Accounting firms are seeking ways to stay ahead of the competition as new tax regulations and audit standards continue to impact their operations. Many are turning to automation and artificial intelligence in order to online accountant eliminate time-consuming, repetitive tasks that take away from client-facing billable work.
H&R Block’s tax app is one example of AI in action. Utilizing IBM’s Watson system, the application has learned how to interpret years’ worth of past filings in order to better comprehend the tax code.
1. Detecting Fraud
Tax season can be a hectic time with so many forms and deadlines to meet. Artificial intelligence can help alleviate that stress by automating the process so you don’t have to manually enter all your data.
One example of AI in the tax industry is RPA. This tool automates manual, repetitive tasks like data entry, integration and reporting, saving labour and freeing up resources for more value-added work.
Another way AI can be advantageous to online tax agent preparers is by aiding them locate deductions and credits in the IRS database. This is especially helpful when it comes to recognizing deductions related to business expenses.
AI can assist tax professionals in making more accurate forecasts, helping them recognize how tax policy changes and economic conditions impact a company’s finances. This knowledge is especially helpful as companies face new requirements from Congress or the IRS.
2. Identifying Deductions and Tax Credits
One of the greatest difficulties tax practitioners face is identifying deductions and credits that may apply to their clients. With thousands of pages in the federal tax code alone, CPAs will need to do extensive research in order to comprehend all of the modifications made under the Tax Cuts and Jobs Act (TCJA).
Artificial intelligence can assist tax preparers by scanning through tax documents and pinpointing potential savings opportunities. For instance, H&R Block utilizes IBM’s Watson AI system for its tax questionnaire.
AI also empowers tax professionals to focus on providing consultative and advisory services. It allows them to identify key elements in a situation and stress-test their effects on client outcomes, helping them avoid potential risks.
3. Streamlining Processes
Artificial intelligence in tax apps can make filing taxes simpler for taxpayers. These programs utilize AI to interpret the tax code and identify potential deductions or credits that may apply.
These software systems can search and extract critical data from various documents, which simplifies human data processing and allows tax practitioners to complete the process faster.
AI solutions can classify products and services, saving the tax team a considerable amount of time on research and decision-making. This feature is especially helpful when it comes to property tax calculations.
These apps can enhance the accuracy of tax calculations by helping identify product and service-based deductions. This reduces the chance for overcharging or undercharging taxes, as well as confirming that correct classifications are made each year.
4. Predicting Future Taxes
AI systems are capable of quickly processing vast amounts of data, providing insights and predictions that enable tax professionals to detect trends in tax compliance. Doing this helps businesses avoid unnecessary fines or other problems in the future.
AI can also be employed to analyse tax returns and identify potential deductions and credits. This helps reduce the amount of work tax accountants must do, saving them both time and money.
Tax analytics can also aid businesses to streamline their operations and gain a competitive edge. It can identify hidden tax risks and opportunities that can be utilized for revenue generation, increased efficiency, and enhanced profitability.
5. Analysing Data
Tax season can be a time of stress and overwhelm. With so many forms and deadlines to meet, it’s up to you and your accountant to make sure everything is filed accurately and on time.
Artificial intelligence (AI) can simplify the process, taking much of the strain off your shoulders. AI tools can automatically enter data into accounting software or business systems so you don’t have to.
Though many automations are created to tackle low-value, repetitive tasks, there is a growing movement toward smart process automation (SPA). SPA utilizes machine learning technology which enables computers to “learn” how to perform a task over time.