Deduction
Deduction is a US tax firm built around Taylor, CPAI, an AI tax accountant that answers questions, plans year-round and prepares federal and state returns, each one reviewed and signed by a licensed CPA before filing.
What is Deduction?
Deduction presents itself as a tax firm rather than as tax software: a modern tax firm where technology and CPAs work side by side. Its product is Taylor, CPAI, which the company calls the first AI tax accountant built for American consumers. Taylor is described as trained on the complete US federal and state tax code, updated daily, and connected to the customer's actual financial documents. The division of labour is the point. Taylor organises, analyses and communicates: it reads uploaded forms, detects their type, pulls the figures, flags what is missing, searches for deductions and credits, and assembles the complete return. Licensed CPAs stay involved throughout, advising on high-impact decisions and reviewing and signing every return before it reaches the IRS. The terms are explicit that AI-generated content on its own is informational, is not tax advice and creates no professional relationship; only what a Deduction tax professional has reviewed carries that weight. Customers interact by email, by chat inside the web application and by phone, which the site announces as coming soon. There are no forms, no questionnaires and nothing to install. Documents live in the Vault, an encrypted personal store that doubles as the place where conversations with Taylor happen. The offer is organised as three services, Tax Prep, Tax Planner and Tax Filing, and three tools: Tax Finder, Deduction Tracker and Document Organizer. Coverage is federal plus all fifty states, multi-state filing included, and the firm claims the situations that defeat consumer software: RSUs, ISOs, NSOs, ESPP, cryptocurrency, rental income, K-1s, self-employment and pass-through LLCs. A hundred-percent accuracy guarantee covers interest and penalties caused by Deduction's own error, capped at USD 10,000 per return under the terms. The service is free until the customer files, then costs USD 499 a year, or USD 999 for a simple solo business. The team mixes engineers and licensed practitioners, led by co-founders Sai Dhanak and Jonathan Kieliszak. A professional arm, DeductionOS, offers the same platform to CPAs, Enrolled Agents and registered investment advisers on a revenue-share basis.
What it does
- Answer tax questions in plain language by email or web chat, at any point in the year
- Read, label and file W-2s, 1099s, K-1s and receipts automatically in the encrypted Vault
- Scan federal and state rules for every deduction and credit the taxpayer qualifies for
- Assemble a complete federal and state return, schedule by schedule, from the uploaded documents
- Route every return and every high-impact decision to a licensed CPA for review and signature
- Transmit the approved return to the IRS and to the selected state authorities
- Project the tax owed and flag deadlines, estimated payments and year-end moves in advance
When to use Deduction / When not to
A quick filter to help you decide if Deduction is the right fit.
When to use Deduction
- Salaried tech employees whose returns involve RSUs, ISOs, NSOs or ESPP alongside multi-state income
- Freelancers, 1099 contractors and sole proprietors filing a Schedule C and paying quarterly estimates
- Content creators and other self-employed professionals tracking gear, home-studio and platform income
- Individual investors and landlords dealing with crypto gains, rental income or K-1 partnerships
- Licensed CPAs, Enrolled Agents and registered investment advisers who want to run or extend a tax practice on DeductionOS
When not to use Deduction
- Taxpayers filing outside the United States, since only US federal and state returns are supported
- Multi-employee S corporations, C corporations, SMBs, startups and larger enterprises, all explicitly out of scope
- Anyone under 18, who is not authorised to use the service under the terms
- People looking for legal, estate or investment advice, which the terms expressly exclude
- Users who need a native mobile app, a public API or a developer integration, none of which exist
How to use Deduction
A typical end-to-end flow, from setup to results.
