Should I Become a Tax Advisor?
A tax advisor, sometimes referred to as a tax preparer or an accountant, helps people and organizations complete their tax returns. This can entail analyzing and extracting information from financial documents such as wage, unemployment, and mortgage interest statements. Travel to meet with clients might be required.
Tax advisors can either work independently, for the government, or for a firm. Salaries depend on degree level; however, the U.S. Bureau of Labor Statistics collects information regarding the salaries of accountants and auditors in general, which are listed below.
|Degree Level||At least a bachelor's degree for CPAs, no degree required for EAs or tax preparers|
|Degree Field||Accounting or taxation; a law degree is also acceptable|
|Licensure||Enrolled Agents need to meet Internal Revenue Service (IRS) regulations; CPAs need to be licensed by a state accountancy board; all tax advisors submitting tax returns need a PTIN|
|Experience||At least three years of tax experience are required|
|Key Skills||Strong verbal and written communication skills, knowledge of federal and state tax laws, math proficiency, attention to detail and analytical thinking skills, accounting, tax preparation and financial analysis software, such as Intuit Quicken and Sync Essentials Trade Accountant, project management software, spreadsheets|
|Salary (2014)||$65,940 (median salary for accountants and auditors)|
Sources: U.S. Bureau of Labor Statistics, National Association of Enrolled Agents, ONet OnLine, Internal Revenue Service
Step 1: Earn a Bachelor's Degree
Tax advisors commonly hold at least a bachelor's degree in accounting, taxation, or a related field of study. A bachelor's degree in accounting, for example, might include coursework in business taxation, fraud examination, non-profit accounting, and federal taxation. These programs also tend to offer internships as electives. Some accounting programs are specifically geared towards students who want to become CPAs. These programs generally consist of 150 semester hours in order to fulfill education requirements set by state accountancy boards and take five years to complete. Tax advisors who take the EA path to this career are not required to have postsecondary training, though employers tend to prefer applicants who hold undergraduate degrees.
- Consider earning a master's degree. While a 5-year accounting bachelor's can qualify individuals for CPA licensure, some aspiring tax advisors earn master's degrees in order to fulfill state education requirements. In fact, the U.S. Bureau of Labor Statistics reveals that some employers prefer accounting professionals who hold graduate degrees.
Step 2: Get Your Credentials
Tax advisors typically qualify for this career by becoming EAs or CPAs. The requirements for becoming a CPA are set by each state's Board of Accountancy, though the process generally involves passing a 4-part national CPA exam after finishing 150 college hours of coursework in accounting or a related field.
Those who choose to become EAs must register with the IRS. Earning this credential usually requires the passage of a background check and the 3-part Special Enrollment Exam, though some applicants who have worked in a taxation-related position for the IRS may bypass these requirements. Candidates must also attain a Preparer Tax Identification Number, which tax advisors must include on all tax returns they prepare.
- Take a prep course. Future tax advisors can increase their chances of passing the CPA or EA exams by studying beforehand. The National Association of Tax Professionals offers exam review courses for aspiring EAs and boasts a 92% passage rate for exam-takers who attend such courses. Additionally, state-specific CPA organizations and some colleges offer CPA exam review courses.
Step 3: Gain Experience and Advance
Tax advisors can gain experience in the field by serving as an accountant or an auditor for a private business, non-profit organization, or accounting firm. They could also work for the IRS or a state revenue department. After gaining a few years of experience, these workers may then qualify for employment as an advisor. In fact, employers looking for tax advisors or preparers tend to require at least three years of experience related to taxation.
Step 4: Maintain Your Credentials
Most states require CPAs to maintain licensure by earning continuing education credits. The number of credits required varies by state. For example, New York requires CPAs to complete 24-40 contact hours each year, depending on the topics studied. EAs are required to maintain their credentials every three years by completing 72 continuing education hours.
- Join the National Association of Tax Professionals (NATP). The NATP is the premier national organization for tax professionals offering networking events and continuing education options for their members.