Each year, tax season brings a critical decision for many entrepreneurs and small business owners: should you file taxes yourself or hire a CPA?
While do-it-yourself tax software has made filing easier and more affordable than ever, it’s not always the best fit—especially for small businesses with complex deductions, multiple income streams, or growth plans. On the other hand, hiring a CPA offers personalized guidance but comes with added cost.
This guide breaks down the pros, cons, and key differences between DIY filing and professional tax services to help you make the right decision for your business.
Option 1: Filing Taxes Yourself
Pros of DIY Filing
1. Lower Cost: Tax software like TurboTax, TaxSlayer, and H&R Block typically costs between $0 and $150, depending on the complexity of your return. For solo entrepreneurs or freelancers with simple income and expenses, DIY filing can be a budget-friendly option.
2. Convenience and Control: Filing on your own lets you work on your return at your own pace, at any time of day. You can review everything before submission and maintain complete control over the process.
3. Good for Simple Returns: If you’re a sole proprietor with limited expenses and no employees, DIY filing may be sufficient—especially if you keep organized records.
Cons of DIY Filing
1. Risk of Missed Deductions: Tax software only goes so far. It may not catch every credit or deduction available to your specific situation, such as depreciation, qualified business income (QBI) deductions, or industry-specific write-offs.
2. Higher Audit Risk Without Guidance: Filing errors, underreported income, or improper deductions can trigger an IRS audit. DIY filers may not realize which red flags increase scrutiny.
3. Time-Consuming: Even with user-friendly software, preparing your return can take 10 to 20 hours—longer if your bookkeeping is disorganized.
4. No Personalized Advice: Software doesn’t know your long-term goals. It won’t recommend changing your entity structure, adjusting estimated payments, or maximizing retirement plan contributions.
Option 2: Hiring a CPA
Pros of Hiring a CPA
1. Expert Tax Knowledge: CPAs are licensed professionals trained to navigate complex tax codes. They stay updated on IRS changes and know how to optimize filings for business owners.
2. Uncover More Deductions and Credits: A CPA can identify deductions most business owners miss—such as Section 179 depreciation, home office deductions, and health insurance write-offs.
3. Reduced Risk of Audit or Penalties: Having a CPA file your return adds credibility. If you’re audited, a CPA can represent you and provide documentation directly to the IRS.
4. Time Savings: Instead of spending hours researching forms and tax codes, you hand over the numbers and focus on running your business.
5. Strategic Financial Planning: A CPA can offer year-round advice—not just during tax season. They can help with entity selection, retirement planning, estimated tax payments, and more.
Cons of Hiring a CPA
1. Higher Cost: Hiring a CPA can cost anywhere from $400 to $1,500+, depending on your location and the complexity of your business. More advanced services (e.g., bookkeeping cleanup, multi-state filings) increase that cost. However, the savings you get on a return for tax credits can potentially more than offset the costs.
2. Requires Collaboration: You’ll need to provide organized financials, receipts, and documentation. A CPA can’t do everything without input from you. However, the collaborative element removes the risk of doing your taxes from you and your business.
3. May Not Be Necessary for Simple Returns: If your income is straightforward and you’ve already claimed all basic deductions, you may not see a significant ROI on professional help. Even on simple tax returns, a professional accountant in Nashville like Kawatra CPA can help you itemize things that you might miss.
File Taxes Yourself vs CPA: Side-by-Side Comparison
| Feature | DIY Tax Software | CPA Services |
| Cost | $0 – $150 | $400 – $1,500+ |
| Audit Support | Limited or none | Full representation |
| Deduction Optimization | Basic / Automated | Personalized and strategic |
| Time Required | 10–20 hours (or more) | 1–3 hours (prep + meeting) |
| Tax Planning Advice | No | Yes (year-round) |
| Risk of Filing Errors | Moderate to high | Low |
| Best For | Simple tax returns | Businesses with employees, assets, or complex income |
When Should You Hire a CPA?
You should consider hiring a CPA if:
- Your business has employees or contractors
- You operate in multiple states or internationally
- You’re planning to change your business structure
- You’ve had a significant change in income
- You plan to apply for business loans or financing
- You’ve received an IRS notice or audit request
- You want to save time and reduce stress
If you’re based in Nashville, hiring a Nashville CPA can also ensure compliance with local and state requirements, including business tax filings at the county and city levels. Local professionals understand the nuances of Tennessee’s tax landscape and can help you avoid state-specific pitfalls.
How Much Can a CPA Save You?
It’s common for CPAs to identify $1,000–$10,000 or more in savings through accurate categorization, overlooked deductions, depreciation strategies, and tax credit eligibility.
Even if the CPA fee seems high, the value often exceeds the cost—especially when you consider the peace of mind and strategic planning that comes with expert support.
Which Option Is Right for You?
If your return is straightforward and you enjoy being hands-on with your finances, DIY filing can work. But if your business is growing, your taxes are getting more complex, or you want long-term financial strategy, hiring a CPA is a smart investment.
Still undecided? Consider this:
- If you’re asking, “Am I doing this right?”—it might be time to bring in help.
- If you’re based in Tennessee, a Nashville CPA offers local expertise you won’t get from national software.
Ultimately, the choice between file taxes yourself vs CPA depends on your comfort level, business complexity, and willingness to trade time for accuracy and peace of mind. Work with Kawatra CPA in Nashville for peace of mind and the maximum savings.