Can AI do your taxes? More importantly, Should You Allow It?
People use AI to write work emails and search for Valentine’s Day gift ideas, so it’s only natural to wonder if it can file your taxes, too. Imagine typing, “ChatGPT, here’s my W-2 and 1099-K. Do my taxes and don’t make a mistake!”
It might be a good idea, but experts say that using AI to do your taxes is a risky move and probably not necessary.
TurboTax’s Keela Robison, who oversees the company’s AI efforts as vice president of product management, tells Money that Intuit extensively tested leading AI models ahead of this tax season — and decided the technology wasn’t reliable enough to trust tax preparation.
“Look, AI is good at many things better in the math, but it turns out that the tax calculations and tax law are incredibly complex,” says Robison. Although the company is fully engaged with border labs, he adds, “We don’t feel the accuracy is high enough at this point to abandon our tax engine and rely on LLMs.”
TurboTax discovered during testing that the AI models confused tax years with tax deadlines. They also failed to understand the newly created tax benefits. Even when the models are pre-trained on the correct tax code, they fail when it comes to the actual calculations, Robinson said.
To be clear: TurboTax is something relying on AI, incorporating new features such as product selection tools, a digital assistant and a cost-based agent designed to help users report stock grants and stock options. Other features are coming, too, like an AI agent to determine if a taxpayer has claimed the right deductions and credits.
But it hasn’t passed the wire yet.
“What we believe is that these [tools] it will really help us … bring better results to people: higher returns, lower balance due (if it’s their situation). That’s where the power of AI starts to come in,” Robinson said.
A note on TurboTax’s website draws a clear line: “Human tax professionals, not AI, write the tax calculations that power our product.”
Why AI can’t be trusted to do your taxes (yet)
TurboTax isn’t the only financial company to conclude that current AI tools can’t reliably prepare taxes. This year, April found an eye-catching partnership with PayPal to offer free online tax filing. It’s also partnered with Chime, OnePay and others for tax-free filing, boasting an average filing time of less than 20 minutes.
april calls itself an AI-powered tax engine – but, if you submit your taxes in April, you don’t actually have AI to do your taxes.
Like TurboTax, April describes its tax software as “deterministic.” What does that mean? Founder Ben Borodach explains that answers from reputable tax software need to be consistent and clear to be useful.
That’s not what AI offers out of the box.
“If you look at LLM like Claude Code or OpenAI, it’s possible that it’s supported – it’s possible. And so you won’t always get the same answer,” said Borodach. “It’s inexplicable again. You can’t go back and check that.”
AI models are also known to “hallucinate,” or invent claims when pushed beyond their limits. So for now, careful consideration – not total commitment – is the way forward.
April is progressing quickly. It created its tax software using an internal AI tool, allowing the company to reach a major milestone: the ability to prepare and e-file state taxes for all 50 states.
“We created our own version of Claude Code that we call ‘Tax-to-Code’ which helped us transfer or translate tax law into production software,” said Borodach. “We do it about 20 times faster than a human alone.”
These efficiency benefits allow April to fill the gap in free tax filing after the IRS ended its Direct File program last year, leaving consumers with fewer options.
Across the industry, the race is on to make better tax software with AI. Bill Harris, founder of Evergreen Wealth and former CEO of TurboTax, says the differences between how tax software providers like TurboTax and April are structured show a divide that will only deepen as AI tax implementation matures.
Harris explains that large established tax software companies are likely to “put AI on top of their existing engines,” while others like April will use AI as a development tool to build new software.
“I used TurboTax for 10 years. It was a long time ago, but there’s a very large codebase built in … very complex, very specialized and not something you can hit quickly,” he says. “There is a lot of knowledge of the institution and the code. Therefore, I think that the older players are less likely to start over.”
Despite the obstacles to using AI for tax preparation and tax filing, AI-powered improvements in tax software are already making filing cheaper and easier, as April and TurboTax hope to prove this season.
But back to the original question: Can you file your taxes using AI? Harris says the answer is a clear “no.”
Current AI models cannot understand all the complexities of individual tax situations, and cannot complete the critical step of e-filing tax returns. Even someone with the easiest taxes imaginable shouldn’t bother trying to use ChatGPT or any LLM to do their taxes this year, Harris said.
You could make a mistake that could lead to an audit, or miss out on a tax credit that could put money in your pocket.
“It would be an interesting science project, but it’s not practical,” Harris said.
Little ways AI can help you with taxes – if you’re careful
Despite its limitations, experts agree that taxpayers can and should use artificial intelligence to research tax questions.
That could mean asking a chatbot like Gemini to help you dig into the rules about certain deductions or brush up on your understanding of IRS forms. Even questions about complex tax topics like “What is adjusted gross income?” or “What is a refundable tax credit?” can be quickly answered by LLM.
While researching questions in general terms is encouraged, you should think twice before uploading confidential financial information or revealing sensitive information in an AI chat. W-2s often contain Social Security numbers, for example, and income statistics, work information, investment information and home addresses are all sensitive.
Experts warn against putting this personal information in an open AI model, especially not the free version that trains your data, because you lose your privacy and can even expose accounts.
One way to do this is to use AI conversational tools within existing tax preparation platforms, which often have strong security systems and data encryption policies, making them safe sources of information.
“AI can be a great tool to just learn about your taxes, learn about what parts of the tax code apply to you, or learn more,” Borodach said. “From that perspective, AI has really opened up what’s possible for everyday people to learn more about how taxes affect their financial picture.”
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