556 2025 TAX Accounting Firm Tech Highlights

Today, we're recapping our 2025 tax tech predictions. What did we think would come this year? And has the tax ecosystem for accounting firms evolved in the way that we hoped it did? We'll recap the coolest stuff that's happened this year and some stuff that kind of fell off the map. Where did, where did it go? Shouldn't we have gotten this by now? And excitingly, we've got a special co host today to sort of run us through this stuff. His name is Jacob Marley. It's actually Scrooge's dead business partner in Charles Dickens A Christmas Carol. Jacob, great to have you.

Yes, it's lovely to be here to discuss. What was it? Accounting firm technology.

Accounting firm stuff.

Oh, boy.

Okay, Jacob's going to run us through last year's predictions. We'll see how we did then.

Lunch. I'm getting lunch for this right then.

Yes, I will do lunch as soon as we're done here. So without further ado, revisiting our 10 biggest tax tech predictions for this year and the best new stuff for tax pros. Come on in, let's do it. So we do this at the end of every year, kind of predicting what does next year's tech look like. And it's to kind of paint the picture of what's just around the corner so that I can factor that into my tech planning right now. Done it for a couple years now. Honestly, it's pretty accurate. A lot of tech people listen to this and I talk with a lot of tech folks. So it is a pretty good snapshot of like what's just around the corner. Let's kick off with 2025 prediction number one. What I thought would be the biggest change to tax tech in 2025. Jacob, you want to take that for us?

Tax intake becomes pro forma, native and mostly self checking. The transcript's biggest bet is that firms will stop.

The transcript is the transcript from last year's podcast episode. Do you not have to be so literal, Jacob?

Building boilerplate organizers and instead generate a real prior year based document request list DRL automatically from the pro forma. Then let clients or staff drag in a pile of PDFs while the system auto matches docs to checklist items. The point isn't just convenience. It's eliminating the flip through the prior year file +organizer completeness review that decides whether you can even start the return. Because headed into 2025, there's genuinely no reason why a human being ever needs to do that again. The author frames this as A universal workflow, Jacob. It was me for 1,040 volume work.

1,040 volume work. Stop it. Okay. So first prediction was that tech would build our custom document request lists for 1040s or 1040 series work, as Jacob describes it, totally eliminating the need for that person to like, flip through last year's file and look at the pile of current year docs and be like, what do we have? What do we need to ask the client for? I don't know how you did this. I think a lot of firms, this was done sort of helter skelter across your whole team. That was how we did it originally. Anytime a client would drop off information, it would then go and sit on a shelf basically until we had time to work on it. And the problem that you often faced was three weeks later, when you're able to pick that project up, you find out we're missing 80% of the information. And you reach out to the client. Then three weeks after the project started, what we then evolved to is we had a person in the office whose job it was. Anytime something came in, like there was a drop off of a 1040 project, they would pull up last year's file, flip through everything we had, flip through everything we have this year, and then immediately send out a request to the client for those documents. What are the things very obviously that it looks like we're missing? And we would send that out same day or the next day. This was a human's job. And this was, in my opinion, the most organized way you could do this work with humans. The clients appreciated the, like, quick turnaround time of those questions. And then, because that project was probably going to sit on a shelf for a couple weeks before any of the professional staff got to it, it meant the client had that time to get that info back to us. So the perceived speed of service from us was much faster. Now, my prediction here was that tech basically wipes that out. And by the end of last year, by the end of 24, what year is it? 26. Hang on. Does anybody know what year it is? Okay, it's 2025. You ever do that? You just spiral on a very basic thing. Yeah, me neither. So at the end of 2024, we had basic versions of this technology that would match any incoming documents with this checklist of what are the documents that we need. The prediction for 2025 is that this stuff gets good enough to where you never really need a human to do that. Check again. And I would say, were we right? Were we right on this I would say yes, we for the people who are using the right tech for it. So the leaders here, I would say the three that do this very well are Stanford, Tax, Sorban and Tress. They do the intake automation part very well. They will go out and build a customized to the client document request list based on pro forma information and then you just give it a pile of files and it works through those files and figures out which items from the document request list are there and which items are still needed. The beauty then is the system can reach out to your client and be like, hey, here's the stuff that we still need. Optionally if you prefer doing that, reach out yourself, then you can use that tool just internally to figure out what information's still needed so you don't have to do the manual process of reviewing the prior year file. The tech is good enough for this that no humans need to be doing the work. I would say the leading reason why humans are still doing this work is either one, they're just not plugged into like recent cloud based tech. They're using practice cs, they're using Access Practice, they're using a spreadsheet to manage the work in their firm. So the folks that aren't like plugged into, well there's tech for this. Obviously they're not tasting the rainbow yet. And that is the biggest group within accountingdom. But the second biggest group of people that have not realized the full benefit of this are those that are still holding out on their practice management system to ship a good version of this because a lot of them have promised you that it's coming yet here we are end of the year and we've got like whiffs of this, versions of it, but not versions of it that are like four years in development, which is what the leaders in this category are. So while some practice management systems have a version of this now, it's not what we're describing here where it will actually based on the prior year tax return import, build a full document request list. I'm talking about every form they need to provide, who the payer was for those forms and then being able to upload whatever the client provides to the system and have it check off the list all the items that are there. Practice management systems, they're not nailing that yet. They're doing a half baked version of this. They're where these intake tools were probably a couple years ago. And so the folks that are still waiting for the practice management system to do a good version of this, unfortunately it's still a lot of human work to review every single document coming in for every single 1040 client gang, there's a better way. This is why my recommendation is always use the tech that works today. Like be rooting for everyone else to like, yeah, go build a good version of this, but then like I'll go use it when it's ready, which is never when they Release a version 1. By the way, a lot of practice management systems were saying at the end of last year they would have it ready and now only a few of them have a basic version of it this year. And then the accounting firms that jumped on these intake tools early like two, three years ago, they're like, man, I haven't. Our humans haven't been touching that part of the 1040 intake process in years. I would love it if practice management systems had the perfect version of this. They just don't yet. And we can all root for them, but in the meantime, for me, we did 1800 1040s a year, so information intake for 1040s was an astronomical amount of work. In my case, I would roll with the point solution that did 1040 intake really, really well because it does totally eliminate the humans from that process. That was prediction number one. I would say we got that right. But as with all things tech and accounting like it, it takes time for folks to adopt, but the tools are there today and like every bit as good as needed to remove the humans from that info gathering process. Some folks have a hard time putting a portal in front of their client and the whole setting the expectations with the clients to go out and use the portal. That is a worthwhile place to apply human effort to be reminding and educating clients on the right way to go through this process. But humans having to check a pile of documents against the prior year file and then follow up and follow up and follow up. That's something we don't need to be doing anymore. Jacob, what was our second prediction?

