AI is changing how Australians do their taxes, but experts warn it could backfire if overused. Convenience comes with risk, especially if you're relying on AI alone.
As tax time rolls around, many Australians are asking whether artificial intelligence (AI) can help them get their tax returns done faster and cheaper. From apps that scan receipts to chatbots that explain deductions, AI may promise to take the complexity out of a traditionally stressful task.
But experts at UNSW Business School say relying too heavily on these tools could come with risks, especially for people with limited tax knowledge or more complex financial circumstances.
Professor Jennie Granger, from the School of Accounting, Auditing and Taxation, says AI can make tax time easier and faster, especially for people with straightforward financial affairs. "AI can be a good starting point," says Prof. Granger. "It has an impressive ability to analyse issues, apply the law and respond in straightforward language."
On the other hand, Prof. Granger and others also caution that convenience can come at a cost. "Using ChatGPT to assist with tax returns is likely to be a bad idea for people with limited tax knowledge," says Associate Professor Sam Kirshner from the School of Information Systems and Technology Management. "When it gets things wrong, you're the one liable."
So, what can AI do well? Where does it fall short? And should you trust it with your tax return this year? Here's what you need to know before handing your finances to a machine.
What can AI do for your tax return?
For individuals with relatively straightforward financial affairs, AI tools that scan statements and receipts to identify income and deductions can save time and improve accuracy, "AI will make it easier for Australians to locate records and thus get their income and deductions right," says Professor Michael Walpole, from the School of Accounting, Auditing and Taxation. "The advantage is that they will be less likely to miss things and thus under-report income or under-claim deductions. AI can also be used to check a taxpayer's understanding of the rules.
"The increased AI assistance will be counterbalanced by a decreased need for it as prepopulating of tax forms from data held by agencies that share it with the ATO will leave less to fill in and more to simply check," he says.
Prof. Granger says that some apps use AI tools to scan receipts and automatically categorise them for deductions. "An example is the ATO's myDeductions record-keeping tool, which can be
