The AI-Powered Tax Season: A New Era for Professional Preparation

MINNEAPOLIS, MN – November 25, 2025

For decades, the tax preparation industry has operated on a grueling cycle of manual data entry, complex form navigation, and relentless deadlines. The annual tax season has been a test of endurance as much as expertise. But a technological shift, long promised and now rapidly materializing, is set to permanently alter this landscape. Artificial intelligence is moving from a buzzword to a fundamental tool, and its latest integration into professional tax software signals a pivotal moment for preparers and their firms.

Leading this charge is Wolters Kluwer Tax and Accounting, which recently announced the launch of TaxWise® Online powered by Expert AI. This move introduces a suite of AI-driven capabilities designed not merely to speed up old processes, but to fundamentally change how tax preparers work, interact with clients, and grow their businesses. While the promise of reclaiming hours from tedious tasks is a powerful draw, the deeper implication is a redefinition of the tax professional's role, pushing the industry toward a future centered on strategic advisory over rote compliance.

From Manual Entry to Intelligent Automation

The core of the new TaxWise Online offering is its integration of Wolters Kluwer® Expert AI, a proprietary system of generative and agentic AI capabilities. This isn't just about faster calculations; it's about intelligent automation that tackles the most time-consuming aspects of preparing a return. The platform now features automated tax document extraction, allowing preparers to upload supported W-2 and 1099 forms and have the data populated with what the company calls "AI precision." This feature, combined with AI-powered ID scanning for driver's licenses and Social Security cards, aims to virtually eliminate manual keying errors and dramatically reduce intake time.

The time savings projected are substantial. According to Wolters Kluwer, the process of collecting taxpayer information, which typically consumes 30 to 60 minutes, can be compressed to just 5 to 15 minutes. Data entry and mapping, another 30-to-60-minute task, can now be completed in under a minute. Applied across a client base of 200, the company estimates a firm could reclaim between 8 and 16 hours per week—the equivalent of one or two full workdays during the busiest season.

“TaxWise is entering a transformative chapter, equipping tax preparers with smarter tools and seamless workflows,” said Rocco Impreveduto, Vice President & Segment Leader at Wolters Kluwer Tax and Accounting, in the company’s announcement. “With AI-powered document extraction, CCH AnswerConnect guidance, and referral tools designed for organic growth, tax preparers can lay the groundwork for growth in a more automated tax preparation landscape.”

Beyond data entry, the system embeds AI into the research process. The integration of CCH® AnswerConnect directly within the software allows preparers to get AI-assisted answers to complex tax questions, drawing from a trusted repository of authoritative guidance. This feature promises to resolve common queries that could previously consume hours in just 5 to 30 minutes, turning research from a workflow bottleneck into a streamlined support function.

The Intensifying AI Arms Race in Tax Software

Wolters Kluwer's strategic push is not happening in a vacuum. It is a significant maneuver in an increasingly competitive tax software market where AI has become the new battleground. The industry is projected to reach $2.5 billion by 2028, growing at an annual rate of 30%, and major players are all vying for a dominant position. This innovation signals an industry-wide pivot, where the value proposition is shifting from simple compliance to intelligent, efficient, and advisory-focused platforms.

Intuit, a primary competitor, has been aggressively promoting its own AI capabilities within its ProConnect Tax platform. Branding its approach as "practical AI," Intuit emphasizes features like intelligent data import, an AI-driven review engine to check for accuracy, and a generative AI tool that summarizes prior-year filings to help preparers identify advisory opportunities. Similarly, Thomson Reuters has highlighted AI's transformative impact, viewing it as the key to freeing professionals from data entry to focus on higher-value services.

This competitive pressure is accelerating the pace of innovation. Smaller players like Drake Tax are also integrating AI for intelligent form completion and state tax optimization. The race is no longer about who can process a 1040 form, but who can provide the most intelligent, secure, and integrated ecosystem that empowers professionals to do more than just prepare taxes. Wolters Kluwer's launch of Expert AI is a clear statement that it intends to lead, not follow, in this new paradigm.

Navigating the New Frontier: Security, Privacy, and Trust

As AI systems process some of the most sensitive personal and financial information, the questions of data security and privacy are paramount. The potential for error or breach carries significant consequences, and the industry is moving cautiously, guided by stringent regulations. Tax professionals operate under strict mandates like the IRS's FTC Safeguards Rule and IRC Section 7216, which governs the use and disclosure of client tax information with severe penalties for violations.

In response, software providers are building their AI platforms with security as a foundational principle. Wolters Kluwer emphasizes that its Expert AI was built with a "privacy-by-design architecture" to rigorously protect user data. This approach is essential for gaining the trust of both tax professionals and their clients. Compliance frameworks like SOC 2, which covers security, confidentiality, and privacy, are becoming the standard for any firm leveraging AI, requiring robust measures like multi-factor authentication, data encryption, and regular audits.

However, technology alone is not a panacea. Cybersecurity experts warn that AI introduces new vulnerabilities, and human oversight remains a critical line of defense. One anonymous tax professional on an industry forum noted that while AI is a powerful research assistant, "you still need to know the right questions to ask, and you absolutely have to verify the output." The final judgment and interpretation must rest with the human expert, who understands the unique nuances of a client's situation and bears the ultimate responsibility for the return's accuracy.

Beyond the Calculator: Redefining the Tax Professional

Perhaps the most profound impact of this technological wave is not on the software itself, but on the professionals who use it. The widespread fear of AI replacing jobs is giving way to a more nuanced understanding of AI as an augmentation tool. By automating the repetitive, low-value tasks that have long defined tax season, AI is liberating professionals to evolve into the strategic advisors their clients increasingly need.

This shift is already being welcomed by the industry. A recent survey found that 84% of tax and accounting professionals view AI as a positive force. Rather than making them obsolete, it allows them to focus on critical thinking, complex problem-solving, and building deeper client relationships. The U.S. Bureau of Labor Statistics echoes this sentiment, projecting job growth in accounting and auditing occupations through the next decade, suggesting that AI will enhance the profession's sophistication and demand.

The skills required for success are evolving in tandem. Expertise in navigating tax code will be complemented by the ability to effectively query AI models—a skill known as prompt engineering. Strategic thinking and communication will become even more critical as professionals spend less time on data entry and more time explaining complex tax planning strategies to clients.

This evolution presents a powerful opportunity for the accounting industry to attract new talent by offering more intellectually stimulating career paths. The future tax professional will not be a data clerk but a trusted advisor, armed with powerful AI tools to deliver insights and value far beyond what was previously possible. The challenge now lies with firms to embrace this change, retrain their staff, and redesign their workflows to capitalize on the new era of intelligent tax preparation.