How to become a tax accountant
Tax accountant are finance professionals who specialize in taxes, but also possess core accounting skills like the ability to read and understand financial statements. Tax accountants help clients prepare and submit tax returns to both the Internal Revenue Service (IRS) and state tax agencies.
What is a tax accountant?
To avoid penalties, tax accountants assist companies in adhering to local, federal, and state tax guidelines. Tax accounting is a serious responsibility. Both the client and accountant could suffer serious consequences if they don’t handle things correctly.
Tax accountants also have the following common duties:
- Prepare tax documents
- Analyzing financial statements
- Reviewing transaction and expense reports
- Financial data discrepancies: Investigating them
- Advice to clients on how to improve their financial situation and make the most of tax benefits
Where do tax accountants work?
Tax accountants can choose to work in three different areas, but the routes to each one are very similar.
You can set up a limited-liability corporation (LLC) and provide accounting to your clients. This includes individuals and small business.
Accounting firms such as KPMG or EY can provide accounting services to their corporate clients.
They can provide accounting services to a single company.
Tax accountants may also specialize in one particular industry or accounting subfield. Tax accountants may also specialize in forensic accounting. They analyze tax documents to look for evidence of fraud and illegal activity. Tax accountants can also be auditors. They check a company’s paperwork to make sure everything is correctly reported and that the reporting process is efficient and accurate.
Do you want to start your career as an accountant in Kentucky?
Kentucky residents pay a minimal amount of taxes. Unlike most other states, Kentucky charges a flat state income tax of 5% on all incomes regardless of income. Kentucky offers you a high salary, low taxes and a pleasant climate. You can also find affordable housing, plenty of outdoor space, and affordable homes. If you are interested in moving to Kentucky, you should know that it is highly urbanized. This means there are more jobs. You can protect yourself against unexpected risks by getting Kentucky errors and omissions insurance.
How to Become a Tax Accountant
Education
A degree in accounting is often the first step to becoming a tax account. Accounting degrees make it easier to become a Certified Public Accountant (CPA), since many of the topics covered in the CPA exam are the same as those you would learn when pursuing an accounting degree. Other degrees, such as Finance or Economics can provide a solid foundation for a career in accounting.
Buffardi says that most people who enter tax accounting as their first career after college work for a public accounting company.
You can choose to specialize in tax accounting after you have entered the workplace, unlike some careers that require you to do so during your college years. Tax-focused courses in school are a great way to see if this is something you want to do.
Certifications
The most popular certification for accountants is that of a Certified Public Accountant (CPA).
Buffardi says, “This is an impressive resume item because it shows that you took the time to study and put in a lot of effort to pass the CPA examination.”
To become a CPA, you must:
Bachelor’s Degree with 120 College Credit Hours
You must have at least two years relevant experience, depending on your state.
The CPA exam consists of four parts that cover taxation, auditing and accounting ethics.
Completing continuing education credits annually is a requirement for maintaining their CPA license.
A CPA is required to work in tax accounting in an accounting firm, or in-house at a large corporation. Certain small businesses will accept accountants who have a degree in Accounting or relevant experience that proves their skills.
Tax accountants may also obtain a license from the Internal Revenue Service and become enrolled agent. Tax accountants can become enrolled agents to be able to file their tax returns in different states. This certification requires registering with IRS and passing an examination on tax regulations and ethical standards.
Advancement Opportunities
Tax accountants who work in accounting firms can advance their careers by moving up the corporate ladder.
Buffardi says, “Many of the friends I met in public accountancy stayed there and became partners in their firms.”
Some may choose to focus on building up their business and creating LLCs. It can be difficult to maintain a business while you are searching for clients and providing them with high-quality service.
Tax accountants may also return to school to earn higher degrees such as MBAs or master’s in accounting. Some accountants even become tax attorneys to take their tax knowledge into the legal world.
Buffardi adds, “Having both a CPA as well as a [doctoral degree in jurisprudence] JD can be very useful.”
The skills that you develop as a tax accounting professional are highly portable, and they can lead to a career in many different directions.
Buffardi says, “I began my career in the tax division of a public accountant firm.” Then I went to a family business where they ran hedge funds. They hired me because I had a background in tax. They valued my experience as a public accountant.
Once you’ve earned your CPA, it is easy to specialize in different areas of accounting, or move into management and planning roles within an organization, like becoming a Certified Management Accountant (CMA).