U.S. tax law is notoriously complicated both to laymen and those who work in finance but may not specialize in tax preparation. Because of this, it’s often worth it to enlist the help of a tax specialist who has an extensive breadth of knowledge regarding the tax code and experience handling different taxation situations.There are few basic options which tax filers in the U.S. choose when preparing their yearly tax returns: filing taxes on their own electronically with the help of tax preparation software, hiring a licensed professional such as a certified public accountant (CPA), or walking into a storefront tax preparation business. All three prepare taxes for a fee in return for expert consultation. And, of course, the higher the expertise needed, the higher the fees.In this case, purchasing tax preparation software is often the most affordable route. But in the end, it’s comparable to filing your own taxes. Because of this, many filers feel more confident having their taxes prepared by a real live person (other than themselves). To this end, many filers wonder whether it is better to get a CPA or hire a service like H&R Block. The answer is (as is typical with financial matters): “It depends.”
A CPA is someone who has had a rigorous education and has been trained to meet high professional standards and follow a strict code of ethics to get licensed by the American Institute of Certified Public Accountants. CPAs have extensive knowledge and years of experience with tax law, including state tax law (for example, a Seattle- or Bellevue-based CPA is required to pass examinations pertinent to Washington state tax codes).
On the other hand, someone who represents a business like H&R Block has only been trained for a few weeks on how to process different kinds of tax information. They offer their employees short, intense training courses to orient them on the process for filing taxes for general purposes. While most of these tax preparation firms tend to hire people with financial backgrounds, you’ll very rarely find someone here who is as experienced and knowledgeable as a CPA.
Bottom-line: with a CPA, you pay more but you’ll get more. But if you have a complex tax situation, a CPA may be able to pay for him or herself by finding you savings that an H&R Block employee might be unaware of. But on the flip side, if you have a very straightforward tax return, a CPA may be overkill. Your best bet is to describe your situation over the phone to both a CPA and a storefront tax preparation business and get a rough estimate before you decide.