As a transformative force for the accounting profession, AI is reshaping daily workflows and unlocking opportunities for deeper, more profitable client relationships. The power lies in reducing time-consuming, repetitive tasks that have long hindered productivity while opening the door to more meaningful financial insights.  

This result is that more accountants are shifting pivotally beyond traditional tax preparation workflow and harnessing AI for a more efficient, streamlined approach. As your firm navigates this new landscape, it’s important to have a comprehensive understanding of AI and its potential to transform your daily work. Let’s take a look. 

Overview of AI in tax preparation

Over the past few years, AI has advanced from simple automation to more sophisticated applications that can analyze vast amounts of financial data, detect anomalies, and even provide real-time tax insights. AI is revolutionizing the tax and accounting profession by automating time-consuming activities such as data entry, document management, tax calculations, and compliance checks.  

Emerging trends such as machine learning, natural-language processing, and computer vision enable accountants to handle complex tax scenarios with greater precision and speed. This not only improves compliance and reporting but also enables predictive analytics, allowing firms to anticipate tax liabilities and optimize financial strategies for clients.  

By automating repetitive tasks such as data collection, classification, and reconciliation, AI enables accountants to focus on providing clients with more in-depth insights and proactive financial guidance. This shift from transactional to consultative work enhances client engagement and helps firms position themselves as trusted advisors rather than tax preparers. 

Beyond efficiency gains, AI also offers a solution to one of the accounting industry’s most pressing challenges — attracting and retaining top talent. As firms struggle with a shrinking talent pool and an aging workforce, AI can alleviate some of the workload pressures by handling mundane tasks and reducing burnout among professionals. Additionally, younger accountants are increasingly drawn to firms that embrace new technology, seeing AI as a tool that enhances their role rather than replacing them.  

Ultimately, AI is not just changing how accountants work — it is redefining the entire profession. By leveraging AI, firms can create a more dynamic and fulfilling work environment, making the tax and accounting work more appealing to the next generation. Think of it as a strategic advantage. Firms that embrace AI-driven solutions early will be better positioned to navigate industry challenges, improve efficiency, and expand their service offerings for long-term success.  

Top 5 ways AI addresses challenges in the tax preparation process

There is no doubt the tax preparation process is often burdened by time-consuming data entry, complex regulatory requirements, and the risk of human error. Traditional methods require manually gathering client documents, categorizing financial data, and ensuring compliance with ever-changing tax laws — challenges that can slow down workflows, increase the likelihood of mistakes, and don’t exactly attract top talent.  

But AI can change all of that. From intelligent data extraction to automated tax law monitoring, AI is helping firms overcome the tedious work of the past, enabling tax and accounting professionals to focus on higher-value advisory services that are more rewarding for both staff and clients.  

Let’s look at some of the key challenges in tax preparation and how AI-powered solutions can help. 

Challenge No. 1: Time-consuming and error-prone data gathering and entry

One of the most significant challenges in tax preparation is the time-consuming process of gathering, entering, and processing your client’s financial data. Accountants and tax professionals often spend countless hours collecting documents, organizing financial statements, and manually inputting information into tax software. This process is not only labor-intensive but also diverts valuable time away from higher-level analysis and more profitable advisory work. Plus, as firms handle increasing volumes of tax filings, inefficiencies in data entry can quickly become a bottleneck, slowing down the entire tax workflow. 

In addition to being onerous, manual data entry is prone to human error, leading to miscalculations, missing information, and compliance risks. Even the smallest data entry mistakes can have significant consequences, from incorrect tax filings to costly penalties for clients. Moreover, the review process to catch these errors adds another layer of inefficiency, reducing overall productivity and client satisfaction. Tax professionals must balance accuracy and speed; however, outdated manual methods often make this task difficult. 

How AI can help streamline the data-gathering process 

AI-driven tax solutions streamline the data-gathering process by automating document collection and organization. For example, tools like SafeSend enable clients to upload documents throughout the year, rather than waiting until the last minute. With an automated document request list generated from proforma data in your tax software, staff and clients can track which documents have been uploaded and which are still outstanding.  

Using Next Gen Gather AI from SafeSend One takes artificial intelligence-powered tax document management to the next level, streamlining document collection and organization with unparalleled automation. Unlike other solutions, Gather AI doesn’t just extract data — it automatically recognizes and correctly categorizes source documents, eliminating mislabeling errors and the need for manual sorting. Firms can generate dynamic, AI-driven document request lists in seconds, ensuring clients know exactly what to upload. Real-time completion tracking and automated deadline reminders keep clients and staff informed and at pace, cutting down on frustrating back-and-forth emails and calls. By seamlessly integrating Thomson Reuters tax software, SafeSend One's Gather AI not only enhances efficiency but also delivers a more intuitive, automated client experience that drives higher satisfaction and compliance. 

