Automated document reading pulls the numbers off tax forms as clients upload them. A W-2, 1099, or K-1 lands in the portal, the system extracts what it can read, flags anything unclear for a person, and updates the return's status. Staff verify numbers instead of keying them, and nobody hunts through an inbox.
What happens on upload
The client uploads from their phone or computer through the firm's branded portal. The system identifies the form type, extracts the fields, and attaches the document and its data to the client's record. The return's checklist updates: what has arrived, what is still missing. If everything needed is in, the return moves a stage and the preparer is notified. If not, the reminder sequence keeps running. No staff touch happens anywhere in that loop.
Receipt confirmation happens in the same motion, so the client knows the document landed without emailing to ask. That single automatic receipt removes one of the most common inbound questions of the season.
Which documents it handles
The common income forms are the core of it: W-2s, 1099s, and K-1s are read as they come in. These are also the forms that make up most of the February volume, which is why extraction moves the needle on data entry at all. Documents outside the clean cases get routed to a person instead of guessed at.
What it replaces
| Manual today | With extraction |
|---|---|
| Open attachment, rename, file it | Document lands filed and attached to the client |
| Key numbers off each form | Numbers extracted on arrival, staff verify |
| Update the status spreadsheet | Return stage updates itself |
| Reply to confirm receipt | Client sees receipt and status in the portal |
What it does not do
It does not prepare or file returns. Your tax software still does the prep. AI360 CPA runs the operations layer around it: getting complete, readable, verified documents to the preparer without the collection grind. Preparers work from a complete file instead of assembling one. More on the split in what AI360 CPA is.
That split matters when you evaluate tools: extraction upstream is about completeness and speed of the file, and it pays off regardless of which prep software the firm runs today.
Accuracy and exceptions
A blurry photo, a crumpled scan, or an unusual form gets flagged for human review rather than passed through silently. On the Ignite plan, document exception handling is part of the service, so flagged items are worked as they occur instead of piling up. The operating principle: the machine does the reading, a person does the judging, and nothing unverified flows downstream.
Does this replace my tax software?
No. Tax software prepares and files the return. Document reading runs upstream of it: collecting, extracting, and verifying so the preparer starts from a complete file.
What about paper documents?
Clients photograph them with their phone and upload through the portal. The same extraction and checklist logic applies to a phone photo as to a PDF.
What happens when a form cannot be read?
It is flagged for human review instead of guessed at. On the Ignite plan, document exception handling covers working those flagged items as they occur.