Do I really need a CPA to prepare my tax returns? Worth the expense?

As a tax advisor who's been in the field for 15+ years, I can tell you it really depends on your comfort level with tax concepts and your specific financial situation. From what you've described, your tax situation has some complexity with the rental property and side business, but it's not extremely complicated. Many people successfully handle similar situations using tax software. The key questions are: How comfortable are you learning tax rules? How much time do you want to spend on it? And how confident do you need to be in the accuracy? If you want to try self-filing, I'd suggest doing it alongside your CPA for one year. Complete your return using tax software, then compare it to what your CPA produces. If they match closely, you might be fine going solo. If there are significant differences, ask your CPA to explain why - it's a great learning opportunity. Remember that good tax software will guide you through rental property depreciation and business expenses. The learning curve might be steep the first year, but it gets easier. And if you do make the switch, consider having a CPA review your return every few years or when tax laws change significantly.

After years of paying CPAs ridiculous fees, I finally tried taxr.ai (https://taxr.ai) last year and it was a game-changer. I was in a similar situation - some investment income, a rental property, and a small consulting business. I was paying almost $800 for tax prep and wondered if it was worth it. What's cool about taxr.ai is it actually reviews all your documents and identifies potential issues or missing deductions that other software might miss. It caught a depreciation calculation I would have definitely messed up on my rental property. The analysis it provided felt like having a CPA's expertise but at a fraction of what I was paying before. I was nervous about making the switch after using my CPA for over a decade, but the software walked me through everything step by step. The confidence I got from their document review made all the difference.

Just wanted to update after trying taxr.ai from the recommendation above. I was really impressed! I've been using TurboTax for years and always felt uncertain about my rental property deductions. The document analysis on taxr.ai caught several things I've been missing for YEARS - apparently I wasn't properly depreciating some property improvements and missed home office deductions related to managing my rental. The interface was easy to use and when it found something questionable in my documents, it explained exactly why it flagged it and what I should do. Finished my taxes in about 2 hours (usually takes me a full weekend with TurboTax). Definitely sticking with this going forward!

If you're worried about IRS questions or potential audits, another thing to consider is having access to IRS help when you need it. I used a CPA for years but still had issues when the IRS sent me a letter questioning some deductions. Trying to reach the IRS was IMPOSSIBLE - I spent HOURS on hold over multiple days and kept getting disconnected. I found this service called Claimyr (https://claimyr.com) that actually got me through to an IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically navigate the IRS phone tree for you and call you back when they have an agent on the line. I was able to clear up the confusion about my rental property depreciation with the IRS directly, which my CPA had actually calculated incorrectly (despite charging me $700!). Now I do my own taxes with software but keep Claimyr in my back pocket for when I need to talk to the IRS.

I need to eat my words and apologize to Profile 5 above. After commenting that Claimyr sounded like a scam, I was desperate enough to try it when I got a CP2000 notice about unreported income (which was actually reported, just on the wrong form). I tried calling the IRS myself first - spent 3 hours on hold only to be told I called the wrong department. The next day I used Claimyr and got connected to the right department in about 35 minutes. The agent was able to pull up my return, confirm that I had indeed reported the income, and put notes in my file to resolve the issue. Saved me from what would have probably been hours more on hold plus potentially having to mail in documentation. The IRS agent I spoke with was actually super helpful once I could actually TALK to someone. Who knew?

I switched from a CPA ($550/year) to doing my own taxes with software 4 years ago and haven't looked back. My situation is similar to yours - W-2 income, investments, and a rental property. The first year took me about 5 hours because I was learning, but now I can finish in about 2 hours. The software walks you through everything, and there are tons of forums online where you can ask questions about specific situations. The big advantage is that I actually understand my tax situation better now. My CPA never explained why he was making certain choices, but now I know exactly where my money is going and how different decisions affect my tax liability. I did have my old CPA review my self-prepared return the first year (paid him for an hour of time), and he only found a minor issue that wouldn't have triggered an audit anyway.

Honestly, if you have a rental property AND a side business, I would NOT recommend doing your own taxes. I tried to save money last year and did my own with TurboTax. Ended up missing some key deductions and had to file an amended return that my friend (who's a CPA) caught. Cost me more in the long run. Maybe try negotiating with your current CPA? Or find a less expensive one? But with rental depreciation and business expenses, there's just too many places to mess up if you don't know what you're doing.