Where AI helps most
- Deduction discovery: Cross-checks your spending for missed write-offs (home office, mileage, depreciation, education).
- Error prevention: Flags mismatches (W-2/1099 totals, basis tracking, wash sales) before filing.
- Scenario planning: Models Roth conversions, capital gain timing, and entity choices with real-time tax impact.
- Record hygiene: Auto-summarizes receipts and bank feeds into clean categories for Schedule C/E/F.
- State/local nuance: Applies location rules (SALT caps, credits) consistently across multiple states.
How AI can lower your bill
- Optimize capital gains: Suggests loss harvesting windows and pairing gains with carryforwards.
- S-corp vs. sole prop: Runs compensation splits to balance reasonable salary and distributions.
- Retirement stacking: Finds the best mix of 401(k), SEP/Solo 401(k), HSA, and backdoor Roth timing.
- Credit eligibility: Checks AGI impacts to unlock education, energy, child, and EV credits.
- Quarterly estimates: Reduces penalties by forecasting safe-harbor payments and adjusting midyear.
Security and privacy
Always deidentify sensitive documents before using AI: remove SSNs, account numbers, full addresses, and exact birthdates. Use secure, compliant tools for final filing.
Prompts you can use
1) Clean and categorize expenses
“Categorize these transactions for Schedule C. Flag potential business vs. personal splits. Highlight any likely deductions I’m missing.”