Becoming a Tax Accountant
As you look through accounting career information, there may be several potential careers that you are considering pursuing. If you enjoy working with taxes to help people maximize their refund or minimize the amount they owe, then a career as a tax accountant may be right for you. Some of the accounting career information that you should consider before making this decision includes:
- tax accounting salary
- education requirements
- duties performed
- typical career advancement
Tax Accountant Job Description
Tax accountants focus on the planning, analysis and presentation of tax returns and payments, specifically with local, state and federal taxes for individuals and businesses. A number of tax accountants choose to work in large corporations to ensure that the company follows all tax laws and files accurate returns at the end of each year. Other options include being self-employed to work with clients on a one-to-one basis to prepare their tax returns or working for a tax company such as:
Tax accountants are more than just number people and must be able to communicate abstract concepts to clients. One of the most important skills you need to possess to work in tax accounting includes the ability to formulate various tax strategies to benefit your client. Other skills necessary to be successful in tax accounting include:
- high ethical standards
- a detailed working knowledge of federal income tax laws
- a passion for research
“We tend to think of accountants as numbers people, but a good accountant does more than just figure the numbers. A good accountant will communicate what the numbers mean to us.” -Ed Lyon, co-founder of the American Institute for Certified Tax Coaches
Tax Accounting Education Overview
There are a few different educational paths for you to consider if you are thinking about a career in tax accounting. Most employers require tax accountants to have at least a bachelor degree in accounting or a related field. Those who pursue a master’s in accounting will decide to specialize in tax preparation or auditing. You may also wish to pursue designation as a Certified Public Accountant (CPA). At this level, you will study financial topics more in-depth. Some of the courses offered include preparing financial statements, cost-benefit analysis and capital management.
Another possibility is to take a certificate program that prepares you for entry-level work as a tax preparer. These programs are offered at most community colleges and universities. Some of the coursework you can expect to complete at this level included the following:
- Taxes for corporations.
- Estate taxes.
- Payroll taxes.
- Capital gains.
- Tax issues facing people who are retiring.
- How to interview taxpayers.
- How to determine filing status and exemptions.
- How to interpret tax schedules.
- How to calculate refunds and amounts due.
With a bachelor degree in accounting, you are prepared to take on a supervisory or tax auditing role sooner than you would be with a certificate alone.
Regardless of which option you decide to pursue, tax accountants are required to become licensed CPAs to stay in regulation of the U.S. Securities and Exchange Commission. In addition, one must also register with the federal government as a tax preparer. You will receive a Preparer Tax Identification Number (PTIN) that must be used on all returns you help to prepare on behalf of your clients.
Career Outlook and Pay in Tax Accounting
According to May 2020 stats from the Bureau of Labor Statistics (BLS), accountants working for the federal government earned an average salary of $105,980, which is much higher than the profession’s overall average salary of $81,660 and higher than the average salary for accountants working in businesses related to tax preparation, bookkeeping, and payroll services, which was $85,050 during this time.
The number of accounting jobs is projected to increase by 4% between 2019 and 2029. This percentage is about average for all types of occupations combined. Two of the factors that are driving the demand for qualified tax accountants are the increasing complexity of tax laws and a large number of people reaching retirement age at the same time. Taxpayers need assistance in understanding the tax ramifications of certain financial decisions in order to ensure that they enjoy a secure future.
May 2020 Bureau of Labor Statistics salary and job market trends for accountants and auditors represent national data, not school-specific information. Conditions in your area may vary. Data Accessed May 2021.