A bit of a confession.
Part of me wishes AI didn’t exist.
Why?
Because it’s making my life harder.
Here’s an example:
Back when I was running Xen Accounting, I wrote this 400-word blog post.
It got some nice traction because not a lot of people were writing about online accounting tools at the time.
But these days?
ChatGPT can create that article in almost no time.
And now that everyone can do it, you have to work harder to stand out.
So what does that mean to you as a tax firm owner?
Whether we like it or not, AI is changing how tax work gets done.
The firms that integrate it into their operations successfully are more likely to pull ahead, and the ones who are reluctant or can’t use it properly are going to fall behind.
In this guide, I’ll show you exactly how modern tax firms are leveraging AI and how you can do the same.
Let’s get into it.
What Is the Role of AI in Tax Firms?
AI works best in tax firms when it handles what you shouldn’t be spending your time on in the first place.
The stuff that’s necessary but doesn’t require your years of experience to execute.
Here’s where AI can make the biggest impact on your firm.
Handling High-Volume, Low-Judgment Work
AI excels at repetitive tasks that eat up hours but don’t require deep expertise.
Firms are increasingly using it to handle routine client emails.
For example, when a client sends a multi-part question about depreciation, vehicle purchases, and estimated payments, AI can draft structured responses in seconds.
Same with tax research.
Like let’s say you need to look up Section 280A rules for a client’s home office deduction.
General rules are not something new to you, but you want to confirm the current guidance and specific limitations.
Well, an AI research tool can pull up something like this almost instantly, with sources too:
You could do it yourself…
Googling, browsing different sites, reading tax code, etc…
But it eats several minutes you don’t have, especially during busy season.
Individually, these tasks seem small.
But when you handle these tasks all day, small chunks of time add up fast, making your work more stressful than it needs to be.
Surfacing Risks, Insights, and Opportunities
Beyond just speeding up your work, AI helps you notice what you’d otherwise miss.
For example, tax planning for clients with investment portfolios.
You’ll find several custom GPTs that can help identify opportunities for tax savings and flag audit risks you might miss, like TaxGPT.
This gives you quick, practical talking points without depending on manual reviews that most teams lack the capacity to perform regularly.
Turning Tax Data Into Business Intelligence
AI can transform historical tax data into actionable insights for your clients.
For example, you can feed multiple years of a client’s tax returns into your preferred AI chatbot.
You can then ask it to identify trends, flag unusual patterns, or suggest strategic planning opportunities, and you’ll get something like this:
Before AI, this level of analysis meant lots of time doing manual comparison across multiple tax years.
Now it takes a few minutes and a well-crafted prompt.
If you want to learn more about how AI is being used across accounting as a whole, not just tax, check out my comprehensive guide on AI in accounting.
What Are the Benefits of AI in Tax?
I mentioned earlier that firms adapting AI will have the advantage.
But it’s not because you can write emails faster or look up tax code quicker.
Here are its real benefits.
More Time Back for Firm Owners
As a business coach, I dedicate a lot of time to handling all sorts of things at Future Firm.
Especially since June of last year, when I went back to running marketing.
I also need to make sure members inside Future Firm Accelerate are getting the support they’re looking for.
RyanBot, my digital AI chatbot clone inside my coaching program, has been a huge help with this.
Because it has been trained on my expertise and all the lessons in my Future Firm Accelerate program, it can do things like:
- Answer general questions from members
- Provide guidance on common firm challenges
- Give highly tailored advice to specific situations
…Even while I’m not available. 🙂
In fact, RyanBot answered 10,682 messages from members in a span of 12 months.
To put that into perspective…
If each message takes about 2 minutes to reply to, that’s roughly 356 hours of interactions.
So about 30 hours saved per month.
That’s given me more time to focus on where I can deliver the most value, such as creating content, supporting my team members, and growing the business.
For tax firm owners, it works the same way.
