Drake Software is expanding its AI capabilities for the 2026 tax preparation season, introducing document extraction, redesigned client intake tools and an in-workflow AI Assistant across its professional tax software portfolio. The new capabilities, grouped under Drake Intelligence, are designed to reduce manual data entry, organise client tax documents and provide contextual guidance inside Drake Tax and Drake Tax Online. The move reflects a broader shift in financial technology toward embedding AI directly into accounting and tax workflows, while retaining professional oversight of financial information, tax calculations and filing decisions.

Drake Software Expands AI Automation Across Tax Preparation

Professional tax preparation is entering another phase of automation as software providers move beyond basic document management and introduce AI into the core preparation process. Drake Software’s latest release reflects that transition, bringing document extraction, intelligent client intake and conversational assistance into workflows used by tax professionals.

The company says its software is used by more than 70,000 tax professionals. Its latest AI capabilities are being developed with customer input and integrated into the existing Drake product ecosystem rather than offered as a separate AI application.

The announcement is particularly relevant to accounting technology providers and tax preparation firms facing seasonal workloads, large volumes of client documentation and increasing pressure to improve turnaround times without compromising accuracy.

Drake SmartExtract targets repetitive tax data entry

The central addition is Drake SmartExtract, an AI-powered document extraction feature available in beta for Drake Tax and Drake Tax Online.

The technology extracts information from supported tax documents and maps the data to corresponding fields in a tax return. Instead of manually entering information from each document, preparers can review the extracted values, make adjustments and add approved information to the return.

The initial supported document categories cover several commonly used tax forms, including W-2, 1098, 1099 series documents, consolidated 1099 statements and Schedule K-1 for Form 1065.

This coverage addresses a recurring challenge in professional tax preparation: collecting financial information from multiple documents and translating it into structured return data.

Drake SmartExtract will be available for purchase in December, according to the announcement. The stated pricing is $5 per return, with package pricing starting at $1.50 per return for customers purchasing at least 100 returns. The company says pricing is subject to change.

For Tax Year 2026, Drake plans to expand document support to additional forms covering health insurance, education expenses, government payments, retirement accounts, capital transactions and other financial activities. Planned additions also include more Schedule K-1 information for Forms 1065, 1041 and 1120-S.

The expansion could make the tool more useful to practices handling complex individual and business tax returns. However, the announced document coverage should not be confused with current beta availability. The additional forms and deeper workflow integrations remain planned enhancements.

Drake Portals redesigns the client intake process

The second development is a redesigned Drake Portals experience, which addresses the document collection and organisation stage of tax preparation.

Client intake can create substantial administrative work for accounting firms. Tax professionals must request relevant records, track submissions, identify missing documents and organise files before preparation can begin.

The redesigned portal introduces AI-powered document ingestion that recognises and categorises supported tax documents, connecting them to relevant checklist items.

Drake is also introducing Guided Organizer, a feature that allows firms to create customised client questionnaires and document checklists. Preparers can use information from previous-year tax returns to tailor the questions and requests presented to clients.

The objective is to make document collection more structured before information reaches the tax preparation workflow.

Combined with SmartExtract, the process creates a connected sequence: clients upload documents through the portal, AI helps organise those documents, and supported financial information can then be extracted into the return for professional review.

For firms managing hundreds or thousands of seasonal client engagements, reducing document sorting and follow-up work could have operational value. The actual productivity gains will depend on document quality, supported formats, extraction accuracy and how effectively firms configure their intake processes.

AI Assistant brings contextual guidance into tax software

Drake’s third addition is an AI Assistant integrated directly into Drake Tax and Drake Tax Online.

Unlike a general-purpose chatbot, the Assistant is designed to operate within the tax preparation environment. Preparers can ask questions using natural-language chat and receive guidance based on the screen they are viewing and information available in the return.

Its stated capabilities include explaining tax forms and alerts, clarifying how amounts were calculated, answering tax-related questions and suggesting possible next steps.

A side-by-side interface keeps the Assistant visible alongside the return, allowing preparers to consult guidance without constantly switching between applications.

This reflects a broader enterprise software trend: contextual AI assistants are increasingly being embedded into existing business applications to reduce workflow interruptions. Salesforce, Microsoft and other enterprise technology providers are pursuing similar approaches across their software ecosystems.

For tax professionals, however, contextual assistance must be treated differently from automated decision-making. Incorrect interpretations of financial information or tax rules can affect filing accuracy and create compliance risks.

Drake explicitly advises preparers to verify AI-assisted information against original documents and apply professional judgment before using it.

Human oversight remains essential in AI-powered tax preparation

The announcement highlights an important distinction between automating administrative tasks and automating professional tax decisions.

Document extraction can reduce repetitive entry, while AI-assisted intake can improve organisation and conversational assistance can make information easier to access. None of these capabilities removes the preparer’s responsibility to verify information, interpret applicable tax requirements and approve the final return.

Drake’s approach keeps review and filing decisions with the tax professional. That model is particularly important in a regulated financial environment where data accuracy, privacy, security and accountability are central requirements.

The expansion also positions Drake Intelligence as a broader AI layer across the company’s tax preparation ecosystem. Its planned integration with Drake Workflow could further connect document collection, preparation queues and review processes.

For the professional tax software market, the competitive question is increasingly how effectively providers can combine AI automation with reliable tax-specific workflows. Drake’s strategy is to introduce those capabilities within software its existing customers already use.

The broader opportunity extends beyond faster data entry. If the planned integrations deliver as intended, tax practices could spend less time managing documents and more time on client communication, complex tax situations and advisory services.

The effectiveness of that transition will ultimately depend on extraction accuracy, the quality of AI-generated guidance and the ability of firms to maintain appropriate human review. Drake’s latest release represents another step toward AI-assisted tax preparation, but professional expertise remains central to the process.

Market Landscape

The professional tax software market is moving toward AI-assisted tax preparation, where automation extends across the complete client lifecycle rather than remaining limited to calculations or data entry.

Several trends are shaping this market:

• Intelligent document processing: AI-powered extraction is reducing manual entry of information from tax forms, financial statements and supporting documents.
• Automated client onboarding: Digital portals and guided questionnaires are helping accounting firms collect and organise client information before preparation begins.
• Contextual AI assistants: Tax software providers are integrating conversational AI into existing workflows to provide guidance without requiring users to switch applications.
• Connected accounting infrastructure: Integrations between tax preparation, document management and workflow platforms are becoming increasingly important for managing seasonal workloads.
• Human-supervised financial AI: Accuracy, privacy, auditability and professional accountability remain essential as AI takes on more tax-related tasks.

Drake Software competes in a market that includes Intuit ProSeries, Lacerte, Thomson Reuters UltraTax CS and Wolters Kluwer CCH Axcess Tax.

Its latest strategy focuses on bringing document intelligence, client intake automation and contextual assistance together within an established professional tax preparation ecosystem.

Top Insights

• Drake SmartExtract uses AI to extract information from supported tax documents and populate corresponding fields in professional tax returns.
• The redesigned Drake Portals introduces AI-powered document categorisation and Guided Organizer for more structured client onboarding.
• Drake’s AI Assistant provides contextual tax guidance directly inside Drake Tax and Drake Tax Online.
• SmartExtract pricing starts at $5 per return, with volume pricing as low as $1.50 for purchases of 100 or more returns.
• Drake retains professional oversight, requiring preparers to verify AI-assisted information before using it in tax returns.

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