I Used An AI Tool To Do My Taxes – Here's Where Experts Say I Went Wrong
A journalist tested using ChatGPT to help with taxes involving capital gains from stock sales, but discovered significant errors when consulting a CPA. The experiment highlights risks of AI tax advice, including outdated training data, overly confident responses, and the potential for users to accept answers without proper verification.
Summary
The author typically has straightforward taxes but faced complexity after selling employee stock purchase plan shares for wedding funds, potentially triggering capital gains tax. Instead of consulting a tax professional, they decided to test AI assistance, joining the more than 20% of taxpayers planning to use AI for 2025 taxes. Using a paid corporate version of ChatGPT that wouldn't use their data for training, they uploaded their consolidated 1099 and received what seemed like helpful, easy-to-follow advice broken into bullet points. However, when double-checking with a CPA, they discovered the AI's guidance was flawed. The tax professional explained that AI models tend to give definitive answers when the reality is 'it depends,' and people often stop reading after getting the answer they want to hear. The number ChatGPT presented as 'almost certainly right' actually needed manual calculation and verification, and the AI missed problematic data in the 1099 because the user didn't know to ask about it. Tax professionals noted that large language models may be trained on outdated information that could be 9-18 months old or older, which is problematic given frequent tax law changes. For those using AI for taxes, experts recommend using thinking models rather than instant chatbots, being aware of data privacy policies, and always double-checking with tax experts, as the IRS won't accept 'the AI made me do it' as a valid excuse for mistakes.
Key Insights
- More than one in five taxpayers say they're planning on using AI to help file their 2025 taxes
- AI models give definitive answers to tax questions when professionals would say 'it depends,' and many people stop reading after getting the answer they want to hear
- ChatGPT missed problematic data in the 1099 form because the user didn't think to ask about it specifically
- Large language models may be trained on data that is 9 or 18 months old or much older, which is problematic since tax laws change frequently
- If you make a mistake while using AI to do your taxes, the IRS won't accept 'Well, the AI made me do it' as a valid excuse
Topics
Transcript
[0:00] Tax time for me is usually pretty straightforward. I get my W2, enter the information into my tax software, E file, and I'm done. But last year was a little different. To raise funds for my upcoming wedding, I sold most of the shares I had bought over the years [music] through my company's employee stock purchase plan. And that meant I might owe capital gains tax. But instead of asking a tax pro for advice, I tested out an increasingly popular route. [music] More than one in five taxpayers say they're planning on using AI to help file their 2025 taxes. [music] I was a little skeptical about trusting [0:31] an AI chatbot with my taxes, but any…
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