I do not do my own taxes.
That will shock a lot of my readers and clients who know that I own a business that offers tax planning and tax preparation.
Also, I am an IRS enrolled agent, licensed to prepare taxes and represent taxpayers in front of the IRS.
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I did my own taxes in high school, college and early in my career, when my taxes were simple and the stakes were lower. But today, I own a few businesses and would rather have someone else — someone who spends all day doing this — wrestle with all the complexities.
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I should also mention that the intent of this column is not to try to persuade you to stop doing your own taxes. We work with retirees who typically have about $2 million to $10 million invested. I would guess about 30% do their own taxes, and for the majority of them, that’s totally fine.
Here are the situations on the other end of the spectrum, primarily folks in the demographic we help, where I think using a professional tax preparer makes sense.
1. You are selling your primary residence
On one hand, this can be a simple thing to report on Schedule D.
On the other hand, the stakes are high. We have a number of clients every year selling homes well into seven-figure territory that they bought for a fraction of that.
There are significant tax benefits to selling your primary residence vs an investment property, but you must ensure you qualify, calculate your adjusted basis, account for any periods when the home was rented, etc. Things can get complicated quickly.
2. You are considering selling an investment property or a vacation property
This calculation is much more complicated than the one for selling your primary residence. You must calculate the adjusted basis and factor in depreciation recapture.
Vacation homes tend to be simpler, but there may be planning opportunities here if you’re willing to convert a vacation home into your primary residence for a period of time.
The accountant’s job is to report the transaction. A financial planner may be able to help with the planning strategies.
We rely on tax planning and financial planning software to walk through the different scenarios and the estimated tax due, or saved, in each one. You can access a free version of the planning software.
3. You are starting a business or own one
Sole proprietors report income on Schedule C. It’s a fairly straightforward form that you may be able to do on your own. However, a good CPA’s job extends beyond just reporting and compliance to strategy.
Should you actually be a sole proprietor? Would an S corp or C corp be more advantageous? If so, things will get much more complicated, but it may be worth it.
Either way, it makes sense to have a pro weigh in.
4. You have significant K-1 income
K-1s report your share of income, losses, deductions and credits from a pass-through entity. That sounds like a different language to anyone who hasn’t lived this life.
I have brought on many clients over the years who had straightforward tax situations but had to file extensions every year because their former adviser put them in a few private investments that issue K-1s.
These can be simple to plug into a tax-preparation software program like TurboTax, but the larger the proportion of your income these are, the more beneficial it will be to hire someone to correctly report the income.
This is especially true in years when one of these entities is sold or has a liquidity event.
5. You are planning a large gift
I’ll define “large” as anything over the annual gift tax exclusion ($19,000 per recipient in 2025) because that’s when you have to start reporting personal gifts on IRS Form 709.
However, the larger the gift, whether charitable or personal, the more important this is to get right.
I see people give kids money all the time for educational or medical expenses that would be better off going directly to the institution.
Similarly, I see charitable gifts done in an extremely inefficient manner.
To get this right often takes the coordination of a financial planner and a CPA.
6. You’ve received an inheritance
Inheriting capital assets (taxable investment accounts, real estate, etc.) is great because beneficiaries receive a step-up in basis.
However, this doesn’t happen automatically. You are responsible for calculating date-of-death values and any subsequent gains. A CPA can help.
Inheriting an IRA or other retirement account has become much more complicated since the SECURE Act became law. You want to make sure you are taking RMDs when you are supposed to.
7. You have a taxable estate and/or there are irrevocable trusts
I don’t think I’ve come across anyone with a taxable estate ($13.99 million per person in 2025) who is doing their own taxes, but this may be you.
In this situation, the investment income is likely high enough to warrant a second set of eyes. There are often gift and estate considerations that would also be reflected on your 1040.
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When you have a taxable estate, you often incorporate irrevocable trusts in your estate plan to help mitigate estate taxes and protect assets for the next generations. Irrevocable trusts will have their own trust tax return.
8. You are a dual citizen or have foreign assets/income
This could take all sorts of different forms:
- You could be living in the U.S. but have foreign investments and foreign income.
- You could be a U.S. citizen living abroad who has to file income taxes in multiple countries.
- You may have dual citizenship, live here, but still own a house back home.
The IRS has specific rules, credits and forms that must be filed in all of these situations. You’ll want to engage someone who specializes in cross-border tax planning.
9. You earn income in multiple states
In the U.S., you must report income in the state in which it was earned. Our clients who retired from big law firms saw the complexity of their returns implode the year after retirement. The same is true of the partners at Big Four accounting firms.
This is not the only situation where this is the case. We often see multiple state returns for clients with rental properties in different states.
Sometimes this is simple. Other times, it makes sense to get help.
10. You are divorced or getting divorced and have joint assets
I recently had a retired accountant reach out to figure out how to report joint income from a private investment with her ex-spouse. I had to refer her to our internal tax team.
My bottom line on DIY taxes
In 2019, I decided to do my own return on TurboTax. I had so many clients using the software that I thought it would be helpful for my clients if I had used it myself.
Two things surprised me: First is how intuitive the software is. The second is how many terms it uses that I know only because I am in the business.
At the end of the exercise, even I wasn’t fully confident in the output. I have to assume most people feel this way.
Final thought: I wanted to keep this article to 10 reasons, but if I were to add an 11th, I’d suggest that if you’re just guessing a lot, it’s time to ask for help.