Time saved on routine client emails, repetitive research queries, and basic tax questions means more time for tax planning conversations, building advisory services, and growing your practice beyond compliance work.
Better Work-Life Balance During and Outside Tax Season
During a holiday break, I spent a week on a deserted beach in Panama.
No electricity, completely off the grid.
I talked about this experience in this YouTube video:
Now maybe you’re wondering, why am I sharing this?
Our industry isn’t exactly known for work-life balance.
A lot of tax firm owners can’t step away because everything stops when they are not available.
A big reason I was able to take that time off?
I have a team I can trust.
They’re good with using AI tools and autonomous enough to handle things while I’m gone.
When your team is capable of leveraging AI tools to answer routine client questions, handle standard research, and keep work moving without you, you stop being the bottleneck.
That’s when actual work-life balance becomes possible.
Not just by working less hours, but also by not being required for every small thing.
Stronger Client Relationships
When you’re not buried in compliance work, you start showing up differently in client conversations.
Less reactive, more proactive.
Less order-taker, more strategic advisor.
AI helps with this by giving you the capacity to better prepare for client meetings.
Instead of rushing from one tax return to the next, you can think through what each client needs to discuss.
For example, instead of a standard year-end meeting agenda focused on what the client owes, you can use AI to build a more strategic conversation framework, like this:
This helps you walk into meetings more prepared and confident.
When you show up with a clear framework and relevant questions, clients will more likely trust that you’re genuinely looking out for their interests.
Practical AI Use Cases for Firms
Many tax firms aren’t using AI for everything as they’re focusing on specific areas where it creates the most value.
Here are six areas where AI can help make the biggest difference:
1. Providing Better Tax Advisory to Clients
Advisory work can be a big revenue boost, but it requires research and analysis that eats hours and capacity.
AI can help with time-consuming research parts so you can focus on the strategic thinking clients actually pay for.
Blue J
Blue J can analyze complex tax scenarios and surface risk factors you might miss.
When I surveyed 150 accounting firm owners, I found that Blue J was one of the most common tools for tax-specific work.
One tax specialist commented that they use it to “take complex technical issues like cross-border problems and make it instantly clear to clients, turning something overwhelming into simple visuals and plain-English explanations.”
Here’s what that looks like in practice:
Instead of spending 45 minutes digging through Section 1202 rules for QSBS exclusions, Blue J gives you a structured breakdown quickly.
If you’re interested in learning more about how firm owners are using AI tools in their firms, you’ll like this AI report I put together.
Stanford Tax
Stanford Tax is trained on authoritative U.S. tax guidance and helps when you need quick verification during tax planning conversations.
For instance, you can upload relevant documents like 1099-DIV forms and get immediate answers with citations.
This keeps advisory discussions moving instead of stopping to say “let me research that and get back to you.”
These tools rely on generative AI to analyze tax scenarios and surface insights.
If you want to learn more about using tools like this in your firm, check out my guide to generative AI in accounting.
2. Automating Tax Payments
Tax payments can be a big source of headaches for both tax firms and clients.
Recalculating installments because someone missed a deadline…
Dealing with penalty notices because a client forgot to pay…
It’s annoying for you and stressful for clients.
Luckily, there’s an AI platform for that.
Remitian
Larry Hasson, a CPA, noticed a pattern.
His wife, a physician, would routinely forget to make her tax payments.
He’d have to recalculate installments, and some years she’d end up paying thousands in penalties.
Then he realized that his clients were struggling with the exact same thing.
The problem was that accountants can calculate taxes but can’t handle payments directly.
(So there’s always this gap where things fall through the cracks.)
Larry registered as a Money Service Business and built Remitian to close that gap.
It connects directly to tax authorities and automates the entire payment process.
Neat!
Clients get one unified dashboard for all their tax payments, with automated reminders and validation that prevents errors.
For firms, it means you can offer tax payment management as an actual service instead of just hoping your clients remember to pay on time.