Challenge No. 2: Manual tax preparation and review

Traditional tax preparation and review are often manual, time-consuming processes that require tax professionals to sift through stacks of client documents, input data into tax software, and cross-check figures for accuracy. Organizing workpapers, reconciling financial information, and ensuring compliance with tax regulations can be labor-intensive, especially during peak tax season. This manual approach slows the workflow and burdens tax professionals, increasing the likelihood of burnout and reducing the time available for higher-value client services like tax planning and advisory work. 

The consequences of manual tax preparation and review extend beyond inefficiency. Increased risk of human errors, such as data entry mistakes and misclassifications, can lead to compliance issues, IRS audits, and potential financial penalties for clients. Additionally, the time-intensive nature of manual processes reduces productivity, preventing firms from handling a higher volume of returns or dedicating more attention to complex client cases.  

Clients also expect faster turnaround times and a seamless experience, and accountants who rely on outdated methods may struggle to meet these expectations, ultimately resulting in decreased client satisfaction and potential attrition. 

How AI can help improve productivity 

AI-powered tax preparation and review tools, such as SPBinder, help mitigate these challenges by automating the organization of workpapers and intelligently categorizing income and expenses. This tool streamlines the tax workflow by automatically linking supporting documents to tax return fields, eliminating the need for manual organization.  

With its Live Sync feature, SPBinder synchronizes real-time tax data, ensuring that updates with your tax software are reflected instantly. Operating seamlessly in the background, Live Sync allows tax professionals to focus more on reviewing rather than administrative tasks. This efficiency not only saves your staff anywhere from 15 to 30 minutes per return but also significantly enhances accuracy and overall efficiency. 

Together, these AI-driven solutions reduce errors, improve productivity, and enable tax professionals to focus on higher-value tasks, ultimately enhancing firm operations and client satisfaction. 

Challenge No. 3: Complexity of tax laws and regulations

From compliance risks to reputational damage, failing to stay up to date on tax legislation and regulatory changes can have serious consequences for accountants. Tax laws are constantly evolving, and missing key updates can lead to filing errors, misinterpretations of deductions or credits, and even non-compliance with IRS regulations. This constant change increases the risk of penalties, audits, and legal complications for accountants and their clients. Firms that do not actively track tax law changes may also struggle to provide accurate tax planning advice, potentially costing clients money and eroding trust in their expertise. 

Beyond compliance risks, outdated tax knowledge can significantly impact efficiency and client satisfaction. Without a clear understanding of the latest regulatory changes, accountants may need to spend extra time researching, correcting errors, or amending returns — leading to delays and added costs. Clients rely on tax professionals to navigate complex tax codes and optimize their financial positions, and an accountant who lacks up-to-date knowledge may struggle to offer strategic guidance.  

In a competitive landscape where clients expect proactive insights, failing to stay informed can result in lost business and diminished credibility. 

How AI can help revolutionize tax compliance 

AI is revolutionizing tax compliance and reporting by automating complex processes such as monitoring tax law changes, analyzing financial data, and identifying potential compliance risks. To effectively implement AI, accounting professionals need a powerful, purpose-built solution that understands the complexities of tax, audit, and compliance.  

An agentic AI-driven platform, CoCounsel Tax is created for tax, audit, and accounting professionals. It accelerates research, integrates diverse knowledge sources, and automates workflows with advanced agentic AI capabilities. By combining trusted public documents, third-party integrations, Checkpoint proprietary knowledge, regulatory sources, and a firm’s proprietary data, CoCounsel Tax streamlines processes and ensures accuracy across complex tasks. 

By providing plain-language answers to tax and accounting queries — complete with embedded citations for easy verification — CoCounsel Tax is a collaborative document workspace with customizable templates that ensure consistency and automate insights. Firms can personalize CoCounsel Tax with their policies, guidance, client documents, and engagement files. Beyond simple automation, CoCounsel Tax can perform advanced document analysis to extract and summarize relevant data and provide clear recommendations for colleagues and clients. 

Challenge No. 4: Inefficient client collaboration and communication

Beyond technical challenges, client collaboration and communication remain significant pain points in the tax preparation process. Misaligned expectations, delayed document submissions, and last-minute questions can be frustrating for tax professionals and their clients.  

Traditional communication methods such as email chains or phone calls often lead to inefficiencies, missed messages, and confusion. Without a streamlined approach to document sharing, status updates, and client queries, accounting firms may struggle to maintain smooth workflows and meet tight deadlines. 

