The words ‘tax season’ are enough to cause many people to break into a cold sweat. Of all responsibilities, filing taxes seems to be the one that most people find stressful and irritating. Because of this, many people and businesses turn to tax accountants to handle the formal paperwork, subtleties of law, and number crunching involved with filing and paying taxes. As the system becomes even more complex, and the economy makes it more important than ever to find all tax breaks and initiatives, the demand for tax accountants will continue to grow. If you are considering becoming a tax accountant, you are entering a very lucrative and promising career that involves very specific training and responsibilities.
Tax Accountant Job Description
Tax accountants have numerous responsibilities within the general area of taxation. They offer expert advice on figuring tax liability and finding applicable incentives and breaks. In addition, they also complete properly prepared tax returns. Depending upon the employer, tax accountants may advise clients on setting up tax shelters and making tax-effective business decisions. Typical duties of a tax accountant include, but are not limited to:
- Preparation of federal and state income taxes. Tax accountants typically do a great deal of research to determine accurate numbers and payment amounts for tax returns for business, organizations, and individuals. Since each return is unique, the tax accountant must be highly knowledgeable about the latest changes to the tax code.
- Preparation for tax audits. A tax audit can be one of life’s biggest headaches. Tax accountants handle every step of the audit for clients, making sure that records are in order and that individuals or companies are within the law regarding deductions, credits, and other facets of tax returns.
- Preparation of 1099 forms. As part of the duties, tax accountants prepare, analyze, and file with the IRS multiple 1099 forms for organizations and businesses.
- Handle business taxes. Much of a tax accountant’s time is spent organizing the numerous taxes of a business, including property and sales tax as well as business license taxes and more. Throughout the year, the tax accountant calculates and files tax statements, usually quarterly, and submits statements for payment by businesses.
- Providing updates. Periodically, tax accountants must provide reports of projected taxes. Management fees, sales taxes, and more to the Chief Financial Officer for review. This allows the CFO and other executives to get an accurate picture of the company’s financial outlook.
Tax Accountant Salary and Benefits
According to the United States Bureau of Labor Statistics, those who work in accounting and auditing can expect to earn an average salary of over $61,000 a year. However, tax accountants and other specialists can earn a much higher than average salary. This will continue to be true as the demand for tax accountants increases in all areas of business and industry. In addition to the excellent salary, many full-time tax accountants enjoy a full range of employment benefits including health and life insurance, paid vacations and sick leave, retirement plans, bonuses, and more. These benefits increase the overall earning of tax accountants by several thousand dollars a year.
Education and Training
Seasonal tax accountants need little more than an associate’s degree that includes courses in bookkeeping. This level of education is also sufficient to land an internship. However, if you wish to work full-time as a professional tax accountant, you will need at least a bachelor’s degree in accounting as well as CPA credentials. The Certified Public Accountant examination consists of four sections that can be taken multiple times if needed. In most states, candidates have as long as 18 months to complete al of the sections of the examination. In addition, most states require that students have more credits than required to earn a bachelor’s degree for those wishing to take the CPA examination. As such, many students choose to earn a master’s degree in accounting.
Regardless of the level of degree you choose, make sure you select an accounting degree program that includes courses in tax accounting, auditing, business law, cost accounting, finance, and financial accounting so you will have the knowledge and skills needed for the CPA examination. In addition, if you are a busy student you can earn your accounting degree online. There are many quality, accredited online colleges and universities that offer accounting degrees from the associate’s level to graduate degrees. Best of all, choosing to earn your degree online allows you to continue working in your current profession until you land your dream accounting job.
Once you have earned your CPA designation, you can choose from a multitude of entry level tax accountant positions. In the beginning, you may have to satisfy yourself with working for a local tax office or other small accounting business. Once you have some work experience, you can begin working your way up the ladder to your dream position. Alternatively, you may follow the path of growing numbers of CPAs and open your own tax business. You may also choose to open a franchise through one of the large, nationally-known companies that offer such opportunities.
Pros & Cons of Tax Accounting Careers
As with all careers, there are pros and cons to a career in tax accounting. The pros are many and include a lucrative salary, expansive employment benefits, and the ability to meet and work closely with a wide range of people. In addition, this career provides individuals with strong job security, great opportunities for advancement, and the potential to become a business owner.
On the other hand, this career is not for everyone. Tax accountants are legally responsible for all reports and forms they prepare and sign. This can create a great deal of stress and a loss of control over aspects of the job. For instance, many business owners may not keep records organized and leave everything to the accountant when tax season arrives. Tax accountants also are often required to work very long hours during tax season, and it is not uncommon to complete 70 hour work weeks. This can cut into family time and can cause disruptions on sleep and recreational time.
The career of tax accounting is certainly not for everyone. For those with the drive, stamina, and organizational abilities, however, this can be one of the most rewarding careers in the world of business. If you think you have what it takes to become a successful tax accountant, the first step is to find a school that meets your needs so you can get on the road to completing your training.