3. Improving Client Experience Through Faster, Clearer Communication
Client communication topped our survey as the #1 AI use case.
82 firms out of 150.
No surprise there.
Email volume gets insane during busy season, and AI keeps your responses fast and professional.
The tools below can help you manage that volume without losing quality.
Missive (AI Rules)
I love me some Missive (affiliate link).
We use it at Future Firm as our primary platform for internal and external communication.
The AI Rules feature is pretty convenient.It can analyze message content and automatically take actions based on what it detects.
You set up a rule with a prompt (like “Is this client asking about their return status?”), and if AI detects “Yes,” it triggers an action like auto-drafting a response:
For tax firms handling common client questions like “When will my return be ready?” or “What documents do you still need?”, AI Rules can draft consistent responses instantly.
It can save a ton of time when you’re receiving a ridiculous number of client emails during busy season.
One more thing on client communication…
AI and automation can help you better communicate with your clients, but document collection is where a lot of firms are struggling.
You may also want to consider document management software to help streamline how clients submit their tax documents.
Abacor
Client meetings eat up more time than most folks realize.
Not just the meeting itself, but the prep before and the follow-up after.
Abacor tackles both ends of this.
Before your meeting, it automatically generates an agenda based on the client’s situation, so you go in with talking points.
During the meeting, it transcribes everything live.
What’s great is that it understands tax terminology.
So when you’re discussing specific deductions or bonus depreciation, it captures it correctly.
After the meeting, you can ask Abacor conversational questions about past client interactions.
Like “What did we discuss with Client X about their estimated payments last quarter?”
It pulls up the details without you having to dig through notes or listen to entire recordings.
4. Using Historical Tax Data for Strategic Planning
Years of client tax data can reveal strategic planning opportunities, but many firm owners don’t have the time or capacity to analyze trends across multiple tax years.
AI tools can compare multiple years of returns and identify which clients are ready for proactive tax planning conversations based on patterns in their historical data.
ChatGPT
Important caveat upfront.
I don’t recommend feeding sensitive client data to ChatGPT due to data privacy concerns.
If you’re going to take this approach…
Make sure you’re either using anonymized data or have proper client consent and understand how the data is being handled.
That said, ChatGPT is good at analyzing historical tax data if you upload past returns and ask it to identify trends or opportunities.
For example, you could upload 3 years of a client’s returns and ask “What planning opportunities do you see based on income and deduction trends?”
ChatGPT might identify things like income growing 40% while deductions stayed flat, or significant changes in business structure that suggest different tax strategies.
This works better as a one-off analysis tool rather than something you’d use for every client, given the privacy considerations.
Power BI with Copilot
Power BI is Microsoft’s business intelligence platform with AI capabilities built in through Copilot.
Unlike ChatGPT, Power BI is designed for secure data analysis. It integrates with (but not limited to):
- Accounting software (QuickBooks, Xero)
- Practice management tools (Karbon, TaxDome)
- Tax software (Thomson Reuters, CCH Axcess)
Once connected, you can ask questions like “Which clients have had income growth over 30% in the past three years?” or “Show me clients with declining deduction ratios.”
The advantage is it’s built for business data with proper security controls, so you’re not uploading sensitive information to a general AI chatbot.
5. Supporting Pricing, Packaging, and Profitability Decisions
The tax industry has a pricing problem as too many firms compete on being the cheapest option, which drives rates down across the board.
Knowing what your services are actually worth becomes difficult when everyone else is racing to the bottom.
AI can help here as well.
Over and above its usefulness in tasks directly related to tax work, AI can also help you price based on the value you actually deliver instead of just matching competitor rates.
RyanBot
Like I mentioned earlier, RyanBot is my AI chatbot clone inside Future Firm Accelerate.
It’s been trained on all the Playbook lessons, my best podcasts, newsletter content, and more.
Basically everything I know about running a healthy firm from my experience building and selling my own practice in 5 years.