Automated delivery becomes table stakes across the category, not just SafeSend.

Mm.

The transcript predicts automated delivery is shifting from a nice to have into an essential part of a modern tax workflow suite. Ingest the final return, split out, esign key KBA items, present explicit client to dos, including payment links and run automated reminders, including voucher reminders.

Okay, second prediction, that automated delivery becomes table stakes. Jacob mentioned Safe Send here. Safe Send was kind of the first one to do a really good version of this. You just give it the tax return and then it creates this portal for the client that has like a really clear visualization of here's all the things you need to sign, here's all the payments that you need to make. Kind of replaces you like building that customized to do list for your clients. Because the transmittal letter, like the letter that the tax software puts on top of the tax range doesn't make any sense to a client. Right. So you hold a client's hand and you walk them through the steps to do Safe. Zen was the first platform that built a really good automated version of this. And that's easier for your clients because they can do all that stuff digitally and it's very clear and it saves you time. But I would argue one of the biggest benefits of these automated delivery tools is it D skills Delivery, meaning you don't have to do it. An admin can do it. I generally don't like having conversations with my clients on delivery. I will like make my booking link available if they want to meet. But at the end of the day there's not much I could do at the time that the tax return is done. All the high level like planning conversations, those need to be happening before year end, like right now or at the kickoff of the project, by the time the project is done. Generally I just want an admin to help them kind of tick the boxes and get that stuff out the door. Now is this true? Did it become table stakes? No, not yet. We got closer. So the three platforms that I mentioned that do intake really well, Stanford Tax, Sorban and Truss. I would say now Truss and Sorben do a pretty darn good automated delivery. It's not as good as Safe Sense yet. I think it will be soon. And so it's like everybody's needing to sort of have an answer for this now. What does it look like to do automated delivery? And everyone kind of has a version of this on the roadmap. They're like, yeah, like this is a no brainer. Needs to be part of the point solutions that we've been talking about. Point solution being like it's just good at a very specific job. It's not like a practice management system, it's a tool for a specific job. The point solutions in this case are the leaders in tax workflow. Your Sorban, Stanfords, Trusses, all of them are. They've either already rolled that out or they're working on it. And practice management systems of as well have acknowledged like they need a version of it. So it's not as far along as I would have liked. But the leaders in the category like it's much further along them having this automated delivery solution. So we've made progress, but I wouldn't yet say this is a totally solved problem because most of us still, we don't have an automated delivery solution. My take is that automated intake is still a greater time saver than automated delivery. And so if I'm optimizing my tech stack for saving a bunch of time on automated intake, oftentimes that tool doesn't also do delivery well. But making progress. Some of the leaders here, they've got better delivery solutions than they had before, as opposed to one or two years ago. The only way you could do automated delivery was safe send. We're in a better place than we were then. Jacob hit me with the third prediction, by the way. Next week we're doing 2026 predictions both for tax and for bookkeeping. But you can't wait for that. Jacob okay, prediction number three from last year.

