What Tax Accountants Do
While tax accountants certainly help their clients with filing taxes, arguably some of their most valuable and interesting work occurs when they help their clients structure their finances and transactions in a way that helps them mitigate liabilities.
Because tax laws are complex, it’s very easy for an average person to overpay or to conduct a transaction, such as a sale of property or transfer of assets, in a way that results in excess tax payments. In these cases, tax accountants routinely work with high net worth individuals and companies because they stand to have the most substantial relief when an expert is brought on board. Tax accountants may own their own practices, work internally for a company, or be part of an accounting firm.
Who would enjoy a career in Tax Accounting?
An affinity for numbers and finance is obviously beneficial as a tax accountant, and it’s important for individuals to have an appreciation for the law as well, particularly as it relates to the often-unclear legal guidelines which dictate the field. Aside from this, a willingness to undergo a rigorous schooling and credentialing process is essential, as is continuing to learn as developments occur in the sector. Having traits like being detail oriented, organized, and mentally agile are also helpful, and sometimes salesmanship can be helpful if the accountant has to prove his worth in order to get a client to sign on, though solid communication skills and the ability to break things down into layman’s terms for clients may be enough.
Who mightn't like the career?
During peak periods, such as tax season or while working on a major project, work can totally dominate a tax accountant’s life - to the point where many don’t so much as schedule personal appointments for three or four months out of the year or may go months without a day off. In many cases, this is the only time a person will seek the help of an accountant, and so it can lead to a feast or famine mentality for accountants. People who are unprepared to deal with this have trouble staying in the tax sector. Getting into the career can also be a challenge for those who don’t enjoy school. Lastly, people who need to be on-the-go at work simply won’t enjoy the position, as the majority of it is deskwork.
People who enter the field intending to become a tax accountant usually have at least a bachelor’s degree in accounting. For those who move in from other career paths, a finance degree is often sufficient, provided the candidate has the skills and work experience the organization is looking for.
In the United States, candidates must test to become a Certified Public Accountant (CPA), and the requirements vary by state. The rest of the world generally uses the term “Chartered Accountant.” Canada requires certification at a provincial level and has three governing bodies that provide it. A number of agencies across the United Kingdom are permitted to grant the title of Chartered Accountant, and the certification is usually valid throughout the UK. Australia and New Zealand share governing bodies.
Work as an intern in the field is beneficial, but not required. When applying for a position, candidates should learn as much about the company as possible and tailor their resume or CV accordingly. To go a step further and stand out, it may also be helpful to think through any tax issues specific to the company or industry and present ideas to solve them to the interviewer.
Moving into Tax Accounting from another career
Because a college degree and licensing is necessary, it’s much easier to get into a career as a tax accountant if one is already a CPA/ Chartered Accountant. However, anyone with a background in finance can later go for the proper certifications if he chooses to become a tax accountant as a second career.
Role: People who enter into the field are generally referred to as “Junior Accountants,” and will keep the title for somewhere between one and four years, depending on the firm. Junior accountants are given simpler tax returns to complete and may handle things like payroll taxes for companies. They may also be brought on board to help support senior accountants with projects. In these cases, they may help do research, document actions, help create client proposals, handle internal communication, or create spreadsheets and other visual representations of information.
Role: Senior accountants do the same work as junior accountants, but they also work more on strategy or in helping clients structure their assets and transfers in a way that reduces tax liabilities. In a larger firm, they may also specialize in a specific sector, ranging from industries such as food service, hospitality, or retail.
Role: After approximately five years as a senior tax accountant, most are qualified to take on a managerial or leadership role. These are almost purely focused on tax strategy and legal compliance for large companies, while passing the documentation and research aspects on to the more junior tax accountants.
Travel will vary greatly, depending on the firm one works for. In some cases, accountants only work from a centralized office. Other times, they’re expected to travel to visit clients, though this is generally local travel.
Credentialing is different for each jurisdiction, though some do allow fast-track options for individuals who were qualified to work as an accountant in a region with similar laws. This makes it difficult to work from other countries unless it’s for a corporation that needs tax help in the accountant’s home country.
Entry Level: According to data from PayScale, those beginning their careers have salaries of approximately USD $52,250 in the United States, £29,040 in the United Kingdom, CAD$49,840 in Canada, and AU$52,440 in Australia.
Mid-Career: USD$62,150, £38,940, CAD$59,920, AU$67,830.
Experienced: USD$63,800, £39,930, CAD$61,600, AU$145,816.
Profit sharing and bonuses are occasionally part of a tax accountant’s pay, though they don’t generally amount to more than a few thousand dollars. However, in instances where commissions apply, a tax account’s salary may be doubled.
Why Tax Accountants move on
A life as tax accountant can be a dream for those who thrive on routine. Although the periods around tax filing deadlines can be hectic, the work and pay are generally reliable and stable. However, the career can have too much monotony for others, and it’s this lack of mental stimulation that drives others to new careers after a few years.