Learned Merchants: How DynaTax AI Picks Up Your Categories
You never write a categorization rule in DynaTax AI. You categorize a transaction once, and the category is remembered against that merchant — so the next charge from the same place fills itself in. This guide explains when a merchant starts filling in on its own, why some merchants deliberately never do, and how to correct one that got it wrong.
What Learned Merchants Are
Every time you confirm a category on a bank transaction, DynaTax AI records the pairing: this merchant, that category. The list of everything it has picked up lives under Learned merchants.
It is worth being precise about what this is not. It is not a rules engine you have to set up, and it is not the AI inventing categories on its own. It is a record of decisions you made, replayed on transactions you have not looked at yet. If the list is empty, that only means you have not categorized anything yet.
Suggested, Auto-Applied, Always Ask
Every merchant on the list sits in one of three states, and the three counters at the top of the page tell you how many are in each.
Suggested
DynaTax AI has seen you code this merchant, but not often enough to act on it alone. The category is pre-filled when the merchant comes up, and you confirm or change it. Every new merchant starts here.
Auto-applied
The category is filled in without asking. This is where a merchant lands once you have confirmed the same category enough times, or once you have set it explicitly.
Always ask
A merchant that will never auto-apply, no matter how many times you confirm it. See Why Amazon Always Asks below.
Why It Takes Three Confirmations
A merchant moves from Suggested to Auto-applied after you have coded it to the same category three times. Until then it only pre-fills.
Three is a deliberate compromise. One confirmation is not evidence — the first time you code a coffee shop to Meals, you might be coding a one-off client lunch, not establishing a pattern. Waiting longer than three, on the other hand, means doing manual work on a merchant that is obviously routine. Three charges to the same place, coded the same way, is a pattern worth acting on.
There is one shortcut: if you set a merchant to auto-apply explicitly from the Learned merchants page, it goes straight to auto-applied. You have made the call directly, so there is nothing to infer.
Why Amazon Always Asks
Some merchants sell everything. An Amazon charge might be printer paper, a monitor, a book, or something entirely personal — and the bank feed gives you the same merchant name for all of them. Learning “Amazon means Office Supplies” from three charges would quietly miscode the fourth.
So DynaTax AI keeps a list of these — retail giants like Amazon, Walmart, Target, Costco and Sam's Club, home improvement stores like Home Depot and Lowe's, and office and electronics chains like Best Buy, Staples and Office Depot — and marks them Always ask. Your past codings are still recorded and still used to suggest a category, but the category is never applied without you.
Correcting a Merchant
Three things you can do to any merchant on the list:
- Edit the category. Change what the merchant maps to. Future transactions use the new category.
- Stop it auto-applying. Keep the merchant and its category, but go back to being asked each time.
- Forget the merchant. Remove it entirely. DynaTax AI starts learning this merchant from scratch the next time you code it.
There is also a correction you do not have to make deliberately. If a merchant is auto-applying and you code one of its transactions to a different category, DynaTax AI takes that as a signal it had the merchant wrong: it withdraws auto-apply and drops the merchant back to Suggested, where it has to earn the three confirmations again. Nothing keeps applying a category you just rejected.
Where to Find It
- Business owners: Banking → Learned merchants.
- Tax professionals: open the client, then Bookkeeping → Learned merchants. It is the same screen your client sees, on their books.
Search the list by merchant or by category, and filter by state to see just the ones that auto-apply.
Frequently Asked Questions
Does an auto-applied merchant post the transaction to my books?
No. It fills in the category and nothing more. Nothing reaches your ledger without a separate, deliberate step.
Do my accountant's corrections teach the same list?
Yes. Learned merchants belong to the books, not to a person. Whether you or your firm codes the transaction, the same list learns from it — which is the point: two people working the same books should not train two different sets of categories.
I forgot a merchant by mistake. Did I lose my old categories?
No. Forgetting a merchant only clears what DynaTax AI learned going forward. Transactions you already categorized keep the categories you gave them.
Why is a merchant still asking after three transactions?
Usually because the three were not coded to the samecategory — the count tracks repeat agreement, not repeat visits. It can also be one of the “Always ask” merchants, which never promote by design.