Tax workflow keeps exploding into a real ecosystem and keeps attracting investment. A core expectation for 2025 is that the momentum from 2024 accelerates. There are now eight or nine tools doing variants of intake and delivery around tax prep. And that sheer density is treated as a legitimacy signal. Traction, maturation, more development. The transcript's implicit prediction is that firms will increasingly buy tax workflow capability as a distinct layer around prep software because it's where meaningful innovation is happening fastest.

I think that one's definitely come true. The whole notion that tax workflow is a category of its own that more firms are investing in because your tax software isn't going to ship these features. And we have seen an explosion of the number of people in this tax workflow space. I wouldn't say people that are figuring it out yet. The leaders this year are more or less who the leaders were in past years. But if I just look at my app recommendation database, which you can grab in the show notes, if you don't have it already, you got some new entrants like filed hubsync Magnetic. There's a, there's five or ten others that don't even really have a product yet, but are building, you know, AI tax preparation software. And you can just tell from their landing page copy they don't understand what problem they're trying to solve yet is it's like, no, you're not building tax prep software. And where most of these tools have set up initially is in automating input into the tax software, which people have been trying to do for the last 15 years and is a Very, very hard thing to build US tax prep software. Like there's just it's manual legacy stuff that's incredibly hard to automate on top of. It's not like QuickBooks Online where you've got an API and you push data into it and you push data out of your tax software doesn't really work that way. So a lot of platforms right now are fumbling around with how do we automate the input of data into tax software? And there's been a notoriously difficult thing to build in the past, but it is something that AI agents are going to be suited to do. And I think we're still a ways off, I think we're still a couple of years off from really having a compelling version of this, but AI agents will absolutely be able to navigate our attack software for us. Now the bigger question is, is data entry the biggest time savings opportunity in the whole 1040 workflow process? Like, no. Intake is a much more natural place to start. We already have really good intake solutions for gathering information from clients at scale and then organizing that for us, doing the bookmarking, like renaming the documents, all that stuff. And so these companies, like they're starting with automating tax software and that's just a really hard thing because everybody's tax software. In fact, you might have, now, you might have had to navigate this already. If you're working with a vendor that is promising to navigate stuff on top of your tax software, you have to basically give them a user license and an IT environment where they can do automated stuff in your tax software. How do you feel about that? Like having a vendor that has an AI agent that's going ham on your tax prep software and can access any of the clients and all that. Like that's what we're talking about. And that still feels pretty weird. And I wouldn't say that they're like good enough to really be able to trust in that environment. And it's a huge headache having to give access to a third party for a license of your tax software, basically. So that's where a lot of the folks that have flooded in this year are working. In the short term, it's not interesting. In the long term, it's extremely interesting. In the long term, it's how tax prep gets like closer to fully automated as it's doing all the entry, we can bridge everything from the intake step to the input into the tax software step. And that's where things really get wild. Right? So long term, that's very interesting. Short term, not, not super exciting to me, but I would say this prediction was right. We've had a bunch of new companies enter the tax workflow space. A lot of them getting new investment filed raised a good amount of money. This year Sorban raised more money. I know a few other companies that did but didn't really announce it. So there is for sure more investment going into the tax workflow catego. In a world where there's more just AI over hyper Y than ever before and you see a new landing page every day that's like, whoa, this sounds exciting. But then you can't actually tell if there's anything real going on there. When all that's going on, it's nice to know what things actually work, what are real, what firms are like actively using and having success with. I'll give you one tool. Stanford Tax Buddy. They were kind of first aboard like the AI tax workflow hype train, but they're now, I don't know, three or four years in. I know probably well over 100 accounting firms that love Stanford Tax is a really, really good solution for better organizing your 1040 work. It gives you a single place where you can pile all those documents in. It creates this like AI checklist based on the prior year tax work of exactly what items we need from the client. Then I could just chuck all those documents into one place regardless of how they come in, and it'll automatically check those items off the checklist and then give me like an actual like work paper in the cloud as an alternative to an Adobe Acrobat PDF. Whether your clients want to work with another portal or not, there's a lot of people that are just now using Stanford Tax internally because it saves you a pile of time on the just the managing of the documents and all that stuff. It's a great company. They've been around an AI accounting solution that's actually really, really good. Worth checking out if you do 1040 work. Learn more about Stanford Tax. Check out the link down in the show notes Attention users of Thomson Reuters Virtual Office. Is that you? Listen up. Pay attention this episode Sponsor Barretto no Host your Thomson Reuters stuff you tired of of slowness. Of stuff breaking. Tired of sharing your cloud with other people? Gross. I don't want anybody else on my cloud. I don't know what that guy's doing. Get faster hosting from Barado. But check this out. It's actually so much cheaper to do this through Verito that for the cost of Virtual Office you can not only host all of your TR apps with Verito but also use their fully managed IT service for less than the cost of your virtual office. That's right. Verito does hosting, but they also do full blown managed it and the cost of both of those things for a better hosting service and managed it is less than the cost cost of Thompson Reuters hosting service. I don't and I, I know, I know what to tell you, man. I first got on Verito when somebody asked me like what's a better hosting service I should go use. I went to my online community, realized almost 700 firms in there now. I literally typed in Thompson Reuters hosting. Somebody had asked the same question and like eight people in a row had commented that they absolutely loved Barado and had a great experience. That's honestly that's why we started talking about about Verdo and now they're sponsoring our stuff. Okay, if you're on virtual office, you know what to do. Check out the link to Verito down in the show notes Tech prediction number four. Let her rip, Jacob.

