Chapter 7: DIY, Software, or Pro? Choosing How to File

This post is Chapter 7 of 14 of the book Keep More of What You Earn — a plain-English guide to US taxes.

Three people, three Aprils. Elena, a barista with one W-2 and the standard deduction, pays $129 for deluxe tax software she didn’t need. Marcus, a freelance photographer with $92,000 in 1099 income and zero estimated payments, does his return on paper in an evening and misses $4,000 in legitimate deductions. Sofia, a landlord with two rentals and a K-1 from her late father’s partnership, hires a CPA for $650 — and the CPA finds a cost-segregation study opportunity worth $11,000 in first-year depreciation.

Elena overpaid for help she didn’t need. Marcus underpaid for help he desperately needed. Sofia got it right. The question isn’t “which method is best?” — it’s “which method is best for your situation, this year?”

Path 1: DIY on paper (or the IRS’s free fillable forms)

Costs nothing and teaches you the most. Who it’s for: genuinely simple returns — one or two W-2s, standard deduction, no investments beyond bank interest. The risks scale with complexity: math errors, missed credits (paper doesn’t ask “did you pay for child care?”), and no error-checking. Paper also forfeits e-filing speed: refunds take 6–8 weeks by mail versus ~21 days e-filed.

My rule: if your return fits on Form 1040 plus maybe one schedule, DIY is fine. The moment you add a second schedule, switch paths.

Path 2: Tax software — the calculator with questions

For most readers, the sweet spot. Software interviews you in plain language, translates answers onto the right forms, checks the math, flags missing items, and e-files. Federal products cost roughly $0–$150 depending on complexity tier.

What software does badly: judgment. It can’t tell you whether to bunch deductions this year or next, whether your side gig should be an S corporation, or whether that K-1 loss is deductible. It answers the questions you ask; it doesn’t know the questions you didn’t ask.

Free options worth knowing:

• IRS Free File: brand-name software, free, if your AGI is under the annual threshold (it was $84,000 for the 2025 filing season — check the current figure each year at IRS.gov/freefile).
• IRS Free Fillable Forms: free electronic paper for everyone, no income limit, no guidance.
• VITA/TCE: free in-person preparation by IRS-trained volunteers — VITA for incomes generally under the annual threshold (about $67,000 for the 2025 season), TCE specializing in retirees. Find sites at IRS.gov.

Decoding “audit protection” and guarantees: most “audit protection” is guidance — they’ll explain the notice and help you respond. “Accuracy guarantees” typically reimburse penalties and interest caused by the software’s calculation error — not the underlying tax, and not errors from your wrong inputs.

Path 3: Hiring a professional — and what the letters mean

• CPA (Certified Public Accountant): licensed by the state; broad accounting and tax expertise. Best for complex situations, business owners, tax planning.
• Enrolled Agent (EA): licensed directly by the IRS; tax-only specialists. Best for IRS problems, complex individual returns. Often more affordable than CPAs for pure tax work.
• Tax attorney: for legal gray areas, fraud exposure, or when attorney-client privilege matters.
• Unenrolled preparer: anyone with an IRS PTIN can legally prepare returns for pay. Quality ranges from excellent to dangerous.

The PTIN is non-negotiable. Anyone you pay to prepare your return must have one and must sign the return. No PTIN, no signature, no deal.

What it costs (typical ranges): straightforward individual return $200–$400; self-employment, rentals, or investments $400–$800; genuinely complex situations higher. Get a fee quote before work starts, in writing.

When a pro pays for themselves — hire one if: self-employment income with real expenses; rental property, especially the first year; K-1s; multi-state income; an IRS notice, audit, or back-tax problem; major life events hitting at once; you keep getting estimated-tax penalties.

Notice the pattern: complexity and change are what you’re buying help for, not income level. A $300,000 earner with one W-2 needs software; a $60,000 earner with a new rental needs a human.

How to hire well (and get your money’s worth)

Finding one: referrals from financially responsible friends beat Google ads. Your state’s CPA society and the IRS directory of credentialed preparers are solid starting points. Interview before tax season — good preparers stop taking new clients by March.

Questions to ask: What’s your credential (CPA/EA)? What’s the fee, and what’s included? Will you do the work or does staff? How do you handle IRS notices after filing? Can I reach you in July?

Red flags — walk away if you see these: fees based on your refund size; promises of refunds before seeing your documents; won’t sign the return or lacks a PTIN; asks you to sign a blank return; directs your refund to their account first.

Getting your money’s worth: bring Chapter 5’s organized folder, not a shoebox. Ask the question that pays for the fee: “What should I do differently next year?”

The hybrid approach most people should use

Software for filing, plus a professional relationship for planning. Use quality software for the annual return. Then, every two to three years — or in any year with a big life change — pay a CPA or EA for a one-hour planning consultation ($150–$300). That hour buys the judgment software can’t give you, at a fraction of full-preparation cost. Match the tool to the complexity, re-evaluate every year, and never let inertia choose for you.

After you hire: your signature, your responsibility

Even with a CPA, you sign the return under penalties of perjury. The preparer’s signature says “I prepared this”; yours says “it’s true.” Review the return before signing — check total income, filing status, dependents, bank account for the refund, and the bottom line versus last year. For e-filing through a preparer, you’ll sign Form 8879 authorizing them to e-file — read the numbers on it, not just the signature line.

Key takeaways

1. Match the method to the complexity, not to your income or your pride. Simple return → software (often free). Complexity or big changes → human.
2. Software is a calculator with questions, not an advisor. Your judgment — the kind this book builds — is what makes it work.
3. Free File and VITA/TCE are genuinely excellent and tragically underused. Check eligibility every year.
4. Any paid preparer must have a PTIN and sign your return. No exceptions. Refund-based fees and unsigned returns are fraud red flags.
5. The highest-ROI question you can ask a pro: “What should I do differently next year?”
6. Re-evaluate yearly. Complexity and change — not habit — should drive the choice.
7. Your signature is the final control. Even with a CPA, you sign under penalties of perjury.

Next: Chapter 8 — Filing Mechanics.