Tax Accountant Salary Guide

According to a 2022 Bloomberg Tax article, accountants have earned consistent salary increases in the past several years. Educational institutions have also noted rising demand for specialized accountants. Together, these factors create favorable labor market conditions for aspiring tax attorneys.

Tax accountants benefit from ongoing demand in the public and private sectors. Government agencies employ these professionals to collect revenues, manage public finances, and investigate fraud. Private organizations and individuals also hire them to apply their deep knowledge of tax regulations to find savings opportunities.

This guide explores the influences shaping current tax accounting salary trends. Considering factors such as education, experience, location, and employment industry can help aspiring tax accountants understand their earning power.

How Much Does a Tax Accountant Make?

The U.S. Bureau of Labor Statistics (BLS) tracks nationwide trends in employment growth and average salaries. As the BLS notes, many factors can affect an accounting professional's earning power, including specializations, location of employment, and industry.

BLS data notes a slight pay premium for accountants working in the private sector. However, the agency includes tax accountants in its broader category for accountants and auditors.

Payscale aggregates salary data specifically for tax accountants:

Notably, this data specifically refers to base salaries. The site indicates that bonuses, commissions, and profit-sharing agreements can add up to $18,000 per year to a tax accountant's earnings.

Average Salary of Tax Accountants by Education

In many professions, advanced education correlates with increased pay. BLS figures indicate that individuals with master's degrees earn 18% higher salaries than bachelor's-level professionals. Workers with professional degrees fared even better financially, out-earning those with bachelor's degrees by more than 44%.

These gaps are narrower in accounting. A candidate only requires a bachelor's degree to qualify for professional licensure as a certified public accountant (CPA). Many working professionals elect to enter the workforce with bachelor's degrees and develop their skills on the job rather than invest in advanced education.

Even so, tax accountants with advanced and professional degrees enjoy increased earning power. The following table offers details:

Salary by Experience

As with many other professional occupations, tax accountants tend to increase their earning potential with experience as they acquire more advanced knowledge. The role depends heavily on knowing how and when to apply targeted strategies to benefit clients and employers.

In addition to the base salaries listed below, high-performing professionals may also qualify for bonuses and other valuable benefits.

Salary by Location

Along with experience, location ranks among the most significant factors affecting tax accountant salaries. Demand, population density, and cost of living are key location-based elements that influence salaries for tax accountants. In general, the average salary for tax accountants rises with increased demand and higher local cost of living figures.

Higher levels of population density also correlate with higher earnings. Professionals working in major metropolitan areas and other high-density urban locales tend to earn more. In contrast, tax accountant salaries tend to decline in more rural areas due to reduced demand.

The BLS includes tax accountants within its general category for accountants and auditors. The following tables present generalized data for this entire sector of finance professionals. Professionals working in tax accounting will likely earn salaries in the ballpark of these overall ranges.

Where Should I Work as a Tax Accountant?

The BLS expects demand for generalist accountants and auditors to keep pace with overall growth rates for all professions from 2020-2030. While the BLS does not publish forecasts for the tax accounting specialization, other authoritative sources offer some useful insights.

For instance, the University of Scranton predicts that specialized accounting professionals will benefit from rising demand in the years ahead. The institution bases its estimates on several broad trends impacting the employment landscape for accountants, including:

• Changing lending policies among financial institutions
• Potential rises in government auditing activity
• Increasing precision and complexity of tax law

Note that the data below applies to all accountants and auditors.

Best Areas

Aspiring professionals may make the mistake of focusing solely on, "How much do tax accountants make?" Career planning should also take stock of locations with plenty of job opportunities.

Consider the states, cities, and industries that employ the most tax accountants. As the agencies responsible for collecting taxes, governments tend to hire tax accountants in significant numbers. This equates to opportunities in and around state capitals and the Washington, D.C., metro area.

Corporations also hire tax accountants for full-time employment and as contractors. In addition, wealthy individuals often consult them on ways to navigate tax codes to protect their assets and reduce their tax burdens.

Major metropolitan centers tend to have a stronger corporate presence than smaller urban and rural areas. The Big Four accounting firms — Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers — also hire tax accountants and other accounting specialists at relatively high rates. All four firms maintain multiple offices throughout the United States.

The following tables reflect data from the BLS and Projections Central. Both organizations include tax accountants in their broader categories for accountants and auditors. Given the lack of differentiated tax accounting statistics, the tables present generalized information for all accountants and auditors.

Best Industries

Federal, state, and local governments rank among the leading employers of tax accountants, given their role in revenue collection. Professional services firms, including the Big Four accounting firms, also employ tax accountants in significant numbers. These businesses focus on providing specialized expertise to their clients.

Several other sectors merit mention as leading and top-paying employers of accountants, including enterprise management, investment firms, asset management firms, and the technology and energy industries. Do you find yourself asking, "How much does a tax accountant make?" These sectors offer a glimpse at the upper end of their earning power.

The BLS includes tax accountants in its general category for accountants and auditors. Data in the table reflects BLS industry-specific figures for all accountants and auditors. Taxation accounting specialists may earn more or less, depending on the industry and other factors.

Questions About Salary for Tax Accountants

What are the highest-paying tax accountant jobs?

According to Payscale data from June 2022, base tax accountant salaries peak at about $68,590 per year in the "late career" phase. Among private-sector industries, BLS data from 2021 identified oil and gas, technology, information services, and securities/investing as the top-paying options for accountants.

Where is the best state to work as a tax accountant?

In May 2021, the BLS named the District of Columbia, New York, New Jersey, California, and Massachusetts as the jurisdictions with the highest accountant salaries, on average. Projections Central expects California, Texas, New York, Florida, and Pennsylvania to lead all states in the number of accountant job openings from 2018-2028.

What is the best industry to work in as a tax accountant?

As of May 2021, BLS data shows that the accounting services, business management, local and state government, and real estate industries employ the most accountants. Other industries that employ many accountants include energy (oil and gas), asset management, wealth management, and financial services.

How much do accountants for the IRS make?

The IRS' Salary & Financial page explains the agency's policy of offering its employees competitive salaries and location-based pay premiums. Thus, actual pay rates depend on location but generally align with average salaries in the sector.