As an example of how it can help, here’s RyanBot answering a question about how you can increase your prices while increasing the value you provide to clients in your tax firm:
It’s not going to help you do your clients’ taxes… 😛
But it will help you figure out how to run your firm better.
Questions about pricing, hiring, or scaling without burning out?
RyanBot pulls from the frameworks I’ve built over 10+ years of running firms.
Ignition (AI pricing assistance)
Ignition is one of my favorite tools.
I’ve been using it since 2013, and we’ve collaborated a bunch of times over the years.
At its core, Ignition (affiliate link) is a dedicated platform for businesses to create or handle share proposals, engagement letters, and billing.
Now, it has an AI pricing feature that analyzes your historical engagement data and suggests pricing based on what similar work has actually cost you.
For example, if you’re currently charging $500 for individual tax returns, Ignition might suggest $575 based on market data and your service profile.
You can see where your current price falls on the range (low end, high end) and whether there’s room to increase rates.
Reducing Owner Dependency in Daily Operations
Owner dependency is one of the biggest growth limiters in tax firms.
When your team can’t answer client questions without you, when processes only exist in your head, and when you’re the only one who knows how things work, scaling becomes impossible.
AI tools can help you systematize that knowledge.
Glean
Glean is an AI-powered search tool that works across all your firm’s documents, emails, Slack messages, and internal systems.
It can search through:
- Google Drive
- Practice management software
- Slack conversations
- Internal documentation
Think of it like Google search, but for everything in your firm.
Your team types “Section 199A memo” or “multi-state filing threshold” and Glean finds it by searching across different platforms.
Strengthening Marketing and Sales Efforts
After coaching hundreds of firm owners, I’ve noticed most aren’t very good with marketing or sales.
When they decide to get serious about growth, they hire agencies or consultants.
But AI can help you handle more of this yourself without jumping straight to expensive outside help.
Canva AI
Canva is a design tool most people know, but the AI features make it especially useful for creating marketing content quickly.
Here’s the result after I asked for “Create an infographic showing ‘Should You Incorporate? A Decision Guide’ with a simple flowchart for small business owners”:
Firms in our survey mentioned using Canva for generating branded social media graphics and marketing materials without needing a graphic designer.
The AI features speed up what used to take an hour into something you can knock out in minutes.
Claude
ChatGPT is the king of AI chatbots right now, but many people (including me) use Claude specifically for writing content.
In my experience, it just produces better written output compared to other chatbots.
For marketing, you can draft LinkedIn posts about tax planning, write newsletter content, or create website copy…
For sales, use it for discovery call scripts, follow-up emails, or proposals.
Here’s an example of Claude drafting a response to someone inquiring about Future Firm Accelerate.
This Project was created using actual responses I’ve used throughout the years, so the output matches my voice.
I still make edits, but not a lot:
You can train a Project on your service descriptions and past client responses, and you’ll get sales emails that sound almost like you without starting from scratch every time.
Gamma
Creating presentation slides with PowerPoint or Google Slides is time-consuming.
If you need to put together decks regularly, Gamma is an AI tool that generates complete slide presentations from simple prompts.
You input your topic like “Year-End Tax Planning Strategies for Small Business Owners”, and let Gamma build a complete presentation in minutes with layouts, visuals, and content.
It’s also capable of converting existing documents into polished slides.
Elevate Your Tax Firm With AI
There’s a narrative going around that AI will eventually replace accountants.
I don’t believe that’s the case.
Like with other disruptive tech, AI is a tool.
Yes, it amplifies what you can do..
But it cannot replace the judgment, trust, and expertise clients want to pay for.
As I said in the intro, tax firms using AI strategically will pull ahead of those who don’t.
And at this point, it’s starting to feel less like a competitive edge and more like table stakes.
So, which tools from this guide are you already using?
Which ones look worth testing in your firm?
Did I miss any AI tools that are working well for you?
Let me know in the comments!
