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by jcranmer 33 days ago
Ultimately, taxes is just filling out a spreadsheet and doing basic math... but the hard part of taxes is understanding how to fill out that spreadsheet correctly. Doing that requires answering several questions that many tax filers may simply not have the background to understand--I'm always struck whenever answering the question about "do you need to correct your W-2?" is how would I know when the answer is "yes." I can see how AI could be helpful here... at least were not AI plagued with hallucinations.

That said, Intuit's actual business model is convincing millions of people that their taxes are so complicated they need to spend $60 on a program that is just copy-pasting numbers from one document to another.
3 comments
nunez 33 days ago
tbf doing taxes is way more than copy from W2; paste into 1040. There are tax credits. Tax incentives. 1099 income (which a lot of people receive!). Loopholes. So many loopholes.

As far as I understand it, a lot of this guidance can be/has been automated programmatically. I can see how LLMs can become useful for niche scenarios if you feed it *a LOT* of data as they become more accurate.

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gamblor956 33 days ago
There are actually very few "loopholes" available to individuals.

What most accountants call "loopholes" are actually just misunderstandings of the tax rules (e.g., the home office deduction, home business expense deductions, hiring family members being some of the biggest), and their clients usually end up paying penalties the IRS if they get audited.

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nunez 33 days ago
Or tax situations that aren't taken advantage of! There are folks who are definitely brave about using those deductions, but there are also people that can who don't. That's what I meant by "loophole" here.
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bombcar 33 days ago
You would correct your W2 when the amount you receive wasn't what was reported - this is exceptionally rare.
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jimbob45 33 days ago
Nah, Free Fillable Forms paired with ChatGPT (free, not even plus) is adequate for the vast majority of the tax population now and none of it is hard. I expect that 2027 is the last year for the tax preparation software companies to still exist.
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Loughla 33 days ago
There have been free alternatives for years.

People still pay accountants to do their very basic taxes and pay $200 for twenty minutes worth of work.

Why?

For the same reason paid software exists in this space - knowing you have someone else to blame.

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