How can Artificial Intelligence (AI) help with your Tax Return

Tax time will be just around the corner. Can you use AI to help with your tax return? The answer is: Yes, you can, and chances are you already do as AI is built into nearly all existing software people use. But there are some limitations and considerations to keep in mind.

1. Pre-filling and Data Entry
   • AI-powered tools can help automate data entry by extracting information from documents (e.g., PAYG summaries, bank statements, and invoices).
   • The Australian Taxation Office (ATO) offers pre-filled data from employers, banks, and government agencies, which AI can help verify and organise.
2. Tax Deductions and Optimization
   • AI can analyse your expenses and suggest possible deductions based on your industry and work-related purchases.
   • Some apps use AI to scan receipts and automatically categorize them for deductions.
3. Checking for Errors and Compliance
   • AI tools can review your return for common mistakes or missing information, reducing the chance of audits.
   • Some AI-powered tax software can flag unusual claims that might trigger ATO scrutiny.
4. Tax Calculations
   • AI can estimate your tax refund or liability based on income, deductions, and tax offsets.
5. Answering Tax Questions
   • AI chatbots (like the ATO’s virtual assistant) can answer general tax-related queries and help navigate MyTax, the ATO’s online tax lodgement system.

Considerations and Limitations of AI for Tax Returns

• AI cannot legally file your tax return for you—only registered tax agents or individuals can lodge it.
• AI may not always understand complex tax situations (e.g., capital gains, trusts, business income).
• AI may not be able to optimise your tax outcome based on your specific situation.
• AI-generated suggestions still require human review to ensure compliance with ATO rules.

• Always keep data security in mind and do not enter any private information into an AI search engine.
• Apply appropriate level of scepticism with the data output
• Use it to complement rather than replace your processes.

AI-Powered Tax Tools in Australia:

Some tax software and platforms use AI to assist with tax returns, such as:

• MyTax (ATO’s online system) – Pre-fills data and provides some basic guidance.
• Xero Tax, Intuit QuickBooks, and MYOB – Help small businesses manage tax obligations.

For more information, or assistance on this topic, please contact your accountant

– Heida Bell

Posted 06.06.2025

This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.