Yahoo Finance Can ChatGPT Do Your Taxes for Free?
Theoretically, ChatGPT can do your taxes for free. But it doesn’t mean you should rely on AI tax services, and it certainly won’t replace tax professionals.
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ChatGPT and other AI tools are transforming every part of life, but a report from FOX 10 Phoenix found that you shouldn’t rely on them to help with your tax return. Based on a test the publication did on ChatGPT, a simplified tax return example can be generated based on information you provide. ChatGPT’s response included a disclaimer that it was “a simplified example,” and that the actual tax return may vary due to other factors.
“It’s always a good idea to consult with a tax professional or use tax preparation software to ensure accuracy,” part of the response read, according to FOX 10 Phoenix.
ChatGPT also doesn’t have the most up-to-date information about taxes. For instance, CNET noted there have been several adjustments to tax regulation, such as the IRS increasing tax brackets, adjusting tax deductions, raising mileage rates and expanding who is eligible to file their taxes for free via IRS Free File. This is all new for 2024; however, the knowledge cutoff date for ChatGPT 3.5 is January 2022, and April 2023 for the paid ChatGPT 4.0.
Another reason experts say you shouldn’t rely on AI to do your taxes is because ChatGPT stores your personal information and usage data when you use the service, including prompts, input information and files you upload, CNET reported. Math also isn’t the tool’s strength, and it struggles with complex calculations.
AI tools can still help, just not with filling out your tax return.
An article published by the University of Illinois Tax School in April 2023 recommended using ChatGPT as a tool, but not a replacement for human expertise. AI shouldn’t be preparing your tax return for you or used for tax advice, but you may be able to use it to review your tax return for errors and inconsistencies.
Tax preparation software can help you file your tax returns, but the best way to file for free is to use the IRS Free File or Direct File tool. This guided preparation software allows qualified taxpayers to prepare and file federal income tax returns online at no cost.
According to Tim Hugo, executive director of the Free File Alliance, 70% of taxpayers, or roughly 100 million Americans, are eligible for Free File, CNBC reported. Only 3% of filers used the program last tax season. Taxpayers who made $79,000 or less in 2023 are eligible to use the software for free.
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This article originally appeared on GOBankingRates.com: Can ChatGPT Do Your Taxes for Free?
