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A tax consultant advises and guides clients on tax-related matters. They work with individuals and organizations to ensure they comply with tax laws and help minimize potential tax liability.
Tax consultants typically have a deep understanding of tax law and accounting principles. This role might be a good fit for detail-oriented, analytical individuals who enjoy working with numbers.
Many businesses engage tax consultants to assist with taxes. Organizations that employ tax consultants include accounting firms, law firms, banks, and real estate organizations. These specialists can also maintain self-employment.
As of September 2022, Glassdoor reports that tax consultants earn an average salary of $66,695 per year, with additional income of $4,771 per year coming from cash bonuses, commissions, and other special payments.
Read on to discover more about tax consulting and what distinguishes the role from other accounting positions, including job functions, employment outlook, and earning potential.
Tax Consultant Duties
A tax consultant provides tax advice and support to individuals, businesses, and organizations on various tax issues. Their work typically involves preparing and submitting tax returns, researching tax laws, advising on tax planning, and representing clients in disputes with the tax authorities.
A tax consultant's role may grow and shift as they mature in the position and become more involved in tax planning and management. They could also specialize in tax research to advise team members and other stakeholders.
They primarily ensure that clients pay the correct amount of taxes. For instance, a typical day in the life of a tax advisor might involve researching a notice of tax liability and recommending a strategy while filing a pending tax return and meeting with the IRS to handle any disputes.
Common duties include:
- Preparing and Filing Tax Returns: Tax advisors collect information from clients, such as income and expenses, to calculate taxes owed. Once computed, the tax consultant files a return with the appropriate regulatory body.
- Researching Tax Laws: To ensure clients comply with the latest regulations, tax consultants may read tax law journals, attend seminars, and network with other tax professionals. Research skills benefit organizations by ensuring that clients follow the law and pay the correct amount of taxes.
- Representing Clients in Audits: Tax consultants represent clients during audits to ensure the tax return is accurate to minimize tax payments. By guiding the process, they can reduce the time and money invested by the organization, along with the overall tax liability.
- Providing Tax Advice: These accounting specialists advise clients on how to minimize tax liability. This guidance may cover available deductions or types of income to report.
- Assisting Clients with Tax Planning: A tax consultant may develop and recommend strategies to reduce taxable income, take advantage of tax breaks, or defer taxes to a later date.
Read about other tax professions:
Key Hard Skills for Tax Consultants
Taxation: This skill references a tax consultant's ability to interpret tax law and advise clients on the best way to manage tax liability. Successful tax advisors recommend approaches to pay taxes and ensure legal compliance.
Financial Analysis: Analyzing financial statements and tax returns is another key hard skill for the tax consulting/tax advisor profession. Proficiency allows accounting professionals to identify areas where clients can reduce tax payments and recommend improvements.
Tax Planning: Tax consultants forecast tax payments and develop customized tax plans for clients based on their specific goals and needs. This skill supports the organization's bottom line by providing services that reduce tax obligations.
Research: The ability to research tax law and regulations is another key hard skill that tax consultants must have. This ability allows the profession to remain current on changes in tax law and identify opportunities to minimize tax liability.
Key Soft Skills for Tax Consultants
Analysis: Tax consultants break down complex problems into more manageable parts. Understanding and analyzing tax law is critical to providing accurate advice to clients.
Communication: These professionals communicate with clients, coworkers, and leadership in writing and through speech. Clear communication is necessary because tax consulting often requires advisors to explain complicated concepts to clients, team members, and non-technical audiences.
Organization: Tax advisors launch and track multiple projects to meet deadlines and deliver quality results. Organization is key, as tax consulting often involves simultaneously working on multiple projects for different clients with varied deliverables and due dates.
Attention to Detail: These consultants must notice minor details and discrepancies — even a slight mistake in tax law can have major consequences for a client.
Tax Consulting Areas of Expertise
Tax consultants can concentrate their work to handle specific tax laws and regulations. By specializing in a particular field, these professionals can become experts in the tax laws and regulations that apply to that sector.
A tax analyst researches tax laws and regulations, prepares tax returns and financial statements, and provides clients with tax planning and consulting services. They must have strong analytical and research skills, as well as a thorough understanding of tax laws and regulations.
Tax analysts typically work in public accounting firms, corporate tax departments, and government agencies. Entry-level positions may involve preparing tax returns and financial statements, while senior positions may provide tax planning and consulting services. A tax analyst typically reports to the head of the tax department.
Common Job Titles
SEC Reporting Consultant
The Securities and Exchange Commission (SEC) reporting consultants can use backgrounds in accounting and finance to help clients comply with reporting requirements. They interpret SEC rules and regulations to communicate with clients and team members.
These niche accounting professionals typically work in accounting firms, law offices, or corporate finance departments as employees or independent consultants. Responsibilities include filing SEC reports, reviewing SEC filings for accuracy and compliance, and advising on disclosure requirements and best practices.
An entry-level position for this career path may be a staff consultant, while a tenured consultant could advance to a managing consultant role.
Tax Analysts and SEC Reporting Consultants
Tax analysts and SEC reporting consultants analyze and prepare tax documents. Each advises clients on tax law changes and potential business outcomes, but SEC reporting consultants also report disclosure requirements.
Common Job Titles
SEC Reporting Analyst Compliance Officer Manager, SEC Reporting and Accounting SEC Reporting Manager Investment Analysis
How to Become a Tax Advisor
Becoming a tax consultant typically requires an undergraduate or graduate degree in accounting, finance, or tax. Many tax consultants also complete professional designations, like the certified public accountant (CPA) or accredited tax advisor (ATA) designation. It can take several years to qualify as a tax consultant by passing certification exams, gaining experience, and completing continuing education requirements.
