Tax Accounting

Simply stated, a tax accountant assists taxpayers in preparing their tax returns. Tax accountants evaluate the consequences of transactions made by their employers, and verify that the transactions are recorded in compliance with local, state, and IRS laws.

Daily Tasks

Tax accountants prepare, amend, and file corporate tax returns on federal, state, and local tiers. In order to perform their job correctly, they should know how to formulate tax strategies; when to expense terms; how to prepare income tax statements; and how to treat mergers and acquisitions.

Tax accountants follow the principles of tax law, a separate and distinct set of principles from the Accounting Standards, which govern most accounting specialties. Additionally, the Internal Revenue Code governs tax accounting by outlining the profession's basic rules and regulations. By reviewing tax returns and identifying payable taxes, professionals in this career ensure that our government obtains revenue from citizens and businesses.

Professionals in this specialty can find employment at small businesses or at large corporations, depending on their level of experience and number of years in the field. As a tax accountant moves further down his or her career path, he or she can expect to gain expertise in an industry, such as real estate, finance, insurance, retail sales, and construction.

Education & Training

Most tax accountants must complete a two-year degree in public accounting or a four-year bachelor's degree in accounting or a related field. Some employers may accept applicants who possess a combination of relevant experience and postsecondary education. Recent graduates who hope to secure a more advanced entry-level position must hold a bachelor's degree or a more advanced degree in accounting. Specific education and training requirements will vary by employment opportunity and may require specialized experience in accounting or tax analysis.

As a prospective tax accountant, consider contacting the schools you are interested in attending and inquire about their accounting programs. Ask where their graduates found employment, and what kind of support the institution offers students during their employment search.

Salary & Employment Outlook

The median annual salary of a tax accountant is approximately $48,000, with the middle 50 percent earning between $36,500 and $67,000 per year. The bottom 10 percent earns less than $29,000, while the top 10 percent may earn more than $89,000 annually. Keep in mind that compensation is likely to depend upon your location and employer.

Considering that taxes are one of life's certainties, employment prospects for tax accountants are favorable. Until the government stops collecting taxes, there will be jobs for tax accountants. Recent graduates should expect to obtain an entry-level accounting position before securing the more demanding position of a full-time tax accountant.

Employment rates for accountants and auditors in general are expected to grow much faster than average through 2018. Job opportunities are therefore favorable, especially for accountants who hold an advanced degree in a specialty. Retirements over the next 10 years will create additional job openings.

Characteristics of a Successful Accountant

Tax accountants work with confidential financial and personal information. Because of this, trustworthiness is crucial for earning the confidence of your employer. As in other accounting specialties, prospective tax accountants should have strong interpersonal skills and excellent written and verbal communication skills. If you have solid analytical, time management, and organizational skills, an affinity for working with numbers, and the ability to follow rules and regulations, consider a future in tax accounting.

Article Resources:

U.S. Bureau of Labor Statistics: Accountants and Auditors
U.S. Bureau of Labor Statistics: Tax Examiners, Collectors, and Revenue Agents