'Tax Accountant' is explained in detail and with examples in the Corporate Finance edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.
Tax accountants are professionals who help clients with finances. One of their main tasks is to prepare tax returns for individuals and businesses. They complete taxes for local, state, and federal levels. These agents can do this because they have great knowledge of governmental regulations and business rules. The Internal Revenue Service established tax accounting with the section Title 26 of its Internal Revenue Code.
Tax accountants also perform a variety of other functions. They help their customers minimize the amount of taxes owed. They assist them in meeting tax filings and requirements. Accountants also update their clients on any changes to the tax code that will impact their business. When there are government audits or disputes over taxes, companies turn to their tax accountants for representation to help resolve them.
Tax accountants’ work schedules are different than those of many professionals. This is because much of their business is seasonal. From mid April thru end of December, they keep busy with typical work weeks. Starting in January through mid April, these professionals see their work hours go up dramatically. The first four months of the year they are doing individual and business tax returns for clients.
Becoming a tax accountant requires significant amounts of education and licensing. These professionals generally need bachelor’s degrees either in accounting or a related field. Business administration is another major that individuals can take to become an accountant. It makes a good base for a master’s degree in accounting. Other master’s programs that help with this line of work involve taxation, auditing, business statistics and calculus, or financial planning.
The professional qualification that sets accountants above many of their peers is the CPA. To obtain the official Certified Public Accountant status they must put in another 30 educational hours and obtain experience in accounting. Finally, accountants take an exam to gain this designation. Having a CPA credential with their state board allows them to file financial reports with the Securities and Exchange Commission.
Each state has its own requirements for the CPA license. One hundred and fifty semester hours of college or university credit is usually necessary. Most states also require a candidate to demonstrate minimally two years work experience in the field.
The American Institute of Certified Public Accounts is the governing body that administers the CPA exam. After candidates have met the other educational and experience criteria they may take this. Gaining the certification is not the end of the process. CPAs are usually required to stay caught up with various continuing education courses. Otherwise they will not be allowed to keep their designation.
There are several questions that business owners should ask before hiring a tax accountant for their enterprise. It is good to know the types of clients these professionals count. Finding one that understands their business is important. Companies also need to make sure a potential accountant is available all year round.
Finally, companies should determine that their potential financial planning company has real experience dealing with the IRS. Sometimes CPAs are a more impressive designation. This does not give them the experience that an Enrolled Agent has with the IRS. The Federal Government actually certifies EAs precisely to handle taxes. Another advantage that EAs have is that many of them have been IRS agents. As such they possess real and valuable experience in performing and handling business and personal tax audits.