- Create a free account on the Deduction Vault; no payment card is requested at sign-up
- Start by asking Taylor a tax question in plain language, by email or in the web chat
- Bring in your documents: upload them, forward them by email, photograph them, or let Taylor pull certain forms automatically
- Let Taylor read each form, detect its type, extract the figures and file it in the right drawer of the Vault
- Review the list of missing items Taylor flags before the return is assembled
- Ask for the federal and state deductions and credits you qualify for to be surfaced
- Have Taylor assemble the complete federal and state return, schedule by schedule
- Wait for a licensed CPA to review every number, every form and every recommendation, then sign off
- Read and approve the finished return, then pay the annual subscription to have it filed
- Keep the conversation going through the year for projections, deadline reminders and year-end moves
Pros & Cons
Pros
- Every return is reviewed and signed by a licensed CPA before it is filed
- A 100% accuracy guarantee covers interest and penalties caused by Deduction's error, up to USD 10,000 per return
- One flat annual price of USD 499 covers unlimited year-round advice and the filing itself
- Free to use until you file, with no payment card required to open an account
- Advice is available all year rather than only during the filing season
- No forms or questionnaires: the whole service runs as a conversation in plain language
- Complex situations are explicitly handled: equity compensation, crypto, rental income, K-1s and multi-state filing
Cons
- United States only: federal and state returns, with foreign filings out of scope
- Complex entities are excluded, including multi-employee S corporations, C corporations and larger businesses
- No native mobile app, no public API and no developer documentation
- Email and phone access are limited for free users, and phone support is still announced as coming soon
- No dedicated pricing page: the amounts appear only on the homepage and in the FAQ
- Payments are final and non-refundable unless Deduction decides otherwise
- No GDPR reference, no data processing agreement, no subprocessor list and no stated hosting country
Pricing & Plans
Deduction operates on a freemium basis. Creating an account and using Taylor, CPAI is free of charge and requires no payment card: unlimited questions, document uploads and year-round advice are included at no cost. Payment is only triggered when the customer files a return or requests professional review of a high-impact decision. The lowest paid entry point is the Personal plan at USD 499 per year, which covers unlimited CPA-reviewed advice, federal and state filing, Vault storage and the accuracy guarantee. A Simple Business plan is offered at USD 999 for a solo S corporation or a small partnership LLC.
- no charge and no payment card required
- covering unlimited questions to Taylor
- CPAI
- document uploads and year-round advice
- email and phone access are limited and filing is not included
- USD 499 per year
- covering unlimited CPA-reviewed advice all year
- CPA-reviewed federal and state filing
- Vault storage
- the 100% accuracy guarantee and pass-through entities such as a side-hustle LLC
- USD 999 for a simple solo business such as an S corporation or a small partnership LLC
- renewal at the price paid the previous year
- available for unique situations
- with no amount published
- revenue share with no platform fees
- no per-seat charges and no filing surcharges
- amount not published
Data, GDPR & hosting
A consolidated view of how Deduction handles your data.
GDPR overview
There is no GDPR implementation to report. Across every page collected, including the privacy policy, the terms and the security page, the General Data Protection Regulation is never mentioned, no Article 27 EU representative is designated, no data protection officer is named and no data processing agreement is offered. The framework Deduction actually invokes is American: a separate Gramm-Leach-Bliley Act privacy notice, IRS record-retention rules, and terms governed by California law with mandatory arbitration in San Francisco. Users do get rights that resemble European ones, namely access and export, correction, and account deletion with live data erased within thirty days unless the law requires retention, but these are granted by contract rather than by regulation. The service is offered to United States taxpayers only, which is the likely reason the regulation is absent.
Who owns the data?
The terms place ownership of uploaded content with the customer: you warrant that you own all right, title and interest in the documents and messages you submit, and the security page states plainly that your data belongs to you. In exchange you grant Treasur, Inc. a non-exclusive, worldwide, royalty-free, transferable, sublicensable, perpetual and irrevocable licence to store, modify and otherwise use that content to operate, develop and improve the service and to promote it. Deduction and its providers may also analyse it to derive aggregated usage data. The software and technology behind the service, by contrast, remain the property of Deduction and its licensors.
Reuse rights
Customers keep practical control of their own material: documents and returns can be viewed, exported and reused freely, and a filed return is delivered with a copy for the customer's records, with no permission to ask for. Deduction states that it does not sell personal data and that personal financial data is never used to train AI models; the AI providers involved in document review are contractually barred from training on customer data and from retaining Social Security numbers after processing. Data is transmitted to the IRS and to the state authorities the customer selects, shared with cloud, e-file, identity-verification, e-signature and email providers, and released to a third party such as a lender only on signed written instruction using an IRS-approved form. The reuse right stops at the customer's own data: the service content and software may not be copied, resold, framed or turned into derivative works, and the service is licensed for personal use only.
