Tax Preparers Are Using AI to Help You File Your Returns

Reasons to be wary of AI tax prep

It is worth noting that other tax preparers are treading more cautiously when it comes to AI, including the AARP Foundation Tax-Aide program, which has helped more than 80 million taxpayers fill out their returns for free since 1968. The free program does not use AI for tax prep.

Meanwhile, for a gaggle of reasons, taxpayers should not seek tax advice from Google Gemini,; Microsoft Copilot; or OpenAI’s ChatGPT. And independent of AI, you should be wary of tax advice given on social media, especially regarding tax credits, different from tax deductions because they can reduce your tax bill by the exact amount of tax credit you can legally claim.

AI bots may spit out information that sounds plausible but is out of date, inaccurate or made up — wrong advice commonly known as hallucinations. You wouldn’t want an AI to go off the rails and fabricate an extra dependent or give filing instructions that no longer apply.

Even if you’re confident in the answers, sharing private information — financial or otherwise — with an AI isn’t a swell idea.

When you train a bot with your own data, that information could be exposed or leaked in the future, at least without proper guardrails.

AI can personalize responses

The generative AI Intuit Assist feature in TurboTax includes what it calls an accuracy check. The AI searches a customer’s return in real time to surface potential problems that may need to be addressed before the taxpayer moves to the next step. For example, it may flag a missing lender name for a mortgage.

AI Intuit Assist also can help personalize responses, perhaps by breaking down the sum TurboTax says you owe Uncle Sam or will get in a refund. You might see an explanation along these lines: “As part of your itemized deductions, you are eligible for homeowner tax breaks. Specifically, you are able to deduct $6,771 for mortgage interest.”

Along the way, you can click prompts or type in questions such as, “What tax breaks am I getting?” If things get too complicated, you can reach out to a human expert.

Intuit Assist also better tailors the answers you’ll get from the self-help digital assistant that’s been a part of TurboTax for several years, the company says. Deeper explanations are culled from Intuit’s proprietary large language model (LLM), a database trained by tax professionals.

What generative AI doesn’t do well yet is math. So Intuit is not using the AI for calculations, in part to avoid those hallucinations.

Making sure tax code outcomes are accurate is “always job number 1A for us,” says Keela Robison, vice president of product management for Intuit’s consumer group. “We don’t feel that generative AI is at a point yet where it can do that.”

Consumers can get human-vetted answers

The AI Tax Assist feature H&R Block started to deploy last tax season is available to customers of the company’s $35 deluxe package as well as its more expensive online packages, which start at $89 and can rise significantly from there.

The Kansas City, Missouri, company is partnering with Microsoft, leveraging Microsoft Azure OpenAI generative AI technology. Microsoft is a leading investor in OpenAI, the company behind ChatGPT.

AI Tax Assist differs from doing a standard Google search on your taxes, says Aditya Thadani, who heads the AI Platforms team at H&R Block.

“You are getting a response that has been vetted [and is] based on content curated by [tax] professionals,” he says. “This is about answering your question rather than just giving you access to an article.”

Thadani is mindful of guardrails around privacy.

“We are seeing a lot of personal private information as we interact with clients,” he says. “As much as we want to use that to answer questions effectively and give the best guidance, we have to find that balance: How do we make sure we respect that privacy, honor that trust, and put it to use responsibly?”

Thadani’s colleague Jody Vanarsdale, global consumer tax director at H&R Block, says it is important that humans are in the loop.

“One of the answers [from AI] should be, ‘Hey, I don’t know.’ If we’re doing our jobs right and we don’t have the right content or a complete picture of that content, we’ve got to go, ‘Sorry, I’m not trained on that content yet.’ We’re doing everything to not give you an inaccurate response.”

AI won’t automate your tax prep — yet

A future in which you might snap a picture of all your tax data, have an AI digest the numbers and then send your return to federal and state tax agencies is still a long way off. Today’s AIs tell you how to do your taxes rather than take the reins for you.

And don’t blame the AI if the IRS audits you. You’re responsible for any errors on your tax return. “The AI made me do it” is the rough equivalent of “the dog ate my homework.”

But maybe the feds will be more understanding. In 2023, the IRS announced its intention to use AI to crack down on tax cheats. Such plans remain uncertain since President Donald Trump signed an executive order calling for a hiring freeze at the agency.