
No matter what, don’t overthink it. The IRS isn’t out here setting up traps for you. Just follow the steps, be honest and don’t let paranoia convince you to spend money unnecessarily. Unless, of course, doing your own taxes means you’ll lose sleep for a month. In that case, by all means—hand it off and sleep like a baby.•
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Dunn is CEO of Your Money Line powered by Pete the Planner, an employee-benefit organization focused on solving employees’ financial challenges. Email your financial questions to askpete@petetheplanner.com.
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