I recently received and answered this question on Quora: Link to original question and answer

Do entrepreneurs do their own taxes?

This really comes down to how best you should spend your time as a professional. Just like any other professional (lawyer, doctor, etc.), entrepreneurs get the best return on their time investment by spending their time on being entrepreneurs and allowing an expert accounting professional to prepare their taxes.

I let my accountant prepare my taxes. I also wouldn’t perform surgery on myself, grow my own food or repair my own car. There are experts who are far better at those things than I am and who can do the job at a far lower price than it would cost me to do it myself in time, money and pain.

Tax law is complex and, generally, entrepreneurs who have been operating for awhile have very complex tax returns in which they need to optimize various types of income, carry-forward NOLs, amortization schedules, K-1s, S- and C- corporation interactions, etc. And the cost of getting it wrong can be high.

For me, personally, I would never consider preparing my own taxes. Having an accountant do it is a huge bargain for me and keeps me out of trouble. My accountant saves me tens of thousands of dollars a year – and a lot more in good years – by doing proper planning ahead of major transactions and optimizing the use of accumulated losses to offset profits. He knows how to use the different kinds of carry-forwards, which is really an art form. He also does a great job of preventing unnecessary penalties when I get too creative with one of my ventures.

He keeps my tax records inside software that allows him to start each year with a prepared set of forms that already have the critical numbers filled in from prior years and ensures that we don’t forget about a carry-forward loss that needs to be used. This is absolutely critical. Early-stage startups are often designed to lose a lot of money in their first few years while plowing all of their earnings back into growth and/or while fundraising, so you need every penny of your carry-forwards to offset future profits.

A good accountant is also a great intercessor with the powers that be, acting as an advocate in times of error and distress. They are wizards who know which magical words to say to the tax man and when to say them. As you become involved in more ventures and have more complex tax returns, this inevitably comes in handy.

Keep in mind that to do your taxes right, you also need a great startup attorney who can help you with things like Reg-D SEC filings, state securities filings and similar matters. Your accountant and attorney should really work hand-in-hand, but I usually find that I’m the one doing the coordinating. But that’s good, because it keeps me 100% aware of what they’re planning.

Good luck and smooth sailing!