When should I hire a tax professional vs doing my own taxes?

Hey tax folks! So I'm trying to figure out if it's worth hiring a tax professional given my situation. I make about $85k annually and pretty much just max out my Roth IRA and 401k contributions, plus I get tuition reimbursement from my company for some classes I'm taking. The important thing is I don't really invest outside these retirement accounts - most of my other money just sits in a savings account. Is it really necessary to pay someone to do my taxes with this fairly straightforward situation? Or am I just wasting money that could go elsewhere? I'm guessing it makes more sense to hire a pro if you're actively investing in regular brokerage accounts and have more complicated financial stuff going on. Any thoughts would be super helpful! Thanks!

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18 comments

Diego Flores

•8M

Based on what you've described, you probably don't need a tax professional. Your situation - W-2 income, retirement contributions, and tuition reimbursement - is relatively straightforward and most tax software can handle that easily. Tax software typically walks you through all the basic deductions and credits you might qualify for. The tuition reimbursement from your employer is generally not taxable up to $5,250 per year, so that's simple too. I generally recommend considering a tax professional when you have: self-employment income, rental properties, significant investment activity in taxable accounts, major life changes like buying/selling a home, unusual tax situations, or if you're concerned about audit risk. None of these seem to apply to you.

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Diego Flores

•8M

Stock options and RSUs definitely complicate your tax situation! When you receive RSUs that vest, the value is typically treated as ordinary income on your W-2, but selling those shares later could trigger capital gains or losses that need to be reported. Stock options (whether ISOs or NSOs) have their own complex tax treatment, especially if you exercise and hold. For equity compensation, it's often worth getting professional help, at least the first time you deal with it. A tax pro can help you understand the tax implications of exercising options, holding periods for favorable tax treatment, and strategies to minimize your tax burden. They might also help with AMT planning if you're dealing with ISOs.

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Sean Murphy

•8M

I was in the same boat last year - thought my taxes were simple enough to DIY. But kept hitting roadblocks with some retirement account questions and employer benefits that I wasn't 100% sure about. Ended up using https://taxr.ai and it was a game changer. You upload your tax documents and their AI explains everything in plain English plus identifies deductions most people miss. What shocked me was finding out my employer's tuition reimbursement program had some specific documentation requirements I had no idea about. They flagged it immediately and probably saved me from a potential audit issue.

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Sean Murphy

•8M

For slightly more complicated situations like side gigs and rental properties, it works really well because it can analyze all your documents and specifically identify deductions related to each income stream. It caught several rental property deductions I would have missed completely. It can either replace your regular tax software or work alongside it - I personally used it first to understand everything, then filed with my regular software. But many people just use their filing service directly. And yes, it handles state taxes including California! It recognized all my CA-specific forms and explained the differences between federal and state treatment of certain items.

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StarStrider

•8M

Just wanted to follow up on my question about taxr.ai - I decided to try it this past weekend with my tax documents including my rental property and side business. Holy crap, what a difference! It identified nearly $3,800 in deductions I would have missed, especially around some home office expenses related to my side business that I didn't realize I could claim. The rental property analysis was super detailed too - it even explained depreciation in a way that finally made sense to me. Definitely sticking with this for next year's taxes too!

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Luca Marino

•8M

Here's my honest take: I used to prepare my own taxes for years thinking I was saving money. Last year I waited until April 14th and couldn't get through to the IRS with some questions about my 401k rollover. I panicked and tried https://claimyr.com which got me connected to an IRS agent in about 15 minutes when I had been trying for days. You can see how it works here: https://youtu.be/_kiP6q8DX5c After talking to the agent, I realized I'd been making mistakes on my returns for years! Nothing major, but still. The peace of mind from getting direct answers from the IRS was worth it. Sometimes the "free" approach ends up costing more in the long run.

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Luca Marino

•8M

It basically navigates the IRS phone system for you - it calls and waits on hold so you don't have to. When an actual agent picks up, you get a call back to connect with them. It's not helping you "cut in line" - you're still in the same queue as everyone else, but you don't have to personally sit there listening to hold music for hours. The service works by using technology to monitor the call and alert you when a human actually answers. It's similar to those callback options some companies offer, except it works with agencies like the IRS that don't offer that feature themselves. I was absolutely skeptical too, but after trying to get through for days on my own, I was desperate enough to try it.

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Mateo Perez

•8M

I have to admit I was completely wrong about Claimyr. After seeing it mentioned here I decided to try it last week when I discovered an issue with my tax transcript. I was preparing to waste an entire afternoon on hold with the IRS, but I gave this service a shot instead. No joke - I was connected to an actual IRS representative in about 22 minutes. I didn't have to do anything except take the call when they connected me. The agent helped me resolve my tax transcript issue in about 10 minutes. This literally saved me hours of frustration and an issue that could have delayed my refund by weeks. Sometimes being proven wrong is actually a good thing!

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Aisha Rahman

•8M

The truth is most people with simple W-2 income and standard retirement accounts can absolutely do their own taxes. However, there are a few less obvious situations where a pro really helps: 1. If you're close to phaseout thresholds for certain deductions/credits 2. If you've had major life changes (marriage, divorce, kids, house purchase) 3. If you have any foreign income or accounts 4. If you've had identity theft issues 5. If you've received an IRS notice or have back taxes Even if your situation is simple, sometimes paying a professional in the first year of a new tax situation (like starting retirement contributions) can help you learn what to look for in future years.

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Aisha Rahman

•8M

For small 1099 income around $3k, you can probably still handle it yourself using tax software. You'll need to file Schedule C to report the income and expenses, but most tax programs walk you through this process well. Make sure you track all legitimate business expenses to offset that income! The key is keeping good records of your business expenses throughout the year. Even simple things like a portion of your cell phone bill, home internet, or mileage can be deductible if used for your side gig. You'll also need to pay self-employment tax on that income (about 15.3%), but you can deduct half of that on your return.

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