Do I need an accountant as a sole proprietor?

Not monthly. You need clean books all year and, at tax time, either consumer tax software for a simple Schedule C or a preparer. Most first-year sole proprietors do not need a CPA.

What is the cheapest way to get my taxes done as a sole proprietor?

File yourself with tax software if the books are clean and the return is a single Schedule C. Next step up is an enrolled agent, usually cheaper than a CPA and licensed by the IRS.

Why is an accountant expensive for a small business?

Because you are paying for hours, and most of the hours are cleanup: turning a pile of receipts and bank statements into categorised numbers. Clean books cut the hours.

Hiring an Accountant Is Out of My Budget. What Do I Do?

You probably do not need an accountant right now. You need two cheaper things: books that are clean all year, and in April the least expensive professional who fits your return. Here is the ladder, bottom up.

Rung 1: clean books, which cost you minutes, not money

Every accountant fee is hours, and for a small business most of the hours are cleanup. A shoebox costs $1,000 to sort. Categorised entries with receipts attached cost almost nothing to review. So the first move is not hiring anyone; it is the five rules, done from the phone as you go. That alone moves your future accountant bill from "cleanup" to "return".

Rung 2: file it yourself

A single Schedule C with clean books is a form, not a project. Consumer tax software walks it line by line. If you know your income by source, your expenses by category, your mileage and your home office square feet, you can file. The books are the hard part and you already did them.

Rung 3: an enrolled agent, not a CPA

Enrolled agents are licensed by the IRS, specialise in tax, and have the same unlimited right as a CPA to represent you if the IRS writes. For a sole proprietor's return they are usually cheaper than a CPA, and they take small clients. Search the IRS directory of credentialed preparers by ZIP code.

Rung 4: a CPA, when there is planning to do

An S-corp question, a second business, real estate, hiring. That is when a CPA earns their fee. Not for a first-year Schedule C.

Text a receipt. It is in your books.

ClaryBook files what you send under the right Schedule C line, keeps a running quarterly estimate, and hands your accountant a tax package with every receipt attached. $30 a month, 30 days free, no card.

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One warning

"Out of budget" is often the cleanup, not the accountant. Two people with the same revenue get quoted $400 and $1,200 for the same return, and the difference is the state of their records. Fix the records and the quotes come down. Here is exactly what to hand them.