How to become a tax accountant

How to become a Tax Accountant

Becoming a tax accountant involves a combination of education, professional certification, and practical experience. Here is an overview of the pathway to the career:

High School Diploma
Complete your high school education or an equivalent qualification. Focus on subjects like mathematics and computer science, as they provide a foundation for understanding the principles of accounting. Classes in English and English composition are key to begin building communication skills, which are also important, as tax accountants often present findings to non-accountants, including members of the general public, business owners and managers, and government agencies.

Bachelor’s Degree
A Bachelor’s Degree in Accounting or Taxation is generally the minimum educational requirement to become a tax accountant. Coursework typically includes subjects like financial accounting, managerial accounting, auditing, taxation, accounting information systems, business law, and ethics. Courses in finance, economics, statistics, and business communications are also important, as they provide a well-rounded understanding of the business environment in which accounting operates. Some programs may also offer specialized tax courses.

While accounting is the most common major, a degree in a related field like business administration, finance, or economics may also be acceptable if supplemented with relevant coursework in accounting and taxation.

Internships
Highly recommended are internships or part-time jobs with accounting firms, tax preparation companies, or corporate finance departments. This practical experience is invaluable and helps build a foundation in tax accounting.

Entry-Level Positions
Start in an entry-level role such as a junior accountant, tax assistant, or bookkeeper to gain hands-on experience with tax preparation, compliance, and financial reporting.

Professional Certification
Obtain professional certification to enhance your credentials and career prospects. The Certified Public Accountant (CPA) designation, offered by the American Institute of Certified Public Accountants (AICPA), is the most recognized and respected certification for public accountants in the United States.

To qualify for the Certified Public Accountant (CPA) exam in most US states, candidates must complete 150 semester hours of college education. Since a typical bachelor's degree program includes around 120 credit hours, many aspiring CPAs pursue additional coursework or a master’s degree to meet this requirement. In most states, one or two years of work experience under the supervision of a licensed CPA is also a prerequisite to sit for the CPA exam, which is comprised of four parts covering auditing, business concepts, financial accounting and reporting, and regulation. Some states require passing an ethics exam as part of the certification process.

Master’s Degree (Optional)
Some students opt for a master's degree in accounting or a related field. A Master of Taxation (MTax), where available, or A Master of Accounting (MAcc) with a focus on tax is particularly relevant.

A Master of Business Administration (MBA) with a focus on accounting or taxation can also be beneficial, especially if you’re interested in broader business management roles.

Specialization (Optional)
Consider specializing in areas such as corporate taxation, international tax, estate and trust taxation, or tax consulting. Specializing can set you apart in the job market and allow you to focus on areas of tax that interest you most.

Career Advancement
With experience, development of leadership and management skills, and additional certifications, you can advance to roles such as Senior Tax Accountant, Tax Manager, Tax Director, or even Chief Financial Officer (CFO). Another option is to start your own tax accounting firm.

Additional Certifications and Professional Organizations
In addition to the preeminent Certified Professional Accountant (CPA) designation, there are several other certifications that can enhance the tax accountant’s credentials and career prospects:

• Enrolled Agent (EA) – The EA designation is issued by the Internal revenue Service (IRS) and specifically focuses on federal taxation. EAs are authorized to represent taxpayers before the IRS. To become an EA, candidates must pass a three-part exam covering individual and business tax returns, as well as IRS practice and procedures. Alternatively, individuals who have worked for the IRS for a certain period may be eligible based on their work experience. EAs are recognized as experts in federal taxation and can provide specialized tax advice and representation.
• Certified Tax Advisor (CTA) – The CTA is a certification that focuses on advanced tax planning and advisory services. Earning the certification often requires a combination of experience, education, and passing an examination. However, requirements may vary depending on the certifying body.
• Chartered Tax Professional (CTP) – The CTP certification focuses on individual and small business tax preparation and planning. Candidates must complete a series of courses and pass an exam. Requirements can vary depending on the certifying organization.
• Accredited Tax Advisor (ATA) – The ATA designation focuses on advanced tax planning and advisory services, similar to the CTA. Candidates typically need to complete advanced coursework, pass an exam, and have relevant professional experience.
• Certified Management Accountant (CMA) – Although not tax-specific, the CMA certification covers broader management accounting principles, including some aspects of taxation related to management decisions. Candidates must pass the CMA exam, which covers financial planning, performance, and control, as well as management accounting. A bachelor’s degree and relevant work experience are also required. CMA certification can be beneficial for those in roles that combine management accounting and tax responsibilities.
• Certified Financial Planner (CFP) – The CFP certification is broader than tax-specific certifications and includes financial planning with tax considerations. Candidates must pass the CFP exam, which covers financial planning, risk management, investments, and tax planning. A bachelor’s degree and relevant work experience are also required. CFP certification is valuable for tax professionals who offer comprehensive financial planning services, including tax planning.

Along with the certifying bodies referenced above, the following organizations also offer resources, access to industry research, and networking and professional development opportunities:

• National Association of Enrolled Agents (NAEA)
• National Association of Tax Professionals (NATP)
• Institute of Management Accountants (IMA)
• American Society of Tax Problem Solvers (ASTPS)
• Tax Executives Institute (TEI)
• Chartered Institute of Taxation (CIT)
• American Association of Attorney-Certified Public Accountants (AAAP)
• International Fiscal Association (IFA)

Continuing Education
Tax laws and regulations frequently change, so continuing education is crucial. Tax accountants often take additional courses, attend seminars, and participate in webinars to stay current.

Most states require that CPAs engage in continuing professional education (CPE) to maintain their certification.