How AI Tax Deduction Scanners Actually Work
Wondering how an app knows that coffee you bought was a business expense? Here is a deep dive into the technology powering modern AI tax deduction scanners.
Plaid Integration and Transaction Parsing
Most AI tax apps use Plaid to securely connect to your bank, continuously parsing your raw transaction data securely.
Machine Learning Categorization
Using NLP (Natural Language Processing), these tools analyze merchant names and amounts, comparing them against millions of known business expenses to find likely write-offs.