Artificial intelligence (AI) is reshaping industries and changing how we operate and interact. From revolutionizing healthcare with personalized treatment plans to optimizing inventory management in e-commerce, AI-driven solutions are transforming consumer experiences. The tax industry is no exception.
Almost half (46%) of the 150 million tax filers in the United States opt to prepare and file their taxes. Yet, the process often feels daunting, time-consuming, and complex. With the integration of AI, consumers now have access to a valuable resource. This technology simplifies the tax preparation experience and ensures greater accuracy and efficiency, empowering individuals to confidently navigate their tax returns.
Streamlining the Tax Prep Experience
The traditional approach to DIY tax filing often involved sifting through piles of paperwork, deciphering intricate tax codes, and dealing with uncertainties about deductions and credits. When questions arose, individuals frequently resorted to unreliable sources for answers. AI-powered solutions can provide real-time guidance and support tailored to users’ queries throughout the tax filing journey.
For instance, if a filer recently purchased an electric vehicle (EV), they may be eligible for the new EV tax credit. Like many tax benefits, an individual must meet specific requirements to claim the credit, but understanding the requirements can be challenging. Consumers can rely on AI tools integrated within their tax filing software to answer questions of this nature, instead of turning to a general search engine. AI tools integrated into tax prep software are programmed and trained with accurate and up-to-date information to be able to accurately answer the filer’s questions about different credits and deductions.
Greater Accuracy and Efficiency
One of the advantages of using AI in tax preparation is its ability to handle complexity. Tax laws are evolving, making it challenging for individuals to stay on top of the latest changes. AI algorithms can adapt to these changes to ensure users receive accurate and up-to-date information. This provides users with the clarity and confidence to make informed decisions.
However, consumers must ask questions to derive useful insights from AI. For AI tools, these inputs are called “prompts,” and the more an individual can share about the intent of a question, the better the tool can respond. For instance, a query like “deductions” could yield a long list of various deductions that may not be useful. A query like “What expenses can I deduct as an Uber driver?” will drive AI to give you detailed insights about vehicle expenses, tolls and parking fees, cell phone and service fees, and other business expenses.
What’s Ahead
The adoption of AI-powered solutions in tax preparation is driven by consumer demand. People want convenience and accuracy, especially when it comes to their taxes. As more individuals and businesses recognize the benefits of AI in streamlining tax processes, the adoption rate is expected to increase. At the heart of AI-powered solutions is solving real problems and addressing common consumer pain points.
AI can offer valuable solutions that resonate with consumers and enhance their tax preparation experience. We can expect to see significant advancements in how we approach taxes, empowering consumers to navigate the process with confidence and ease.
