There is no shortage of tax filing software available for a pretty decent price (at least when compared to the price of hiring an accountant, for an average of $37 per hour, depending on location). Though this software generally gets the job done, it’s likely to do so in a bare minimum way — and costly errors can occur.
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Everyone filing their taxes should consider enlisting the help of a living, breathing certified public accountant (CPA), but retirees should be even more keen on getting human-expert help. Why? Financial experts discussed the four reasons retirees should use accountants in 2025.
They’ll Educate You on Tax Laws and Ensure You Comply
Tax laws are always changing and retirees need to stay in the loop. If you don’t understand these laws, you could accidentally break one.
“Retirees might spend the extra money on a CPA to ensure they fully understand the tax laws around withdrawing from retirement accounts and the potential implications,” said Joe DiSanto, a financial advisor, fractional CFO and the founder of Play Louder. “This includes managing Social Security in combination with other withdrawals, understanding combined income limits, tax brackets and optimizing withdrawals from retirement accounts or taxable brokerage accounts for living expenses.”
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They’ll Help You Stay Safe From Tax Fraud
Accountants can help retirees stay safe from bad actors looking to scam you via your tax filings.
“CPAs have access to technology-driven solutions that integrate directly with the IRS to monitor a retiree’s account activity in real time,” said Kevin Knull, CFP, president at TaxStatus. “With this active monitoring, the advisor can promptly identify suspicious behavior and address potential threats before they escalate into serious issues.”
They’ll Help You Avoid Costly Mistakes
Mistakes are never made on purpose (that would defy the definition of “mistake”), but the IRS doesn’t care. It’ll penalize you for an error, however innocent it is. An accountant has the intellect and know-how to help you avoid messing up important information.
“CPAs play a crucial role in helping retirees avoid costly mistakes in filing taxes, and in finding additional financial and tax planning opportunities,” Knull said. “CPAs are equipped to avoid errors in tax planning that can lead to unexpected tax liabilities, penalties and audit risks. Examples of tax planning mistakes from a lack of data include: missed tax deductions and credits; overlooking unreported income; failure to adjust for tax liabilities on past earnings; incorrect Roth conversion recommendations; non-compliance with IRS reporting requirements and delayed filing deadlines due to missing information.”
They’ll Ensure You’re Minimizing Your Tax Burden and Claiming the Right Deductions
Think of hiring an accountant as an investment if only because they can help you lower your tax liability and claim money-saving deductions.
“Accountants play a critical role in ensuring retirees take full advantage of all tax deductions, credits and strategies to minimize taxable income,” said Melissa Murphy Pavone, founder at Mindful Financial Partners.
But Do You Really Need a CPA If You Can’t Afford It?
We’ve highlighted the four reasons retirees should use accountants, but what if money is really tight? If that’s the case, you might be able to safely skip this expense. Emphasis on the word “might.” It depends on how complicated your finances are — and how much money you’re reeling in.
“The complexity of a retiree’s financial situation often determines whether they need a CPA,” DiSanto said. “If someone’s pretax retirement income is in the range of $4,000 to $5,000 per month, their tax liability might be minimal, and their situation might not be overly complicated.
“However, for retirees with higher income — say $100,000, $200,000 or $300,000 per year from sources like IRAs, 401(k)s, Roth accounts, life insurance, Social Security or taxable brokerage accounts — it might make sense to seek professional advice,” DiSanto said. “A CPA can help navigate capital gains, dividends and other considerations to maximize efficiency.”
Always Verify Credentials
If you do go the route of hiring a CPA, it’s crucial to verify their credentials before commencing work.
“If you’re going to pay someone, I’d recommend at least an enrolled agent who can represent you in case of an audit,” DiSanto said.
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This article originally appeared on GOBankingRates.com: 4 Reasons Retirees Should Use Accountants for Their Taxes in 2025
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