558 2026 Tech Predictions for TAX Accounting Firms

It's here our 2026 tech predictions specifically for tax firms. What's coming, what's just around the corner? What should we be excited about and how should it impact how we plan tech decisions and all that in our firm today? The last couple years have been the most exciting years from a technology standpoint for tax pros in as long as I've been in this profession, a couple of decades. We're far enough into this change now to where I think I can give you more clear advice on like what's the right stuff to buy and what we'll likely see in the next 12 to 24 months that might impact those decisions. Now, some of these predictions seem like slam dunks. Others might surprise you. They're a little bit more speculative. But either way, we're, we're about to have a great time. So much fun. Come on in. Let's do it. Okay. If you're new here, on this podcast we talk about all things running small accounting firms like 100 people and under and in the US and you've ever touched tax work. You know just how awful the tech ecosystem for tax pros is at at its core is the tax software platforms that we use to prepare the returns. And they're these awful legacy systems. There aren't any new ones for a hundred reasons that we won't really get into today. But excitingly over the last couple of years, the tech around those caudrely over tax but excitingly, over the last couple of years, the tech around those cajarly old tax prep platforms, the workflow tech around those tools have gotten really good. Like, like really, really good. So my first prediction for 2026 is in this category of tax workflow tools. We will see greater parity in the features that each of them have. This category is getting a little more developed to where we can see what features are super valuable and similar to what we've seen from practice management systems over the last decade. There was this initial period where they all came to the market with very different takes on what practice management should be. Then over time they got more similar and as that category matured, we're going to see the same thing this year with tax workflow solutions. So the jobs that most tax workflow tools are doing are number one and this is the biggest, most important one. Intake automation for 1040 work. So that is building a custom document request list that is specific to that client based on pro forma information, a list of all the items that you need from the client before work can begin. And then giving the client and your team kind of a modern place to collect all of that, that automatically updates that checklist. So it creates the checklist and has to do this stuff in bulk too. Like we did 1800, 1040s. Not going to go through and run this process for every client individually. So create those document request lists, but then give me a place where I can just dump all the files. And it figures out here are the items that have been submitted and here are the items that still remain. That is a massive, massive time saver. It's the biggest change in tax tech the last few years. So the first feature these tools have, they really have to have, is a way to handle intake. Now, now, second most important feature, I would probably say is delivery, automated delivery. So you could take a completed tax return, drop it in the app, and it slices and dices that up to put a streamlined like signing and paying and a whole experience in front of the client. That makes it so I don't have to go chasing people for 8879s until the end of time. And the client knows exactly the steps they need to do. A lot of us sent that like very manual, here's all your to DOS sort of thing. And you do that for every single tax return. Consumes a tremendous amount of time. I would say Safe Send is the company that probably first created a great version of this automated delivery, but it's increasingly going to become an expectation of tax workflow tools. If you're getting into tax workflow, you have to give me a way to do automated delivery. Those two things, intake and delivery, I think this year become table stakes. All the tax workflow solutions, they need to have a good version of this. Now going beyond those two things gets a little more speculative. Some of the things that, that these providers are working on are input into the tax software, but that's really, really hard to do because there is no interface for these legacy tax software tools. You basically have to have a sandbox environment where the software can like work on top of where your tax workflow tool can like work on top of your tax software as if they are another user, like entering data and all that. And that's, I mean, that's problematic. At the very least, it's just hard. But some companies are working on this automated input into tax software, so some are also working on review. So like an AI review of your 1040 work. By the way, what you're not going to hear a ton of in these predictions, AI stuff. There was a day when it was like, oh, AI will just become the app. Like AI will just do the thing. And that day, I think has feels probably further away than we may have thought it was 12 months ago. Because the people that are winning, not only in the tax category tech, but in the bookkeeping stuff, the people that are just building good products and there's some AI elements of those products, but at their core they're just good, useful products. As opposed to two or three years ago where if you went to any accounting conference, there'd be some non accountant that would do a keynote talk and say, no, you'll just pile it all on AI and it'll just do it. Maybe that'll happen someday, but we're a long ways away from that. So there's not a ton of AI stuff in these predictions. So across tax workflow tools, what will become table stakes is specifically automated input is specifically automated intake, gathering information from clients and automated delivery systems sending the finished version of that project out to clients. Regardless of what tax workflow platform you have, I think that's something that you can expect from a feature standpoint to have by the end of 2026. Now the other speculative stuff, it is more