How AI can help improve client collaboration and communication 

As tax professionals navigate these challenges, leveraging technology and AI-driven solutions can significantly enhance efficiency and accuracy. Automating data entry, utilizing AI-powered compliance tools, and adopting cloud-based client portals can help firms overcome these roadblocks. By addressing inefficiencies in tax workflows, professionals can spend less time on administrative tasks and more time providing strategic insights, ultimately delivering greater value to their clients. 

Consider how Gather AI revolutionizes client collaboration by taking time-consuming and mundane traditional document exchanges and turning them into seamless digital interactions. Instead of the typical back-and-forth communications experienced throughout the busy season, Gather AI creates a collaborative workspace where clients can simply see what documents they need to provide and when—with intuitive visual progress tracking, keeping everyone informed. 

Gather AI’s intelligent communication features send automated, personalized reminders at optimal intervals, eliminating the need for staff to follow up with clients repeatedly. By recognizing and instantly categorizing uploaded documents — even those incorrectly labeled by clients — Gather AI significantly reduces confusion and miscommunication. This collaborative approach fosters greater client engagement and satisfaction because clients appreciate transparency, convenience, and reduced friction in their tax experience. Ultimately, this strengthens the accounting-client relationship, while saving time on both sides. 

By streamlining communication and collaboration, AI-powered tools enhance efficiency, improve the client experience, and foster a more seamless working relationship between tax professionals and their clients.  

Challenge No. 5: Attracting and retaining top talent

It’s no secret that accounting firms face a growing challenge when it comes to attracting and retaining high-quality staff. The profession is becoming increasingly competitive as younger generations seek flexible, technology-driven work environments.  

The traditional, time-intensive nature of accounting work, with long hours during peak seasons and repetitive tasks, has historically led to burnout and job dissatisfaction. Additionally, the shortage of skilled professionals, combined with the increasing demands for more complex advisory services, puts pressure on firms to fill positions and maintain high levels of employee engagement and retention. 

One of the key obstacles in attracting talent is the perception that accounting work is monotonous and lacks the dynamic, innovative environment that younger professionals crave. Millennials and Gen Z workers are often drawn to industries that embrace technology and offer opportunities for personal growth and continuous learning. Unfortunately, many accounting firms still rely on outdated systems and manual processes, making it difficult to attract a younger, tech-savvy workforce. As a result, firms struggle to compete with other industries that offer more modern, flexible, and innovative work environments. 

How AI can help attract and retain staff 

Thomson Reuters offers AI-driven solutions that provide an answer to this challenge. By implementing advanced AI technologies, accounting firms can automate routine tasks, streamline workflows, and improve the efficiency of daily operations. This efficiency reduces the time spent on repetitive work, allowing staff to focus on higher-value activities such as client advisory services.  

With AI handling the heavy lifting, firms can offer a more engaging work environment that allows employees to develop their skills in strategic areas, ultimately making the profession more appealing to top talent. Furthermore, AI can help accounting firms provide a better work-life balance for their staff, a critical factor in both attracting and retaining employees.  

AI-powered solutions from Thomson Reuters encourage secure, remote collaboration and automate many of the time-consuming administrative tasks associated with tax preparation and auditing. By relieving staff from these mundane tasks, employees can achieve a more manageable workload, especially during peak periods, thus reducing stress and burnout. This relief not only enhances employee satisfaction but also improves retention rates, as staff are more likely to stay in an environment that values their well-being and professional development. 

Ultimately, adopting AI-driven solutions from a trusted technology provider like Thomson Reuters allows firms to remain competitive in a challenging talent market. By embracing the latest technology, firms can create a more dynamic and flexible work environment that attracts top talent, reduces burnout, and empowers employees to focus on higher-value tasks.  

With the ability to offer an innovative and efficient working environment, you can position your accounting firm as a leader in the profession and attract skilled professionals seeking a modern and fulfilling career opportunity. 

Emerging trends and future impact of AI for accountants 

The rapid evolution of AI has demonstrated transformative potential — and it’s only the beginning.  

Early AI applications focused on automating repetitive tasks such as data extraction and document categorization. However, today’s AI-powered tax solutions go beyond automation, leveraging natural-language processing and machine learning to interpret complex regulations, analyze financial patterns, and suggest tax strategies.  

AI-driven platforms now assist accountants by cross-referencing vast databases of tax laws, generating real-time insights, and reducing the risk of errors. Even as we speak, emerging trends in AI are reshaping the tax and accounting industry in profound ways. From generative AI-powered research tools to agentic AI systems that automate decision-making, these innovations enhance efficiency, accuracy, and compliance.  

Unlike traditional AI, which is typically reactive and limited to predefined tasks, agentic AI can dynamically adapt to changing circumstances, proactively seek information, and refine its outputs without constant human intervention. By operating autonomously, agentic AI can make decisions and take actions based on goals, constraints, and real-world feedback. 

