Upload a W-2 and a 1099-B from the same employer. TaxScout instantly detects the RSU double-taxation trap: your client's stock sale shows $0 cost basis while $40K of RSU income is already in their W-2 wages. Without correction, the IRS taxes the same income twice. TaxScout calculates the correct basis, estimates the tax savings, and tells you exactly what to do — with Form 8949 codes and dollar amounts. Cross-form rules, traffic-light severity, zero manual cross-referencing.
Every tax season, CPAs manually cross-reference information across documents: Does the W-2 match the 1099-B cost basis? Is the client over the Medicare additional tax threshold when you combine both W-2s? Are the HSA contributions on the 5498-SA reflected on Form 8889? This is slow, error-prone, and invisible to the client. When a CPA misses that an RSU sell-to-cover was reported with $0 cost basis — even though the vesting income was already taxed on the W-2 — the client silently overpays thousands. Nobody notices. The IRS doesn't flag overpayments.
TaxScout's Rule Engine runs automatically after every document is processed. It loads all form data for a client — W-2s, 1099-Bs, 1099-DIVs, 1099-NECs, 1098s, 5498-SAs, and more — builds a complete tax profile, and evaluates every rule. Each rule checks a condition across documents, calculates the financial impact in dollars, and returns a flag with severity, description, recommendation, and affected documents. Results appear instantly — no manual triggers, no page refresh.
RED severity flags require CPA action. Each one includes a calculated dollar amount based on the client's actual data and marginal tax rate — not generic warnings.
W-2 RSU income already taxed, but 1099-B reports $0 cost basis — IRS taxes the same income twice
Stock option exercise income on W-2 not reflected in 1099-B cost basis — phantom capital gains
Noncovered securities on 1099-B with no basis reported — IRS assumes $0 basis
Combined Medicare wages exceed threshold — Form 8959 required
Investment income + MAGI over threshold — Form 8960 required for 3.8% NIIT
HSA contributions detected but required form not filed — penalty risk
1099-NEC income detected without Schedule SE
YELLOW and GREEN flags identify opportunities the CPA can act on — deduction method comparisons, contribution room, and filing status optimization.
Clients with state/property taxes exceeding prior limits may benefit from updated thresholds
$1,000–$7,200 in additional deductions
Compares estimated itemized deductions against standard deduction — identifies optimal method
Dollar difference calculated per client
Foreign tax paid on dividends/interest — credit saves more than deduction
Dollar-for-dollar credit vs. marginal-rate deduction
Current HSA contributions below annual limit — tax-advantaged savings available
Tax savings on additional contribution amount
401(k) or SEP-IRA contributions below limits — additional pre-tax savings available
Up to $69,000 in tax deferral (SEP-IRA)
Self-employment income detected — simplified deduction available
~$360 at 24% marginal rate
MFS filers reviewed for whether MFJ produces lower total tax
Often $1,000–$5,000+ difference
Most tax software treats equity compensation as a footnote. TaxScout treats it as a revenue opportunity. When an employee receives RSU shares, the vesting income appears on their W-2. When they sell, the broker often reports $0 cost basis on Form 1099-B. The IRS sees full proceeds as capital gain. The truth: the cost basis is the FMV at vesting — already taxed on the W-2. CPAs who catch this save clients thousands.
W-2 Box 14
RSU compensation amount detected: $40,397
1099-B Transaction
Proceeds: $14,057 — Reported basis: $0 (noncovered)
Cross-Reference
Engine matches RSU income to sell-to-cover transactions
Correct Basis
Calculated basis: $14,615 — Actual result: $558 LOSS (not $14,057 gain)
Tax Savings
$3,508/year at 24% marginal rate — Form 8949 Code B recommended
Supports: RSU vesting, NQSO exercise (W-2 Code V), ESPP purchase (Form 3922), and ISO exercise (Form 3921). Links equity events to specific 1099-B transactions with corrected basis and tax impact per lot.
Select any combination of prior years and run the full rule engine against each — using year-specific thresholds. Deadline tracking calculates amendment eligibility with urgency flags. Recovery calculator totals federal + state savings across all years.
RSU Double Taxation — $0 basis on 263 shares
Requires spouse signature (MFJ)
$2,880 recovery
RSU Double Taxation — $0 basis on 574 shares
Requires spouse signature (MFJ)
$3,550 recovery
One-click AI review that uses everything the rule engine found as a starting point, then asks AI to find what the rules missed. Catches edge cases like AMT triggers from ISO exercises, wash sale interactions with RSU sales, FEIE impact on other deductions, passive activity loss limitations, QBI deduction phaseouts, and complex filing status optimization.
~5 seconds
Fast validation of rule engine findings — confirms or escalates flagged issues.
~30 seconds
Comprehensive analysis: all form data, all anomaly flags, filing status, income totals, and document inventory. Returns structured findings with severity, financial impact, and reasoning.
Tax Intelligence surfaces naturally inside the tools you already use — no separate module to learn.
Badge counts next to each name — severity indicators with total potential savings. Spot high-value clients at a glance.
Tax Intelligence panel with severity-sorted anomaly cards. Each card shows title, dollar impact, and one-line description. Expand for full evidence, affected documents, and actions.
Year-specific tax thresholds (45+ values per year), year-over-year comparison with color-coded deltas, and inline editing.
| TaxScout | TaxDome | Canopy | Karbon | Drake / UltraTax | |
|---|---|---|---|---|---|
| Cross-form rule engine | Auto-run after every doc | None | None | None | None |
| Equity comp detection | RSU, NQSO, ESPP, ISO | None | None | None | None |
| Financial impact per flag | Dollar amounts calculated | N/A | N/A | N/A | N/A |
| Prior-year audit | Multi-year with year-specific thresholds | None | None | None | None |
| AI deep review | Edge case detection | None | None | None | None |
| Auto-resolve on correction | Yes | N/A | N/A | N/A | N/A |
| Data quality detection | Extraction integrity rules | None | None | None | None |
| Price | Included (all plans) | N/A | N/A | N/A | N/A |
Practice management platforms (TaxDome, Canopy, Karbon) don't read documents — they store and organize them. Tax preparation software (Drake, UltraTax) calculates taxes but doesn't compare documents against each other. Cross-form intelligence is a category TaxScout created.
W-2s, 1099-Bs, 1099-DIVs, 1098s, and any other tax documents are uploaded and processed by AI extraction — the same flow you already use.
Cross-form rules fire automatically after every document. All form data is loaded, a complete tax profile is built, and every rule is evaluated — in seconds. Zero configuration needed.
Anomaly cards appear with traffic-light severity (RED for errors, YELLOW for optimizations, GREEN for confirmations), dollar amounts, evidence, and affected documents. Expand any card for full detail.
One click to resolve a flag, dismiss it with notes, or run an AI deep review for edge cases. Dismissed flags never reappear. Resolved flags update the audit trail.
TaxDome, Canopy, and Karbon store and organize documents — they don't read them, let alone compare them. Drake and UltraTax calculate taxes but don't compare documents against each other or detect cross-form errors. TaxScout created this category: cross-form intelligence that finds errors and savings no other platform catches. Included in every plan.
Extraction validation checks each document individually (field formats, OCR accuracy, math consistency). Tax Intelligence checks documents AGAINST each other — comparing W-2 data to 1099-B transactions, checking totals against IRS thresholds, and finding optimization opportunities across the full picture. They're complementary.
Book a 15-minute walkthrough and see how it fits your firm.