Why this matters
TurboTax handles a straightforward Schedule C well. But some situations carry mistakes costing far more than a CPA's fee, and the errors compound every year. Knowing the handoff line is a business skill, not an admission of defeat.
What "done" looks like
- You've matched your situation honestly against the complexity triggers
- If you're past the line, an accountant is engaged before deadline season, not during it
- If you're staying DIY, you can explain every form in your return
How to do it
- Check the entity trigger: an S corporation or partnership files its own return (Form 1120-S or 1065, due March 15) and issues K-1s. An S corporation generally must pay reasonable compensation to owner-employees, while partners receive distributions or guaranteed payments.
- Check the multi-state trigger: employees, inventory, or significant sales in other states can create filing obligations there.
- Check the inventory trigger: cost-of-goods-sold accounting and anything resembling manufacturing move you well past casual DIY.
- Consider the middle path: TurboTax's assisted and full-service tiers, or a year-end-only CPA review, sit between pure DIY and a retained accountant.
Common mistakes
- Electing S-corp status for the tax savings, then missing the payroll and filing obligations that come with it
- Discovering a second state's filing requirement years late, with penalties stacked
- Hiring a pro but handing over shoebox records, paying CPA rates for bookkeeping
Real-world examples
- South Dakota v. Wayfair (2018) let states require out-of-state sellers past economic thresholds to collect sales tax, the ruling that made multi-state compliance a small-business problem.
- Intuit itself sells the escalation path: TurboTax Live Assisted and Full Service exist for filers who want expert review or a full handoff.
From a founder's point of view
The DIY-versus-pro question is really about where founder hours create value. Time spent decoding multi-state apportionment is time not spent on customers, and the error modes are silent and cumulative. Pay for expertise where mistakes compound.
Rule of thumb
One entity, one state, no inventory: DIY is fine. Add any one of those, and get a professional's eyes on it at least once.
