Do You Need an Accountant to Do Your Tax Return? How to Find One

You might have more options than you think

Couple shaking hands with their accountant.
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An accountant can prepare your taxes quickly, professionally, and securely, ensuring that you get all the tax credits and deductions to which you're entitled. Perhaps most importantly, they can tackle any complex tax situation you might face, given your personal financial situation.

Finding an accountant to prepare your taxes is a relatively straightforward process, but ask yourself why you think you need a professional to prepare your return. You might choose to do so for three common reasons.

You're Dealing with a Complex Tax Situation

Life isn't stagnant, and it's surprisingly common for taxpayers to experience a wrinkle, crisis, or significant change during the tax year that dramatically affects their tax situations. This is a time for professional help.

You'll want to at least consult with a professional so you understand what you're facing if your situation has changed significantly, even if you don't ultimately ask them to prepare your return.

Accountants often specialize in certain kinds of tax issues. Seek an accountant who has expertise in that area if you have a special circumstance. For example, you might have moved outside the United States, you launched a small business, or you've begun day trading in the stock market.

Call around to various tax offices to find an accountant who specializes in your area of concern if you have a complex tax situation. Ask about their prices and find out how quickly you can schedule an appointment.

You Want to Save Time

Consider going to H&R Block, Jackson Hewitt, Liberty Tax, or to any another retail tax company if having your taxes done quickly and effortlessly is your primary concern. These companies employ specially-trained tax preparation experts who will get your return completed as fast and as seamlessly as possible, and they have locations all over the country.

Keep in mind that preparing your return quickly usually means that the professional isn't going to spend a lot of time meeting with you to determine what tax credits and deduction you might qualify for that you might not be aware of.

Some independent accountants will prepare your taxes for you while you wait, but most will want to conduct at least a brief interview with you first. Then they'll typically finish your tax return within a few days. Be sure to ask how long it will take the accountant to complete your tax return if time is of the essence and you decide not to use a retail tax company.

Many retail tax companies also sell software at half the cost if you don't mind spending a little time at your computer keyboard. 

You Want to Reduce Your Tax Bill

You might want to seek the advice of a licensed tax professional, such as a certified public accountant, if your goal is to figure out how to lower your tax bill. This will probably cost you more than a retail tax company would charge, however, so it might end up being a wash financially unless you expect to save big through professional advice.

Check into Professional Licenses

Some accountants have earned licenses or certifications in their profession. The most well known is that of certified public accountant (CPA). This license is granted when an accountant has met certain educational requirements and passes comprehensive testing of their tax and accounting knowledge by taking the Uniform CPA Examination.

Experience and education requirements for CPAs can vary somewhat by state.

An enrolled agent (EA) is an accountant who has passed a comprehensive two-day test covering tax law given by the Internal Revenue Service, or has actually worked for the IRS in a qualifying capacity. Along with CPAs and tax attorneys, these individuals are authorized to practice before the IRS. They can go to an audit or talk to the tax collector on your behalf without you being present.

Not every taxpayer requires the specialized knowledge and skills that these professionals possess, but it’s good to know that they're there in case you need them.

Accountants at local tax firms are often more than helpful and knowledgeable when it comes to simple tax preparation.

Do Some Price Shopping

Don't neglect to ask potential accountants what their price ranges are, but keep in mind that it's difficult to give an exact price estimate just by talking on the phone.

Most accountants charge for each form they have to complete for you, so more complex tax returns naturally cost more than simpler ones. Some accountants are moving to a flat rate or per hour pricing, however, so it pays to ask.

Inquire about any guarantees that an accountant might offer as well. Many will personally guarantee that your tax return is free of math errors and data-entry errors. The accountant should offer to redo your tax return free of charge to correct mistakes if any are found.

It's ultimately up to you to make sure your tax return is accurate. You have to sign the tax return yourself.

How Much Will This Cost?

On average, a tax return that's professionally prepared cost about $158 in the 2018/2019 tax season, but this can depend on location. It ranges from $106 in the north central states to $200 in the New Jersey and New York areas for a basic Form 1040 claiming the standard deduction.

Plan on spending more if you want to itemize your deductions, because this involves a good bit more work. And you'll pay still more if you're self-employed and must file a Schedule C.

Don't Overlook the Software Option

This goes back to the original question: Do you really need someone to prepare your tax return?

The days of sharpening several pencils and dragging out a calculator are long behind us. You might want to consider purchasing tax preparation software if you don't mind investing a little time, if your tax situation isn't extremely complicated, and if you can navigate a website or program fairly well.

Most of these programs, including H&R Block and TurboTax, will walk you through a series of questions. You answer, and the program will complete your return based on your responses. Do you have a W-2 form? Fine. Just enter the information from the form when prompted. The same goes for any Forms 1099 you've received.

Do you have any qualifying dependents for certain tax credits? Not sure? Just answer a few questions. Tax preparation software will tell you the answer.

These programs usually cost a fraction of what an accountant will charge. H&R Block charged $105 for a self-employed tax return including Schedule C as of late 2020 for the 2019 filing season. Turbo Tax was slightly more at $120.

State returns are typically extra, but an accountant will usually charge extra for state returns, too. And prices can increase across the board during peak filing season.

Finally, the IRS offers the Free File Alliance if your tax situation is very basic and you earned $69,000 or less during the tax year as of 2020. This option won't cost you a dime, but other qualifying rules can apply.

Article Sources

  1. AICPA. "CPA Licensure." Accessed Sept. 29, 2020.

  2. IRS. "Become an Enrolled Agent." Accessed Sept. 29, 2020.

  3. National Society of Accountants. "2018-2019 Income and Fees Survey National Averages." Page 1. Accessed Sept. 29, 2020.

  4. IRS. "File Your Federal Taxes Online for Free." Accessed Sept. 29, 2020.