around input into the tax software, automated review, even doing automated stuff on top of like the work papers themselves, like annotating them and referencing them and all that. But I think these tax workflow tools get more similar over time. My leaders here, and they have been for almost two years now, are Stanford Tax, Sorban and Trust. They remain head and shoulders above the alternatives. And there's a lot of folks coming into this space, which is great, a lot of investment in tax tech. But those three tools are, are quite a bit ahead of anybody else right now. Please stick with my app recommendations. That's a product of talking with a bunch of accounting firms about what works and what doesn't. It's not a sponsorship thing. I don't take any money on the back end of that. We've done some sponsorship with Stanford, done just a little bit with Sorban. I've never done any sponsorship with Tress, but they're up at the top of our recommendations anyways. Okay. Prediction number two is practice management systems will continue to specialize in either tax or accounting. So your practice management systems in the past, the most common one was Practice CS from Thomson Reuters CCH Access has a version of this too. What is it? Access Practice or something like that. But the cloud practice management category now super mature for accounting firms, maybe eight years old. Leaders here, Carbon canopy Tax Dome, Financial Sense, Client Hub. There's, there's over 40 of them now. I shouldn't start, I, I, I never start listing things like that because I inevitably forget somebody that will then be insulted. But these practice management systems, they're being asked to do more workflowy things. So wouldn't it be nice if your practice management did like the automated intake and did the automated delivery? Yeah, of course they either need to do it themselves or they need to integrate with the platforms that do it because they are th, those workflow solutions are such a time saver for us now. But a practice management system is going to have a hard enough time building any version of that, let alone do it well for both tax work and bookkeeping work. So we're forcing practice management systems to say, are you great for tax firms? Are you great for bookkeeping firms? Because it's very hard, I mean impossible to be great for both. Taxdome, I would argue, even though the name doesn't suggest this, they've said like, no, we're great for bookkeeping firms too. I would argue with the stuff they're building around tax intake, it's taking them down a path of being like, no, we're going to be a great platform for tax firms. Canopy, same thing. They built some automated tax intake stuff taking them deeper into the tax side of things. Carbon, they've done a little bit of both. They've, they're integrating now with Stanford Tax and they acquired a company ador that does bookkeeping automation. So they're still sort of straddling both sides of the fence. Financial sense has built out some month end close automation stuff in the platform. So they're going more down the bookkeeping path. I think we will continue to see these platforms go down more specific paths and to not do so in my opinion is a mistake. The category is plenty big enough to be the one that owns like the tax first firms or the bookkeeping first firms. If there's a counter argument to that, how do you make that work? It's probably what Carbon's doing where you are more integrations first and you say we actually want to work with everybody. Go out and pick your favorite workflow tools and just know that they'll connect with us. If there's a, if there's a way where you can straddle kind of both things and be good for both, that's probably how you do it with more of an ecosystem approach where you're trying to really push integrations. Now prediction number three here. And I wish this Wasn't the case. Prediction number three is that all in ones will continue to be pretty meh. Honestly, not that great. I can't tell you. I mean from from the beginning of talking about these workflow tools like three or four years ago, what everybody will always say, and there will always be a comment to this end and the companies, the practice management system say the same thing, will always say, yeah, we'll have that in insert date within the next two quarters. Gang, they've been saying this for three or four years. Where are we? Where do we sit? Today taxdome has a very, very basic version of, of tax intake. Canopy launched their own version of tax intake, which is better than nothing. But a long ways off like the point solutions, the tax workflow leaders. And I don't, I mean there's, I don't know how long we have to wait before just committing to the fact that practice management systems and I want to be wrong here, I really do, but I've seen absolutely nothing that would lead me to believe they're going to build really cool tax workflow stuff. Like we're getting a feature here and we're getting a feature there. But these are not platforms to like manage my 1800 1040s and do this stuff in bulk. That is still a long, long ways off for practice management systems. And every day the tax workflow solutions are getting better because this is, these are the only problems that they're working on. And so building workflow into an existing practice management system, that's a really hard thing to do as opposed to being like, we only do workflow and we're just going to do this really, really well. And so if you're still holding out, if you're still listening to the software rep at your practice management system, that's like, yeah, we'll have that. Yeah, we're, we're about to ship that, man. I don't know how many years you gotta wait and how many years have to go by when you just don't have a useful version of that same thing with three tier proposals. How long have we people been saying that where it's like you've got good options like ignition and anchor, but everybody's like, yeah, no, our practice management system, they're about to ship their version of it and it takes forever, oftentimes years longer than you expect and then it finally ships and you're like, oh this, like, this is what I've been waiting for for three