Small Business Taxes

The Role of AI in Small Business Tax Preparation

Updated 2025-10-28

Ways AI can help: document extraction, classification, error detection, and planning scenarios—with controls for human review.

  1. Document ingestion
  2. Classification & mapping
  3. Error checks & anomalies
  4. Planning simulations
  5. Human review & governance

Document ingestion

Use OCR to parse W‑2s, 1099s, and receipts into structured data.

Classification & mapping

Map vendors and line items to correct tax categories with confidence thresholds.

Error checks & anomalies

Flag duplicate expenses, odd trends, or missing forms for review.

Planning simulations

Model entity elections, salary/distribution mixes, and depreciation choices.

Human review & governance

Require approvals for filings; keep an audit trail of adjustments and prompts.