Wealthtech startup April announced its new AI-powered tax tool for RIAs and wealth management firms, with Robinhood and Savvy Wealth among the platforms to integrate the software.
Advisors can upload a client’s 1099, K-1, and other income documents into April to produce filings for federal and state tax returns in around 20 minutes, April President Raj Doshi and CEO Ben Borodach explained to InvestmentNews. The software also runs simulations to forecast tax impacts of client scenarios such as selling a large stock position or conducting a Roth conversion.
“This is a first of its kind platform that enables a three-way collaboration between the end client, the financial advisor, and the tax professional,” Doshi said. “Historically, even within RIAs who have tax professionals in-house, essentially the only real value is they have a shared email address. But the manual work required for a tax filing or planning decision to keep the financial advisor in the loop of what the client's going through, is extraordinary.”
April under a “nationally licensed and chartered tax engine” with a “deterministic” codebase, which Borodach contrasts with other tax systems relying on large language models that are more prone to producing errors. A recent study from AI advisor startup DeepVest found that ChatGPT, Claude, and Gemini failed on 85% of investment tasks as Claude developer Anthropic released new AI plug-ins for wealth management.
“We have a calculation engine that is tested by humans, it's reviewed by the IRS and the states. It is rigorously tested, audited and auditable,” said Borodach. “We are able to reduce errors but also explain and analyze every calculation at any point in time that happened on the platform. That's very different than an LLM that's going to provide a probabilistic guess basically, which may change over time randomly and wouldn't be auditable.”
Robinhood is offering free tax filings with April amid the brokerage’s broader push into providing tax services for millionaire investors. Fintechs like Savvy Wealth, whose RIA arm Savvy Advisors manages more than $5 billion in assets, are also using April as the startup says it has already processed $1 billion in refunds this tax season across 782,000 federal and state tax returns.
In the event of an error from April’s tax software, the company offers to reimburse its users up to $10,000 in instances that result in fines from the IRS. April’s tax software for advisors joins a market that also includes a recently launched AI-powered tax planning from RIA custodian Altruist.
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