TurboTax costs $50-$200. A CPA costs $300-$2,000+. On the surface, the software seems like the obvious choice. But cost and price are different things. The real question isn't which costs less — it's which saves you more.
Here's how to decide.
When Tax Software Is Enough
If your tax situation is genuinely simple, tax software handles it fine:
- W-2 income from one or two employers
- Standard deduction (no itemizing)
- Basic credits (Child Tax Credit, education credits)
- No business income or self-employment
- No rental properties or complex investments
- Single state filing
For this profile, TurboTax, H&R Block, or even the IRS Free File program will produce an accurate return. A CPA would file the same return and charge more.
When a CPA Saves You Money
The moment your situation gets more complex, tax software starts leaving money on the table — because software asks questions, but it doesn't think strategically.
Self-employment or business income. Software calculates your self-employment tax. A CPA tells you that an S-Corp election would save $8,000 per year — and sets it up for you.
Multiple income sources. Software puts numbers in boxes. A CPA coordinates timing, identifies which income to defer, and optimizes your overall tax position.
Rental property. Software handles basic Schedule E. A CPA recommends a cost segregation study that generates $30,000 in accelerated depreciation.
Stock options or equity compensation. Software asks you to enter 1099-B data. A CPA plans the timing of your exercises to minimize AMT exposure and maximize long-term capital gains treatment.
Business deductions. Software asks "do you have a home office?" A CPA calculates the actual expense method vs. simplified method and identifies the $3,000 difference. Software doesn't tell you that your home office makes all your business mileage deductible.
Tax planning. Software looks backward — it files last year's return. A CPA looks forward — they tell you what to do this year to pay less next year. Software can never do this.
The Real Cost Comparison
TurboTax Self-Employed: ~$120 + state filing CPA for self-employed: ~$500-$1,500
Difference: $400-$1,400
But: If the CPA identifies $5,000-$15,000 in deductions, strategies, or structural changes that TurboTax wouldn't suggest, the CPA's fee pays for itself 3-10x over.
The most expensive tax return isn't the one with the highest preparation fee — it's the one that misses the most money.
What Software Can't Do
- Recommend entity structure changes
- Calculate optimal S-Corp salary
- Advise on retirement plan selection and contribution amounts
- Plan Roth conversions during low-income years
- Coordinate multi-year tax strategies
- Represent you in an IRS audit
- Provide financial statements for a bank loan
- Tell you when tax law changes affect your specific situation
The Bottom Line
Use software if: Your taxes are truly simple (W-2, standard deduction, no business income).
Hire a CPA if: You have any business income, self-employment, investments beyond basic retirement accounts, rental property, or you simply want to make sure you're not overpaying.
The tipping point for most people is around $50,000 in total income or any self-employment income. Above that, a CPA almost always pays for themselves.
Find a CPA who works with your type of tax situation at ListMyCpa.com. Search by state, city, and specialization — and stop wondering if you're leaving money on the table.