AI is a strong assistant for some tax and finance tasks and an unreliable one for others. Knowing the difference helps you use it where it shines and double-check it where it doesn't.
Where AI Helps
- Explaining concepts in plain language, like the difference between a deduction and a credit
- Organizing documents and building a checklist of what you've received
- Summarizing long documents, such as a brokerage statement or a letter from the IRS
- Drafting questions to bring to your CPA
- Building a budget or a simple cash-flow plan
- Spotting documents you might be missing compared with last year
Where AI Trips Up
- Recent law changes and current-year amounts and limits
- Basis in investments, property, and S corporation stock
- Depreciation and what happens when you sell a business asset or rental property
- Multi-state returns, residency, and income allocation
- Carryovers from prior years, like capital losses or passive losses
- Business owners' pay, such as reasonable compensation for S corporation owners
- Election deadlines that can't be fixed after the fact
- Long calculations with many numbers, where small errors compound
If your situation involves anything on the second list, that's the part worth having a CPA look at.
General information only, not tax advice for your specific situation.
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