Data retention & training
Hosting summary
Deduction's privacy policy names cloud infrastructure and storage providers only by example, AWS and GCP, as the hosts of its encrypted databases and backups. The security page adds that systems run on trusted, independently audited cloud platforms with physical and network protections, that documents and personal information are encrypted and kept in private locations closed to public access, that every connection between device and application is encrypted, and that backups are secured with a restore procedure tested regularly. Access is restricted to trained staff with a demonstrated need. What is never stated is where any of this physically sits: no hosting country and no region are disclosed anywhere on the site, so both fields are left empty here. What can be said is that the company and the service are American, since the terms place the headquarters in the United States and the structured data declares the United States as the sole area served, and that the domain resolves to a United States address behind a Cloudflare anycast node, which indicates an edge network rather than the location of the data.
Where Deduction works
Country-level availability.
Available in
Not available in
Things to keep in mind
Risks and trade-offs to weigh before adopting Deduction.
- AI-generated guidance is informational only under the terms; acting on anything a licensed professional has not reviewed shifts the risk back onto you
- The accuracy guarantee is heavily conditioned: the error must be Deduction's alone, your information complete and supplied at least 21 days before the deadline, and the claim filed within 30 days of the first notice
- The guarantee never covers the additional tax actually owed, and reimbursement stops at USD 10,000 per return
- You accept mandatory arbitration, waive a jury trial and give up class actions, while overall liability is capped at six months of fees or USD 100
- Your full Social Security number is transmitted to the IRS and to the state authorities you select, and identity documents pass through third-party vendors
- The licence you grant over uploaded content is perpetual and irrevocable, and your data may be transferred if the company is sold, merged or wound up
- Convenience can erode your own grip on your tax position: a conversational assistant makes it easy to approve a return you have not really read
Setup & Integrations
Technical difficulty
Very low. Setting up requires a free account on the Vault and nothing else: no payment card, no form, no questionnaire and no download, since the service runs in any web browser. Documents arrive however suits you, uploaded, forwarded by email or photographed, and Taylor can pull some of them itself; accounts can also be linked. The conversation happens in plain language, and in the filing sequence the only step left to the customer is approval. The single practical prerequisite is a browser.
Deployment
Supported languages
Behind Deduction
Fundraising
Social
Resources
All the official URLs gathered for verification and reference.
Alternatives
Tools that compete with or complement Deduction.
Frequently asked questions
Is Taylor, CPAI an AI or a person?
How much does Deduction cost?
Which returns and which states are covered?
What happens if there is a mistake on my return?
Is my data used to train AI models?
How long is my data kept?
Do I need to install an application?
Is Deduction GDPR compliant?
Is there a minimum age?
Can a CPA or a financial adviser use Deduction professionally?
Should you pick Deduction?
Deduction is unusual in that it does not really compete with tax software; it competes with an accountant. The product is a firm, and the AI is how that firm gets its work done. Taylor, CPAI reads the documents, finds the deductions and assembles the return, while a licensed CPA reviews every number and signs before anything reaches the IRS. That human step is not decoration: it is what lets the company stand behind an accuracy guarantee capped at USD 10,000 per return, and the terms are careful to say that unreviewed AI output is not tax advice. For the audience it names, American taxpayers whose situations have outgrown consumer software but who balk at USD 750 to USD 2,000 for a traditional preparer, the value is easy to see. Equity compensation, crypto, rental income, K-1s and multi-state filing are handled, advice runs all year rather than in an April scramble, and the whole thing is free until the moment you file, with no card required to try it. The limits are equally clear. The service stops at the United States border. Multi-employee S corporations, C corporations and anything resembling a real company are out of scope. There is no mobile app, no API and, at the time of review, no phone line yet. Anyone with European obligations should note that the GDPR appears nowhere on the site, that no data processing agreement or subprocessor list is published, and that the hosting country is never stated. Deduction is also young: it came out of stealth in November 2025 with USD 2.8 million in pre-seed funding. That argues for judging it on what it demonstrably does today, CPA-signed returns at a flat USD 499 a year, rather than on the roadmap.
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