Tax consultants may start their careers working as tax preparers. Strong analytical and problem-solving skills can help professionals grow as tax consultants. Successful tax consultants understand complex financial information and are detail-oriented. Strong communication and interpersonal skills also deliver success in this field.
Tax Consultant Salary and Career Outlook
The Bureau of Labor Statistics (BLS) projects tax accountant employment to grow by a promising 6% from 2021-2031, as fast as the average for all occupations. As of 2021, the agency reports a median salary for accountants of $77,250.
Specialization in a particular area of tax law or accounting can lead to higher earnings. Tax consultants who work in metropolitan areas may earn more than those who work in other locations. Industry experience can also lead to higher earnings. Tax consultants with master's degrees in taxation or accounting may earn more than other tax professionals.
Career Spotlight: Daniel Sleep, CPA, CTC
Along with accountants of many specialties, we often speak with professionals who focus on taxes. Can you break down the differences between a tax consultant, a tax accountant, and a tax attorney?
All three can partially overshadow each other in some aspects of their jobs. For example, a tax attorney may offer tax advice in addition to being able to represent you in court. Whereas a tax consultant may only focus on tax advice, my firm also does tax compliance like the majority of firms do too. Tax accountants tend to be more compliance-driven in their job functions.
For example, when I was at Deloitte, many of the tax accountants acted as an extension of our audit team but focused on the client's areas of the audit that had to do with tax. You'll find that large corporations will have tax departments in charge of different areas of tax compliance for the company.
What are some job titles that are synonymous with tax consultant?
Some other titles commonly used include tax advisor, tax planner, and business tax strategist.
“Tax regulations are always changing, so keeping up to date with new tax law proposals and changes is vital to being the best tax consultant you can be to your clients.”
What kinds of education, certification, and experience did you need to gain tax expertise (beyond accounting)? Is continuing education needed?
Traditionally, I would say get your bachelor's degree in accounting and a master's degree in taxation if possible. Getting your CPA license will test a lot of your tax knowledge as well as other aspects of accounting. Personally, I didn't go to a university that had a focus on taxation. I was pushed to do auditing only to find out I greatly disliked it.
As a result, I had to develop an education outside what I had gained at the university. Getting my certified tax coach (CTC) license taught me how to find opportunities to implement tax-saving strategies. Tax regulations are always changing, so keeping up to date with new tax law proposals and changes is vital to being the best tax consultant you can be to your clients.
Which might be some common events that would prompt a client to contact you outside of tax season?
Clients reached out to see how they could do things better tax-wise. Business owners who start their venture usually don't have extensive knowledge on how they should position their business or what tax-saving strategies can be implemented that also have a viable business purpose outside of tax savings.
Many of these things can be looked up on the internet, but much like getting a medical diagnosis, you eventually need to speak to a qualified person and make sure the solutions you think will work won't actually hurt you. Good tax strategies can actually lose you money if done at the wrong time.
Can you talk about a few of the more unusual tax issues you've come across?
We had a client take over a million-dollar business for $10. I am still not entirely sure what the relationship was between the old owner and the new one, but that's pretty minimal consideration for transferring business ownership.
You'd be surprised how many businesses neglect filing their taxes. It's a headache, but we do love getting clients back on track and finding solutions to their tax problems. A lot of them do not know what to expect, and as a tax consultant, you can walk them through a process that will get them back on the IRS's good side again.
What do you think is the most important skill required for a tax consultant to succeed?
Tax consultants and planners need to have enough understanding of tax strategies and be able to communicate that clearly to a potential client. There is a lot of value in tax planning. If you can confidently demonstrate that value, you will excel as a tax consultant and, if it is your hope, as a partner or owner of your own firm.
What advice would you give to students considering becoming a tax consultant?
Take classes that will discuss tax cases both in court or out of court cases. It's not just about what is illegal, but what solutions you can recognize that would work great for a client. The universities like to focus on large corporations, but most of the tax strategies out there are applicable and very valuable to the backbone of the economy (small businesses).
Daniel Sleep, CPA, CTC
Daniel Sleep is a certified public accountant (Arizona), chartered retirement planning counselor, and certified tax coach. He received his degree in accounting from the University of Nevada, Las Vegas, has worked as an auditor for Deloitte & Touche LLP, and taken managerial accounting roles in many small businesses.
Daniel started an accounting firm that specializes in accounting/tax services for small business owners as a way to better serve and guide the small business community. You can learn more about Daniel's former job on our accounting assistant career page.
Questions About Tax and Accounting Consultant Jobs
What is the role of a tax consultant?
A tax consultant researches tax issues, recommends strategies to minimize and address tax liability, prepares and files tax returns, and meets with the IRS to represent clients during audits. To advise clients on tax-planning strategies, tax advisors must remain informed on tax law changes.
What specializations can tax consultants have?
Common tax specialties include corporate, partnership, international, employee benefits, and other niche areas of taxation. With a specialty, tax advisors can strategically align tax planning, preparation, and advocacy recommendations with the client's goals and interests.
Where does a tax consultant work?
Tax consultants may work as employees or independent consultants for accounting firms, law firms, and other clients.
What is the difference between an accountant and a tax consultant?
A tax consultant is a specialist in tax law who helps businesses and individuals minimize tax liability. An accountant performs more broad responsibilities as a financial professional who tracks, records, and analyzes a company's or individual's financial transactions.
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