Practice management platforms respond, build, buy, integrate and the PM market fragments toward tax specialization. The transcript expects PM systems to feel real pressure because workflow tools are redefining what workflow even means in a tax firm and solving problems that can be more painful than classic PM problems. In 2025, PMs have to start shipping stuff especially around proposals and tax workflow. But they're framed as playing catch up to workflow vendors already on later versions.

Yeah. So prediction here was practice management systems that historically have just like overseen the work. They're the 10,000 foot view of the work. They're having to scramble a bit and figure out like are we going to build our own tax workflow solution or are we going to integrate with tax workflow solutions? This is absolutely played out. You go down the list of practice management systems. This, this is why Carbon did a partnership with Stanford Tax. So there's now a super deep integration between Stanford Tax and Carbon because that made more sense than trying to build their own version of this Carbon also very international platform. To build a platform in such a regionalized way to like to support 1040 work in the US that's a big investment into the product in just one of your regions. Canopy. I'd say Canopy was shipping some of their own automated intake stuff and their sort of ethos being we want to build all in one like the they very clearly are now shipping tax workflow features and continue at least say they continue to keep developing on kind of the tax workflow features within Canopy taxdome. Same thing They've been teasing this for the longest time and it's not an easy thing to build. But they're now like rolling out kind of a basic tax intake solution in beta. As I've said, doesn't go as far as the point solutions but you're seeing all the practice management systems now sort of take a position of are we going to integrate with other providers on this? Are we going to build our own version of this Carbon acquired, you know, adir, which is like a month end close automation platform. To me that's a response to seeing bookkeeping workflow tools and being like we're going to build this in house, we're going to make an acquisition or do integrations. They made an acquisition financial sense. They're building more workflow but have started on the bookkeeping side rather than the tax side. So they're building some month end close automation stuff into financial sense to my knowledge, yet aren't yet touching automation on the tax side. So I think this one is absolutely played out. Practice management systems have to have an answer to tax workflow. Are we going to integrate with these really good tax workflow tools or are we going to build our own version of them into our platforms? If any of this is like going over your head or you're like what is that? What are these tax workflow tools? Grab the app database, app recommendation database. Got a big old list of what all these sort of tax workflow solutions are. Basically they're making you more efficient and working around your tax software. So you're still putting like all the data into the same tax software and generating the forms with the same tool. But then we have these other new tools that will automate delivery, automate intake, kind of all the stuff around your tax software. All right, prediction number five. What do you got Jacob?

AI use becomes normal inside firms as security pearl clutching fades security on business plans the Transcript's first explicit 2025 prediction is cultural. AI assistance becomes normalized in accounting similar to the cloud adoption curve as people get past reflexive fears about client data.

