Pros and Cons of a Tax Accountant Career
Tax accountants are finance professionals who specialize in tax preparation and tax-related issues. You can enter this career with only a bachelor's degree, but you can expect to work more than 40 hours per week, especially around the end of fiscal quarters or during tax season. Before you make your career decisions, consider some of the positive and negative aspects of becoming a tax accountant.
| Pros of Becoming a Tax Accountant |
|---|
| Favorable median earnings (around $66,000 per year)* |
| Steady job growth (13% from 2012-2022)* |
| Numerous certification options* |
| Opportunity for advancement* |
| Cons of Becoming a Tax Accountant |
|---|
| May work long hours* |
| Often requires license* |
| Employers usually require experience* |
| Keen competition for jobs* |
Source: *U.S. Bureau of Labor Statistics (BLS)
Essential Career Information
Job Duties
In general, accountants make sure financial statements are accurate and adhere to legal guidelines. Tax accountants might prepare tax returns, calculate deductions and figure out what taxes are owed for businesses or individual clients. Additionally, they make sure taxes are prepared and submitted to state and local governments on time. Many accountants work for private corporations and have additional responsibilities, including keeping track of financial records, organizing financial information, recommending efficient financial practices to upper-level management or improving cost efficiency.
Daily job duties could include checking financial reports for completeness, talking with management about organizational finances, developing accounting protocols, reading tax requirements or developing budgets. You could also be in charge of calculating employee compensation, performing cost-benefit analyses, analyzing business operations or evaluating financial commitments.
Salary Information
According to the BLS, accountants earned a median annual salary of approximately $66,000 as of May 2014. Top professionals in this field earned upwards of $116,000, while the bottom 10% of accountants made less than $41,000 per year. Additionally, some of the top-paying industries for accountants were commodity brokering, commodity exchanges, the federal government, financial investment activities and software publishing.
Job Outlook
The BLS reported an expected employment growth rate of 13% between 2012 and 2022. Growth in this field will likely be driven by an increased demand for corporate financial accountability amid recent and public financial scandals. Jobs may also open up as a result of businesses that want to globalize and need to comply with international financial regulations. Industries with high levels of employment of accountants in 2013 included tax preparation, enterprise management, local governments, state governments and technical consulting services.
What Are the Requirements?
Education
The minimum educational requirement for most accounting positions is a bachelor's degree in accounting; however, many employers prefer a master's degree in the field, especially for senior or managerial positions. So, if you want to work as a tax accountant, you could pursue a Bachelor of Science (B.S.) or Bachelor of Business Administration (BBA) degree program in accounting. Some schools offer 5-year joint degree programs in which you can earn a bachelor's degree and a master's degree consecutively. Additionally, you could pursue a Master of Business Administration (MBA) degree with a concentration in accounting. An MBA is a terminal degree in business that takes 2-3 years to complete and could qualify you for upper-level management or executive positions.
Licensure
If your position entails filing reports with the Securities and Exchange Commission, you'll need a Certified Public Accountant (CPA) credential to work as an accountant, which is issued by state boards of accountancy. While CPA requirements vary from state to state, most require you to complete 150 semester hours of college-level coursework, which typically exceeds a bachelor's degree program; however, some states will allow you to substitute education with work experience. In addition to meeting your state's requirements, you must also pass the national CPA exam, which has four parts and is administered by the American Institute of Certified Public Accountants (AICPA). While you don't have to pass all four parts at the same time, you usually need to pass all sections within an 18-month period.
Job Postings from Real Employers
Employers often look for job candidates who the CPA credential and can demonstrate strong critical-thinking and problem-solving skills. Some look for those with a background in a specific type of accounting, while others value communication skills. Another essential qualification is experience, which aspiring tax accountants might earn through internships or entry-level finance work. The following are examples of real job postings in March 2012 to give you an idea of what employers may be looking for:
- An accounting firm in Connecticut wants a tax accountant with at least three years of experience in corporate taxation and a bachelor's degree in accounting. Experience with public exposure is preferred.
- A national tax office based in California seeks a senior tax accountant with a bachelor's degree, CPA and two years of public tax experience. Among the preferred requirements are good presentation skills and the ability to travel frequently. The employer also prefers applicants who hold master's degrees in taxation or law degrees.
- A finance department in a private company based in Indiana wants a tax accountant to handle property taxes and file tax returns. This position includes audits, financial planning and other special projects. The ideal candidate has a bachelor's degree, 1-2 years of corporate tax experience and a CPA.
How to Beat the Competition
Certification
While licensure is often required to work as an accountant, certifications are not; however, they can be a good way to advance your career. Certification shows advanced knowledge in a particular area of accounting. For example, you could earn a Certified Management Accountant (CMA) credential, which is issued by the Institute of Management Accountants, to demonstrate that you are qualified to work as an executive accountant. Other organizations offer credentials like Certified Internal Auditor (CIA), Certified in Control Self-Assessment (CCSA), Certified Government Auditing Professional (CGAP), Certified Information Systems Auditor (CISA) and Certified Financial Services Auditor (CFSA).
Alternative Careers
Bookkeeping Clerk
If you like working with finances but don't want to fulfill the education and licensing requirements for a career in accounting, you could consider becoming bookkeeping clerk. You can get this job with as little as a high school diploma or an associate's degree in accounting. In this position, you'll record financial transactions for a business, calculate debits and receipts, update financial statements and maintain organizational financial records. According to the BLS, professionals in this field earned a median annual salary of about $35,000 as of May 2011.
Financial Manager
If you have a few years of experience finance and want to advance your career, you could seek employment as a financial manager. Professionals in this field oversee all aspects of an organization's finances. This also means that they are also responsible for anything that may go wrong. These workers generally enjoy high earnings; financial managers earned a median salary of about $107,000 as of 2011, according to the BLS.
