How AI will change the game for tax pros over the next five years

The word "transformation" doesn't quite do justice to the kinds of seismic changes that have started to take root in the accounting profession over the past year. 

From whipsaw changes to the tax code to the rapid-fire introduction of new technologies to growing urgency around the talent shortage, the challenges facing tax professionals have reached a breaking point. But here's the reality: AI-powered tools will overcome these challenges, and the firms that operationalize AI in 2025 will define the next decade of the profession.

There is plenty of cause for optimism as we look ahead to the New Year, particularly in how tax departments are leveraging new tech. As the industry gets set to tackle 2026, I'm ready to take some of the guesswork out of the equation and make some predictions about what the future holds for tax pros and AI.

A 1:1 ratio of talent and tech

It's not that long ago that tax pros were questioning whether an army of bots was coming for their jobs. Now, seeing that AI is more of an enhancement than their replacement, their fears have been quelled. Thomson Reuters research finds that 79% of tax, audit and accounting firm professionals believe artificial intelligence will have a high or transformational impact on their businesses within the next five years, and many professionals are already seeing huge gains by leveraging AI. As more firms start to adopt these tools, the future is starting to crystallize, and in the next five years, I am predicting that firms will employ at least one virtual agent for every CPA on staff.  

This 1:1 ratio will crush talent shortages and act as a cost-effective way to bolster productivity and curb burnout. AI agents will handle the manual research, data extraction and routine analysis that currently consume countless hours. They'll cull vital information from trusted sources — like the IRS code, a firm's financial documents and more — to distill key insights and solve specific tax-related problems. That's no easy task, considering the tax code has undergone such sweeping and continual changes over the last decade.

A happy byproduct of these virtual agents' productivity will be a decreased attrition rate out of the profession — making the profession attractive to new talent once again.

Back to basics

Another major change taking shape in firms that have become early adopters of AI is a renewed focus on the kind of critical thinking that led most of us to this industry in the first place. That is a welcome change from the late-winter and early-spring rite of passage, when tax professionals sprint from their holiday celebrations right into an arduous tax season. Eighty-to-100-hour weeks coupled with Navy Seal-like resilience has become the standard, albeit a completely unsustainable one. Fortunately, in the next five years, AI-driven automation tools will reduce the need for this type of frenzied crush.  

Instead, critical thinking, curiosity and adaptability will become a much bigger part of how tax pros interact with their clients, fundamentally changing relationships with clients. Grinding out tax season will give way to more nuanced, customer-centric services, ultimately allowing tax pros to get back to basics of delivering great counsel. New solutions will allow tax pros to streamline communication with their clients, make document gathering and gathering e-signatures easier, and automate tax payments, invoicing, and tax return delivery.

The new advisor

New technology is also allowing tax professionals to expand their roles. Specifically, I foresee a further blurring of the lines between accounting and financial advisory services. 

According to a recent survey by J.D. Power, 48% of consumers say they consult friends or family for financial advice or guidance. That's a figure that dwarfs both the number of consumers who ask a financial advisor or planner (26%) or a bank or credit union representative (25%). With consumers already open to nontraditional sources for financial advice, it would make sense that tax pros with newly found bandwidth could expand their offerings and marry a client's tax services with a financial advisory service. That becomes even more likely as tax pros identify new insights into their client's finances using AI-driven tools.

New capabilities will allow tax professionals to upload tax returns and client information and uncover areas of clients' finances to explore, allow tax pros to refine strategy recommendations to ensure they align with client goals and circumstance, and eventually, empower tax pros to branch out further to new advisory roles.

The next frontier

AI is still a work in progress, so firms should allow for the possibility of a few twists and turns, but its rapid growth is clearly signaling the direction of its next evolution. As AI-driven solutions become more targeted and intuitive, technology will unlock new opportunities for tax professionals. For firms that are making the right moves around AI, the future is finally starting to come into focus.