I mean the cloud adoption analogy is great, where we still have accounting firms that are like struggling to adop opt cloud, right? I would say we definitely took a big step in firms comfort level with AI tools, using them for tax research and also using them for more like client sensitive stuff. But obviously this is, this is a huge curve and it's going to take many firms years to get comfortable with the fact that right now, I mean we're talking about the chat GPT for business plan which comes with SOC 2 type 2 security. And it has from the moment it launched. It was called ChatGPT for teams two and a half years ago. And that's a higher bar of security than many of the apps we've been talking about here today that are commonplace inside accounting firms. But there's still the AI of it all and people don't understand what that means. And so they're spooked just because it's AI. Meanwhile they'll run to a tool that uses AI and it's the exact same API that sits behind ChatGPT. So I, yeah, I would say we've gotten closer here. More people are comfortable with this. We've had another year under our belts. Everything we've been saying on this podcast last two or three years, it's like, yep, like people are just kind of finally starting to get comfortable with that. But because it's the accounting industry, still got a long ways to go there. Still got to keep, keep spreading the message, still got to keep sharing cool ChatGPT use cases and YouTube videos and then just get absolutely torched in the comments when people are like, you're giving your data to Sam Altman and then they'll go and use like Notion or all these other tools that use the exact same API for doing AI stuff inside of their platforms. So have we gotten past security pearl clutching? I mean we're still doing security pearl clutching on like cloud versus desktop in the accounting industry, so obviously not totally. I would say we made a good step though. Number six, what you got, Jacob? I haven't seen these by the way.

Tax research takes a big step forward.

Oh yeah.

General purpose AI gets better at hard problems and verification. The transcript expects mainstream model advances, longer horizon reasoning, pulling more material, double checking work to spill into tax research, making many determinations faster and more trivial, especially the non gnarly cases that consume tons of time today.

Has tax research taken a big step forward? I would say it has. That was actually a big talking point on this, this series of workshops we did this fall for folks who are outdoing tax. I, I think in this category Blue J has is kind of separated itself as the clear leader for like dedicated tax workflow solutions. You can still get so far with Chat GPT now with Gemini, like their third generation of models are so, so good. So yes, I would say, I mean you compare this to how I did tax research back in the day. Like I had my trusty quick finder. If it wasn't in there, I would take to Google and It just took so much longer to get answers than how we're able to do it with the tools we have today. The problem is the verification and the double checking is it's just a totally different process with AI than it is the traditional ways that we research. But even the double checking and the making sure, like AI can help us with, we've seen huge reductions in hallucinations. Every single model is getting better at this. I mean, it wasn't that long ago where AI wouldn't even cite like citations. We've come a long, long ways from, you know, 18 months ago. Where I want to see more development from our industry specific tools is in the proof. Because right now it's like, well, do you trust what AI says? And you gotta treat AI like a junior, where I'll only believe you when you can prove out what the right answer is. To me, it's not enough to just give me an answer right? The goal is what's the shortest path to a verifiable answer? And I want to see like some of our more industry specific tools do a better job of visualizing this stuff. Historically, I've said that I didn't think those industry specific research tools were worthwhile because General tools like ChatGPT are so good. As industry tools have gotten better, I've backed off of that a bit. I'm also recognizing more that not everyone is a big time chatgpt nerd on your team and there's still right and wrong ways to do research in ChatGPT. I know the right way to do it, but just because I do doesn't mean that my whole team knows the right way to do it. And especially in an age where so many of us have these tax research platforms where we have a license for every member of our team and then when our team has to research a tax thing, they go to Google or increasingly go to Chat GPT. Then if I'm literally already paying for a tax research platform like yes, just go buy a better one. I do think industry tax research tools, they lower the difficulty bar for using AI to get good answers. Myself, if it's me, probably still just using ChatGPT, but my whole team isn't made up of AI nerds like me. What are we on number seven on the home stretch? Jacob?

A vendor nails end to end workflow by turning workpapers into an AI readable workspace. Beyond intake and delivery, the transcript predicts the next competitive battleground is work paper management. Not just storing PDFs but organizing slash annotating Documents in a structured binder where I can run cross document logic tire.

