Pros and Cons of Becoming a Tax Advisor
Most tax advisors are experts at preparing taxes, but they primarily advise and inform their clients - be they individuals or corporations - about complex and sophisticated tax-related issues. Find out the pros and cons of being a tax advisor to decide if it's right for you.
| Pros of Becoming a Tax Advisor |
|---|
| High paying ($108,000 mean annual salary in 2014 for personal financial advisors)* |
| Much-faster-than-average expected job growth (27% for personal financial advisors 2012 through 2022)* |
| Flexibility to work independently or for an organization, assisting individuals or corporations* |
| Opportunities to advance, add to knowledge base through accreditation and continuing education** |
| Cons of Becoming a Tax Advisor |
|---|
| Education and experience requirements (top positions may require advanced degree and experience in specific tax matters)* |
| Work long hours during tax time, nights and weekends (meet with clients outside normal business hours)* |
| Self-employed are constantly seeking new business* |
| Must keep up with rapidly changing tax laws, codes and enforcement practices** |
Sources: *U.S. Bureau of Labor Statistics, **Accreditation Council for Accountancy and Taxation
Career Information
Job Description and Duties
There are two types of tax advisors: those who advise individual (and sometimes small business) taxpayers and those who advise corporate taxpayers. The former work for accounting and tax firms or are self-employed and take individuals on as clients, counseling them on how to maximize their tax deductions and credits and minimize the amount of tax they owe. They also may assist people with tax preparing and planning or trust and estate taxes.
A corporate tax advisor, who sometimes works as an employee of the organization he or she is advising, must have extensive knowledge of corporate tax codes and regulations. Tax advisors who work for global corporations must also be familiar with international taxes and be able to recommend strategies for complying with national and international tax laws. Depending on the structure of the organization, tax advisors may also prepare tax returns and other financial documents.
Salary Information
The U.S. Bureau of Labor Statistics (BLS) in May 2014 reported mean annual wages of around $108,000 per year, or $52.00 per hour, for personal financial advisors in all industries (not including those who were self-employed).
Requirements
Educational requirements for tax advisors vary depending on whether their focus is mostly on preparing taxes or on consulting individuals or corporations with respect to tax regulations. Most have a bachelor's degree in accounting, finance or a related area. Those who wish to work in an advisory capacity with a major corporation may decide to pursue a master's degree in accounting or finance or a law degree with a concentration in taxation.
Similarly, experience and training requirements often vary with the position. Senior-level advisory positions may require years of experience and training in specific tax matters, whereas tax advisors who are self-employed or work for an accounting firm may need experience in tax preparation and planning. Tax advisors must also be well versed in Internal Revenue Service (IRS) regulations with respect to assisting and advising individuals and businesses.
Job Postings from Real Employers
Employers look for tax advisors who have an understanding of complex tax issues and can communicate them in easy-to-understand terms. It is also important for tax advisors to be experienced at handling various tax problems so they are able to evaluate risks and make informed, cost-effective recommendations to their clients. They should also have strong interpersonal, oral and written communication and analytical skills. The following actual employer postings represent tax advisor positions open during May 2012.
- A mining company in Salt Lake City is in need of a tax advisor to work under contract for about a year. Qualifications include a degree or diploma, 1-3 years of relevant experience and fluency in management software like SAP and Oracle.
- An Oklahoma firm is looking to hire a tax advisor to prepare tax returns and other reports for individual and business clients. The ideal candidate will have an accounting or related degree, at least 5 years of experience in tax preparation and knowledge of tax software.
- A global oil and gas company is seeking a senior tax advisor for its trading and supply and distribution divisions located in Houston. Requirements include a J.D. or LL.M. and at least 10 years of experience in U.S. and international tax matters.
How to Stand Out
Professional certification is voluntary for tax advisors, but it may lead to better job prospects and help you to stand out, especially if you are self-employed and selling your services to individuals. The Accreditation Council for Accountancy and Taxation offers an Accredited Tax Advisor (ATA) credential for those with a minimum of 5 years of experience in tax planning and consulting. ATAs must maintain their credential through continuing education.
Specialization in an area of tax law or other matters is another way to gain an edge with potential employers. If you work primarily with individuals, you may want to specialize in consulting on matters such as estate or retirement tax planning. If you plan to be a corporate tax advisor and work with large companies, especially those that do business in other countries, you may want to specialize in international tax matters like the Value-Added Tax (VAT) or permanent establishment.
Other Careers to Consider
If you would like to work in an advisory capacity but focus on something other than taxes, you may want to consider becoming a financial analyst. These professionals work with businesses and individuals to analyze their investment options, make recommendations and evaluate the performance of stocks, bonds, mutual funds, securities and other investments. A bachelor's degree in accounting, finance or business is required, and many financial analysts also have a Master of Business Administration (MBA). Certification as a Chartered Financial Analyst (CFA) is available for those with a degree and relevant experience. The BLS predicted 23% employment growth for financial analysts between 2010 and 2020 and reported an average annual salary of about $88,000 as of May 2011.
If you enjoy the sales aspect of working as a personal tax advisor, you could become a securities, commodities and financial services sales agent. You'll monitor financial markets, buy and sell securities and commodities, advise clients on what to buy or sell and make recommendations to corporations on how to present public offerings and handle mergers and acquisitions. You'll need a bachelor's degree and an MBA to compete for higher-level jobs. According to the BLS in May 2011, wages for securities, commodities and financial services sales agents averaged around $99,000 per year.