years. Because the alternative like three years ago was, was better than this. So I Totally get the appeal of all in one. I really, really do. Where all in one ends up being bad and is when change is happening fast. You go back to the era of practice cs. All practice CS did was like work management and time and billing and there's a span of, I don't know, 20, you could argue 40 years where the tech that was supporting accounting firms like, like there wasn't much to it. You needed a lead sheet and you needed to track time. That's not a lot of change. If you look back just the three last three years now we've got tax workflow tools doing all sorts of stuff on the 1040 side. We haven't even touched entity yet, which has its own set of workflow tools. But there's a ton happening and in any period of time where there's a ton happening, all in Ones will fall behind. In fact, if you go back three or four years, I would say the all in Ones had kind of all like settled around the same feature set. We gotta do projects, we gotta have a client portal, we gotta do time and billing, gotta do some sort of reporting. And that was kind of what all the project management systems had settled into. Now the advent of a month end close automation tools like Double or formerly Keeper and then Tax Workflow Solutions and Stanford Tax and Sorban were the first ones on this. Those have kind of turned practice management systems on their head where they're now scrambling to keep up with that. But as long as change is happening fast and I, I foresee change happening fast, at least for the next few years, it's very hard for all in Ones to catch up. Now if change kind of stops and they've got two or three years to get to where the other point solutions are, great, all in Ones start looking better. But in a period of rapid innovation, all in Ones they're really going to struggle to keep up. Like that's just the reality. Again, I want to be proven wrong here, but I've been saying this exact same thing for years. It's unfair to compare a platform that already does a thing really well to another platform that says we will have it. And it doesn't, it doesn't even exist yet. Like you can't compare those two things and inevitably the version one will be a version one. It'll be very bare bones. Like that's just from a software development standpoint that's best practices not to build this huge monolith and then ship it is to build the light version, get a bunch of feedback and go from there. So I implore you, stop holding out for the version from your practice management system even if it comes the day that it does come cool. If it's good enough, pull the plug on the point solution, go back to the practice management system. That's great news for everyone. But give me one example of that in the last three years where it has been good enough. I struggle to come up with it myself. Kind of sucks to say and I super want to be wrong about that. But all in ones right now like they're struggling to do the workflow stuff Foreign. Listen up. Do you have a tax workflow solution yet? I'm not talking about Graham Pappy's little auto scan. The the awful intake OCR thing that comes with it with our dumpy old tax software. That's not what I'm talking about. There's a new crop of AI tax workflow tools that are doing some really really cool things. One of the leaders here is this Episode Square sponsor Sorban. They were one of the first to this they do a really really good version of automated 1040 intake. A tremendous amount of the time spent during tax season is just chasing people for docs and like building out the request lists of all the things that we need. When the client emails and they're like what do you need from me? And you go back to the prior year file and you look at what you already have and you just gotta do all that stuff. Sore man. It wipes out all of that complete no brainer. Tax workflow tools like this is not an exaggeration are honestly like a must buy right now for tax firms. I say they have been for the last like two years and they just keep getting better. Sorban also they are working on pushing the data to your tax software. Really hard problem to solve. They're working on it. They're also working on automated delivery. So ingest the tax return and then gives the client like a super smooth signing and sort of to do list experience once the return is actually done. Really good product. Know a lot of happy users. That's Sorban. If you do more than a couple hundred ten forties a year, definitely check out Soroban link down in the show notes. Attention users of Thompson Reuters Virtual office. Is that you? Listen up. Pay attention. This episode sponsor Barrier they'll host your Thomson Reuters stuff. You tired 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. Verto does hosting, but they also do full blown managed it. And the cost of both, both of those things for a better hosting service and managed it is less than the cost of Thompson Reuters hosting service. I don't, and I, I know, I don't 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 Thomson Reuters hosting. Somebody had asked the same question and like eight people in a row had commented this that they absolutely loved Verito and had a great experience. That's honestly, that's why we started talking about Verito and now they're sponsoring our stuff. Woo. Okay, if you're on virtual office, you know what to do. Check out the link to Verito down in the show notes. Okay, prediction number four. So far we've been talking about 1040 workflow automation. What about entity stuff though? Prediction number four here is I actually see more investment coming into Entity Tax workflow automation. And the reason that there's been a bunch of investment, Specifically on the 1040 side, there's now like upwards of 15 companies working on 1040 automation in some form or another. Most of them are still just AI landing pages with kind of nothing behind them. But that whole category kicked off with Thomson Reuters. Safe Send, not safe send, SurePrep acquisition. That was a, I think it was a $500 million cash acquisition. And everybody's like, holy geez. And so a whole bunch of companies in that same 1040 category started