Tax consultant career guide

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Your guide to becoming a tax consultant

Do you want to have a varied and challenging job? Do you want to have access to a wealth of employment opportunities? Do you want to play an essential part in your customers’ financial success? Do you want to enjoy the freedom of working with companies, organizations, or individuals of your choice? If your answer is yes to these questions, then becoming a tax consultant can be the right career choice for you.

What is a tax consultant?

The tax consultant – also known as tax advisor – is an accounting professional who offers advice and helps with the balance sheet and financial activity, planning, and goals of a private company, a government organization, or individual. The tax consultant can also create a plan for upcoming or potential financial activities, ensuring that everything meets national, state, and federal tax laws and that regulations are in place.

Before making major investment decisions, it is recommended that you engage the services of a tax consultant. By doing so, you can have advance warning of how these investments will impact your future tax obligations. Tax consultants can also create a plan for planned or possible financial activities while making sure the overall personal or corporate tax plan is duly calculated.

Tax requirements in the United States can vary significantly from one state to another, and that is another thing tax consultants can help with. Given their specialist knowledge, they are able to provide critical advice on whether a specific financial investment is subject to multi-state filing requirements.

Tax return forms report the results of someone’s financial decisions made in the previous fiscal year. Quite often, people leave it until it is too late to ask for advice on how an investment strategy could affect their tax obligations. That is why having a tax consultant to advise on the financial planning process can benefit companies or individuals not only at the end of the tax year but all year round.

What does a tax consultant do?

Contrary to what many people think, a tax consultant does more than just help businesses prepare their tax return documents. As a matter of fact, preparing and filing a company’s tax return papers is the last step in a tax consultant’s job. We’ve already mentioned it in the previous section of this article, but it’s worth repeating – the work of a tax advisor is valuable throughout the entire fiscal year.

Tax consultants can:

  • help a customer with all the tax-related information needed to set up a new business
  • inform about all the tax implications that mergers, acquisitions, or sales may bring
  • figure out how any financial activity can impact future tax return numbers
  • have their customers’ taxes figured out long before it’s tax return time, and
  • help clients get over tax season with confidence while also presenting them with legal methods to pay fewer taxes further on.

Tax consultant career path

As a tax consultant, you can pursue a variety of accounting career paths, providing services to corporate organizations, individual clients, or both. You can choose to work for public accounting firms, join the IRS, become part of a tax consulting firm, or start your own specialized company. Regardless of the industry segment you choose, the tax consultant career is a lucrative choice. The median yearly salary in 2020 for tax consultants was $61,119, with an hourly rate of $22.47.

Skills needed to become a tax consultant

In the current business world, to be successful means to have the ability to adapt and learn new things that are outside your field or comfort zone. Thus, a successful tax professional is no longer just a specialist in taxation policies with good know-how in accounting-related matters. They are also knowledgeable in data analysis, statistics, or technology, as well as an excellent communicator and project manager. Here is a list of must-have skills, competencies, and abilities that you should ideally possess before choosing to become a tax professional.

Communication abilities

Tax consultants help their customers make educated decisions in relation to their financial activities. That is why we can equate the role of a tax consultant to that of a teacher. The reason for this comparison is that tax consultants must explain complicated tax-related laws and procedures to their customers who are often not specialists in that field or do not understand the specific terminology being used.

Thus, tax consultants must be able to simplify complex information while making sure the essential information of their message reaches their client. That is why they need to have excellent written and verbal communication skills, the capacity to be concise, and to get straight to the point.

Numerical abilities

Being comfortable with numbers is a general must-have in the accounting industry, so good mathematical knowledge counts among the skills tax consultants should have. Even if tax advisors do generally not need to perform arithmetical operations on a daily basis, getting the numbers right is an essential factor in their business as it enables them to verify the accuracy of a company’s financial documents. Also, the capacity to calculate with accuracy is proof of an ability to analyze figures and to think critically.

Time and project management

Tax consultants will likely work with more than one customer at a time, juggling multiple projects at the same time. This calls for serious time and project management skills to allow for successful completion of all tasks. Ad-hoc requests, rush shifts, or urgent decisions are common in today’s fast-paced business world. That is why managing time, organizing everything, and prioritizing accordingly is a skill set that will help tax advisors meet deadlines and grow a positive reputation.

