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A Business Owner’s Guide to Hiring an Accountant for Tax Season

  • Writer: DM Monticello
    DM Monticello
  • Jun 20
  • 8 min read

Doing your own taxes might seem like a cost-saving decision—until it costs you. Whether you’re self-employed, running a business, or managing a complex financial life, hiring a tax accountant can save you time, money, and stress. In this guide, we’ll explore why, when, and how to hire an accountant for taxes and how to find the right one for your needs.



What Does a Tax Accountant Do?

A tax accountant specializes in preparing and filing tax returns for individuals, small businesses, and corporations. They are trained in federal, state, and sometimes international tax laws, helping clients stay compliant and avoid overpaying.

Key Services Offered:

  • Preparing and filing tax returns

  • Identifying deductions and tax credits

  • Estimating quarterly taxes

  • Representing clients in front of the IRS (if licensed as a CPA or EA)

  • Advising on tax strategies based on life events (e.g., marriage, home purchase, inheritance)

  • Handling back taxes or audits

Tax accountants may be CPAs (Certified Public Accountants), Enrolled Agents (EAs), or non-credentialed preparers registered with the IRS. For the most reliable service, it’s smart to choose a CPA or EA with relevant experience.



Signs You Should Hire an Accountant for Taxes

You don’t need to be wealthy or own a business to justify hiring a professional. Here are common situations where working with a tax accountant pays off:

1. You’re Self-Employed or Freelance

If you’re a 1099 worker or independent contractor, you’re responsible for estimating and paying your own taxes quarterly. A tax accountant will help:

  • Calculate what you owe

  • Find write-offs (e.g., home office, equipment, mileage)

  • Avoid underpayment penalties

  • Set up retirement accounts like SEP IRAs or Solo 401(k)s

2. You Own Rental Properties

Rental income must be reported, but many people miss depreciation deductions, repair expenses, or even travel write-offs. A tax accountant can:

  • Prepare your Schedule E properly

  • Advise on passive activity rules

  • Help with real estate professional status qualifications

3. You Have Capital Gains or Stock Options

Selling stock, receiving RSUs, or exercising ISOs? A good accountant ensures:

  • Correct reporting on Form 8949

  • Use of long-term vs. short-term gain strategies

  • Avoidance of AMT or overpayment on gains

4. You Have Multiple Income Streams

Between W-2 jobs, side hustles, and investment income, you may need:

  • Help reconciling forms like 1099-K, 1099-INT, and W-2

  • Strategies to minimize tax on overlapping income sources

5. You Had a Major Life Change

If you recently:

  • Got married or divorced

  • Bought a house

  • Had a child

  • Inherited assets

…your tax profile has likely changed. An accountant can update your withholding or estimate new liabilities.

6. You’re Behind on Filing or Facing IRS Issues

Tax accountants help resolve:

  • Back tax returns

  • Notices from the IRS

  • Payment plans or Offers in Compromise

This is where a CPA or EA licensed to represent you before the IRS becomes critical.



Benefits of Hiring a Tax Accountant

Hiring a professional isn’t just about doing it “right”—it can offer a measurable return on investment.

Save Time

The IRS estimates it takes 13 hours to file a simple tax return. Business returns can take 24+ hours. Hiring a tax accountant allows you to focus on your job or company instead of forms and formulas.

Save Money

Even with fees ranging from $200 to $800 or more, accountants often help you:

  • Maximize deductions you didn’t know existed

  • Avoid penalties for late or incorrect filings

  • Plan ahead to reduce next year’s tax bill

Avoid Mistakes

Incorrect filings can trigger audits, IRS letters, or payment delays. Accountants understand how to avoid common errors:

  • Incorrect Social Security numbers

  • Misreported income

  • Missed tax form schedules

  • Improper dependent claims

Audit Protection

CPAs and EAs are legally allowed to represent you before the IRS. If you ever face an audit, they can communicate directly on your behalf.



How Much Does It Cost to Hire an Accountant for Taxes?

Costs vary based on:

  • Complexity of your return

  • Number of forms needed

  • Local rates and credential level

  • Whether you’re a business, freelancer, or individual

Average Rates:

Service Type

Cost Range

Basic 1040 return (no itemizing)

$150 – $250

1040 + Schedule C (freelancers)

$300 – $600

Business tax returns (LLC/S-Corp)

$600 – $1,500+

IRS audit response

$500 – $3,000+ (varies)

Be sure to ask for:

  • A written engagement letter

  • Fee breakdown by form or service

  • Info on hourly vs. flat-rate billing



Where to Find and Hire a Tax Accountant

There are several reliable places to search:

1. IRS Preparer Directory

2. State CPA Societies

3. National Association of Enrolled Agents (NAEA)

4. Online Platforms

Reputable services like Thumbtack, Upwork, and even LinkedIn can help you filter by specialty, reviews, and location. Always verify credentials before hiring.

What to Ask Before Hiring an Accountant for Taxes

Hiring a tax accountant is a decision that should be based on more than just price. Ask the right questions to ensure you're choosing a professional who fits your needs.

Key Questions to Ask

  1. What credentials do you hold?

    • Look for CPA, EA, or AFSP (Annual Filing Season Program).

  2. How long have you been preparing taxes?

    • More years often equals more experience with complex returns.

  3. Do you specialize in my type of tax situation?

    • For example: real estate, freelancing, crypto, or small business ownership.

  4. What are your fees, and what do they cover?

    • Clarify whether e-filing, audit protection, and phone calls are included.

  5. How do we share documents securely?

    • They should use encrypted tools like SmartVault or secure client portals.

  6. Will you help me with tax planning year-round, not just filing?

    • Strategic accountants offer advice beyond tax season.



