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Tax accountants help individuals and companies prepare and file accurate tax returns that meet all legal standards. They also use their knowledge of tax law to help clients increase savings and avoid penalties.
Some tax accountants hold permanent in-house positions with businesses. Others work for payroll service providers or accounting firms. Government agencies, insurance companies, and financial services firms also hire tax accountants. Self-employment is another option.
Like most tax professionals, tax accountants are usually very busy during the Jan. 1-April 15 tax season. During the off season, they may provide tax management services to clients. These services include performing audits, offering advice on investment and asset management, and developing financial plans.
As of 2021, women in the accounting field earned 95% of what men in the field earned. This indicates a smaller gender pay gap than other professions.
Tax Accountant Duties
Tax accountants work with clients to produce tax return documents that follow laws and regulations. Before tax time, these professionals help clients create a plan to reach their desired financial goals. Throughout the filing process, they keep clients updated on their return information.
Tax accountants often work longer hours during tax time. Their responsibilities can include:
Tax accountants work with clients to produce tax return documents that follow laws and regulations.
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Key Hard Skills for Tax Accountants
Knowledge of Tax Law
Tax accounting experts rely on detailed knowledge of all tax laws and regulations that apply to their clients. They must stay up to date on local, state, and federal statutes.
Accounting Best Practices
Tax professionals must chart forward paths based on raw data. This process draws on established best accounting practices. Key skills cover such areas as account analysis, financial reporting, auditing, and income and payroll taxation.
Accountants increasingly rely on specialized software and cloud-based tech tools. Tax experts benefit from mastering both general and tax-specific accounting software.
Individuals and organizations depend on tax professionals for advice on how to reduce their tax burdens. As such, excelling at strategic asset management is a key skill for tax experts.
Key Soft Skills for Tax Accountants
Like all accounting personnel, tax experts work with large volumes of data. Tax professionals should feel comfortable dealing with numbers and their real-world implications.
Most tax accounting professionals get very busy during tax season. They must excel at time management to avoid becoming overwhelmed.
Collaboration and Teamwork
Tax accounting experts regularly interact with their clients to clarify financial details and provide advice. A collaborative outlook helps professionals manage the interpersonal side of their duties.
Attention to Detail
In tax accounting, tiny mistakes can lead to major liabilities. This profession has little to no room for error.
Tax Accountant Areas of Expertise
Tax accountants are already experts in a concentrated area of accounting practice. Some choose to pursue further specialization. Doing so can broaden an accountant's appeal to clients and employers and enhance their professional profile.
Examples of concentrated areas of tax accounting expertise include:
General accountants can advise their clients on tax-related matters. However, tax specialists use proven methods to help clients legally reduce their tax burdens. Tax advising requires strategic planning and complete knowledge of federal, state, and local tax laws.
Tax advisors must understand how to manage assets to improve taxation outcomes. They also need to understand how financial choices affect taxation. They should know how to explain tax issues in simple terms.
Some tax advisory experts earn optional professional certifications. The certified financial planner designation is a common example.
Common Job Titles
- Income tax accountant
- Income tax specialist
- Tax advisor
- Tax consultant
Some employers only hire tax accountants who hold accounting certifications. Examples include the certified public accountant, certified management accountant, and certified in financial forensics designations.
Many employers with more flexible policies still prefer to hire certified accounting professionals. Earning one or more of these certifications may expand your career options.
Common Job Titles
- Certified public accountant
- Certified management accountant
- Forensic accountant
Auditors operate in both external and internal capacities. External auditors usually work for accounting firms or government organizations. They examine financial records for evidence of tax evasion or other financial crimes.
Internal auditors usually work for businesses. They assess their employer's financial activities and look for possible performance improvements. Internal auditors also check company accounting procedures and ensure accurate financial reporting.
These experienced professionals usually hold senior roles on accounting teams. Auditors master the specialization through a combination of education and on-the-job training. Many hold formal credentials as certified internal auditors or certified fraud examiners.
Common Job Titles
- Tax auditor
- Internal auditor
An enrolled agent is a specially certified tax accounting expert. IRS regulations allow enrolled agents to carry out expanded duties for their clients. These agents can represent clients in dispute resolution negotiations. They can also argue cases before government tax authorities.
In short, enrolled agents hold more legal authority to advocate for their clients. They can assist clients or employers with most tax-related legal situations.
How to Become a Tax Accountant
Tax accountant careers begin with a specialized college education. Most taxation specialists major in accounting or a related field like economics or finance. Some choose to earn a degree in tax law or study tax law as a minor.
Earning a designation such as certified public accountant requires at least a bachelor's degree. Many tax accountants opt to complete a graduate degree as well. A master's degree can enhance your authority and appeal to employers while boosting your earning potential.
Tax Accountant Salary and Career Outlook
The U.S. Bureau of Labor Statistics (BLS) projects 96,000 new jobs for accountants and auditors during the 2020-2030 period. This increase keeps pace with the average growth rate projected for all U.S. jobs. The BLS also notes that the accounting field pays above-average salaries. As of 2020, median pay for accountants and auditors reached $73,560 per year.
The U.S. Bureau of Labor Statistics (BLS) projects 96,000 new jobs for accountants and auditors during the 2020-2030 period.
Factors like location, industry, and experience level can influence individual earnings. In general, accountants working in the private sector in metropolitan areas tend to earn the most.
