How to Become a Tax Accountant

How to Become a Tax Accountant

Tax Accountant Tips

o Relevant Fact 1: Do your own taxes starting with the first year you earn income to help learn the process from the ground up.
o Relevant Fact 2: When working, take every opportunity to learn new tax issues and seek out new learning opportunities.
o Relevant Fact 3: Discover the CPA requirements for the state where you reside as they vary slightly from state-to-state.

Do you enjoy working with numbers; have a natural affinity for details and like the idea of working on taxes? If so, you may have the makings of a great tax accountant. This guide on how to become a tax accountwill help you with all the steps, which are needed.

Yearly taxes can be a daunting task for many individuals. From complicated tax situations, multi-state incomes and even self-proprietors situations, tax laws and regulations are abundant and can change yearly. Due to the complexity of taxes, there is a thriving industry to provide services and assistance to taxpayers. One of the most common jobs in the tax preparation industry is a tax accountant.

Tax accountants are highly trained professional accountants with a concentration in public accounting and tax work. The median annual wages of an accountant who is involved in tax preparation, payroll or bookkeeping services was over $61,000 according to the Bureau of Labor Statistics.

This lucrative profession can be performed in a variety of settings including large accounting firms, tax preparation companies, and corporations or even as a stand-alone business. The job tends to cyclical with a higher concentration of work being performed during the tax season and less work during other parts of the year. Tax accountants may also perform other services during non-tax periods to maintain income and a sufficient workload.

Tax Accountant Tips

Step 1: Obtain an Accounting Degree

Obtain a formal degree in accounting from an accredited college or university. Accounting is a common degree offered at most institutions of higher education, but smaller colleges tend to focus on more general accounting, while larger universities may offers tax concentrations or electives. Ensure the college is fully accredited, preferably by the AACSB(Association to Advance Collegiate Schools of Business). This accreditation will ensure you receive adequate preparation and can make entry into advanced education easier.

While in college, make sure to take every opportunity to take classes in tax related work and related areas. For example, take classes on law, finance and basic computer operation to help expand your knowledge base.

Work towards a master’s degree after obtaining your undergraduate degree. The end goal is to become a certified public accountant, so you will usually need at least 150 semester hours to be able to take the CPA exams, which usually will require masters level work. You can opt for a masters degree in accounting, tax or general business. If you prefer, you can attend classes on a full-time basis, or work and attend classes in the evening. There are numerous programs, which allow flexibility for the general business masters programs, but the more specialized programs may require a full-time commitment. If your goal is to work for a top-tier company, or in the tax consulting industry, consider attending a top ranked business masters program for higher placement opportunities.

Step 2: Get your Certified Public Accountant Certification

Advancement in tax accounting typically requires having a CPA certification, and it may be a prerequisite for obtaining some positions. The requirements for CPA vary by state, but generally, the requirements include an educational component, work experience, and successful completion of a series of 4 CPA exams.

In most states, you need 150 hours of education, mostly concentrated on accounting topics. Some specific requirements can include accounting theory, advanced audit, statistics, finance, business law, and economic analysis.

Experience prerequisites typically include having full years worth of experience working under a licensed CPA professional. This full year can be completed in conjunction with completing educational requirements. If your work experience is completed at a professional accounting firm, you may qualify for financial assistance to help you complete your educational requirements needed to sit for the CPA exam.

The Uniform Certified Public Accounting examination is the culminating event for receiving CPA certification. The exam is broken into 4 separate tests including Auditing and Attestation, Concepts and Financial Accounting, Regulation and Business Environment. For each exam, you will need to receive 75 out of a possible 99 points to pass. The exams can be taken individually, but must be completed within an 18-month period.

Work in Tax Accounting

Step 3: Work in Tax Accounting

Obtain experience working in the tax field. It is advisable to work for a professional firm that will give you a good foundation and resources for working on a variety of tax issues. Exposure to more tax situations expands your work ability and can increase your opportunities. In addition, working at an established firm will allow you to work with tax professionals that have years of experience working through common practical issues, that may not have been covered in your classes.

Once you have a solid foundation and are comfortable preparing tax returns and researching tax situations, you must choose your career path. You can decide to stay with a professional accounting firm and work your way up to a partner level position, start your own firm, or decide to work at a smaller company where you have more authority and responsibility. Match your career objective with your work style and personality.

Working at a bigger firm can be intense, but you do not need to worry about finding assignments. Working at a smaller company may make your earnings more variable and you may be required to take on more company management functions. If you open your own company, you are your own boss and you can decide how much work you want to take on based on your desired income level.

If you decide to open your own firm, you will need to will need to establish a corporate framework to limit personal liability, become an authorized IRS e-file provider and take on advertising and marketing responsibilities to ensure a sufficient customer level.