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Organizations have complex tax requirements, which require regular monitoring and management. Tax managers oversee these responsibilities, helping organizations understand tax laws, calculate and pay federal and state taxes, and ensure compliance to avoid penalties and audits.
Tax managers need a combination of experience and education. These professionals can come from various fields, including accounting and finance positions. They typically possess strong leadership skills and a solid understanding of tax regulations and expectations.
In this guide, we cover the tax manager profession and requirements professionals need to meet to enter the field and succeed.
Steps to a Tax Manager Career
Earn a business-related bachelor's degree
Tax managers typically possess bachelor's degrees in accounting or finance. These four-year programs cover business and accounting foundations, offering a pathway toward more advanced degrees.
Complete an internship
Most bachelor's programs feature internships in their third or fourth years. These placements provide practical training, mentorship, and networking opportunities. Internships also give students a feel for the field and their specialization.
Acquire an entry-level accounting job
Professionals can develop fundamental accounting skills and best practices in entry-level accounting jobs. On-the-job learning also covers tax guidelines and the processes for filing organizational tax returns.
Pursue a master's degree
Individuals can pursue master's degrees directly after their bachelor's programs or while employed in entry-level jobs. Many master's programs offer specialized tax accounting studies, which prepare graduates for complex tax accounting practices and leadership positions.
Obtain certified public accountant certification
The certified public accounting certification (CPA) demonstrates strong experience and education levels. The prestigious credential allows accountants to represent their clients during audits and appeals, a valuable asset for tax managers.
Get additional and optional certifications
Employers may require or prefer tax managers with additional credentials, such as the certified management accountant (CMA) and the chartered financial analyst (CFA). These certifications may also lead to higher earning potential.
Required Education for a Tax Manager
The educational requirements for tax managers depend on the organization and role. In general, a tax manager needs a bachelor's in accounting. These programs teach students generally accepted accounting principles, fundamental tax laws, and tax documentation standards.
Many employers require managers to have a master's in accounting. Learners explore corporate accounting principles, advanced tax practices, and accounting leadership in these programs. According to the Association of International Certified Professional Accountants (AICPA), about 48% of all new hires at CPA firms held master's degrees in 2021.
Candidates can improve their tax management employment opportunities by completing specialized tax degrees, such as a master's in taxation or an international tax degree. These programs focus on corporate taxation, federal tax issues, and international tax regulations. Along with improved job prospects, graduate and specialized degrees can improve salary expectations.
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Required Credentials for Tax Managers
Most employers hire tax managers with CPA credentials from AICPA. While every state recognizes the certification, requirements vary by jurisdiction. Regardless, a CPA candidate needs a bachelor's degree and two years of professional experience.
After meeting the minimum requirements, candidates can take the CPA certification examination. The exam process totals 16 hours and features four sections: auditing, business environment and concepts, financial accounting and reporting, and regulation. Depending on their state, CPA candidates may need to complete additional education, experience requirements, and examinations before applying for licensure with their state's board of accountancy.
Before licensure, most states require CPA candidates to complete 150 semester hours, exceeding the 120 credits provided by bachelor's programs. Many candidates pursue master's programs for these additional credits. Renewal requirements vary by state but include a certain number of continuing professional education credits every 1-3 years.
Optional Certifications and Degrees
Along with the CPA, aspiring tax managers can pursue other accounting certifications to improve their chances of employment. Some effective optional certifications include the CMA from the Institute of Management Accountants and the CFA from the CFA Institute.
These certifications require a bachelor's degree and 2-3 years of relevant experience. Qualified professionals must then enroll as members of the respective organization, pay the registration fees, and pass the examinations. Certification-holders can maintain their credentials via continuing education, which is required for the CMA and recommended for the CFA.
Industry certifications demonstrate a high level of industry expertise, leadership skills, and commitment to the field. Employers often prefer individuals who have completed the requirements and process. Certified professionals can pursue more desirable employment and advancement opportunities, which bring higher salaries and better job security.
Required Experience for a Tax Manager
Employers have different experience requirements, but tax managers typically need extensive work in the field to qualify. According to Payscale, fewer than 1% of these professionals have less than one year of experience, and only about 8% have less than four years of experience. Most tax managers have between 5-9 years of experience.
Tax managers can build experience in general accounting and tax accountant roles. Advanced education and industry certifications may reduce the experience requirements for certain positions. Professionals can also develop experience while in school via accounting internships.
Should I Become a Tax Manager?
It takes time and commitment to become a tax manager, but the rewards can be worthwhile. These professionals hold some of the top positions in the field and enjoy the demand and salaries that come with them.
According to the Bureau of Labor Statistics (BLS), the top 10% of accountants and auditors earned more than $128,970 in May 2021. Technological advances in the field have also created a demand for accountants with analytical and advisory skills, such as tax managers.
Aspiring tax managers must prepare to complete continuing education opportunities. The role requires a thorough knowledge of tax laws and guidelines, plus extensive business and industry expertise. These professionals should remain updated on legal changes, industry developments, and new technologies and practices.
While the tax manager career path may appear daunting, it develops professionals into well-rounded financial experts. In time, tax managers may pursue other financial management careers.
The Job Hunt
Tax managers can access the field in many ways. Experienced accountants and financial professionals can advance into management through internal promotions and by leveraging their professional networks. Career fairs and industry conferences also offer powerful networking opportunities.
Job-seekers should consider joining professional associations to build helpful industry relationships and networks. These organizations also have job boards, such as those listed below.
- AICPA Global Career Hub: AICPA's career hub offers career advice, an employer search database, and a job board with thousands of accounting-related job postings.
- AccountingCrossing: AccountingCrossing's job board features accounting and finance positions that may not be publicly available. Job-seekers can sort by location and job type.
- iHireAccounting: iHireAccounting offers more than 2,800 daily job postings for accountants. Job-seekers can also post their resumes and identify trending job titles.
- Association of Chartered Certified Accountants Careers: ACCA's career center features accountancy and finance job postings from around the world. Job-seekers can also receive job alerts and professional advice.
Read more tips on job searching:
What Does a Tax Manager Do to Climb the Ladder?
Tax managers looking to advance their careers can pursue financial management roles. They may access positions within their current companies or look to other employers and industries. Below, we examine details about the financial manager position and requirements for the role.
- Financial managers help organizations develop and implement plans to improve financial health goals.
- They provide broad financial analysis and insight to management.
- They need comprehensive knowledge of financial laws and regulations.
- The BLS projects a 17% employment growth rate for financial managers from 2021-2031.
- The median annual salary for these professionals was $131,710 as of May 2021, per the BLS.
- Additional credentials may be required, such as the certified government financial manager.
Questions About the Tax Manager Career Path
What degree do you need to become a tax manager?
While tax managers need bachelor's-level education, most positions require candidates to possess master's degrees. Students can pursue many business-related disciplines, including accounting, finance, and business management.
How long does it take to start a tax manager career?
The time it takes to access a tax manager career path varies, but most professionals have at least five years of professional experience. Experience comes after the education portion, which takes 4-6 years.
What certifications do you need along the tax manager career path?
There are no industry-mandated certifications, but most employers require tax managers to have the CPA credential from AICPA. Other useful certifications include CFA and CMA credentials.
Are tax managers in demand?
Yes. The BLS projects a 6% growth employment rate for accountants and auditor employment from 2021-2031, as fast as the average for all occupations.
How can a tax manager be successful?
Tax managers can find success by staying modern with their skills and industry knowledge. They can remain up to date through self-study, continuing education, and professional certifications.
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