Can you depend on Artificial Intelligence apps, such as ChatGPT, to help you do your taxes? Maybe, maybe not. Robert Powell, editor of Retirement Daily on TheStreet, is running a series in which his team asks ChatGPT a financial question and then asks a financial expert to respond.
In this case, the question was: “If I'm expecting a tax refund, what will happen if I file for an extension? Will I have to wait to get the refund?”
The reply could probably best be described as correct, but not complete.
DON’T MISS: Don’t Trust ChatGPT With Your Retirement Questions
TheStreet’s Tom Bemis writes of AI: The onslaught of artificial intelligence tools is accelerating, bringing with it a radical reworking of just what is authentic and trustworthy and even human.
Microsoft Co-Founder Bill Gates has called the technology "as fundamental as the creation of the microprocessor, the personal computer, the internet and the mobile phone."
And as quickly as AI is developing, people are trying to come up with tools to detect its use.
Back in March 2023, OpenAI announced that its language model ChatGPT would be launching GPT-4, the newest upgrade for the chatbot.
According to OpenAI’s announcement, the new and enhanced language system update will create a service that's "more creative and collaborative than ever," and better suited for "creative and technical writing tasks, such as composing songs, writing screenplays, or learning a user’s writing style."
It appears that the new update is also tailored to soothe some of the concerns that critics have had about the chatbot. GPT-4, according to internal analysis, “is 82% less likely to respond to requests for disallowed content and 40% more likely to produce factual responses than GPT-3.5.”
But back to the tax question. In response to the question, If I'm expecting a tax refund, what will happen if I file for an extension? Will I have to wait to get the refund?”
Here’s What ChatGPT Says About Filing Your Taxes
ChatGPT answers:
ChatGPT’s Answer Is Not the Whole Story
Retirement Daily expert Jean-Luc Bourdon, CPA, PFS, and founder of Lucent Wealth Planning, responds:
“I’d say: If you file for an extension to submit your tax return, it will give you more time to prepare and file your return, but it will not delay any tax payment that you owe. If a refund is due to you, it’ll only be sent to you after you file your tax return.”
Bourdon adds there are three important factors to consider in this situation, including:
“Filing an extension makes sense when all your tax information isn’t available to prepare the tax return or if you otherwise have no choice. Filing an extension merely for convenience might cause more work (and expense) than filing on-time because a tax-estimate must be created to make any tax payment due by the original due date. Then, your tax return must be prepared and filed by the extended deadline.”
He also says that a valuable benefit of filing early is to have the prior year’s tax return as a guide for current year tax planning.
To read all Boudon’s comments on the Chat GPT tax answer, check out Testing ChatGPT: Filing for a Tax Extension and Refund.
Among other things ChatCPT may have forgotten to mention, this year's regular deadline for filing your 2022 tax return is Tuesday, April 18. As the IRS says, taxpayers should know that an extension to file is not an extension to pay taxes.
Also, that's the day first-quarter 2023 estimated tax payments are due. And for residents of some counties and states affected by this winter's destructive storms, the IRS has extended the filing deadline into July.
