"Just use TurboTax" is the right answer for a W-2 and a savings account, and the wrong answer at a very specific point in a business's life. A CPA isn't always necessary — but when the tax picture crosses a threshold, the cost of being wrong dwarfs the fee.
CPA vs. tax preparer vs. EA
Not all tax professionals are the same:
- CPA — licensed Certified Public Accountant. Fiduciary obligation, education + exam + ethics requirements, authority to represent you before the IRS, and (importantly) business *advice* — entity choice, structure, planning.
- EA (Enrolled Agent) — federally licensed tax professional focused on tax and IRS representation. Great for returns and disputes; lighter on broader business advice.
- Tax preparer — unlicensed or lightly credentialed. Fine for simple returns, no fiduciary standard, limited representation rights.
For a business owner, the distinction that matters isn't just "who files your return" — it's who you can trust with a judgment call about structure, deductions, and risk. That's the CPA's lane.
The moments a business needs a CPA
- You've formed an entity — choosing LLC vs. S-Corp vs. C-Corp and *how* to take money out (salary vs. distributions) has tax consequences that compound every year.
- Self-employment tax is real — above roughly $60k of profit, the S-Corp election math (see our S-Corp guide and reasonable salary guide) starts to justify itself — and it's a decision to make *with* a professional.
- Employees or contractors — payroll withholding, 1099s, and the misclassification trap.
- Multi-state activity — sales in several states, remote workers, or foreign qualification (see our foreign qualification guide) create multiple filing obligations.
- Inventory, equipment, or real estate — depreciation, COGS, and Section 179 are real money and easy to get wrong.
- Cross-border or visa-holder status — ITIN filers, non-residents, and visa-holder LLC owners have extra layers (see our visa guides).
- The IRS notices you — any letter from the IRS deserves professional attention immediately.
What to bring to a first meeting
- Formation documents — Articles, Operating Agreement, EIN confirmation.
- 12–24 months of bank statements and books — the messier the better; the point is to give them the full picture.
- Prior tax returns — especially if you're switching professionals.
- A list of business expenses — your best guess of categories is fine.
- Your goals — buy a house? raise money? sell the business? The strategy depends on what you're optimizing for.
The more complete the picture, the more of the hour goes to *planning* instead of *catching up*.
Questions to ask before hiring
- "Who exactly will work on my account?" — you may meet the CPA and get the junior associate.
- "Do you work with businesses like mine?" — visa holders, online sellers, S-Corps, multi-state — pick someone who sees your situation regularly.
- "What's your fee structure?" — flat for the return, hourly for planning? Get it in writing.
- "Are you comfortable defending your work to the IRS?" — you want representation included, not as an extra surprise.
Common questions
Can't I just use software until I'm bigger? Yes — and you should. The threshold isn't revenue; it's *complexity*. The moment you have an entity, an S-Corp election, employees, or multiple states, you have questions software can't answer.
Will a CPA save me more than they cost? Frequently yes, but not automatically. A good CPA saves money on elections, deductions, and structure choices — and *prevents* mistakes that cost multiples of their fee.
Our tax-planning add-on is a 30-minute CPA session. It's the right first step for deciding whether you need ongoing help — you walk away knowing your structure and your next move.
The bottom line
Hire a CPA when the questions stop being "what goes in this box" and start being "what structure, what salary, what risk." Software handles simple returns; a CPA handles judgment. For most founders, that threshold arrives the day the business becomes worth protecting.