Most people groan whenever tax season rolls around and it’s time to fill out frustrating tax return forms, but tax accountants literally earn their living from tasks like this! Tax accounting is a unique discipline in the financial field that is focused on tax returns, company taxes, auditing, and other related forms of tax keeping. Tax accountants typically are certified by the Internal Revenue Service (IRS) to work in tax preparation and help employees, sole proprietors, or businesses handle all of their tax obligations before the infamous April 15th deadline. Tax accountants may be self-employed or work for tax preparation firms, corporations, consulting services, government agencies, investment brokerages, and financial organizations. Tax accountants play a prominent role in guaranteeing that tax forms are handled appropriately to reduce the risk of pain-staking audits.
Salary
According to the Bureau of Labor Statistics, the average annual salary for all accountants in America is $72,500, which is equivalent to a mean hourly wage of $34.86. In particular, the 2015 Salary Guide for Accounting and Finance from Robert Half shows that tax accountants typically earn an average salary between $56,000 and $76,000 each year.
Beginning Salary
When just starting out in the field, tax accountants with less than one year of experience tend to earn anywhere from $46,000 to $60,000. However, it’s important to note that tax accounting professionals who move into senior-level or management positions in large companies have the potential to break the six-figure salary mark bringing home over $129,250 annually.
Key Responsibilities
Tax accountants are given the hefty responsibility of making sure all tax-related financial information is properly compiled, submitted, and documented for either individuals or whole companies. During the typical workday, tax accountants can be found filling out tax return forms, meeting with new or existing clients, reviewing financial files, calculating earnings, contacting tax agencies, performing tax preparation, and preparing for any audits. In senior-level roles, tax accountants or managers may also supervise and train other tax accountants within the firm’s tax department. Tax accountants have the duty to ensure all tax forms are being completed with the highest level of accuracy and in compliance with the latest government regulations.
Necessary Skills
Beyond being knowledgeable about tax codes and business concepts, tax accountants must possess strong analytical skills to identify any sources of inaccuracy in financial documentation and create an effective solution. As one might expect, mathematical abilities are important for tax accountants to make certain all numbers are adding up properly. Tax accountants often must communicate clearly in an easy-to-understand manner with their clients and business executives when compiling tax forms, so interpersonal skills are a must. Having good multi-tasking and organizational skills will also be helpful when tax accountants are swimming through piles of financial records and completing several tax returns simultaneously.
Degree and Education Requirements
At the bare minimum, tax accountants will need to earn a four-year undergraduate degree from an accredited business school before taking on the role. Most aspiring tax accountants will select a bachelor’s degree program in accounting, finance, or business administration. However, more employers are now preferring to hire tax accounting professionals who have completed graduate school with a Master of Accountancy (MAcc), Master of Taxation (MTax), or Master of Business Administration (MBA) in Accounting degree. Master’s programs will build on the broad-based foundation of undergraduate studies to deliver in-depth knowledge in income taxation, estate planning, tax policy, U.S. tax codes, corporate taxation, and tax law.
Pros and Cons of the Position
Although poring over tax forms may seem boring to some, becoming a tax accountant is a rewarding option with many benefits for individuals with a love for finances. Not only do tax accountants earn rather high average salaries, but they also have the freedom to choice their employment setting or become self-employed. Steady accounting job growth provides various options for tax accountants to advance into senior tax management positions. Tax accountants also have the ability to specialize their interests with numerous available certifications. On the other hand, tax accounting can be a stressful job with long hours beyond the normal 40-hour workweek, especially around the end of quarters and during tax season. Tax accountants may also find it overwhelming to maintain licensing with continuing education requirements and compete with other accountants for new clients.
Getting Started
While earning an appropriate education with accounting-related coursework, it’s important to put your learned skills to practice in real-world situations. It’s advised that you complete internships and take on part-time jobs in accounting to start building your resume with financial experience. Jump on every opportunity to help others prepare their local, state, or federal tax returns, even in service learning or volunteer projects. After graduation, you’ll likely be qualified to apply for entry-level tax accounting positions and start working your way up. You may want to then head back to graduate school for your master’s degree and fulfill the 150-hour requirement for becoming a Certified Public Accountant (CPA). You can also boost your professional competency in tax accounting by becoming an Enrolled Agent (EA), Accredited Tax Preparer (ATP), or Accredited Tax Advisor (ATA).
Future Outlook
Unlike other accounting positions that fluctuate with the health of the economy, tax accountants typically have stable job conditions because people always need help completing complex tax return forms. Due to corporate scandals and the recent financial crisis, the government has even created more strict tax regulations that taxpayers will need to comply with. Tax accounting professionals will remain in demand to provide their specialized expertise in preparing tax forms and representing people during audits. In fact, the BLS predicts that employment growth for tax accountants and other accounting workers will grow faster than average at 13 percent before 2022. Tax accountants will likely have the best job prospects with the CPA credential at tax preparation firms, government agencies, and corporations.
Throughout the year, tax accountants are the highly skilled financial professionals who act as go-to resources for individuals and companies to get their tax-related questions answered. Tax accountants will compile necessary financial documents, look for appropriate deductions, figure out the amount of taxes due, and verify all information before filing tax forms. If you’re interested in working as a tax accountant, you could have the rewarding opportunity to help people get the best possible refunds while using your passion for numbers.