getting investment. They're like, yeah, we're going to do the AI version of that. But on the entity side, I would argue we haven't seen the same investment. But that 1040 segment, like it's starting to get more crowded. So I wouldn't be surprised if some of that money started coming over to entity tax workflow. And honestly I, I, this may be a terrible prediction because I don't think I've seen a single new company here in the last two or three years. I would say the most modern company in this space to point to is probably tally for so the word tally and then f O R really cool tool. It's basically cloud based trial balance. It's to going got integrations into like Zero and QuickBooks Online but then some, some way or another depending on what tax system you use, you can export the tax trial balance and try to import it into your tax software. Again put about six asterisks on that because even the first party trial balance things like you know, bridging information from you know, CCH engagement to access tax, you know just how much work that still is. Like there's no version of this that magically goes into the tax software just how you need it. But Tally four got started with trial balance stuff and now they're doing more like automated work paper development which is pretty interesting. But I want to see 10 times the competition in the entity tax workflow space. Tally for right now honestly kind of doesn't have any competition and probably the biggest objection I hear to Tally for is it's a little bit expensive and when you're the only shop in town you can do that. But that would be my prediction number four as we see more money go going into the entity tax workflow automation and that's exciting, like I think we need that because that's still just a bunch of manual bookkeeping, cleanup and a load of manual entry into the tax software. There's a possibility that this actually comes in some capacity from month end close automation solutions. So if you look at like a double or if you look at like Client Hub or financial sense that have some built in month end close automation stuff, in a perfect world you want to close the books on that platform and then just bridge it directly to the tax software. Right now that works for shops who are doing the accounting in house, doesn't work for tax pros who are not touching the bookkeeping. But part of the solution might come from those month end close automation tools as well. Prediction number five is one of these leading tax workflow platforms gets acquired and that's usually bad news but they're growing and you've got a whole bunch of legacy players in the space from CCH to Thompson where they've got these war chests of money where they've come out and said we're going to spend x $100 million on AI stuff and they need somewhere for that money to go. You want example, look no further than Thompson late last year acquiring Materia which was doing like basically research around sort of audit and financial statement preparation for big companies. But Materia has become co counsel which is Thompson's research product and it's okay. Like if you look at the product stack for Thompson Reuters co councel, it's probably the most interesting there. It's probably the most interesting thing there. And it's there because they acquired it. So. So as this 1040 Workflow Automation category matures, you will almost certainly start seeing the bigger sort of legacy players cherry pick their favorites to pull that functionality into what they do. Now in practice, what usually happens there is development on the product itself pretty much stops. The team coming in, you know, has to work like a three year earnout or something like that and stick around for a bit. But these are people that are like founders, folks that were like first 20 employees at a startup, if they get pulled into a company like Thompson Reuters, the day they earn out ends, they're out of there and you can't blame them. Like that's not a environment that lends itself to cool new innovations and all that. And you can go down the long list of past acquisitions from people like Thompson to see what ends up happening with those products. Basically they're kind of frozen in time at that point and you just hope that they don't lose functionality. Like if I use CCH Access and Thompson acquires, you know, SafeSend when they did that, does that jeopardize the level of support that CCH tax users or Access tax users get with Safe Send? Like it just, it becomes more problematic. So that's not usually good news for us, at least initially. If your favorite tool gets acquired by kind of a legacy player, that's a bummer. What the longer term opportunity is is that's a signal to the larger market that there is money in this space, which usually leads to the creation of more companies doing new things. So in the long term maybe that's all right. In the short term it's a bummer. Prediction number six. I think we're going to see more noise around automated tax review right now. We got a couple folks dabbling in it Tax GPT has a version of this, Juno has a version of this. Neither of them right now, to be totally honest, are very good or at a, at a crazy high level by any means. And this is a challenging thing to do. Get AI to review a tax return. A big problem here is that tax forms, PDF tax forms are not something you can just chuck into a large language model. And it makes sense of because the text in that PDF is not laid out in like a logical way. The boxes and where the descriptions for those boxes are like, they're just very Hard to understand. And so just plopping a 60 page PDF into an AI tool, it, it honestly can't really make sense of that right now. And so you build your own sort of processor for that. And this is something that, that Juno has done where they've got some software where you give it a tax return and it knows all the tax forms and all that and it extracts all the data points, all the numbers from the boxes to sort of create its own structured data file of what's all the stuff in that tax software. I think they pull like can't remember how many it was over 600 data points or something like that. From the tax software. Sorry, not from the