We’ve come a long way from the days of lugging boxes of receipts over to your accountant’s office. By 2022, 150.6 million individual federal income tax returns were filed electronically, accounting for 94 percent of all individual filings that year, according to Pew Research.
Four years later, many tax services offer their own AI-powered tools to streamline tax filing, including automatic form-filling and deduction calculators, as well as on-site AI assistants to answer basic tax questions.
Around 30 percent of Americans say they will be use an AI tool, such as ChatGPT, to help prepare their taxes, according to a recent survey by McAfee. Another poll found that nearly half of Americans trust AI to give them tax advice. Those rates are higher among younger taxpayers — and men — according to surveys.
But universal chatbots and LLMs are very different than AI tools on tax prep sites from companies like H&R Block and Jackson Hewitt. “You don’t want to be using chatbots as your tax consultants,” warned Abhishek Karnik, head of threat intelligence research at McAfee. “They’re not the experts.”
Why chatbots seem like an easy answer
It makes sense that more people would turn to chatbots for tax help, cybersecurity professionals tell Mashable. The end of the IRS’ Direct File program and recent legislation, primarily President Donald Trump’s One Big Beautiful Bill, has generated increasing confusion about federal taxes — on top of an already complicated tax code.
“Many individuals see chatbots as an easy way to translate confusing guidance into plain language,” explained Christopher Caen, CEO of AI cybersecurity firm Mill Pond Research. “At the same time, rising costs for professional help and increased comfort with AI in everyday tasks are driving experimentation.”
As AI becomes more embedded in routine activities, especially among younger generations new to filing, more Americans will naturally turn to their daily AI assistant for tax purposes, said Karnik.
Don’t give ChatGPT your personal information
But deferring to ChatGPT as your personal tax assistant could have real financial and security consequences, experts say.
Keep personal documents offline
“General-purpose chatbots aren’t designed to securely handle highly sensitive financial information,” Caen said. Any personal information uploaded to a platform like ChatGPT is vulnerable to exposure.
When it comes to taxes, less data shared is always the safer approach.
Platform breaches, for example, could expose users’ private conversations to bad actors. Users’ live chats can be intercepted by malicious browser extensions or compromised devices. Caen says that even publicly shared prompts or copies of chatbot outputs can put users’ sensitive information at risk. Both Caen and Karnik warn of an increase in phishing sites masquerading as AI tools, as well as spoofed tax sites enhanced by powerful generative AI.
Mashable Trend Report
“When it comes to taxes, less data shared is always the safer approach,” said Caen.
In addition to the text content of chats, any files uploaded to chatbots are also at risk, Karnik warned. Never upload full tax forms, your Social Security number, or bank account details, experts warn. Avoid other personally identifiable information, too, like your employer’s details or your address.
“We don’t know where this information is eventually ending up,” said Karnik. “It’s going somewhere. It’s being processed by some Large Language Model. Who knows how it will be utilized for training.”
ChatGPT is no math whiz
Another reason to avoid chatbot accountants, according to Karnik: Most LLMs aren’t good at doing the math. Users have shared ChatGPT errors on the r/tax subreddit, like incorrect income tax figures and misunderstandings of capital gains tax brackets.
And while ChatGPT and its competitors have recently improved in their ability to do complex calculations, they aren’t infallible. Nuances in tax law and IRS procedures change frequently, Karnik explained, with chatbot models potentially pulling from outdated sources or coalescing information that spans differing state and federal codes.
Hallucinations are still a problem, too. “In general, you can’t trust the output,” Karnik said. “You don’t want that to turn into an issue with the IRS, because the IRS doesn’t care if you say ‘the AI told me so.'”
Use chatbots in moderation
Instead, security and tax professionals encourage taxpayers to seek out in-person, professional help if it’s available (and financially feasible) for you to do so. Karnik says this lessens the chances of you being victim to tax scams or digital attacks by a bad actor.
But they also recognize that not everyone is able to hire their own tax pro.
In general, practicing good digital hygiene will keep the impact of potential AI-powered breaches to a minimum. Use secure, well-known platforms, enable multifactor authentication, and avoid accessing financial tools on public or unsecured networks, recommends Caen. Karnik suggests not completing your taxes while traveling or using a VPN if you must, regardless of the digital tools you choose, as unknown networks could open you up to malicious attacks.
If you can’t get away from the allure of the chatbots, both Caen and Karnik recommend using them only for general guidance. “Think of AI as a research assistant,” said Caen.
You can ask AI tools to explain deductions, terminology, or filing steps, without providing your personal tax details. Use ChatGPT’s responses to organize questions you’ll pose to human professionals.
“These tools are good guides,” said Karnik. “It doesn’t mean you can take their advice, especially for tax filing.”
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