Ooh, okay, this is a juicy one. I forgot about this prediction. So the notion that someone will not only like help tax pros automate the intake and the delivery, but the annotating of the work papers themselves. I mean, think about this. Think about like a PDF environment where we've got all these work papers that like link one number here to one number there and run these 10 key tapes and do all these different things. The future is AI doing more of those annotations for you and then reviewing, reviewing the work all within the work paper. In fact, this is something Chat GPT can already do. It can actually annotate PDFs for you. And it's a bit of a crapshoot historically, but I'll have it like produce a work paper and then give it some instructions for how to annotate this, that or the other thing. And it will highlight things in different colors. It will make like reference annotations between different pages. It can do all that stuff, can drop boxes, circles, all that. And the prediction here is that we'll have an AI that will do some of that stuff for you. I wouldn't say this got as far as I would have liked to see this year. The company is probably the closest Stanford Tax. It now gives you like an in browser sort of PDF editor sort of thing. And all the 1040 documents that come in, it will rename them and bookmark them and identify what they are and sort of update the AI checklist to say like, yes, this is in now. But then the idea is just inside that same interface you can mark up that work paper binder and run 10 key tapes and do all of that there. I would say in its current form, it's basically a more slick version of Adobe Acrobat. The big bonus here is I can drag more documents into it and we'll just figure out what they are and rename them and bookmark them and update the AI checklist. If that was a document that was still outstanding in the checklist, that's pretty cool. But it doesn't go as far as it doing the annotating for me and like working within that doc, like you think about being able to give it a tax return and the I then go through the work papers and be like, is everything that I see in the workpapers reflected on the tax return? Like that's where we're headed. Like that's a next 24 to 36 months sort of thing. But step one there is the AI just being able to work in that document and navigate it and make annotations and all that. We didn't get that. I want to get it. One of the problems here is that there's just a lack of standardization around how firms annotate their files and what they expect to see there. I'd say we're seeing the beginnings of it because we have now like more dynamic browser based ways to manage all of our 1040 files. 12 months ago I wouldn't have said this, I wouldn't have said that you could really fully get away from Adobe Acrobat. Now I think Stanford has a good enough version of this where all your work paper management can be done just inside of Stanford and I don't have to run out to Acrobat. But this is one I still really want to see in 26. AI doing more of the work. And agents, I don't remember this if this is part of these predictions or not. I've always said 2026 will be more the year of the AI agent, not 2025. So I hope as agents get stronger in 26 we'll see agents that can like do more of the manipulation of the work papers themselves to get them to a finished state. Jacob, hit me with prediction number eight.

Client facing AI advisors get compelling and clients pressure firms to offer a version of it. The transcript predicts consumer facing AI guidance. Think embedded assistance in tools like TurboTax plus general AI like ChatGPT will make people more comfortable asking an AI for tax answers which then raises expectations for firms. It argues that a firm offering a 24,7 avatar trained on the firm's own published expertise and internally offers on years of meeting transcripts becomes a service differentiator. So portals and PM systems are positioned as the natural distribution point because they already hold client context.