Career Spotlight: Cody D. Belland, CPA, JD
Why did you become a tax accountant? What initially interested you about the field?
Growing up, I always had a passion for business, economics, law, and policy. I found a career as a tax accountant to be a great way to combine those passions while also doing rewarding and meaningful work.
What education did you need to pursue this career? How did it prepare you for your current role?
An accounting degree (whether it be an associate or bachelor's degree) is a great way to get started in a career as a tax accountant. If one wants to go the CPA route (as I did) you generally need 150 credit hours and so most CPAs have a bachelor's degree in accounting and also some sort of master's degree such as a master of accounting, master of business administration, or master of taxation since most undergraduate programs only require 120 credits to graduate.
I received a bachelor of business administration in accounting as part of my undergraduate studies, and also minored in economics and political science, all of which prepared me for my current role. Besides needing to know basic accounting and tax principles (which the accounting degree gave me), the classes I took in economics and political science have given me a good perspective on tax policy, which is something I interact with on a daily basis. My passion for tax law eventually led me to law school and most recently, a graduate tax law program (LLM in taxation), which goes to show that a career as a tax accountant provides for continuous learning and growth.
What was the job search like after graduating with your degrees?
The great thing about an accounting degree is there are plenty of career options and it opens the door to a variety of jobs in various industries. For example, you could go into public accounting (as I did), work for private companies, or even work for nonprofits or governmental agencies. When I was in college at the University of Massachusetts Amherst, there were constantly various employers on campus recruiting students. I accepted a job with the public accounting firm Wolf & Company, PC my senior year and have proudly been with the firm ever since!
What was the career path that led you to this position? What do you think helped you most on your journey to becoming a tax accountant?
Prior to becoming a tax accountant I had various jobs ranging from landscaping to retail to interning at a large financial institution. These experiences all helped me learn about some of the attributes I want in my career such as the ability to serve others, have independence, and be entrepreneurial. These experiences also taught me the value of hard work and I think that has certainly helped me in my journey to being a tax accountant.
"There is a common misconception that life as a tax accountant is boring and repetitive, and that couldn't be further from the truth."
What does a typical day at work look like for you?
There is a common misconception that life as a tax accountant is boring and repetitive, and that couldn't be further from the truth. My day-to-day often depends on the time of year and what my clients are involved with and so, for those reasons, there really is no "typical day." On any given day I could be filing tax returns for clients, assisting a business with tax planning, advising an entrepreneur on how to best structure a transaction, networking with other professionals (e.g., attorneys, financial advisors), sitting on internal committees/task forces, attending or giving trainings, or reading up on recent tax legislation.
What are some of the most rewarding aspects of working as a tax accountant? Some of the most challenging aspects?
I've always had a passion for entrepreneurship and so by far one of the most rewarding aspects of my job is providing valuable guidance to business owners and helping them to reach their goals and grow their businesses. There are some clients that I've been working with for several years now and there is something truly rewarding and humbling when they call asking for your opinion on various matters and truly value your insight.
One of the most challenging aspects can be the stress of having various deadlines and needing to constantly stay up to date with new legislation, regulations, and court rulings to see how tax law changes could impact clients. It can be especially challenging when it is unknown if certain legislation will pass because we often have to operate with uncertainty and still advise clients accordingly.
What do you think is the most important skill tax accountants need to succeed?
I don't know if there is one specific skill that tax accountants need, but I think tax accountants need to have time management, organization, communication, and people skills in order to be successful. While technical skills are obviously important, we are in the business of client service and so it's more important that we can communicate with clients effectively, serve them to the best of our abilities, and earn their trust.
What advice would you give to students considering your career?
My advice would be to talk to as many people in the career as possible and don't be afraid to put yourself out there and make yourself feel uncomfortable, as that is how you learn and grow. Additionally, I'd say that your career path doesn't have to be the same as someone else's and so follow your passions and you can build the career you want.
Cody Belland has been with the CPA firm Wolf & Company, PC for over six years. There, he has risen from the role of staff accountant to that of tax manager. He works with a variety of individuals and businesses providing tax compliance, planning, and consulting services, along with thought leadership in the industry. He serves as the chair of the Massachusetts Society of CPAs Tax Committee and is currently pursuing an LLM in taxation at Georgetown Law. He is originally from western Massachusetts and currently resides in Boston, Massachusetts.
FAQ's About Tax Accountants
What is a tax accountant?
Tax accountants are financial professionals who specialize in preparing tax documents and advising clients on taxation matters. They offer advice on how to manage assets and time financial transactions to reduce tax liabilities.
What is the difference between a tax accountant and a tax broker?
Tax brokers, also known as tax preparers, concentrate solely on preparing and filing tax returns and related documents. Tax accountants take a broader view and act as long-term strategic partners for their clients and employers.
What is the difference between a CPA and a tax accountant?
CPAs undergo rigorous training and generally hold more complete skill sets than non-certified tax professionals. CPAs can also represent clients during government audits, while non-certified tax specialists cannot. Many tax accountants hold CPA licensure or similar accounting credentials.
Are tax advisors accountants?
Some tax advisors are accountants while some are not. Instead of accountants, employers can also hire tax attorneys and financial planners. Tax advisors may hold educational backgrounds in a combination of accounting, law, and finance.
What are the qualifications to be a tax accountant?
Tax accountants usually hold at least a bachelor's degree in accounting, economics, or finance. Many also earn accounting certifications through a combination of education, work experience, and exam-based testing.
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