This AI Tax Assistant Actually Seems Pretty Useful

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The promise of AI chatbots lies in their seemingly infinite wisdom and asking them any question you can think of—plus the simpler stuff, like writing a thank-you note, crafting a cover letter, or even having a spoken conversation. However, there are limitations. I've previously turned to ChatGPT to test out its personal finance expertise, only to be told: “As an AI language model, I cannot provide financial advice or make specific investment recommendations...you may want to consult with a financial advisor who can provide personalized advice based on your individual financial situation and goals.” In other words: Don't go to chatbots to make financial decisions.

Now, however, H&R Block has released a new AI chatbot specifically for your tax questions—an arena where, in the past, I'd say AI should not be trusted. Using conversational AI, this virtual tax expert can answer many of your common tax questions and supplement your understanding of the tax process, and it seems surprisingly useful.

What to know about H&R Block's AI tax assistant

To reiterate, I'm hesitant to use AI when it comes to any sort of financial guidance. After all, as ChatGPT itself explains to users: “The system may occasionally generate incorrect or misleading information and produce offensive or biased content. It is not intended to give advice.”

Here's where this AI Tax Assist is different: H&R Block promises is that its AI model does not randomly pull information from the internet. Instead, the company says that it trained the chatbot only on H&R Block’s library of tax laws and refined with the help of its many accountants, lawyers, and other tax professionals. Plus, the chatbot will point people to a human tax expert for more personalized advice, if needed.

How to use the H&R Block AI chatbot

H&R Block said that while AI Tax Assist is not available on the free version of its app, it will not increase the prices of its subscription tiers that will have access to the conversational AI platform. Paid plans start at $35. 

The chatbot is designed to feel like a natural conversation, allowing you to phrase questions conversationally instead of needing to use specific keywords. You can use this tool to help explain tax forms you may need to file, eligibility for certain credits and deductions, estimated payment requirements, and much more. It can also provide helpful definitions for tax terminology you may encounter.

For instance, you can use the chatbot to ask questions specific to your situation, like, “What can I deduct as business expenses as an Uber driver?” Then you'll be provided with a list of allowed deductions, as opposed to having to search through painfully dense IRS resources.

Between keeping track of paperwork, making sure you don't miss any deductions, and getting accurate answers to your questions, taxes are always a headache. By supplementing self-service options like H&R Block’s chatbot, you can get more done on your own, saving time and money on your taxes. And as a final reminder, you're probably eligible to file your taxes for free.