Okay, so did we get client facing AI assistance for advisors? There are a couple super early stage companies that say they have this and the versions they have of it like aren't great. I don't even want to call them out because they don't recommend the products aren't far enough along yet. But if you've been around the podcast, you know we've got this, this Jason assistant in Delphi that basically can see into all the podcast episodes so you can ask it questions and it responds very accurately. Like me. My prediction here is basically we have a version of this that's client facing and there's a growing number of firms that are doing this more through a marketing lens where they've got, you know, background of writing blog posts or doing podcast episodes or something like that. And they stand up a an assistant that, that clients or leads can use to ask it questions, get immediate answers just based on all the stuff that you've already published. Like, it's not making up answers, it's parroting the things that you've already put online, in some ways functioning as like a search engine. Like, if you've got a blog post about this thing already and the client doesn't know about it, an easier interface for them to find it is this chat assistant that pulls in all of your sources of context across your YouTube videos, your social posts, or like wherever you post stuff to give the client a near instant answer. Now, I mentioned like AI assistance and tools like TurboTax. That stuff's everywhere now. Like pretty much every tax platform out there, consumer tax platform, has an AI assistant. So I do think there's a lot more people now comfortable getting tax answers from AIs. But I don't know that this goes as far as them expecting their accounting professional to have an AI assistant yet. And that's because historically, I think folks give accountants a lot of grace on the tech side. They're like, oh, they're just my accountant. They won't be tech savvy in any way. So I don't know that. I don't think accounting firms are really feeling pressure on this front yet. But I do know, and I can't name any names, there are some big existing platforms in our space that are working on this client facing chat assistance. Because if you think about it, who is like, best suited to be able to do a cool version of this chat assistant? Probably our practice management systems. Because the only chat assistant I can make that's better than some generalist chat assistant out there that somebody can use for free is the assistant that can see into like my client's past tax filings or their accounting ledger, or the conversations that we've had in the past, maybe our meeting transcripts. That's a much higher quality AI assistant that only I can put in front of the client because I have all of that context. People in the space are working on it. It's not the easiest thing to build. There's a tremendous amount of risk and putting something in front of a client. Right? So I think there's a little bit of this, like, who's going to move first sort of thing. But the prediction was AI advisors will get compelling. I don't know if they get compelling. Ryan Lozanus Fellow Internet think person. He has a Ryan bot that people pay a subscription for access to. It's like 20 bucks a month or something like that. It is a AI chat experience that's backed with kind of all of his proprietary materials on how to run an accounting firm and a bunch of people use it. So stuff like that, like it's becoming more normalized. I don't think it's gotten to the point though where accounting firms yet feel a bunch of pressure to put an AI assistant in front of a client. In fact, most of us I think feel really scared to do that. Like we don't can't, can't get our heads around what a responsible version of that looks like. I do know there's one marketing agency that is pushing this really hard with accounting firms right now to use an AI assistant in your marketing. In fact, Michael King, if you follow him on LinkedIn at all, he does thought leadership for fractional CFO practice owners. Michael King is his name and his very first link on all of his stuff goes to a Michael King AI where you have this interaction with it. So it's becoming more of a thing. I wouldn't say that accounting firms are feeling pressure to offer AI assistance to their clients yet though. For sure it's a cool differentiator. But I wouldn't say we're feeling pressured to do that yet. Hey, real quick attention. If you have clients that do project work, do ugly stuff like manufacturing, like inventory, construction stuff, anything where you got hairy itemized bills that have to go to specific destinations. When it comes to bill pay, there is a new sheriff in town. It is this episode sponsor Makers up. Even if you don't do bill payments, this is something that is worth showing your clients. Actually we've done a number of videos on my channel. You can start sharing my videos with your clients. What fun. Gang, we are light years beyond what the old guard like Bill ever did with automated bill extraction and get like getting these things through the approvals process which is oftentimes much more complex than just is this bill over $10,000 or under $10,000? Man, I worked with, with a church that had this like multi level like just this crazy hairy combination of approval approvals that was dependent on like a mountain department, all these different things and they had this physical thing that had to get passed around for every single total nightmare. You probably got a bunch of clients with situations like this and you can absolutely be the hero with Maker's Hub. It is seriously good. Worth checking out. Learn more about Makers Hub at the link down in the show notes. Hey, real quick. We recently did an updated demo day of of one of this episode's sponsors. Client Hub over On the main YouTube channel ran through the really cool stuff that they're doing for bookkeeping and accounting services firms building sort of the centralized brain where you manage and oversee all of the work. But also Client Hub is getting more into like the doing of the work, the actual workflow itself, doing some really cool stuff around like AI month end close review and doing so with a deep integration into QBO and Xero. So like pulling all the transactions into Client Hub so you're able to do more of the review from inside of the practice management system. And it happens right now at a time where it's kind of annoying. We've got these really cool workflow tools redefining how efficient we can be with getting the work done. But then you've got your practice management system which is like disconnected from all of this workflow and seemingly just overseeing like the status management of the work. Client Hub, they're kind of trying to do both of those things in one platform. It's been really interesting to follow if you are a bookkeeping firm or client accounting services firm. Client Hubs one of those platforms that I think you just kind of have to check out. Like I said, we just did a new demo of it on the YouTube channel. I think you like it. To learn more about Client Hub, check out the link down in the show, notes Jacob. Two more to go, then we'll get you out of here for lunch.

Number nine we get closer to a new tax prep platform, but not in 2025 on tax prep software specifically, the transcript predicts 2025 won't deliver a truly new full replacement platform. Sure didn't because you can't ship half a prep system and expect firms to switch even state local coverage complexity. But it flags visible progress, naming indeed the team behind Korvand.com as publicly committed and suggests stealth efforts exist while emphasizing how hard the product is.

Okay, it's not indeed this building a tax platform. It's instead the company behind Corvi. And yes, there's another company, Taxa, who is acquired by Iwin that's working on a new tax prep software. This prediction, I mean it was an easy one to make, but it's right. We're closer to a new tax prep platform, but it's not here yet and frankly we're still years away because you're not going to switch to a new tax prep platform until you can See a whole bunch of people having success with it. I'm a big development this year. Instead. This is a quote from them. They said they're the first company in decades to receive IRS approval for E filing. Individuals, C Corp. S corps, partnerships, estates and trusts. Oh. In fact they say, well we'll soon release E filing the platform. It's like it's not out yet for tax pros to begin using. Although one announcement just from this last week is an acquisition that Iwin did Iwind who owns Taxa, they acquired, what was it, Columns. Basically a company that built a consumer tax platform from scratch. Yes, they acquired Column Tax. This is, I mean this is great news for the economy profession. So column tax was founded five years ago and they built a from scratch consumer tax platform that has processed. I saw a number somewhere. I think it was over a million. Yeah, over a million tax returns. Great. So a group that in the past five years has shipped a full tax platform. Consumer facing, not tax pro facing. I win. Acquired this group to pull their expertise into building their own tax software for tax pros. Again, awesome. People are working on it, but unfortunately still a little ways out. Like I honestly the sad truth here, I think we're probably five years out from there being another platform that is like amazing. A built from scratch new tax software that's like ecosystem first now, you know, a stealth sort of surprise entrant here is at the end of September, Drake launched a cloud version of Drake Tax. I didn't really see that one coming. Like it's. It's browser based. Right now the only other pure browser based tax prep solution for pros is Intuit Pro Connect. So Drake launches Drake Cloud right now. It doesn't do anything more than normal Drake Desktop. Drake does. In fact, it's a little worse in some ways and it's not quite as good. Drake Cloud is not quite as good as Pro Connect from Intuit. But I mean if I had to like root for a horse in this race, oh man, I would way love to. I would much more happily root for Drake than I would into it. Drake, a bit of a weird company. It was like a privately held company until was bought by some European PE group a couple decades ago. By all accounts, people still say like incredible levels of support from Drake and a lot of the old folks. That's not the right way to say it. A lot of the folks that were with Drake from early on are still with Drake. So it's not like a lot of the transactions you've seen where somebody else comes in Buys the company and then everyone just leaves. Right, but they launched. I mean that's, that's, that is a big deal. A fully cloud based tax prep software. It's not good enough for me to recommend folks go and use it yet. It's kind of a no man's land where it's not better than their core Drake tax. And it's not as good as Proconnect if you just want a cloud like SaaS based tax prep platform. But I'm excited to see how that one develops. That was a bit of a dark horse. Came out of nowhere this year. Okay, last prediction. What do you got? Jacob?

