What Is a Tax Advisor? Duties, Pay, and How to Become One

Tax advisors, or "tax consultants," offer various tax consulting services to both individuals and businesses. From preparing tax returns to estimating past due tax payments and representing clients during audits, professional tax advisors help others successfully maneuver the tax laws and regulations that impact their finances.

If you have a knack for problem solving and enjoy working with numbers, then you might consider a career as a tax advisor.

In this guide, you'll learn more about tax advisors, what they do, and how much they earn. You'll also learn the steps you need to take to become a tax advisor and explore cost-effective courses that can help you gain job-relevant skills today.

What is a tax advisor?

Tax advisors, or "tax consultants," help businesses and individuals navigate the complex world of taxation. As a tax advisor, you'll pair your knowledge of tax law and finance with skills in accounting, auditing, and effective planning to minimize tax liabilities for your clients.

There are several roles where you could offer tax advice, including as a certified public accountant (CPA), tax attorney, and an enrolled agent.

What does a tax advisor do?

Tax advisors are experts in taxation who advise others on how to decrease their taxable income or increase their tax refunds. In effect, tax advisors ensure their clients don't pay more in taxes than they need to based on their income level, investments, and other factors by conducting audits and resolving tax issues with the Internal Revenue Service (IRS) or state tax authority.

Typically, they perform the following tasks:

• Research tax issues and ensure their clients are tax-compliant

• Prepare and review tax returns, corporate and personal income taxes, sales and use tax, property tax, franchise tax, and estimated taxes

• Advise and consult on taxation issues

• Represent clients before the IRS (if you are a CPA, attorney, or an enrolled agent)

• Review proposed legislation that would affect clients' taxes

Tax advisor salary

Tax advisors are well rewarded for their knowledge and skillset.

According to the US Bureau of Labor Statistics (BLS), the median annual income for accountants and auditors was $77,250 a year as of May 2021 [1]. Glassdoor, meanwhile, pegs the average base pay for tax advisors at $62,734 a year as of January 2023 [2].

The exact amount that you can expect to earn as a tax advisor, though, will likely be dependent on your work experience, specialization, employer, and geographic location.

Where do tax accountants work?

Some tax advisors work alone with clients as freelance consultants, while others work in large teams of tax professionals at accounting firms, such as Deloitte, H&R Block, Franchise Group Inc, and Ryan LLC.

Many tax advisors concentrate on specific areas of taxation, such as real estate, international, or business tax. As a result, they are often employed not only by professional tax preparation companies but also corporations, legal companies, government agencies, and nonprofit organizations.

How to become a tax advisor

While the specifics will vary based on your background and personal journey, here are the primary steps you'll likely need take to become a tax advisor:

1. Consider a degree.

While a college degree is not necessarily required to become a tax advisor, about 54 percent of all tax advisors have a degree according to Zippia [3]. Common degrees that tax advisors earn include associates, bachelor's, or master's degree in accounting, business, finance, or a related field. As you consider the path you'll take to becoming a tax advisor, here's what you can expect from each degree programs:

• Associate degree: An associate degree program in accounting or a related field of study can help you learn how to analyze financial data and the details of business law and accounting regulations. These programs are usually completed in two years.

• Bachelor's degree: Most employers looking for tax advisors prefer applicants to have at least a bachelor's degree. Consider a bachelor's degree in accounting, business, finance, business tax, business administration, or related fields. 

• Master's degree: Master's degree programs expose you to more complex tax issues, like international taxation, and can prepare you for a specific tax specialization.

  Online Master's programs

  If you're looking to gain a master's degree but require a cost-effective, flexible program that fits your life, then the University of Illinois Urbana-Champaign's Online Master's of Accounting (iMSA) might be right for you.

  

2. Gain the right skills.

To become a tax advisor, you must have a strong knowledge of tax law, accounting, math, and have excellent communication skills. As a result, here are some of the skills you should consider building to join the profession:

• Mathematical ability: As a tax advisor, you'll use strong numerical reasoning abilities. You must be able to analyze financial information to identify errors or problems. 

• Attention to detail and accuracy: You'll need to pay attention to detail since mistakes can be costly for clients.