Red Flags to Avoid

Even credentialed professionals might not be a good fit. Here are some warning signs:

Vague Pricing

If an accountant won't give you at least a general quote range before starting work, be cautious.

Promises of Big Refunds Without Review

Anyone guaranteeing a huge refund before looking at your paperwork may be stretching the truth—or the law.

No Secure Communication

Avoid accountants who ask for sensitive documents by email or don't use secure uploads.

Lack of Transparency on Credentials

If they can't prove they are a licensed CPA or EA, move on.



CPA vs EA vs Tax Software

Not all tax preparers are created equal. Here's how they compare:

Option

Best For

Cons

CPA (Certified Public Accountant)

Business owners, high earners, complex taxes

More expensive, often require appointments

EA (Enrolled Agent)

IRS representation, freelance & rental income

Less financial advisory services

Tax Software (e.g., TurboTax)

Simple W-2 returns

High error risk, limited strategy, no audit help

For most people with anything more than a single W-2, using software alone can result in missed deductions, wrong forms, or costly mistakes.



Real-Life Examples of Hiring a Tax Accountant

Case 1: Real Estate Side Hustle

Client: Dana, full-time nurse, part-time Airbnb host Situation: Didn’t know how to report Airbnb income or deduct utilities and renovations What the Accountant Did:

  • Created a depreciation schedule for the property

  • Used pro-rata formula for utility write-offs

  • Saved $6,200 in taxes Outcome: Dana now files quarterly and works with the same CPA yearly.

Case 2: Crypto Investor With Complex Gains

Client: Marcus, 29, freelance designer Situation: Bought and sold NFTs and altcoins across 5 wallets What the Accountant Did:

  • Consolidated wallet transactions using Koinly

  • Matched gains/losses with capital tax schedules

  • Filed Schedule D correctly and on time Outcome: Avoided IRS flags and filed within 48 hours of receiving Form 1099-B.

Case 3: LLC Partnership in Tech

Clients: Tom & Raj, app developers running a SaaS startup Situation: First year running a pass-through LLC, unsure about K-1s What the Accountant Did:

  • Filed 1065 Partnership Return + K-1s

  • Helped them defer income and prepay expenses

  • Estimated quarterly taxes based on projected revenue Outcome: On track to raise capital with clean books and compliant tax filings.



When to Use Tax Software (and When to Upgrade)

Use tax software if:

  • You only have W-2 income and standard deductions

  • You don't own property, invest, or freelance

  • You’re comfortable with DIY and tax basics

Upgrade to an accountant if:

  • You make over $75K annually

  • You own real estate, freelance, or run a business

  • You have multiple 1099s, capital gains, or charitable deductions

  • You received unemployment, crypto gains, or inheritance

  • You want to plan, not just file



Timeline for Hiring a Tax Accountant

Timing

Action

Nov–Jan

Begin outreach and ask for consultations

Feb–March

Upload documents and review estimates

March–April

File or request an extension

May–Dec

Schedule mid-year tax planning sessions

Avoid waiting until March or April. Many top accountants book up by February.



Where to Hire a Tax Accountant

Reputable Resources:

  • IRS Directory of Federal Tax Return Preparers

  • AICPA “Find a CPA” Tool

  • National Association of Enrolled Agents

Other Options:

  • LinkedIn or referrals from trusted professionals

  • Local CPA firms with Google Business reviews

  • Virtual tax services like Bench, Taxfyle, or CPAs operating online



Tax Planning Tips and Hiring Checklist

Strategic Tax Planning Tips You Can Only Get from a Pro

Tax accountants don’t just file returns—they help you plan smarter. Here are examples of how accountants deliver long-term tax savings:

  1. Timing Income and Expenses If you're self-employed, a CPA might recommend deferring income until the next year while accelerating deductible expenses before year-end.

  2. Understanding Depreciation Property owners often miss out on depreciation schedules. CPAs apply cost segregation studies to maximize upfront write-offs.

  3. Choosing the Right Business Entity Your accountant can help you transition from sole proprietorship to LLC or S-corp to save thousands in self-employment tax.

  4. Maximizing Retirement Deductions Solo 401(k)s, SEP IRAs, and defined benefit plans can reduce taxable income while securing your future.

  5. Capital Loss Harvesting A skilled accountant can offset gains with losses to reduce capital gains taxes—especially important in volatile markets.



Hiring Checklist: Choosing the Right Accountant for Your Taxes

Before hiring, walk through this quick checklist to make the smartest choice:

Credentials

  • CPA, EA, or at least AFSP-registered

  • Experience relevant to your tax situation (e.g., crypto, real estate)

 Communication

  • Offers secure document exchange and e-signature options

  • Replies within 24–48 hours

  • Willing to meet virtually or in person

Services

  • Clear scope of services (filing only or year-round planning?)

  • Flat-rate vs. hourly pricing is explained

  • Includes audit response or support

References and Reviews

  • Online ratings on Google, LinkedIn, or professional sites

  • Referrals from business owners or friends

  • No red flags or vague guarantees



Accountant vs. Tax Software (Expanded)

Even premium tax software can’t match the expertise of a seasoned accountant. Here’s a deeper look:

Feature

Accountant

Tax Software

Custom tax strategy

✅ Yes

❌ Only surface-level recommendations

Audit protection

✅ CPA/EA can represent you

❌ Basic audit support (if any)

Secure document handling

✅ Often encrypted client portals

✅ Encrypted, but less personalized

Filing complexity

✅ Handles all tax scenarios

❌ Limited to common forms

Long-term planning

✅ Advises on deductions, structure

❌ No planning services

Cost

💰 Higher up front

💰 Cheaper, but may cost in missed savings

If you're unsure which to choose, ask yourself this: Would you rather save $200 now or risk overpaying $2,000 later?



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