The big wild card is AI agents controlling computers. And 2025 is the year of agents.

That's what they say anyways.

The transcript's wrench prediction is that AI agents, systems that can operate software interfaces on our behalf start materially reshaping how tax work gets automated even if they're not amazing yet in 2025. The key is scaling. Once an agent can reliably complete one task, for example filing a report by pulling data from systems, it can do it hundreds or thousands of times without proportional human effort. And it can even modernize legacy ecosystems by operating old software through its ui.

Okay, a lot of people at the end of last year were saying 2025 would be, quote unquote, the year of AI agents. As I said earlier, I think 2026 will more be the year of AI agents. And I was, I was saying that back in 24. But yeah, this is the big wild card. The day that AI figures out how to use tax software. Ho ho, things change. And a headline we talked about this year to this end was a tax pro who used TurboTax to prepare a client tax return, did it all on its own, 100 by itself. And the output from TurboTax matched their output from their professional tax software. That is an AI agent that is available today that anyone can go out and use. I mean a consumer can use ChatGPT's agent mode to go through TurboTax and prepare their tax return. That's a big deal. It's like it's good enough for that today. In fact that was like September when we first got agent mode. And as we talked about, a lot of the companies coming into the space now getting investment are working on developing AI agents to operate tax software. And while in the immediate term that's not like interesting to me yet and it's, I've kind of just a fundamental reality of building a company like that is it isn't interesting until the day that it is. And then everything changes the day that it is. This didn't come to bear in 2025, at least not in a way that impacts most of us. But it's still the biggest looming potential change to the tax prep industry is what happens when AI agents get good enough to do everything from the intake through to the input. Pretty interesting. It's going to remove a lot of the tedium from all this stuff. We all know like what we do as professionals is set to change and this AI agents getting good, this will be the biggest driver of that change. I'll share more of my thoughts of like how far out are we on this now? I'll share that in our predictions episode next week for what we think we will see in 2026. But we can see it starting to happen, right? I mean a consumer $30 a month AI agent to actually $20 a month AI agent being able to complete somebody's tax turn and TurboTax and it's like totally fine and correct and even opted out of all the upsells. That was actually a funny detail of that. Like it navigated all these things where TurboTax is trying to get it to like call an expert and upgrade to this and that and it successfully dodged all those things. I'm going to give this year. If I had to give this year a grade in terms of tech development for tax firms, I'm a little torn here. I would probably give the year a C because the practice management systems aren't along as far along as I would have hoped, but also would have been what I've predicted. I mean I've been saying that for years. It's a very hard thing to build. But at the same time this is the most interesting time for tax tech that we've had in my whole 20 year career. Never has there been excitement around tax tech developments and. And now there is 20, 2026 might be bonkers. The number of companies not like before this coming tax season, but the number of companies that are now working on cool AI agent stuff and the whole transition into AI agents doing this work and trusting them and having to double check their work. You think using AI for tax research right now is messy? Wait until we are using AI to prep the entire return and then having to have the humans go through and review it. But then they start reviewing it with the help of AI. Like man, it is going to get weird the next few years and next year is it too early to say this? I don't know. A lot might change next year. We'll see. We'll talk more about predictions for next year next week. But then next episode, we're recapping bookkeeping tech predictions for 2025, given the year a grade. And I'll see you back here then. K. Jacob, let's get some food, buddy.

Who wants chili? You want chili? You want chili?