When to Hire a CPA: 5 Signs It's Time to Get Professional Help

You've been doing your own taxes for years. TurboTax, H&R Block, maybe even paper forms. It's worked fine.

But lately, things have gotten more complicated. You're second-guessing yourself. Wondering if you're missing something.

The short answer: There's nothing wrong with DIY taxes—until your situation outgrows the software. Here are five signs it's time to get professional help.

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Sign #1: Your Business Income Exceeds $50,000

When you're making real money from your business, the stakes get higher—and the opportunities for savings increase.

Why It Matters

At $50,000+ in business income:

• Entity structure decisions (LLC vs S-Corp) can save thousands annually
• Retirement account options expand significantly
• Tax planning strategies become more impactful
• Mistakes cost more money

What a CPA Can Do

• Evaluate whether S-corp election saves you money
• Set up optimal retirement contributions
• Identify deductions you're probably missing
• Create a tax planning strategy that reduces your annual bill

The Math

A sole proprietor earning $80,000 pays about $11,300 in self-employment tax alone.

Converting to an S-corp with proper salary could save $4,000-6,000 annually.

That's far more than CPA fees—and you get professional guidance on everything else too.

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Sign #2: You Have Complex Tax Situations

Some tax situations are just too complicated for DIY software.

Complex Situations Include

Investment income:

• Stock sales with complicated cost basis
• Cryptocurrency transactions
• Options and RSUs from your employer
• K-1s from partnerships or S-corps

Real estate:

• Rental property income and expenses
• Property sales and 1031 exchanges
• Depreciation and cost segregation
• Passive activity loss rules

Life events:

• Divorce (especially with business assets)
• Inheritance with stepped-up basis questions
• Multi-state income
• Large charitable donations

International:

• Foreign income or accounts
• Foreign tax credits
• FBAR and FATCA reporting

Why Software Falls Short

Tax software asks questions and fills in forms. It doesn't:

• Analyze whether your answers are optimal
• Suggest restructuring to save money
• Catch errors in your assumptions
• Know what you don't know to ask

Real Example

A Richardson investor sold stock received as an RSU. TurboTax asked for the sale price and quantity. What it didn't ask: whether the cost basis reported by the broker was correct (it often isn't for RSUs).

Result: The investor overpaid taxes by $3,000 because of incorrect cost basis. A CPA would have caught this.

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Sign #3: You're Starting a Business

The decisions you make when starting a business affect your taxes for years.

Critical Early Decisions

• Entity choice: Sole prop, LLC, S-corp, C-corp?
• Accounting method: Cash or accrual?
• Asset purchases: Section 179, bonus depreciation, or standard?
• Retirement accounts: Which type to set up?
• Estimated taxes: How much to pay quarterly?

The Cost of Getting It Wrong

Starting as the wrong entity type can mean:

• Thousands in extra self-employment taxes
• Missed QBI deduction opportunities
• Complicated (and expensive) restructuring later

Why Professionals Matter

A CPA doesn't just file your return—they help you structure things correctly from day one.

The consultation fee to set up properly is a fraction of the cost of fixing mistakes later.

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Sign #4: You've Had Major Life Events

Big life changes create tax complexity that software handles poorly.

Events That Trigger Complexity

Marriage:

• Filing status decisions
• Combining finances and records
• Potential "marriage penalty" or "marriage bonus"

Divorce:

• Asset division implications
• Alimony rules (changed significantly in 2019)
• Child-related deductions and credits

Home purchase or sale:

• Capital gains exclusion rules
• Points and mortgage interest
• Home office implications

Inheritance:

• Stepped-up basis calculations
• Required distributions from inherited IRAs
• Estate income from trusts

New baby:

• Child Tax Credit
• Dependent Care Credit
• FSA and HSA strategies

When DIY Works

If you got married but both have simple W-2 income, software is probably fine.

When You Need Help

If you got divorced, sold a house, inherited an IRA, and started a business all in one year—please hire someone.

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Sign #5: Taxes Take Too Much of Your Time

Your time has value. If you're spending hours on taxes that could go to your business (or your family), it might be cheaper to hire help.

The Time Calculation

How long do you spend on:

• Organizing receipts and records
• Learning about tax changes
• Researching deductions
• Actually preparing the return
• Worrying you did it wrong

If the answer is "20+ hours," consider what that time is worth.

The Hidden Costs of DIY

Beyond the time itself:

• Stress and anxiety about accuracy
• Opportunity cost of not focusing on your business
• Risk of errors and missed deductions
• No one to call when you get an IRS notice

When a CPA Saves Time

A good CPA:

• Tells you exactly what records to keep (and how)
• Handles IRS correspondence if it happens
• Answers questions throughout the year
• Frees you to focus on what you do best

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The ROI of Hiring a CPA

Let's talk about money.

What CPAs Cost

Service	Typical Range
Simple individual return	$200 - $400
Complex individual return	$400 - $800
Small business return (Sch C)	$400 - $700
S-Corp return	$800 - $1,500
Comprehensive tax planning	$500 - $2,000

What CPAs Save

A CPA's value isn't just in filing—it's in strategy:

• Entity optimization: $3,000 - $10,000+ annually
• Missed deductions found: $1,000 - $5,000 typically
• Retirement planning: $5,000 - $20,000+ over time
• Audit representation: Priceless (if you need it)

The Real Comparison

DIY approach:

• TurboTax: $150
• Your time: 15 hours × $100/hour = $1,500
• Missed deductions: Unknown, but probably $500+
• Stress: High

CPA approach:

• CPA fee: $600
• Your time: 3 hours gathering documents = $300
• Missed deductions: Near zero
• Stress: Low

Which one actually costs more?

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CPA vs. Tax Preparer vs. DIY

Not all tax help is equal.

DIY Software (TurboTax, H&R Block Online)

Good for: Simple returns, W-2 income only, no complications Not great for: Business owners, investors, complex situations Cost: $50 - $200

Tax Preparers (Non-CPA)

Good for: Moderately complex returns, local convenience Not great for: Strategic planning, representation, complex issues Cost: $200 - $500

Enrolled Agents

Good for: Tax preparation and IRS representation Not great for: Broader financial and business advice Cost: $200 - $600

CPAs

Good for: Complex situations, business owners, strategic planning Not great for: If you just have a simple W-2 return Cost: $300 - $2,000+

The Bottom Line

If your taxes are simple, software works fine. But once you have a business, investments, or complexity, a CPA provides value that far exceeds the fee.

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Finding the Right CPA

Not all CPAs are created equal. Here's what to look for:

Must-Haves

• Active CPA license (verify with your state board)
• Experience with your situation (business owner, investor, etc.)
• Availability for questions throughout the year
• Clear communication style you understand

Good Signs

• They ask lots of questions about your situation
• They explain things in plain English
• They proactively suggest strategies
• They have reviews or references

Red Flags

• They guarantee a specific refund before seeing your situation
• They discourage record-keeping ("we'll estimate")
• They're unavailable outside of tax season
• They don't ask about your goals

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The Bottom Line

There's no shame in doing your own taxes. Millions of people do it successfully every year.

But if your situation has grown more complex—business income, investments, life changes, or just general overwhelm—professional help often pays for itself.

A good CPA doesn't just file your taxes. They help you structure your finances to minimize taxes legally, year after year.

If any of these five signs resonated with you, let's have a conversation. We can talk through your situation and see if professional help makes sense.

Ready to talk through your situation? Schedule a conversation →

— Krystal Le, CPA

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LeCPA helps individuals and businesses across Plano, Richardson, Frisco, and Dallas with tax preparation and strategic planning. Schedule a free strategy session →