tax software, from the tax return. But you know, the information on the tax return that's not as good as the information inside of the tax software if we're trying to get it to do a review. So how do you get AI to review all the inputs that I did in my tax software? Two potential paths here. One path could be AI agents getting better and it navigating the tax software itself and like pulling all that information or you know, this whole review process just happens by it crawling through your tax software. That's one possibility. I think the more immediate possibility is simply getting the tax return and the data out of the tax software in a better format than the PDF tax returns we're get. We maybe I'm getting too technical here, but little inside baseball. When you E file a tax return when it goes to the irs, what goes to the IRS is not a bunch of PDFs, it's actually an XML file. And so it's a sort of structured file where there's all these sort of tags that have agreed upon meetings. And so the entire tax return is represented by this XML file. That's what gets pushed to the irs. Now a structured XML file like this, AI tools, they can absolutely work with that. Remember large language models right now the thing that they are best at is like writing code and working with code and a structured data file like this that is right in an AI tools wheelhouse. Now some tax software platforms, they will let you export the XML file that would go to the IRS for E filing. Some tax softwares right now do not. But if we're looking for like what is the solution to how do you review a tax return in a way that like an AI tool can make sense of? It's not a pile of PDFs. In all likelihood it's probably either going to be an AI agent crawling through your tax Software or an export of something like an XML file so that I can give it my work papers and then the XML file and it can try to make all those connections and be like, hey, here's some stuff that might be missing. Now to be clear, this is a super, super hard thing to solve for. But I think in 2026 my hope is this stuff gets better, gets a little bit more real. Because even like a so so okay version of review, that's really nice, like if you can snap your fingers and that thing's done in like 60 seconds, this is one of those things where like the day it's good enough to do the 20% version, no human will ever do that 20% version again. So like this is a big deal. Like if review can even get just a little bit good, then we now have this infinitely scalable little bit good reviewer which is still not as, as good as you potentially. But every little baby step up that it makes, that's a big deal because humans will never go back to doing that work. So we'll see how this whole automated review thing develops. I think it'll be interesting to follow prediction number seven. And this is get the, get the tiny violins out. This is probably the most sad one. I expect little to no movement on new professional tax software this year. We are years, years and years away from new tax software. Unfortunately now excitingly we did just get Drake Cloud which is like a SaaS browser based version of Drake. I would say right now it's still not as good as the old Drake and it is not as good as Pro Connect at being a cloud tax software. But I am hoping that that Drake Cloud gets better. The trouble is even traditional Drake like does not rise to the level of handling the complexity that say an ultra tax or that sort of thing would. So even if Cloud Drake got to parody with normal Drake, that's good because Drake is enough for a lot of firms. But like in my firm we could, we couldn't use Drake like we were doing too much ugly multi state stuff. And so is Drake ever going to be the company that will build Drake Cloud? To be able to handle that really complex stuff feels unlikely. But the hard thing about anybody building a new tax software platform is just the buying cycle for firms is so slow. The last thing in the world that you want to buy is a new tax software. And so nobody's going to be the first user on this brand new platform. And it's going to take years of hearing positive results from the folks that are on the platform. For you to ever consider. So it's kind of this chicken and the egg thing and you can't ship a tax software that like only supports one type of tax return or only supports federal only and not state. Like it's just an insanely hard thing to build and ship new tax software. And when it's close to good enough, you will be seeing and hearing from people who are users about it for years. Honestly, before most of us would be willing to pull the trigger on something new. So new tax software unfortunately feels quite a ways off. Prediction number eight, and this is an important one for the legacy brands in the space from your Thompson Reuters, your CCHS is I think people will continue to ditch those companies hosting solutions in droves. It's happening really fast right now. You know, Virtual Office Thomson Reuters hosting solution is probably the biggest waste of money in small accounting firms today. It's so overpriced, the service is so poor, you deal with so many outages when there's a bunch of other providers now that offer faster hosting at a way, way smaller price. Like for perspective, Verito who we've done some sponsorship stuff with Verito. This is not an ad read but Verido just to put this in perspective, the cost of their fully managed IT service and hosting is less than just the cost of Thomson Roadies Virtual office hosting. So you can literally get like your entire IT department and the hosting for less than the cost of just having Thomson Reuters host your stuff. And by the way, Verito, way faster, way better service. You're not using shared servers like you are with Thompson Roadies Virtual Office. Now Verito is one example for anyone looking for hosting. I'm sending them to either Verito rightworks or Ace Hosting. Again, those are not sponsored things at all, only people we've really done sponsor stuff with. There are Verito rightworks came to a couple of our events, but those are the three folks that I've heard from firms that they absolutely swear by those hosting companies and what