How to Become a Tax Accountant: Your 2025 Guide

If you're interested in the taxation system, a career as a tax accountant is a great option. Tax accountants are in demand across various sectors, from local governments to accounting firms. You might also choose to work independently as a consultant. Learn more about a tax accountant's job role and career path.

What is a tax accountant?

A tax accountant handles the taxes for individuals, organizations, companies, or governments. Unlike an accountant who oversees all financial matters, you’ll specialize solely in taxes and follow tax laws set at the federal, state, and local levels. 

While income tax preparers also prepare and file taxes for clients, a tax accountant's qualifications and expertise extend beyond this so they can provide ongoing and long-term tax assistance to the people and entities they serve. 

What does a tax accountant do?

As a tax professional, your regular tasks and responsibilities might include:

• Preparing federal and state tax returns

• Offering tax planning advice

• Helping clients save money during tax season

• Creating annual tax-related plans for clients to follow throughout the year

• Protecting clients from paying more than necessary

• Making sure clients meet quarterly and annual tax deadlines

• Advising clients about the impact of tax laws and liabilities

• Arranging tax audits with authorities when needed

What is the difference between tax accounting and financial accounting?

The US accounting system incorporates both tax accounting and financial accounting, also known as generally accepted accounting principles (GAAP). GAAP centers on delivering precise financial information to external parties. Tax accounting, on the other hand, prioritizes compliance with tax laws. 

Tax accountant income and job outlook

The median annual salary in the US for accountants and auditors is $79,880, according to the US Bureau of Labor Statistics (BLS) [1]. Your salary will vary depending on your education, experience level, the industry you work in, and the state you live in.

As for job outlook, the number of jobs between 2023 and 2033 is set to grow 6 percent, faster than average for all jobs [1]. Many accountants work in private practices or freelance when tax season rolls around.

Benefits of hiring a tax accountant

Tax accountants, especially in the United States, help individuals and organizations prepare their taxes for submission to the Internal Revenue Service (IRS) every year. A good accountant is familiar with intricate rules to help their clients save as much money as possible. They can even act as financial advisors and sometimes are hired to do so when dealing with large sums of money and assets. The US federal tax system is comprehensive, so learning how to apply basic principles to tax returns and strategies is a useful skill for anybody to learn.

Types of tax accountants

Tax accountants distinguish themselves by the industry they work in or the clients they serve. Some examples include:

• CPA tax accountants are certified public accountants (CPAs) who also offer tax accounting services.

• Forensic tax accountants investigate individuals and businesses in anticipation of a legal proceeding.

• Management tax accountants take care of financial and tax matters for organizations and businesses.

• Personal tax accountants manage taxes for individuals.

• Government tax accountants work with federal, state, and local government agencies.

• Small business tax accountants focus on smaller and typically privately owned businesses.

Tax accountant skills

Tax accounts handle complex, confidential data regulated by law. If you have a keen understanding of mathematics, pay attention to detail, and enjoy serving others in a way that helps them flourish financially, you may be well-suited for a tax accountant role. Specific skills you'll need include:

Technical skills

• Knowledge of the latest federal, state, and local tax laws and regulations

• Proficiency in Microsoft Excel and tax preparation software

• Understanding of basic arithmetic and statistics to calculate complex tax information

Workplace skills

• Attention to detail in order to accurately prepare error-free documents and tax returns

• Verbal and written communication skills to effectively interact with clients

• Organizational skills to keep financial records easily accessible for reference

• Time-management skills to meet important deadlines

• Critical thinking and analytical skills to evaluate data, uncover fraud, and minimize tax liability

Tax accountant career path

As you complete your studies and gain experience as a tax accountant, you will likely find that your interests and abilities gravitate toward a certain industry or clientele. Continue to refine your skills in the specialties that you choose, hone your customer service skills, and stay on top of tax law and requirements. 

Your career path may also lead you to a different accounting career, such as a management accountant, public accountant, budget director, or internal auditor. Some tax accountants also progress to become top executives and financial managers of corporations, including financial vice presidents, treasurers, controllers, and chief financial officers.

How to become a tax accountant

While degrees aren't always required, many accountants have a bachelor's in accounting or finance. Tax accountants who take courses in tax law are particularly well-prepared for their profession. Some employers seek out tax accountants who have master's degrees in accountancy or business administration. 

Many tax accountants also hold certifications. Certifications help build your skill set and validate your knowledge to potential employers. Consider the following certification options:

• Certified Public Accountant (CPA): This credential is useful for accountants who file reports with the Securities and Exchange Commission (SEC). It requires both passing a national exam and meeting certain state requirements.

• Enrolled Agent (EA): This option allows tax accountants to legally represent clients in front of the IRS and involves passing the IRS Special Enrollment Exam. 

Learn more about tax accounting on Coursera

Tax accounting, regulated by the IRS, outlines the rules companies and individuals need to follow when filing their tax returns. Explore whether a career in accounting may be right for you with a Business Foundations Specialization from the University of Pennsylvania.

Focus on building job-ready skills with a targeted certificate program like the Tally Bookkeeper Professional Certificate. You'll prepare for an entry-level role by practicing essential business data management, financial accounting, bookkeeping, and banking skills.

Are you looking to build upon existing skills to advance your accounting career? Consider earning your Master's of Accounting online from the University of Illinois Urbana-Champaign.