Unlock Hidden Tax Savings: How AI Finds What You’re Missing

Written By David Haase

Helping your clients identify every available tax-saving opportunity is one of the most valuable services you can offer as a tax professional. But manually reviewing returns and digging through financial details to spot deductions, credits, and savings opportunities is time-consuming — and prone to oversight.

That’s where automation — especially with AI-powered tools like TruePrep — can transform the process. By analyzing client data and financial history, AI-tools can automatically identify tax-saving opportunities, helping you offer more value to your clients while saving time.

Why Identifying Tax Savings Is Challenging

Manually identifying tax-saving opportunities requires a deep understanding of tax law, client history, and financial complexity. For example, clients may qualify for deductions or credits they aren’t even aware of, like:

  • Retirement contribution deductions

  • Health Savings Account (HSA) contributions

  • Child Tax Credits or Earned Income Tax Credits (EITC)

  • Energy efficiency tax credits

Clients’ financial situations change year over year — new income sources, property purchases, life events — which means you need to reassess their eligibility for these benefits each tax season. Without automation, these updates are easy to overlook.

How AI-Powered Automation Improves the Process

AI-powered tax prep tools automate the process of analyzing client data, identifying missed savings, and proactively flagging opportunities for increased tax efficiency. Tools like TruePrep scan financial documents, tax returns, and prior-year filings to generate a detailed list of available tax benefits — and can even suggest new opportunities based on evolving tax laws and client-specific changes.

6 Key Tax-Saving Opportunities You Can’t Miss

1. Tax Credits

Tax credits reduce tax owed dollar-for-dollar, making them one of the most powerful ways to lower a client’s tax liability. Examples include:

  • Earned Income Tax Credit (EITC) – For low- to moderate-income earners.

  • Child and Dependent Care Credit – For families with childcare expenses.

  • Education Credits – Like the American Opportunity Tax Credit.

  • Energy Credits – For home upgrades like solar panels or energy-efficient appliances.

💡 TruePrep Pro Tip:

TruePrep scans prior-year returns and client financial data to flag missing or potentially available credits. If a client listed dependents last year but didn’t claim the Child and Dependent Care Credit, TruePrep will automatically suggest it.

2. Retirement Contributions

Encourage clients to use retirement accounts to lower current-year taxable income while preparing for their future:

  • 401(k) Contributions – Pre-tax contributions reduce taxable income directly.

  • Traditional IRAs – Deductible contributions for those eligible.

  • SEP or SIMPLE IRAs – Higher contribution limits for entrepreneurs and small businesses.

  • Catch-Up Contributions – For clients aged 50+.

💡 TruePrep Pro Tip:

TruePrep can flag unused SEP IRA contribution limits for self-employed clients and recommend additional contributions to lower taxable income.

3. HSAs: Triple Tax Savings

Health Savings Accounts (HSAs) offer tax-free contributions, tax-free growth, and tax-free withdrawals (for medical expenses).

  • Maximize annual contributions ($3,850 for individuals or $7,750 for families in 2025).

  • Use funds as a long-term growth vehicle for retirement health costs.

💡 TruePrep Pro Tip:

If a client with an HDHP hasn’t maxed out their HSA contributions, TruePrep will suggest increasing contributions to maximize tax benefits.

4. Charitable Contributions

Clients who itemize deductions can reduce taxable income through charitable donations, including cash, goods, and appreciated stock, like RSUs and ESPP. Some other examples could include donated:

  • Appreciated cryptocurrency

  • Land or property easements

  • Art, antiques, and collectibles

  • High-end clothing and designer items

💡 TruePrep Pro Tip:

TruePrep automaticall flags missing Form 8283 for large charitable donations and prompts you to follow up with the client for supporting documentation. It can also highlight opportunities to donate appreciated stock, helping clients maximize their tax benefits while supporting causes they care about.

5. Education Savings (529 Plans)

529 plans offer tax-free growth and withdrawals when used for qualified education expenses. State tax deductions or credits available in some cases, as well as high contribution limits for long-term education planning. Tax accounting AI tools can uncover these opportunities in minutes, saving you hours of manual work.

6. Small Business Deductions

Clients who are small business owners can often deduct:

  • Home office expenses

  • Business-related travel

  • Vehicle use for business purposes

  • Health insurance premiums

  • License and certifications

Tax accounting AI tools quickly identify inconsistencies between business income and reported expenses, and flag potential deductions the client may have missed.

The Importance of Streamline Client Communication

Once tax accounting AI tools identify available savings opportunities, following up with clients is key to ensuring they maximize their benefits. TruePrep simplifies this process by automatically generating personalized emails, enabling efficient communication without the need for in-person meetings.

Example Email:

Subject: Found You Hidden Tax Savings
Hi [Client Name],

I reviewed your latest tax information and found a few ways you can save money on your return this year:

Increase your IRA contribution to lower your taxable income by [$X]. Maximize your HSA contribution — you still have room for an additional [$X]. Claim the Child Tax Credit for [$X] based on your newest dependent.

Let me know if you'd like to take advantage of these options.

Best,
[Your Name]

Stop Leaving Money on the Table — Let AI Do the Heavy Lifting

Identifying available tax credits, deductions, and contribution opportunities can significantly reduce your clients’ tax burden — but finding them manually takes time and effort.

TruePrep automates this process by analyzing client data, identifying tax-saving opportunities, and facilitating client communication, all in one. This not only increases accuracy and efficiency but also strengthens client relationships by providing proactive value.

For more insights on enhancing your tax preparation process, read more here: How To Avoid In-Person Meetings This Tax Season

You can also start your free trial today and see how automation can transform your firm’s workflows.

David Haase
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