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Empowering Small Businesses: Using AI for Seamless Tax Filing

3 Mins read

McKinsey dubbed 2023 “generative AI’s breakout year.” In 2024, we’re continuing to see artificial intelligence (AI) transform the way we do business and interact with others. According to a survey from The Small Business & Entrepreneurship Council, 75% of small businesses are using AI tools in their operations for everything from financial management and email marketing automation to inventory management. But the AI use cases don’t have to stop there — generative AI can also help small businesses file their taxes when and how they want to.

Taxes are frequently met with confusion, dread, and fear, and small business owners are faced with more intricate tax scenarios than the average individual. New DIY tax platforms integrate generative AI to provide immediate, conversational responses to common tax questions, in addition to offering access to online tax professionals. This integration of generative AI gives small business owners and entrepreneurs round-the-clock access to resources that guide them through the entire filing process. Let’s explore some of the ways AI can help make filing taxes easier for small business owners.

Filing on Your Own Clock

Running a small business often means bringing the work home with you and working hours outside the typical nine-to-five window. On top of working long hours, small business owners are constantly thinking about balancing cash flow, managing expenses, generating new business leads, managing employees, and ensuring smooth day-to-day operations.

When tax season approaches, the last thing small business owners want to do is find time in their busy schedules for a physical appointment with a CPA or other tax professional. Fortunately, DIY tax filing options that integrate AI are making it easier than ever for business owners to file their taxes on their own time, eliminating the unnecessary stress of showing up in person during business hours.

With AI-enabled tax filing solutions, small business owners can work through the tax filing process whenever is best for them, including late at night. If they have questions about how to claim expenses like mileage or what the QBI deduction is, AI tools are there to help — even when a live tax professional is not.

Streamlined Tax Preparation Help

Filing taxes as a small business is far more complex than filing as an individual. It can be difficult to figure out what forms are needed, which expenses can be written off, how to calculate and pay estimated taxes, and what the tax implications are of hiring employees or independent contractors. While some people turn to general search engines for help, business taxes are too complicated for generic solutions, and there are significant financial consequences if returns are filed late or incorrectly.

AI-powered solutions built into DIY tax filing platforms give business owners a reliable source of information to help them throughout their tax journey and answer specific tax questions that come up along the way. The AI systems are trained to provide information specific to small businesses on tax forms, deductions, and credits, helping small business owners maximize potential refunds and minimize tax liability.

Confidence in the Filing Process

Small business owners and entrepreneurs can take comfort in knowing that the AI solutions integrated into tax software platforms are trained to handle complexity. The AI systems in place can help business owners who have complex tax situations, like those who own or rent multiple properties, for example. The tools leverage the latest data from tax experts and are up to date with tax codes and recently changed laws and tax policies.

To receive the most accurate answers from AI, small business owners need to be specific in their questions. For example, asking general tax questions like, “What deductions are available to small businesses?” can result in a long list of answers not applicable to your business. Formulating specific tax questions like, “Which home office expenses can a small business deduct?” will lead to more accurate responses that apply to the user’s unique situation.

If small business owners need extra help, tax software platforms typically provide access to live tax professionals who can walk through the process step-by-step.

The Future of Filing

When it comes to tax preparation and filing, busy professionals seek convenience and ease, as well as accurate, reliable, up-to-date information to navigate the confusing and ever-changing world of taxes. Small business owners also need to be able to prepare and file taxes at any time during their already hectic schedules. AI-powered tools empower small business owners, so they enter tax season feeling prepared and confident, and can keep their focus on growing their business.

Jody Vanarsdale, Director, Expert Help, H&R Block

Small businesses taxes stock image by Rix Pix Photography/Shutterstock

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