Understanding the Cost of Tax Preparation: When Does It Make Sense to Work with a CPA?

Individuals and business owners often find themselves weighing the costs and benefits of professional tax preparation. While online software and DIY methods may seem appealing, there are many situations where working with a Certified Public Accountant (CPA) provides significant value—both in terms of financial savings and peace of mind.

How Much Does It Cost to Have a CPA Prepare Your Tax Return?

At DWD CPAs & Advisors, we take a thorough and strategic approach to tax preparation, ensuring accuracy and compliance while identifying opportunities for tax savings. As of January 1, 2025, our minimum tax return fee is set at $750.

The actual cost of tax preparation varies depending on the complexity of your return. Factors that may impact pricing include:

• Number of income sources – Wages, self-employment income, rental properties, and investments all add layers of complexity.
• Itemized deductions vs. standard deduction – If you’re claiming deductions for mortgage interest, medical expenses, charitable donations, or other eligible expenses, it requires additional time and expertise.
• Small business or rental properties – If you operate a business, own rental properties, or have significant investment activity, your tax situation requires a more detailed approach.
• State and local tax filings – Multi-state tax filings or unique state-specific deductions can increase the complexity of your return.

When Does It Make Sense to Hire a CPA?

While some individuals can confidently file their own taxes, there are many situations where working with a CPA is a wise investment:

1. Your Tax Situation Is Complex

If you have multiple sources of income, significant deductions, or own a business, a CPA ensures everything is reported correctly and that you’re maximizing deductions while staying compliant.

2. You Own a Business or Are Self-Employed

Running a business comes with tax obligations that go beyond a simple W-2 filing. A CPA can help you with deductions, estimated tax payments, and structuring your business for optimal tax efficiency.

3. You Have Rental Properties or Investment Income

Real estate and investment income require additional forms and reporting, which can be complex. A CPA ensures you take advantage of depreciation, capital gains strategies, and other tax-saving opportunities.

4. You Experienced a Major Life Change

Events such as marriage, divorce, retirement, or inheriting assets can impact your tax situation. A CPA helps navigate these changes and ensures proper tax planning.

5. You Want to Minimize Audit Risk

Mistakes on your tax return can trigger an IRS audit. A CPA provides a layer of accuracy and expertise that significantly reduces errors and potential red flags.

6. You Value Long-Term Tax Planning

Tax planning isn’t just about preparing your return—it’s about strategizing for the future. A CPA provides guidance on retirement contributions, tax-efficient investments, and estate planning strategies.

Investing in Professional Tax Preparation Pays Off

While DIY tax software may seem cost-effective upfront, working with a CPA offers expertise, accuracy, and potential tax savings that often outweigh the cost. If your financial situation is anything beyond simple, a CPA helps you avoid costly mistakes and ensures you’re making the best financial decisions.

At DWD CPAs & Advisors, we are committed to providing expert tax preparation and strategic tax planning. If you’re unsure whether hiring a CPA is the right move for you, we’re happy to discuss your situation and provide insight.