KAYSVILLE — The emergence of artificial intelligence is causing angst among people working in a variety of industries, who fear the technology may be coming for their jobs. And around this time of year, many individuals likely feel similar anxiety about filing taxes, according to financial experts.
"I see a lot of my clients who aren’t prepared for taxes because they’re avoiding it," said Jenny Groberg, CEO and founder of BookSmarts Accounting, a women-centric accounting firm. "Then you have the uncertainty and anxiety from being unsure of how much you’re going to pay; and so that’s also scary for people."
With the rapid emergence of AI, Groberg said she’s aware that more and more people may look to the tool for help with their taxes.
Obviously, a chatbot can’t sign and submit your tax documents to the government, but AI can perform a wide range of tasks to streamline your preparations.
While she said it can certainly aid the process, Groberg warns that relying entirely on AI for tax filings can have serious consequences.
Groberg says AI can be useful for doing some of the tedious, busy work, such as gathering documents, explaining basic tax terms, identifying common deductions and getting questions ready for your CPA or tax preparer.
"I’d much rather have an organized chart that AI helped them create than a pile of receipts," she said in a statement.
Using AI as a tool
Groberg believes there are several ways the technology can not only benefit taxpayers, but may also save their preparers some extra paperwork.
She points to three reasons people should use AI for filing their taxes:
- Simplicity: AI can explain basic tax terms, deadlines and common deductions.
- Organization help: To help build checklists, gather documents, and prepare questions for your CPA.
- Scenario planning: To assist taxpayers in thinking through "what if" situations, like starting a side hustle or buying a home.
"I think AI has a place where it can take some of that stress off their plate, help them get organized, maybe offset some of that shell shock of uncertainty," Groberg suggests.
However, she believes using AI can be dangerous when taxpayers plug in personal information.
Companies like TurboTax and H&R Block have AI capabilities embedded in their platforms that can help users answer questions, flag deductions and credits, and import documents.
In some cases, AI can also scan photos of important personal information — which Groberg believes may not be a good idea.
"The concern I have with doing that is you are giving AI access to your Social Security numbers, your W-2s (and) your dependents," she said. "I would have AI help you organize, but I wouldn’t advise people to take pictures of their tax documents and upload them for security reasons."
Beware of risks
Groberg notes several reasons people should not rely on AI to file taxes:
- AI confident guesses: Tax law is full of exceptions, phase-outs and state-specific rules that AI often misapplies.
- No accountability: If AI gets it wrong, the IRS doesn’t penalize the chatbot. You pay the bill, interest and penalties.
- High-risk blind spots: Tips, overtime, 1099 income, gambling losses and business deductions are examples of where AI errors occur.
Last month, the IRS issued guidance on the use of AI, though it did not formally specify any regulations for tax preparers, other than that the person would be liable for any miscalculations or misinterpretations submitted for a tax return.
Groberg said she isn’t against AI, nor is she against the technology, but feels that taxpayers who are considering solely relying on it need to be fully informed about the pros and cons of using it.
"I think it’s just important that people go with reputable preparers who are skilled, who know the rules and the laws," she said. "You can use AI to come up with a list of questions for a potential preparer and see how well they know (Utah specific) laws; you can use AI to say who are some preparers in my in my area that are reputable and so in that regard, yes, use AI; but I just wouldn’t use AI to the finish line."
