Tax accountants prepare federal and state tax returns for businesses, organizations and individuals. As such, these professionals are knowledgeable on business concepts and government regulations. Tax accountants may advise clients on how to minimize tax liability, inform them of any tax changes that affect their business and ensure compliance with tax laws and statutes. They are also involved in any disputes or audits that affect their clients.
In the United States, there is a comprehensive set of accounting principles for tax purposes which are separate and distinct from General Accepted Accounting Principles. The Internal Revenue Service (IRS) governs the application of this branch of accounting. These principles are contained in various volumes published as the Internal Revenue Code (IRC). These codes were first approved by Congress in 1874. Tax statutes have been re-codified several times by Congress since 1874. Also, federal and state tax laws can change on an annual basis.
There are three basic types of accounting degrees that can be earned:
- Associate’s Degree
- Bachelor’s Degree
- Master’s Degree
An associate’s degree in accounting takes approximately two years to complete. A bachelor degree in accounting can usually be earned in four years. And a master’s degree in accounting can be earned in two years or less after completing a bachelor’s program.
A bachelor’s degree is usually the minimum educational requirement and the most common for tax accounting. Prospective tax accountants may seek out accounting programs or related majors such as business administration. Individuals who are considering master’s programs in accountancy may look for programs that include a tax concentration. These programs include coursework in financial planning, auditing and taxation, in addition to courses in business calculus and statistics.
The student who graduates with his/her associate’s or bachelor’s degree can practice accounting. She/he is qualified to perform many accounting functions, such as the preparation of tax forms for small businesses and individual filings. In order to broaden your scope within the accounting profession, it’s advisable to earn a Certified Public Account (CPA) license. Only with the CPA can an accountant be referred to as a certified public accountant.
Colleges and universities with quality accounting degree programs will offer both a bachelor’s degree in accounting as well as the more ambitious 150-credit degree, the latter one meeting the state’s requirements for sitting for the CPA Exam. If you want to become a CPA, you need to choose the 150-credit program. Within those 150 credits you will most likely earn the bachelor’s degree in accounting.
The issuance of the CPA license is conducted in the state where the accountant is practicing. Licensure norms are different in every state, but in most states, completion of one hundred fifty semester hours is mandatory that is thirty hours over the requirement for completion of a four-year degree program. Most states seek two years’ experience of accounting work. Once they have satisfied the eligibility criteria, candidates will be allowed to take the CPA exam conducted by the American Institute of Certified Public Accountants. Once they have earned certification, continuing education by CPAs is required to maintain their credentials.
After passing the CPA Exam, but before a CPA license is issued, applicants for a CPA license will need to fulfill an ethics requirement, such as completion of an ethics course and/or an ethics exam. This requirement is governed by your respective State Boards of Accountancy.
Employment of accountants is projected to grow 13% from 2012 to 2022, according to the Bureau of Labor Statistics (BLS). The median annual wage is $64,000. As of 2012, there were close to 1.3 million accountants employed in the U.S..
Here is a selection of specialty areas to consider:
- Public Accounting- a special type of public accounting, called forensic accounting involves investigating financial crimes, securities frauds, contract disputes, bankruptcies, money laundering and other criminal financial transactions.
- Management Accounting- managing the finances of the company you work for, prepare budgets and taxes, evaluate performance, and perform cost accounting and asset management.
- Government Accounting- involves handling the finances of federal, state and local government bodies.
- Internal Audit Accounting- includes examining and verifying the company’s financial records to check for waste, mismanagement and fraud.
- International Tax Accountant- employed by large corporations, international companies, tax consultancies and accounting firms; international tax accountants may also be self-employed and own their own practice or firm.
The tax accounting profession offers diversity in career choices due to the various specialties within accounting. The BLS projects growth and it’s financially rewarding. Definitely a career path to consider for those who have an aptitude for complex numerical calculations.