I had Gemini help me with RMD calculations for an estate I manage. Advice was mostly good. Wrong about withholding for both US and CA. Missed deductions on US. Was accurate on MFJ and spousal death impacts.
I've found it so far more effective for preparation than for planning/advice.
I've got a plan to feed the laws and rules and instructions into the machine before the prompts - is RAG still cool? Maybe I should small-language this?
My tax accountant mis-filed my taxes a couple years ago, which cost me about $20K (which I learned after I switched to another accountant later). Don't know if Claude / GPT would make the same mistake or not given SOTA today, but feels like there's an opportunity for models to be saving me thousands or tens of thousands of dollars a year.
Someone still needs to take liability for mistakes.
The real issue is that accountant most likely has a track record of those kinds of mistakes - but you have no info on other clients. So you weren’t as informed at the time you chose them vs the new one.
People misunderstand the concept of liability. Yes your tax professional is liabile for fraud or gross misconduct, but if they make a mistake which results in unpaid taxes or fees you're still the one on the hook.
Typically you are on the hook for paying the actual taxes and penalties, but if you acted in good faith on the negligent advice of a tax professional many jurisdictions allow you to recover the costs of penalties and interest accrued as a result of the negligent advice.
The IRS made it crystal clear to me long ago. The tax filer is responsible for everything on the tax return, regardless of the preparer. Of course, accountants can be liable in other ways, but the filer has to pay the fines if the accountant makes a mistake.
From the IRS' point of view, the tax-payer is responsible for paying all of it. You can then turn around and sue to recover any of the fees/fines or penalties incurred as a result of an error made by the accountant, not the actual taxes though.
yeah i think liability ultimately lies on the individual. of course, you could sue your accountant, but that feels hard, maybe almost as hard as suing the model providers.
At least in Poland it is not viable. Friend's business lost noticeable amount of money because accountant has not filed taxes and lied that they filed and lied that they checked it.
And there was no real path to recovering funds, except small part, after long court case.
At least they were able to fire them without severance pay.
I'm also 0 for 4 on tax preparers / tax accountants, so I concur with you its best to just do it yourself, which is what I now do. Only time I ever got audited (and failed) was when I had employed an accountant, since then I've never had a problem including passing audits. The tax code isn't /that/ complicated for most people's situation, and it's well worth understanding it.
I'm 1 for 6. And my current firm is overworked. I'm moving to do it myself (three companies, fund admin and personal). Recently Found a Tax-Accountant, not a CPA, who does advice only, no paperwork, who I'm using to cross-check my AI tools.
I have a non-trivial tax situation, as a US citizen living abroad. I prepare my own tax returns, never having found a cross-border tax preparer I trust, and have for the past few years, fed my draft return along with all the supporting paperwork into Claude. It has:
1. found errors, e.g. where I used the incorrect exchange rate (and managed to work out how I had made that error, which I was impressed by)
2. found items which would appear to be errors except for context it did not know
3. flagged areas where it disagreed with me as to the correct tax treatment, but accepted that the law is ambiguous (and in some cases I preferred its interpretation after additional research and in other cases I did not)
4. flagged areas where it disagreed with IRS guidance, and only acknowledged said guidance after I provided links to it
5. provided highly inaccurate estimated tax calculations, and not been able to fix its estimates even when challenged
So my takeaway is that it is a very useful tool for tax, but perhaps unsurprisingly, it is not good enough to dump all your paperwork into and expect a shiny return you don't need to check. (Possibly it is if you just have a W-2 and no other substantial income, but I can't speak for that scenario.)
Try this, it uses a tax engine as the backbone and provides feedback for Claude if it goes off the rails. Albeit it doesn't support every tax scenario.
I appreciate the recommendation, but as it happens I have already solved the estimated issue (mostly by just preparing a full return with estimated next year's figures, which while time-heavy is going to be more accurate). And for what it's worth, I suspect it wouldn't work for me - cross-border is extraordinarily complicated because of the tax treaties (indeed there is a dedicated IRS form to disclose the effect and rationale of any treaty based position), and given there is no obvious note on the documentation for it that there is cross-border support I doubt there is.
(And as I said to another commenter, I think it would be advisable in this thread for people to expressly acknowledge or disclaim any interest in or prior experience with any particular product)
I also had a great experience being consulted by an LLM regarding registering a business as a foreigner. Except I'm still very sceptical since it's not my area of expertise and consequences for a mistake are very high.
Are you saying I should use this (or it looks like one of their portfolio companies) as my return preparer, or as a replacement for Claude my return-checker? If the former, I would want to know why I should trust it; if the latter, I would want to know why I should pay for their services given I am already playing Anthropic for a subscription plan anyway.
(It would also help to know if you had a financial interest in or prior experience with this company)
Not related but I hope QuickBooks learn something and make their software better.
I downloaded 1700 of my transactions and use AI to build an app for it, so I can analyze the transactions and make sure that everything is properly categorized.
It used to take me whole day because of the Quickbooks. It took me less than an hour to go through all the transactions.
In Germany, there are companies like Buhl data that let you do your tax return very easily and give a live estimate of your return based on the data you provided. From my experience over the past 5 years, its prediction error is less than 5%.
I've found it so far more effective for preparation than for planning/advice.
I've got a plan to feed the laws and rules and instructions into the machine before the prompts - is RAG still cool? Maybe I should small-language this?
The real issue is that accountant most likely has a track record of those kinds of mistakes - but you have no info on other clients. So you weren’t as informed at the time you chose them vs the new one.
I think the red flag should have been when he printed out all my tax returns and made me pick them up in person, and didn't even send a digital copy.
It's not the accountant that paid $20k for his mistake but the accountant's client.
I am not aware of setups available to me that would transfer liability onto accountant.
So in either case I am taking liability.
(also, I am pretty sure that if corporation loses 10 millions over accountant making bad decisions, they are not going to recover that funds either)
And there was no real path to recovering funds, except small part, after long court case.
At least they were able to fire them without severance pay.
https://blog.nawaz.org/posts/2022/Nov/do-you-trust-your-tax-...
1. found errors, e.g. where I used the incorrect exchange rate (and managed to work out how I had made that error, which I was impressed by)
2. found items which would appear to be errors except for context it did not know
3. flagged areas where it disagreed with me as to the correct tax treatment, but accepted that the law is ambiguous (and in some cases I preferred its interpretation after additional research and in other cases I did not)
4. flagged areas where it disagreed with IRS guidance, and only acknowledged said guidance after I provided links to it
5. provided highly inaccurate estimated tax calculations, and not been able to fix its estimates even when challenged
So my takeaway is that it is a very useful tool for tax, but perhaps unsurprisingly, it is not good enough to dump all your paperwork into and expect a shiny return you don't need to check. (Possibly it is if you just have a W-2 and no other substantial income, but I can't speak for that scenario.)
Try this, it uses a tax engine as the backbone and provides feedback for Claude if it goes off the rails. Albeit it doesn't support every tax scenario.
(And as I said to another commenter, I think it would be advisable in this thread for people to expressly acknowledge or disclaim any interest in or prior experience with any particular product)
it's the most ai-native tax experience for US citizens abroad
(It would also help to know if you had a financial interest in or prior experience with this company)
Has anyone verified to see if they hold up?
I downloaded 1700 of my transactions and use AI to build an app for it, so I can analyze the transactions and make sure that everything is properly categorized. It used to take me whole day because of the Quickbooks. It took me less than an hour to go through all the transactions.
Not much, I assume.
EDIT: good point that paying accountant does not ensure avoiding it
wonderful, you made a good point that make me dislike situation even more