What Qualifications Does A Tax Accountant Need?

Are you interested in becoming a tax accountant? A tax accountant is an individual who specializes in taxation and the overall preparation of company and individual accounts.Here is an article that gives detailed information about the qualification required to become a tax accountant.

Updated by Tanisha Alex on 12th May 2020

Although the qualifications of a tax accountant may vary from state to state and is mostly dependent on a variety of factors including educational requirements and so on. From education to developing personal qualities to professional certifications, the right combination of skills and knowledge help to build the qualifications to become an accountant specializing in tax. 

What is a Tax Accountant?

In short, a tax accountant is an individual who specializes in taxation and the overall preparation of company and individual accounts. They are usually responsible for the compilation of any possible expenditure and assets indebted to the company during the taxation period.

The General Job Description of a Tax Accountant

A Tax Accountant is responsible for assisting clients and companies with their financial and income tax statements. These qualified professionals research, study and interpret tax law. Their work includes preparing payments, identifying tax savings, and analyzing tax issues.to conclude they are responsible for the following:

  • Preparing tax payments

  • Estimating and tracking tax returns

  • Completing regular (quarterly and annual) tax reports

Their responsibilities also include the following:

  • Organize and update the company’s tax database.

  • Recommend tax strategies that align with business goals.

  • Prepare necessary paperwork for tax payments and returns.

Educational Requirements

Before you are legally considered a tax accountant you must possess certain educational qualifications before you are deemed a legitimate tax accountant. Tax accountants must achieve a certain education level to practice, as well as complete numerous additional steps before they can begin their career as a tax accountant. 

Tax accountants must undergo additional training to their undergraduate degree. Receiving an undergraduate degree in accounting is the minimum requirement for tax professionals, and some employers require education beyond a traditional bachelor's in accounting.

Associate’s Degree

All aspiring tax accountants must undergo an associate’s degree in accountancy and related fields. This would enable them to further pursue a bachelor’s degree in accountancy which is a requirement and prerequisite for the pursual of tax accountancy. It takes around 2 years to complete an associate degree.

Bachelor's Degree

Tax accountants all start with a bachelor's degree in accounting.  In fact, according to a 2009 trends report by the American Institute of Certified Public Accountants (AICPA), 35 percent of new accounting program graduates with bachelor’s degrees and hired by CPA firms were assigned to work in taxation. A bachelor’s degree in accounting tax up to 4 years to be completed. During your business program, you will need to major in accounting and complete such relevant coursework as statistics, calculus, financial planning, auditing, tax law, and taxation. Other classes, you may be required to complete include business law, business communications, and various other business-related courses depending on the school of your choice.

Advanced Degree

To ensure the best possible career, many accounting majors move on to graduate programs. There are many different routes to take in graduate school. Some will find a Master of Accounting program that offers a specialty in taxation. Then, there are programs that offer a Master of Tax Accounting, an MS in Taxation, and even MBA programs that focus on taxes. 

Pass Your CPA Exam

After earning your master’s degree in accounting, the next step is to obtain licensing in your state as a certified public accountant. You can do this by contacting the American Institute of certified accountants and applying for a seat to take your CPA exam. Passing this exam, will grant you CPA certification and allow you to apply for licensing in your state.

Qualifications

The main qualifications required in every competent tax accountant are a bachelor’s degree in accountancy and related fields. This would enable them to be more competent in their respective fields as they have been endowed with the relevant skills and experience. 

Tax accountants specialize in preparing and submitting documents relating to their clients’ tax returns. These clients may be companies or individuals. They also develop tax strategies to ensure that clients do not pay more tax than they need to.

Typically, they work during regular business hours. During tax season, however, they often have to render overtime work. They usually work in offices, together with their clients and senior management teams.

Other duties of the tax accountant are:

  • To prepare tax reports and tax returns, research and analyze complex tax issues, and maintain records.

  • To ensure support is provided if an audit takes place.

  • To ensure all federal and state regulations are complied with.

  • To stay abreast of tax regulations, helping clients minimize their tax burden through better strategies.

Requirements

  • Proven work experience as a Tax Accountant, Tax Analyst or Tax Preparer

  • Knowledge of accounting and bookkeeping procedures

  • Familiarity with accounting software packages

  • Computer literacy (MS Excel in particular)

Certification

Tax accountants can hold numerous certifications and licenses. Each has rigorous standards for those who claim those credentials, and those accountants reap the benefits of their hard work.

Designations through the accreditation council of accountancy and taxation  are most applicable to accountants working with individuals and small businesses:

CPA License: Those who decide to move on to attain a full CPA license will enjoy even more opportunities, especially in the long-term. 

EA: To become an Enrolled Agent, accountants don′t necessarily need any special education, though it is helpful.

Licensing

Many tax accountants choose to make themselves more competitive in the job market by becoming certified public accountants. Becoming a CPA can not only broaden your employment opportunities as a tax accountant, but it may increase your yearly salary as well. But before you can become a CPA, you will need to earn a master’s degree in accounting.

In most cases, this can be done relatively quickly, because some of your prior coursework can be applied to your master’s degree program. Since this may vary from one school to another, it is best to make an appointment with your program adviser to create the best educational path necessary to meet your unique occupational goals.

Accreditation

Yet another avenue that many tax accountants take is through the Accreditation Council for Accountancy and Taxation. They offer examinations in four areas:

  • Accredited Business Accountant

  • Accredited Tax Advisor

  • Accredited Retirement Advisor

  • Accredited Tax Preparer

Salary and Job Growth

The national average salary estimate for the Tax Accountant was $65,728. This number is estimated from over 1,137,436 employees, users past and present job advertisements from Indeed.com. This equates to an hourly salary of $34.23 and a monthly of $5,477.

Since the field is in constant demand, it is projected to see a higher than average rate of growth. The BLS projects that this employment sector will rise by 10% in the years between 2016 and 2026.

Career Outlook and Prospects

Alternative career options include a budget analyst, cost estimator, and financial manager. These three options all require a bachelor's degree. 

  • A budget analyst helps organizations organize and budget their finances. They create reports and observe the spending of the organization.

  • A cost estimator collects and reviews data to report the time, costs, materials used, and any labor in creating a product. 

  • Financial managers manage finances in an organization. They develop financial reports and strategies to help with long term finances.

Conclusion

The qualifications of a tax accountant are rather extensive and comprehensive. But, as we can see from their potential salary and job growth we see there is a significant advantage from this job. The best way to achieve the position of a legitimate tax accountant is to work hard and stay motivated.