TurboTax is a genuinely good product. For the right person in the right situation, it is fast, affordable, and accurate. This is not an article about bashing tax software. It is about helping you figure out which category you are in, because getting that wrong costs people real money in both directions.
When TurboTax makes sense
Tax software works best when your financial situation is relatively straightforward. If most of the following apply to you, DIY probably works fine:
- You have a single W-2 and standard deductions
- You have no business income or self-employment
- You own no rental properties
- You have minimal investments and no complex capital gains situations
- You have not had any major life changes (divorce, inheritance, moving states)
- You are not dealing with any IRS notices or back tax issues
If that is your situation, TurboTax will probably do the job and save you money doing it.
When a CPA earns back their fee and then some
Here is where things get interesting. Tax software asks you questions and enters your answers. It does not proactively look for opportunities. It does not ask whether you should restructure your business, whether your retirement contribution strategy makes sense, or whether an S-Corp election would save you $12,000 this year.
A CPA does. And in the right situations, that proactive thinking pays for itself many times over.
Consider working with a CPA if any of these apply:
- You are self-employed or own a business
- You have multiple income streams or sources of investment income
- You own rental property
- You hold or trade cryptocurrency
- You have significant equity compensation (RSUs, stock options)
- You operate in or recently moved between multiple states
- You are going through a major life change: marriage, divorce, selling a business, inheritance
- You have received any IRS correspondence
- You are not confident you are claiming everything you are entitled to
The hidden cost of DIY
The most common mistake people make with tax software is not fraud or errors, it is missed opportunities. TurboTax will not tell you that your business structure is costing you $8,000 per year in unnecessary self-employment tax. It will not suggest that you should open a Solo 401(k) before year-end. It will not notice that you are eligible for a deduction you did not know to ask about.
Software does what you tell it to do. A CPA does what you need done, including the things you did not know to ask about.
The honest middle ground
Some people use TurboTax for their personal return and hire a CPA for their business return. Some people do their own books and bring in a CPA for year-end review. Some people with genuinely simple situations have no need for a CPA at all.
The question is not really "TurboTax or CPA?" The question is: what is the actual cost of each option, including the cost of what you might miss?
For someone paying $200 for TurboTax when they could be saving $10,000 with proper planning, the math is not close. For someone with a truly simple return, paying $500 for a CPA to enter the same numbers into the same boxes does not make sense either.
How to figure out which category you are in
The easiest way is to have a 30-minute conversation with a CPA before you decide. A good CPA will tell you honestly if your situation does not warrant their services. And if it does, you will know exactly why and what the upside looks like before you commit to anything.
Still have questions? This is exactly the kind of thing we talk through on a free 30-minute call. No pressure, no commitment. Just a straight answer from a licensed CPA who has seen your situation before.