that means for your Thomson Reuters and the CCHS of the world and even Drake to a degree because Drake makes money on their hosting products, is that they got to find a new way to make money. Not that hosting is, you know, a huge part of the pie for them. But this leads me to prediction number nine, which may surprise you. I think legacy platforms are going to finally be forced to actually ship some cool new stuff like the writing's on the wall. I mean I can see the number of people that are leaving the practice CS and all of That I have this, I have a practice management system recommender. It's a little tool that you can go through and recommend a practice management system for your firm. I can see genuinely thousands of firms who have gone through that tool, who we've gotten off of practice CS onto a more modern cloud practice management system. And so eventually these companies, they got to start shipping something new and interesting that people will buy. But I would say this prediction comes with a giant asterisk and that is, it's exceptionally unlikely that any of these cool new things get built in house. And I'll return to the example of Thompson acquiring Materia and that now becoming co counsel their research product. There's a version of co counsel that could be very, very cool. I mean, AI tax research is a huge thing right now, but the version of co counsel that is super cool and they're working on this is the one that can actually see into your client's tax returns. So I can say I'm doing this research for this client specifically and it will then augment all of that research with oh yeah, I can see in their last six years tax returns. Here's been their situation. That's a really, really cool research product. Now, they have said they have built it, but everything I just said is hypothetical. I mean, so much of the AI stuff is like, look at all these things we can do and then we never get them right. I mean, go back to three months after ChatGPT launched and Microsoft was bought 50% of OpenAI and said, you're going to have an AI assistant now or every morning you can clock in, it's going to tell you, hey, here's the emails to be looking out for. Here's what's on your counter. Just this immensely helpful AI assistant that can see across all your stuff. Gang, that was three years ago. Where is it? Why is my Windows machine not so much more smart than it is right now? And so being able to say like, well, here's this really cool thing that only we can do, that's great, but I'll believe it the day that it's live and other accounting firms tell me that it works. So the ceiling of what's possible, it's very high with what these legacy companies can do. And I truly think like they will ship more interesting things and co counsel, while I think there's better alternatives right now it is the most interesting new thing to come from a legacy provider in our space in decades. But the giant asterisk here is in all likelihood it's going to come via acquisition. And for the users of that platform, that's usually bad news. But who knows, maybe more money going into the space is ultimately a net positive because it'll encourage other new companies to come into the tax base as well. So that was tax prediction number nine, that legacy platforms are actually going to ship some interesting stuff. Hey, if you've got any clients that have to do like ugly project tracking or have any degree of inventory management or big ugly invoices like the type you see from construction companies that are a mile along and have all this item detail, then my brother, this episode's sponsor, Maker's Hub, it is for you, even if you don't do the accounting is a big one to share with your client because truly the area of accounting that has been most turned on its head by AI is accounts payable. And it's not even close. We had some big meaty bill pay engagements we did with clients where I truly could have automated 80% of of what we were doing. With Makers Hub, the extraction quality is so far beyond what OCR could ever do. And because it can now pull like every little fiddly detail from the invoice in a totally automated way, like, like by the way, we, I think we're actually very close to fully automated extraction, which people have been saying for over a decade, you don't have to review the bills anymore. It's like, really? Because my job is to do the bills and if there's an extra zero that slips in there, I'm going to lose my job. Feels like we're actually getting close to fully automated extraction. But because it can pull all those details really well, you can then build all sorts of automated workflows on top of that for like really complex approvals. And we're talking more than just like pull the date and the amount from the invoice. We're talking about every single little fiddly detail in the item, like itemized list. This is crazy. Makers Hub, we did some examples on a demo on YouTube where it was even pulling handwritten text accurately. Crazy stuff. Even if this is not something you're doing for your clients, if you have clients that are doing gnarly billing and inventory management, all this stuff, Maker's Hub, a lot of people that are raving fans of it because it just takes the level. This stuff can be automated like just to another level. How many times did I just say level? Okay, you know what to do next. Learn more down at the link in the show notes. If you got a client you want to share this with, I would say either send them the landing page or send them one of the demos we've done on my YouTube channel. And in like seven minutes they can get a sense of what it is. That's it. That's the ad read. Hey, real quick. Are you tired of having to like duct tape a whole bunch of apps together to run your accounting firm? Of course you are. Wouldn't it be nice if you had you had what you needed all in one place? Gang, listen up. This is where today's sponsor Financial Sense can make your life a whole lot easier. It's everything you need to run your firm all in one place. But they recently started shipping some really cool workflow stuff. It has a deep integration into the accounting ledger. It will actually pull all the transactions in so you can do more