Excellent attention to detail

As a tax consultant, you must review all of your customer’s financial documents, including fiscal reports, tax statements, or investment portfolios. You have to check that they comply with all applicable laws, and for that – apart from solid technical skills like knowing the tax code, tax regulations, and being able to perform tax calculations – you must have excellent attention to detail. That means you have to pay attention to every word and to every number you come across because, when it comes to tax, even the smallest thing can make a big difference.

Computer competency

Technology evolves quickly and knowing how to use it in the business environment has transformed from nice-to-have to must-have. Analytics and reporting software bring added value to the working processes, while artificial intelligence solutions streamline routine tasks and make errors a thing of the past. Although you don’t need to be proficient in all of these as a tax consultant, it definitely helps to know the basics and have an open mind about bringing technology to your aid.

Creativity and competence

Tax consultants must ensure that, by employing their advised tax-reduction measures, customers continue to comply with all state, regional, nationwide, or global taxation rules and laws at all times. Helping customers pay less tax at the end of the year implies that tax consultants are experts in their field and have a creative outlook on things. These 2 actions go hand in hand as finding a clever solution or making creative recommendations always relies on having specialist knowledge in the field. Creativity is important, and competency is a must. That said, let’s have a closer look at how to become a tax consultant.

Your education path to becoming a tax consultant

Although there are no specific education requirements that one needs to fulfill to become a tax consultant, earning at least a related degree in accounting or finance will help you gain the necessary knowledge. A bachelor’s degree in accounting, for example, gives you the needed know-how to access various job opportunities in the field and gain valuable work experience.

If you want to further your education, you can enroll in a master’s in accounting program. Apart from offering you in-depth knowledge, a master’s program gives you the opportunity to choose a specialization, allowing you to focus on a specific area of interest in your desired accounting field. One such specialization is tax.

This area of study dives deep into the field of taxation and the laws and regulations that govern it. Courses focus on taxation processes, techniques, and practices at local, national, and international levels. You’ll gain specialist technical competencies in tax planning and tax codes and broaden your know-how of federal taxes and regulations from the Internal Revenue Service (IRS).

Certifications and licensing

If you want to increase your knowledge and stand out from other professionals in your field, there are several types of accounting certifications and taxation-related licenses you can obtain.

Earn an IRS certification

If you want to help your customers prepare and file their tax return documents, you will need to obtain a certification from the Internal Revenue Service. After you obtain your IRS Preparer Tax Identification Number (PTIN), you’ll be authorized to prepare federal tax returns. Depending on your type of expertise, experience, and education, you can qualify for various credentials issued by the IRS. Click here to find out more about each one of them.

Become an Accredited Tax Advisor

To qualify for this credential and become an Accredited Tax Advisor (ATA), you must be over 18 and have at least 3 years of work experience in areas such as tax preparation, compliance, tax planning, and consulting. An important criterion you must meet is that at least 40% of the work experience mentioned above must be in either tax planning or consulting. If you qualify, then you can sit for an exam that takes place every 6 months countrywide and is organized by the Accreditation Council for Accountancy and Taxation (ACAT).

Become a Certified Public Accountant

A common credential to obtain in the tax consultants’ community is that of Certified Public Accountant (CPA). Probably the most sought-after certification in the accounting world, becoming a CPA is not an easy thing to do. Still, it provides you access to more and better employment opportunities and helps you stand out from other professionals in your field. We have put together a dedicated page where you can find everything you need to know on how to become a CPA.

Financial Accounting Standards Board (FASB)

Founded in Norwalk, Connecticut, in 1973, FASB is an independent organization that sets the standards for public and private organizations following Generally Accepted Accounting Principles (GAAP) in the field of financial accounting.

European Accounting Association (EAA)

Founded in 1978, EEA is an academic organization that supports Europe’s accounting community through research, education opportunities and knowledge sharing.

National Association of State Boards of Accountancy (NASBA)

Established in 1908, NASBA acts like a forum for the 55 State Boards of Accountancy in the US, which administer the Uniform CPA Examination. In partnership with AICPA, NASBA facilitates CPA examination for professionals oversees.