Key Takeaways AI tax preparation tends to work best if your return is low to moderate complexity and your records are clean. Today's AI tools still fall short when your taxes involve complex business ownership, multi-state filings, foreign income and other situations that may require judgement calls. There are also important privacy and data security issues to consider when using AI tools for tax filing preparation. Not long ago, doing your taxes with artificial intelligence meant chatting with a ...

Core Insights - Generative AI chatbots, such as ChatGPT, are increasingly being utilized for various tasks, including tax preparation, despite potential drawbacks [1][3] Group 1: Adoption of AI for Tax Preparation - A significant portion of the American population, over 43%, would trust AI for tax filing rather than hiring a professional, with Gen Z showing the highest trust at 49% [3] - Older generations also exhibit willingness to trust AI, with 25% of Baby Boomers and 18% of The Silent Generation expressing confidence in AI for tax-related tasks [3] Group 2: Advantages of Using AI - AI can assist in tax preparation by generating lists of required documents and forms, especially for individuals with multiple income streams [4] - It can help identify common deductions or tax credits, aiding users in deciding between itemized deductions and the standard deduction [5] - AI may flag inconsistencies or missing information, prompting further investigation by the user [5] Group 3: Limitations and Risks of Using AI - The information provided by AI may not be current or accurate, potentially missing newly announced credits, which could lead to inaccuracies if users rely solely on AI without verification [6] - AI lacks personalized understanding of individual financial situations, such as debt-to-income ratios or specific tax brackets, which may result in outdated or irrelevant guidance [7]