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The IRS is significantly increasing its use of AI for tax audits, despite cutting human agents. New AI systems will scan all financial data, including crypto, potentially leading to more audits. Taxpayers need to be aware of red flags like improper deductions, side hustle reporting, and crypto transactions to avoid scrutiny.
A vast majority of taxpayers, 91%, are opting for the standard deduction, highlighting a trend towards tax simplicity. Recent legislative changes have increased the standard deduction threshold, making it the most advantageous choice for most individuals, especially those early in their financial careers.
New tax legislation is set to increase average taxpayer refunds by an estimated $800 this year, reaching $3,800. While touted as historic cuts, many benefits are deductions, and economic stimulus hinges on consumer affordability amid rising costs.
