By: Jake Gensemer
With the constant and rapid progression of AI and tools that are available to consumers, its limitations and capabilities are constantly evolving. As the federal income tax deadline approaches, how can filers use AI to their advantage? Unfortunately, AI is not yet at the stage where it can accurately fill out and file an entire tax return on its own. However, it can be a great resource for those who don’t rely on tax professionals to complete their returns.
When used thoughtfully, AI can act as a powerful assistant throughout the tax preparation process. Individuals can use AI to:
- Clarify unfamiliar tax concepts
- Generate digital organizational tools to help track info that has been or needs to be collected
- Walk through hypothetical scenarios to see how situational changes could impact their taxes
- Identify questions to ask professionals
- Find reputable sources that can help file electronically
For example, someone who recently received an inheritance might use AI to better understand general concepts like capital gains taxes, inherited retirement accounts, or why the “step-up in basis” rule matters. Having that baseline knowledge can make tax documents feel less overwhelming and help filers engage in more productive conversations with professionals.
Despite its usefulness, AI should never be treated as a final authority on tax matters. AI systems generate responses based on patterns in existing data, not real-time verification of tax law, IRS updates, or a person’s complete financial picture. As a result, there are several important risks filers should keep in mind if they intend to use AI during tax season.
One risk is outdated or incomplete information. Tax rules change frequently, and AI tools may reference prior-year laws or miss recent updates. Another risk is overgeneralization. What applies to one taxpayer may not apply to another, especially when inheritances, trusts, multi-state income, or investment activity are involved. Perhaps the biggest concern is that AI can sometimes deliver incorrect information with a high level of confidence, making errors harder to spot.
Because of these limitations, any AI-generated tax guidance should always be double-checked against official IRS publications or reviewed by a qualified tax professional before acting on it.
Ultimately, AI can be a helpful educational and organizational tool during tax season, but it is not a substitute for personalized advice. Used responsibly, it can reduce confusion, improve preparedness, and support better decision-making. Used carelessly, it can create costly mistakes. At The Wealth Conservancy, we believe technology works best when paired with human judgment and experience, especially when taxes intersect with major life events like inheritances. If you’re navigating a complex tax situation, AI can help you ask better questions, but trusted professional guidance remains essential.