When to Hire an Accountant as a Freelancer (And How to Find a Good One)

My CPA’s first question when I hired her was: “Are you claiming the self-employed health insurance deduction?” I said: “The what?” I’d been paying $550/month for health insurance for 18 months — $9,900 total — and hadn’t deducted a penny of it because I didn’t know I could.

That single missed deduction cost me about $2,800 in taxes. Her fee for the entire year? $375.

I should have hired her a year earlier. Here’s how to know when it’s time, and how to find someone who actually understands freelancers.

Signs You Need an Accountant

You’re leaving money on the table (and you know it)

If you have a nagging feeling you’re missing deductions but aren’t sure which ones — that’s the sign. A good CPA will review your first year’s return and find money you left behind. Mine found $3,200 in missed deductions in her first year.

Your income crossed $75K

Below $75K, the tax situation is relatively straightforward and DIY software handles it fine. Above $75K, the complexity increases: higher marginal rates, more deduction optimization opportunities, S-Corp consideration, retirement strategy. The ROI of professional advice increases with income.

You’re considering S-Corp election

S-Corp adds significant tax complexity: payroll, Form 1120S, reasonable salary determination, distribution timing. This is not DIY territory. A CPA who handles S-Corp election and ongoing compliance is essential.

You got an IRS notice

If the IRS sends you a letter — about anything — hire a CPA immediately. They know how to respond, what to dispute, and how to negotiate. I got a CP2000 notice (underreported income) that turned out to be a 1099 reporting error by a client. My CPA resolved it with one letter.

Tax prep takes you more than 5 hours

If you’re spending 5+ hours on tax filing and still unsure you did it right, a CPA will do it in less time, more accurately, and find deductions you missed. The $375 is worth it for the hours reclaimed alone.

You can’t sleep before quarterly payments

Tax anxiety is real. If you lie awake wondering “did I calculate this right?” every quarter, outsource that worry to a professional. Peace of mind has genuine value.

What a Good CPA Does for Freelancers

Tax preparation: Filing your annual return (Schedule C, SE, state returns). This is the basics.

Tax planning: The valuable stuff. A good CPA proactively advises on:

• S-Corp election timing
• Retirement contribution optimization
• Estimated payment accuracy
• Income timing strategies (defer or accelerate income across tax years)
• Business expense optimization
• Entity structure decisions

Quarterly check-ins: My CPA and I have a 15-minute call each quarter to review my estimated payments and adjust for actual income. This prevents year-end surprises.

Representation: If the IRS contacts you, a CPA can respond on your behalf. This alone is worth the relationship.

How to Find a Freelancer-Friendly CPA

Ask other freelancers

The best CPA referrals come from people in similar situations. Ask in freelancer Slack groups, Facebook communities, or local coworking spaces. “Who does your taxes?” is a perfectly normal question.

Look for small-business specialists

Search for “CPA self-employed [your city]” or “CPA freelancer [your city].” Check their website — do they mention sole proprietors, Schedule C, self-employment tax? If their site only talks about corporate tax and audit services, they’re not your match.

Interview before committing

Call 2-3 CPAs and ask:

• “How many self-employed/freelance clients do you have?” (Want: 20+)
• “Are you familiar with S-Corp election for sole proprietors?” (Want: yes, with details)
• “What’s your fee for a basic Schedule C filing?” (Want: $300-600)
• “Do you do tax planning or just preparation?” (Want: both)
• “How do you communicate between filings?” (Want: email/phone accessibility)

Red flags

• They’ve never heard of Schedule C (run)
• They push complicated strategies for simple situations (they want fees, not what’s best for you)
• They’re not available between February and April (overcommitted)
• They charge by the form instead of a flat fee (costs add up quickly)
• They can’t explain things in plain English

What to Prepare for Your First CPA Meeting

Bring:

• Prior year tax return (if you filed yourself)
• Profit & Loss report from your accounting software
• List of major business expenses with receipts
• 1099-NEC forms from clients
• Health insurance premium records
• Retirement contribution records
• Home office square footage and home size
• Questions you have about deductions or strategy

A prepared client gets better service. Your CPA can focus on optimization instead of data gathering.

My CPA Relationship: Year by Year

Year 3 (first year with CPA):

• She found $3,200 in missed deductions from previous years
• Set up proper quarterly estimate calculations
• Advised me to start a SEP IRA for retirement deductions
• Fee: $375

Year 4:

• Recommended S-Corp election based on my income trend
• Guided LLC formation and S-Corp filing
• Set up payroll through Gusto
• Fee: $800 (more complex return with S-Corp setup)

Year 5 (projected):

• S-Corp return + personal return
• Quarterly planning calls
• Fee: $1,200 (S-Corp ongoing)

Total savings from CPA advice over 2 years: ~$8,000+ in found deductions and S-Corp tax reduction, versus ~$1,175 in fees. That’s a 6.8x return on investment.

CPA vs. Bookkeeper vs. DIY

My stack: FreshBooks handles daily bookkeeping. I do weekly categorization (15 min). My CPA handles quarterly estimates, annual filing, and strategy.

I don’t use a bookkeeper because FreshBooks + my 15 min/week handles it fine. If you hate bookkeeping entirely, a bookkeeper at $100-200/month can do all the FreshBooks work for you.

The Bottom Line

Hire a CPA when:

• Income exceeds $75K, OR
• You’re considering S-Corp, OR
• You know you’re missing deductions, OR
• Tax anxiety is affecting your work

Find one who specializes in freelancers/self-employed. Interview 2-3 candidates. Expect to pay $300-600 for basic filing.

The cost of a good CPA is almost always offset by the deductions they find and the strategies they recommend. Mine has paid for herself every single year. The peace of mind is a bonus.