Agentic AI can also automate tax compliance and reporting by continuously monitoring tax law changes, analyzing financial data, and proactively identifying potential compliance risks. It can autonomously gather and categorize transaction data, apply accurate tax treatments, and help users throughout the tax filing process — alerting them when anomalies or strategic decisions require experienced input. 

But are tax and accounting professionals prepared for this level of change? 

Although firms may be more focused on technology than ever, most lack the personnel and workflow infrastructure to achieve true technology success, according to findings in the 2024 tax firm technology report produced by the Thomson Reuters Institute. Most respondents said their staff is somewhat, but not very, technologically competent. Only one-quarter said their firms use key metrics to track the success of technology within their ecosystems. 

Not surprisingly, many respondents said they believe AI will play a part in tax work of the future, and some firms are already moving ahead with the implementation and adoption of these tools. However, these technologies are extremely complex, requiring integrated sets of data and a basic understanding of how AI arrives at its answers. Implementing new tools without proper training can pose challenges for tax and accounting firms, potentially leading to inefficiencies in their workflows and decreased job satisfaction among staff.

As such, the tax and accounting industry is at a crossroads when it comes to technology competency. Most professionals agree about technology’s importance, both now and in the future. However, many feel they lack the resources, time, or ability to properly implement and operate critical technology tools, given the other demands of the firm. 

That said, therein lies an opportunity. Upskilling staff with AI technology training can become a significant differentiator in a competitive landscape. Increasing your firm’s overall technology skills not only benefits clients in terms of insightful AI tech-enabled outcomes, but it also can serve as a competitive advantage in attracting and retaining high-quality talent.  

As AI is increasingly integrated into tax preparation, audit, and compliance, properly training staff on harnessing it is no longer an option, but a necessity. Predictive analytics and machine learning are becoming increasingly sophisticated, enabling firms to anticipate tax liabilities, identify potential compliance risks, and provide proactive advice to clients. As AI advances, accounting firms that embrace these technologies and train their staff to use them effectively will gain a competitive edge by delivering faster, more precise, and highly personalized services. 

A new generation of accountants

As we look to the future, the integration of AI will enable a new generation of accountants to focus on more creative and strategic tasks, such as problem-solving, expanding firm services, and strengthening client relationships. As AI continues to evolve, advancements in machine learning, natural language processing, and predictive analytics will continue to shape the future of tax and accounting. These innovations will further optimize workflows, enhance compliance, and empower professionals to make data-driven decisions. 

Ultimately, AI is not replacing accountants — it’s empowering them. The time saved through AI-driven technology can rejuvenate the tax and accounting industry, giving firms embracing innovation the opportunity to thrive and succeed across multiple areas. It may even rekindle the spark that drew them into the profession.  

Firms that proactively adopt AI will not only improve efficiency but also future-proof their business against evolving industry demands. The key to success lies in embracing AI as a partner to deliver high-quality, data-driven insights that support client needs, staff engagement, and long-term firm growth. 

Ready to learn more?

Discover how  SurePrep, CoCounsel Tax, and SafeSend can transform your firm's operations and help you navigate the complexities of tax preparation, improve compliance, enhance collaboration, and deliver higher-value services to your clients. 

Recommended solutions from Thomson Reuters 

SurePrep 1040SCAN. This tool automates the scanning and importing of tax documents, reducing manual data entry and minimizing the risk of errors. Using SurePrep 1040SCAN accelerates the 1040 preparation process, freeing up your team for client interactions and advisory work. 

SurePrep SPBinder. This digital binder solution organizes and standardizes your workpapers, improving accuracy and collaboration among team members. Integrate SurePrep SPBinder with UltraTax CS to ensure a seamless data flow from tax documents to final reports. 

SafeSend One Next Gen Gather AI. SafeSend, part of Thomson Reuters, offers award-winning automation technology for tax and accounting firms to provide unrivaled client experience. Its flagship product, SafeSend One, is an end-to-end solution for tax and accounting professionals. 

UltraTax CS. This comprehensive tax compliance software enables efficient, accurate tax preparation and e-filing. Thomson Reuters designed it to integrate seamlessly with other products to streamline your tax process. 

CoCounsel Tax. The trusted agentic AI assistant for tax professionals, designed to simplify tax research while automating complex workflows. By leveraging CoCounsel Tax, you can significantly elevate your firm’s productivity. CoCounsel combines the latest agentic AI technology and deep industry expertise to deliver precise, trusted answers to complex tax questions. CoCounsel Tax automates tedious tasks and allows professionals to focus on strategic insights and high-value client work.