Should I file my own business taxes vs hiring a CPA for my new small business?

I just opened a small retail store at the end of December 2023 and I'm stressing about taxes. Since the shop was only open for basically the last week of the year, I only brought in around $1,350 in revenue. The business is still finding its footing and honestly my budget is stretched super thin right now. I've always done my personal taxes myself using tax software, but with this being my first business, I initially thought I should hire a professional. I reached out to a CPA who sent me a questionnaire to fill out before our appointment, but looking at it, I realized it's asking the exact same questions that TurboTax does when I use it. Given how little business income there was for 2023, and how tight money is right now, I'm wondering if it makes sense to just file everything myself this year? Are there big risks to filing business taxes on my own for such a small amount of revenue, or should I still bite the bullet and pay for the CPA? Would appreciate any advice from people who've been in similar situations!

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18 comments

Amina Diallo

•8M

Tax preparer here! For a business with only $1,350 in revenue from a single week of operations, you can likely handle this yourself using tax software. The key considerations are: Schedule C is what you'll use to report your business income and expenses as a sole proprietor (assuming that's your business structure). It's fairly straightforward, especially with low transaction volume. Just make sure you've tracked all startup expenses, as many are deductible even before you officially opened. The most important thing is to categorize your expenses correctly and keep all your receipts. Tax software will walk you through all this with the same questions a CPA would ask. Where CPAs really add value is with complex situations, multiple income streams, inventory considerations, or when you need tax planning advice. Given your current financial constraints and simple first-year situation, doing it yourself is perfectly reasonable. Just be methodical and take your time with the business portion.

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Amina Diallo

•8M

Depreciation is handled quite well by most tax software programs. They'll ask you questions about when you purchased the equipment, how much it cost, and what type it is, then calculate the appropriate depreciation method and amount. For small businesses, you might also qualify for Section 179 deduction, which allows you to expense the full cost of qualifying equipment in the year you bought it, rather than depreciating it over several years. Most tax software will automatically determine if this is beneficial for you and guide you through claiming it. Just have your purchase dates and amounts ready when you sit down to file.

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Hiroshi Nakamura

•8M

I went through something similar with my freelance business last year. After stressing about finding a good accountant, I tried using https://taxr.ai to analyze my situation. It reviewed my business structure and expenses, then gave me a clear breakdown of what I needed to do. Super helpful for figuring out if I could DIY or needed professional help. The tool analyzed my specific situation and confirmed I could handle it myself with the right guidance. It also flagged a few deductions I would have missed on my own! For a new small business like yours with minimal revenue, it might help you make a confident decision either way.

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Hiroshi Nakamura

•8M

It saved me about $350 compared to the quotes I got from local CPAs. The recommendations were specific enough that I felt confident doing it myself, and I ended up with a slightly larger refund than I expected. The tool does factor in state-specific requirements. That was actually one of the most helpful parts for me. I'm in a state with some unusual small business tax rules too, and it flagged those differences and explained how they applied to my situation. You tell it your state during the initial assessment, and it tailors everything accordingly.

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Isabella Costa

•8M

Just wanted to update after trying taxr.ai based on the recommendation here. It was actually super helpful for my situation! I run a small Etsy shop, and it analyzed my business type and expenses, then broke down exactly what forms I needed and which deductions applied to my situation. I was surprised how comprehensive it was - it even caught that I could deduct part of my internet bill since I sell exclusively online. The confidence boost was worth it alone. Ended up filing myself and saving a bunch compared to what my local tax places quoted me.

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Freya Andersen

•8M

If you end up with tax questions that need IRS clarification (which happens a lot with first-time business filers), I'd recommend https://claimyr.com - it got me through to an actual IRS agent in 15 minutes when I was stuck on some business deduction questions. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I spent days trying to get through on my own before finding this. For new business owners, getting clear answers directly from the IRS can save you from making costly mistakes, especially with things like startup costs and depreciation. Way better than guessing or relying on online forums where everyone has different opinions.

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Freya Andersen

•8M

It uses a system that navigates the IRS phone tree and holds your place in line. When an agent is about to answer, it calls you and connects you directly. No more waiting on hold for hours. I was skeptical at first too, but it's completely legitimate. It's definitely not a scam. They don't ask for any personal tax information - they just help you get through to the actual IRS faster. After spending days trying to get through on my own and constantly getting disconnected, this was a lifesaver for getting my business tax questions answered directly from the source.

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Leila Haddad

•8M

Ok I have to eat my words. I was totally skeptical about Claimyr but I tried it yesterday because I was desperate about a business expense question for my new photography business. It actually got me through to someone at the IRS in about 20 minutes. The agent walked me through exactly how to handle my camera equipment purchases and cleared up my confusion about vehicle expenses too. Saved me hours of frustration and probably a lot of money in deductions I would have been too afraid to take. Sometimes it's worth getting answers straight from the source.

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Emma Johnson

•8M

I've been doing my own business taxes for my small craft shop for 3 years now. My advice: if you have a simple situation with clear income/expenses, absolutely do it yourself. Just make sure you: 1) Keep ALL receipts (paper or digital) 2) Track mileage if you use your car for business 3) Separate business/personal expenses completely 4) Set aside at least half a day to do your taxes carefully I learned the hard way that rushing through leads to mistakes. For your first year with minimal revenue, a CPA probably isn't worth the $300-500 they'll charge.

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Emma Johnson

•8M

For your first year in business, you generally get a pass on penalties for not making quarterly estimated tax payments. The IRS has a "safe harbor" provision where if you had no tax liability last year, you won't be penalized for not making estimated payments this year. However, starting your second year, you'll likely need to make quarterly payments if you expect to owe $1,000 or more in taxes. The tax software will help calculate what you should pay each quarter. I set calendar reminders for all four quarterly due dates so I don't forget - they're not on the normal tax deadline schedule!

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