of your month end review from inside a Financial Sense. And it'll even auto flag a bunch of stuff like big transactions, inconsistent transactions. It's got kind of a whole month end review flow that you now go through from inside a Financial Sense. Then you make those changes to the transactions. They all get pushed back to the ledger like magic, bro. So one of the headaches right now in picking accounting tech is you have practice management systems that, that oversee the work. Then you have workflow tools that do the work. Financial Sense doing a bit of both now they've been a practice management system historically. Now they're getting more into the bookkeeping workflow which is great news if you're the type of person that doesn't like juggling a whole bunch of tools. Now Financial Sense, they'll actually give you a 14 day trial if you use the link down in the show notes. That is the most generous free trial I've actually seen in our space. Absolutely worth kicking the tires on. To learn more, check out that link. Got three more to go here. Prediction number 10 is AI tax research goes mainstream and this is as much about the maturity of these companies as it is the maturity of the models. We're now at GPT 5.2. One of the big headlines with 5.2 is it reduces hallucinations by 30%. It's shocking how much better language models are now than even just two years ago at accuracy about being able to retrieve the right information from the right source material. I, I think I've shared this before. Two months after chat GPT came out I had a tax research, an AI tax research platform built and we, we like, we're so close to rolling it out. The problem was at the time this was how long ago was this? Three years, four years now it was January Chat GPT had come out in November and we built an AI tax research platform that looks a lot like what you'll see from like Blue J and Tax GPT and all that. All it did was pull from authoritative sources. The trouble was for a single query it cost about $2.40. That was where we were at in order to get a high quality answer out. There were there were cheaper version of versions of that we could do for sure. But for my bar it was like well this doesn't give me a quality enough answer. And so at the time it was like this is a long ways from being a business that makes money. Now we are light years from that now where the same work from an AI model is happening at truly less than a thousandth of the cost, while the models are vastly better. And something people don't talk about that much in the development of AI over the last few years is just how much more efficient and how much cheaper it has gotten. But I think in 2026, because these the companies involved here are more mature and because the models are just so darn good that we see huge adoption of AI tax research tools. If I had to pick one, that's probably the leader here just that I see in talking with firms it's probably Blue Jay, the other big one in the States. I say big one that people talk about Tax GPT but I like the Blue Jay users I know to tax GPT users right now are probably 20 or 30 to 1 now Blue Jay raised over $100 million this year. 130 million. I think it was the only alternative that like you can sort of make an argument for us probably. Thompson REUTERS CO COUNSEL but right now it's not as good as Blue J. And again, you know my stance on this. Don't buy the thing that isn't as good because of the promise of how it could be in the future. Like Microsoft Copilot is a great example. Copilot still sucks and we all want it to be better and I will start using it the day that it is good enough to justify using. But until then I'm going to use the best tool. And so this year I think we probably see huge growth out of Blue Jay. I actually think tax research companies probably evolve more into like tax review companies longer term this is, I mean this is purely my speculation, no insider knowledge here, but what's Blue Jay going to do with 130 million bucks besides sell a bunch of tax research Product. I think you're probably going to build more like a technical review platform. That's what I do with the money anyways. Two more predictions here. Number 11. I think agencies, automation agencies who work with tax firms are going to see records growth in 2026. There's such an appetite for IT and tax software and the tools we use are so difficult to automate that that skill of knowing how to get a thing out of Lacert or Ultra Tax or Drake or whatever it is. Just having the vernacular and having built that tooling for other firms becomes so valuable that the agencies themselves become a tremendous resource for firms to like automate this stuff that historically has been unautomatable. I just see this being a huge opportunity. There's another life where I didn't run a firm and I just wanted to be a tech nerd where like running an agency is attractive because I just see how much opportunity is out there and the fact that it's like you can build the same thing, you can build a thing once for a firm and then sell that to 100 more firms. Like it's a pretty compelling business because we use such a small number of tools in the tax space that you can then resell those solutions across other firms. Right. Like that just seems like a no brainer to me. But I think agencies supporting accounting firms will have a record year in 26. Last one, number 12. This is a prediction, but honestly more of a wish list item. I really, really want this to happen. And this is tech development that happens on the back of greater connectivity with tax jurisdictions. A lot of jargon there. So my accounting firm was in Oregon. It's pronounced Oregon, not Oregon. You're welcome. And they had a really good Department of Revenue portal. It's some platform that they bought from somebody because a bunch of the states use this same services portal and you could log in, get connected to all of your clients accounts and I can't tell you how useful this was in Oregon. On every 1040 when we're working out the taxability of their state refund. To be able to hop in and get the correct information as the Department of Revenue has it, or you sent clients, you know, quarterly vouchers and you're