Every tax season, a frustrating question appears to come up among individuals and businesses: Should one hire an online tax preparer, or the services of a local accountant? Both offer the same service but are very different in the whole procedure, price, convenience, and scope of work.
In this blog, we will help you understand the differences between an online tax preparer and a local accountant, when and what to hire one for, how to hire the best tax preparers, and which one is better suited to your financial needs in 2025.
What do Online Tax Preparers Do?
Online tax preparers operate on an online basis using an online platform and/or software. For the client, this means uploading tax documents electronically and communicating by email, chat, or video with no option for a face-to-face meeting.
These kinds of tax preparers capitalize on technology and automation in a very streamlined environment to make filing time more efficient. Also, online tax preparers cost less than local accountants because of fewer overhead expenses to absorb than their local counterparts, which usually include office space in a city center.
Online tax preparers are a great fit for taxpayers who have uncomplicated financial circumstances and want the most convenience and time efficiency. A number of online tax preparers operate in a 24/7 environment, which could also work for busy entrepreneurs or clients abroad.
What do Local Accountants Do?
Local accountants offer in-person services, likely from an established office near you.
They provide customized, comprehensive consulting services and know you well when it comes to your financial history.
They are best suited for a complicated tax situation with business income, investments, trusts, or when reporting is multi-state. Local accountants understand your specific tax laws and business regulations in a nuanced way.
They are able to provide ongoing coordination of your financial or tax planning during the year, audit support, and consulting services. Clients appreciate personal conversations, and knowing that you are managing their situation fosters trust and quality of service.
Key Differences Between Online Tax Preparers and Local Accountants
Let us now understand the differences between the two:
|
Feature |
Online Tax Preparer |
Local Accountant |
|
Location |
Fully remote, document upload via cloud |
Physical office, face-to-face service |
|
Cost |
Generally lower and fixed |
Often higher, hourly or retainer |
|
Complexity Handling |
Suited for simple to moderate returns |
Handles complex and multi-state returns |
|
Personalization |
Service tends to be standardized |
Highly personalized and consultative |
|
Convenience |
Filing can be started anytime, anywhere |
Typically fixed office hours |
|
Local Tax Knowledge |
Limited to general federal and state rules |
Deep knowledge of local regulations |
|
Service Scope |
Tax preparation and filing |
Tax prep, planning, audit defense, business advice |
|
Support Availability |
Often 24/7 digital support |
Business hour support and urgent consultations |
Benefits of Hiring an Online Tax Preparer
Here are the benefits of hiring tax preparers online with The Fino Partners:
- Cost savings: Fees decreased due to expense reduction and automation.
- Time and convenience: Quick filing without appointments.
- Access: No geographic constraints; a plus for travelers and remote workers.
- User experience: Simple digital interfaces take taxpayers step-by-step.
- Wide availability: Many offer a 'just-in-time' scheduling and quick response time.
Benefits of Hiring a Local Accountant
Below are the advantages when you hire a local accountant:
- Tailored service: Face-to-face meetings bolster trust and peace of mind.
- Full service solutions: In addition to tax preparation, we have tax planning, audit review, and business advisory services.
- Knowledgeable regarding complicated returns: Essential for a business owner, investor, and/or multi-state taxpayer.
- Insight on regulations: It is easier for locally based professionals to keep track of the municipal tax codes and lawmakers at the state level.
- Ability of audit representation: A local accountant is in the best position to represent it in an IRS or state audit.
When to Choose an Online Tax Preparer
Here are some situations stating the need of hiring tax preparer for your business:
- Your tax situation is simple (W-2 income, few deductions).
- You are budget-conscious and want fast service.
- You feel that using documents digitally is easy, and it is not a problem sharing information virtually.
- Rarely need ongoing personal financial planning or IRS audit support.
When to Choose a Local Accountant
Here are some situations stating the need of hiring a local accountant for your business:
- You run a business with multiple streams of revenue and tax issues.
- Your personal finances include investments, real estate, or a trust.
- Prefer face-to-face meetings and building a relationship in person.
- Need ongoing year-round tax, advisory, and IRS audit support.
- Your tax situation requires expertise in local-specific laws or billing for business licenses.
How to Hire the Best Tax Preparers in the USA
Know how to hire the best tax preparers with The Fino Partners:
- Verify Credibility: Find out that they have the following credentials: CPA, Enrolled Agent (EA), or IRS Registered Tax Return Preparer.
- Read Reviews and Confirm Referrals: Request client evaluations and a record of employment.
- Define Fee Structure: Confirm what fees entail, flat fee, hourly, or fee-based, in the form filed so they don't add up at the end.
- Confirm Range of Services: Check they are able to offer services you need, beyond being able to file your taxes.
- Verify Communication: Choose a tax professional within your mode of communication and time frame for communication.
- Security Bulletins or Procedures: For online preparers, verify they have encryption and privacy agreements to protect your files while being on their portals.
The Emerging Hybrid Model: Best of Both Worlds
Businesses that utilize online automated tools, along with a local accountant reviewing the data, are becoming more common:
- The advantages are two-fold, with automated actions saving time and costs, and a knowledgeable person providing advisory services, offering a balance of lower cost together with expertise.
- Many hybrid accounting services have remote access but schedule their clients for in-person meetings if desired.
- This hybrid model expands access while keeping a human connection.
Cost Comparison and Value Considerations
Below is a cost comparison and values to decide whether hire online tax preparer with The Fino Partners or a local accountant:
|
Cost Factor |
Online Tax Preparer |
Local Accountant |
|
Base Preparation Fee |
$50 - $300 depending on complexity |
$200 - $500+ |
|
Hourly Advisory Rates |
Typically lower or included |
$100+ per hour |
|
Audit Defense Costs |
Rarely included, extra fees |
Usually included or offered |
|
Tax Planning Consultations |
Limited |
Comprehensive |
|
Additional Services |
Usually fee-based add-ons |
Often bundled |
True value is ultimately determined by the complexity of the returns and the desired level of service. For basic returns, with no audit risk, there are very affordable options when hiring tax preparers online. For the more complex returns and ongoing support, local accountants offer a better overall comprehensive value.
Related Resources
Why You Should Hire a Tax Preparer : Benefits, Costs & What to Expect
Drake Tax Software vs. QuickBooks: Which Is Better for Tax Professionals?
How to Find an Accountant for Small Business: A Step-by-Step Guide
The decision to hire an online tax preparer or a local accountant comes down to tax complexity, budget, and preference for in-person service. Both will provide tax compliance; however, the approaches may differ.
Contact The Fino Partners today to hire an online tax preparer for your business.
