When Accounting Department Lecturer Stephen Pascarella stops and checks his email, he’s always on the lookout for a daily message from RIA Checkpoint, which sends updates on tax developments in Washington D.C.  

“I tell students you can spend six to eight hours a week reading the information that comes from Washington just to stay current with the tax law,” says Pascarella, who has a full-time accounting firm, adding that the law constantly changes. But artificial intelligence has the power to streamline the process, both for tax professionals and individuals filing on their own. 

Pascarella has taught at Bryant University for the past 27 years and, come August, will head the university’s new online Master of Science in Taxation program. With tax season in full swing, Pascarella says most people should keep it simple: If you’re filing a basic return (e.g., you have a W-2 and interest and dividend income), TurboTax is the way to go.

Pascarella says the online application has been tested and is not too expensive; his clients, who used the application prior to going to Pascarella for more complex tax filing needs, were satisfied with TurboTax’s capabilities. He also notes that individuals may choose to file through the IRS’s website, which is free for those with adjusted gross incomes of less than $73,000.

The filing process becomes more involved when individuals have rental properties or own sole proprietorship small businesses. For these individuals, Pascarella recommends seeking a tax professional (such as an attorney, an enrolled agent, or CPA) who can complete the tax filings and share information that could help them lower their tax liability. 

“An app’s really not going to do that for you,” Pascarella says — at least not yet. 

He says tax return preparations could evolve in the next five to 10 years through the industry’s continuous implementation of artificial intelligence. Companies such as H&R Block are currently using artificial intelligence to assist with customers’ experiences. After individuals insert their tax information online, H&R Block takes that data and draws connections between their statements and returns. Employees then use these AI-generated findings to locate areas where clients can maximize their refunds or reduce how much they owe. 

Looking to the future, Pascarella predicts the power of artificial intelligence will shift from the tax preparer to the palms of individual filers. 

“I think with artificial intelligence, you’re now going to be able to say, ‘How could I lower my tax liability based on what I currently have?’” Pascarella says. “They should be able to do that because, as it is right now, artificial intelligence could actually pass the bar exam. We'll have to wait and see what happens.”

When filing online, Pascarella reminds individuals to be cautious when choosing a tax preparation app. Downloading a tax app on your phone may seem innocent enough, but tax-related cybercrime is a growing concern. According to Health Net Security, fake apps can gain access to photos, messages, and credit card and bank account details. Bad actors can also reverse-engineer a recognized app, add malicious code, and upload it to the app store. Pascarella points to H&R Block and TaxSlayer as trustworthy apps for individuals. 

“Make sure you’re using one that has been tested and has a good rating,” Pascarella says.