• Strategic thinking and problem-solving skills: You will be looking at clients' financial data and using strategic thinking skills to identify ways for clients to save money or increase profits. You will use your problem-solving skills to find solutions for clients.

• Computer and software skills: You'll need knowledge of various types of software programs related to accounting, including spreadsheets, databases, and accounting and taxation software. Software often used in tax work includes QuickBooks, Peachtree, Sage 50, ProSeries, Drake Tax, ATX Tax, and Lacerte.

• Verbal communication: Taxes can be complex and convoluted. Effective communication skills are essential when discussing delicate financial matters with clients.

• Dedication to continued learning: To stay registered and up-to-date, you must complete continuing education courses each year. 

3. Get relevant work experience.

Work experience in a related field can help you prepare to be employed as a tax advisor. This can include experience as an accountant, auditor, financial assistant, financial examiner, or another finance professional. You can also gain the necessary experience by working as an intern.

4. Consider credentials.

There are several credentials that can increase your chances of getting work as a tax advisor. While some of qualifications (like PTIN and ATA) will likely be required by many employers, others (like EA and CPA) aren't usually necessary but do open up new job opportunities. At a glance, here's what you need to know about the most common certificates, certifications, and qualifications you'll encounter as a tax advisor:

• Enrolled Agent (EA): The IRS issues the Enrolled Agent certificate. It allows an EA to represent taxpayers before the IRS. CPAs and attorneys can also represent their clients at IRS meetings.

• Certified Public Accountant (CPA): Being a CPA can give you additional credibility due to the training involved. To become a CPA, you must have a bachelor's degree in accounting or a similar field and pass the Uniform CPA Exam administered by the American Institute of Certified Public Accountants (AICPA).

• PTIN: You need to get a preparer tax identification number (PTIN) if you plan to prepare taxes for clients. The IRS has made it compulsory for all paid tax return preparers to obtain a PTIN before preparing any federal tax returns.

• ATA: Accredited Tax Advisor (ATA) is a qualification that enables you to plan taxes for complex scenarios, such as retirement planning, high net worth individuals, and estate taxation. You need to have five years of experience to take the exam. ATA status can enhance your career prospects and may be required for some roles.

CPA Credentials

The CPA exam is considered the gold standard for accountants and tax advisors in the US. It covers taxation, auditing and attestation services, and financial accounting and reporting. You do not need to take the CPA examination to work as a tax advisor. However, passing the exam demonstrates your knowledge of the necessary technical skills that some employers will prefer or expect. 

5. Apply for state licensure (if required).

Not all tax advisors are CPAs but if you do want to be a one, then you'll need to be licensed in your state. After passing the CPA exam, you must obtain licensure from the state board of accountancy before advertising as a CPA in that state. The exact requirements vary from state to state, though, so make sure to check to ensure you take all the required steps.

6. Join a professional organization.

Joining professional tax bodies can help enhance your resume and profile. In addition to providing various professional training and continuing education opportunities, professional organizations also host online and live networking events and conferences that can assist you with your professional development.

Some professional organizations you may consider joining include:

• National Society of Tax Preparers

• National Association of Enrolled Agents

• National Society of Accountants

• National Society of Tax Professionals

• National Association of Registered Tax Return Preparers

7. Continue your education and training.

You must complete continuing education courses throughout your career to maintain your CPA certification and licensure, and EA certification. It's also advisable to regularly keep your tax advisor skills current by taking relevant courses and other learning opportunities.

Typical career paths 

The career path of a tax advisor depends on their goals.

People often enter the taxation field from jobs in accounting, the IRS, office management, customer service, and administration. You may move into related roles during your career, such as tax accountant, tax analyst, and potentially to more senior positions as a manager or director.

Start your tax advisor journey

Tax advisors have the knowledge, skills, and expertise required to help others maneuver the complexities of the tax system. If you're interested in joining the profession, then you might consider taking a cost-effective, flexible specialization through Coursera to gain the job-relevant skills you need to excel in the profession. In the University of Illinois' US Federal Taxation Specialization, you'll learn to apply basic principles to settings involving individuals, corporations, and other business entities, complete key components of major, individual U.S. federal tax returns, and identify tax-related strategies and implications of structuring transactions and organizations.

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