like, did you end up paying these or not? To be able to go to the Oregon website and see what they have on file doesn't mean that sometimes you don't still like confirm with the client. But it was so, so useful to have that information available there. But it requires logging in and manually fetching that for every single client. Now, IRS's tooling is not great, but it's a long ways from where it was two or three years ago. And if we make the analogy to another tech platform that really changed things, Plaid, Plaid was arguably the first banking data aggregator. So Plaid is like this tech layer where any tech company can connect to Plaid and then get, like, bank feed data from it. Like, you connect to Plaid, you give it the login for, you know, your different banking accounts, and then Plaid has a direct connection to the bank and can send transactions through your accounting ledger, can pull bank statements, all that stuff. Now, there's a bunch of other platforms now that work like Plaid. I think they're usually called banking aggregators. But Plaid became sort of this standardized layer so that software companies, rather than having to develop for the 5,600 banks that there are in the United States, could just develop for Plaid, and then their tool worked with any bank that Plaid supported. Now, behind the scenes of Plaid, it was a whole lot of paperclips and duct tape. Like, they would have deals with, like, the three or four big banks where they could build, like, API connections and do all this stuff reliably. But for a whole lot of other banks, what was actually happening on the back end, the service Plaid was providing, is they were creating all these bots that could go into these bank accounts and scrape the information that they needed. It was very manual stuff that would break, like, all the time. But Plaid, the bet was that the banking systems would get better. They could automate this stuff better over time. And the bet worked out, what was Plaid's exit? They sold for 5 billion. So there was a day when, if you wanted to connect with a bank, you had to build all those connections individually. If you're building software and then the user, like, if you just needed the banking activity, you would have to log into your own bank and grab all that stuff yourself. As soon as you had banking aggregators, that day ended today. Right now, if you want to get information from a taxing agency, a jurisdiction, you have to log in and do that stuff yourself. There will be a day where you have a Plaid for tax that sits on top of all those different agencies to be aggregators of that tax information. How incredibly useful will that be for you when all of that data gets pulled in wherever you want it automatically? So you have a tech platform that's giving you a notification that there's a new IRS notice once all that stuff is. Is able to be pulled into a single system. There are so many Opportunities from having all of that data in one place for. For everything from like automating tax resolution. I mean you've got tax resolution softwares out there. If you just had a direct connection to these jurisdictions, you could automatically fire off whatever the best practice tax resolution, you know, letter or fax or whatever it is, automatically based on a couple inputs from you, we come back to like pulling payments that were made to Oregon. Like how valuable would that be in your tax workflow solution for that data all to just come in automatically? That kicks off almost an entirely new ecosystem of tax tech that can then sit on top of the software layer that kind of aggregates all of that tax information from the IRS and the states and even local tax agencies. If we think about fintech, that's, you know, a huge tech category, the category of tax tech, like, that's really exciting to me and could make our work a lot more efficient. So my 12th prediction, which feels a little bit more like a wishlist item, is simply greater connectivity with tax jurisdictions being able to get this information out more efficiently, pull it into my software. The only version of this that I've seen in the wild, actually Carbon, I don't think it's live yet, but they announced maybe it is an integration with Tax now, which is kind of like a transcript pulling company, at least historically it was. But this whole thing, like that whole side of things has so far to come and may actually be a part of the tax workflow conversation. Like over the next two to four years is any information I can get from tax agencies on an automated basis. How can I pull that into workflow to automate the doing of the work for my clients? Was that enough? 12. That's a lot. What do you got? What did I miss? I would love to see your predictions or even just your wish list items. We could probably do a whole reaction episode of like crowdsourcing. What are your coolest predictions? And if you had the ear of a developer today, because a lot of developers will watch this and this factors into how they build their products. What do you want them to hear? There was a day five years ago where I still remember writing the Twitter thread. Here's the thing. Developers is what tax pros need more than anything is a tool that does just this, pulls a custom DRL from the prior year tax software, like the document request list that is specific to that client's prior year return. Give me that information and then give me a nice place where I can present that to the client. They can upload the documents. There this was pre AI. The whole notion of like the checklist automatically resolving that would have been tremendously hard to do before. But I got this. I built this whole Twitter thread that is like, we just need the ability to put an intelligent request list in front of the client that isn't boilerplate based on prior information. Here's how to do it. This is five years ago we had that. Now, I don't want to take credit for it, but I think I just did. Okay, so having these conversations, it matters. What is your big brain idea? Pop that stuff down in the comments. I want to see it on Wednesday. We're doing the same for bookkeeping. We'll do our bookkeeping tech predictions, and I'll see you there. It.