A career in tax accounting can be incredibly lucrative. According to PayScale, tax managers earn an average income of $97,000, with more experienced tax managers earning over $100,000 per year. Tax managers report taxes, ensure compliance with various regulations, and oversee accounting staff in their organizations.
If you're wondering what are the job responsibilities of a tax manager, the answer is simple: Tax managers are accountants who specialize in taxes. The type of taxes and regulations tax managers are in charge of depends on the industry, though federal, state, and local tax laws must be considered. In short, tax managers are experts in their field.
What Skills Do You Need to Become a Tax Manager?
To become a successful tax manager, individuals must demonstrate critical thinking, strong mathematical skills, and leadership. The position blends management with tax expertise, so it usually requires professionals to have plenty of industry experience.
Due to the nature of the position, tax managers need a comprehensive understanding of tax compliance and federal, state, and local tax laws. These professionals must also know regulations for their specific industries.
Most tax managers begin their careers as accountants and gain work experience auditing and filing tax reports.
In addition, tax managers must have expert accounting skills. Most tax managers begin their careers as accountants and gain work experience auditing and filing tax reports. This experience allows tax managers to understand the complexities of tax preparation and make a final review of tax returns. They also leverage this experience to determine any tax implications for company IPOs or mergers.
All tax managers must understand Microsoft suite programs, particularly Microsoft Excel. Tax accounting information lives on spreadsheets, and tax managers spend large portions of their days filling out, analyzing, and editing spreadsheets.
How Long Does It Take to Become a Tax Manager?
Becoming a tax manager can take several years. According to PayScale data, the majority of tax managers (78.8%) are either mid-career or have more experience than mid-career employees. Just 0.3% of tax managers are entry-level accountants. Prospective tax managers should plan to spend several years working their way up in the field.
The first step in this journey is earning a bachelor's degree. Most tax managers have bachelor's degrees in a business field, such as finance, accounting, economics, or business administration. While the focus of the bachelor's degree isn't too important, students must complete a bachelor's degree to reach the minimum requirements for a tax manager position. Most students can finish their bachelor's degrees in four years; this may be less if students choose an accelerated online program.
Master's degrees take 1-3 years to complete, depending on the school, the program, and whether students continue to work while earning their degrees.
A master's degree is also required for tax accounting positions, in part because some certifications require a master's degree. The focus of the master's degree is more important than that of the bachelor's, so students should choose an accounting or business administration program. Some schools may offer master's degrees in taxes or tax management, both of which are ideal for the position. Master's degrees take 1-3 years to complete, depending on the school, the program, and whether students continue to work while earning their degrees.
Learners should also consider an internship during their master's or bachelor's program. Internships give valuable experience, and finding an internship in an accounting firm or finance department may help you advance through your career faster. Some internships are available for school credit, so seek out those opportunities while completing your degree. Internships typically take 3-6 months and can be completed while in school, adding no extra time to your education.
Next, graduates should earn their certified public accountant (CPA) certifications. This distinction proves accounting acumen, and it may be required to find a position as an accountant. Tax managers typically have 5-10 years of professional accounting experience, which begins after you're certified in the field. In total, individuals should expect to take a minimum of ten years to become tax managers: four years for their bachelor's, one for a master's, then at least five years of work experience.
What Education Do You Need to Become a Tax Manager?
While experience is more important than education, tax managers must have at least a master's degree, and some may even have a doctorate. However, a master's degree is the minimum. Note that no amount of education guarantees a position as a tax manager.
While a bachelor's and master's degree are the minimum educational requirements for this career, work experience is just as important.
Students should begin by pursuing a bachelor's degree through a business school. Almost any business-related degree works, but pick a major that qualifies you to earn a master's in accounting or business administration. For instance, some graduate schools may only select students with bachelor's degrees in business administration, finance, economics, or accounting.
A master's degree is also an important prerequisite for many certifications. While professionals can earn numerous certifications and credentials in the field, the CPA is the most important. Tax managers often begin their careers as accountants, and earning a CPA qualification is essential.
While a bachelor's and master's degree are the minimum educational requirements for this career, work experience is just as important. There are no formal training prerequisites to become tax managers, but they must have extensive experience with taxes, regulations, leadership, and reporting.
Tax Manager Career Development and Credentials
Tax managers come from various backgrounds, and different organizations may prefer candidates with backgrounds in a specific field. However, there are ways to make yourself stand out when applying for positions.
Certifications and Continuing Education
The most important certification for a tax manager is the CPA. This certification requires continuing professional education (CPE), and the required number of CPE credits can vary from state to state. However, CPAs must complete a minimum of 120 CPE credits over three years.
Future tax managers may also want to become chartered financial analysts (CFA). CFAs are experts in the codes and standards of their field and demonstrate leadership -- two critical skills for tax managers. Like CPAs, CFAs must complete continuing education. A minimum of 20 credits must be earned annually, two of which should be in the topics of standards, ethics, and regulations (SER).
Becoming a certified treasury professional (CTP) is also useful. This certification demonstrates expertise in finance and leadership and is recognized across the globe. A total of 36 credits must be earned over three years to maintain this certification.
Credentials and Licensing
Generally speaking, tax managers aren't required to have any licenses. Of course, some businesses or organizations may require tax managers to earn a specific license. If that's the case, the license can typically be earned after getting the job.
Credentials for tax manager positions are entirely experience-based. Experience with accounting and leadership are critical, and tax managers could bolster their resumes by earning leadership credentials. However, these are not required.
Learn More about Tax Manager Careers and Take the Next Step Today
Not only does the CFA Institute offer CFA certification, but members also enjoy career resources, industry research and data, and access to events. Members may also join local CFA societies for networking.
National Association of Tax Professionals
Along with serving tax professionals at the national level, NATP members are connected with state tax professionals. Members can discuss changes in the tax code, learn about other states' taxes, and network to find opportunities.
Financial Management Association
FMA promotes academic financial understanding in the business world. Members learn new financial management practices as they're created.
American Institute of CPAs
AICPA is the organization that offers CPA certification, but members also receive access to a job board, professional guidance, a network of accounting professionals, and discounts on products commonly used by accounting and tax professionals.
Association for Financial Professionals
Members of AFP join 16,000 other finance and treasury members, all of whom receive professional guidance and industry insights. This resource can help finance professionals make the step to tax manager.