Running a business entails navigating intricate tax requirements and regulations, demanding vigilant monitoring and adept management. Tax managers leverage their expertise and experience to supervise these obligations, ensuring a company's sustained financial success and longevity. If you harbor an interest in finance and tax policy, understanding the path to becoming a tax manager can empower you to make well-informed decisions and chart your career trajectory.
This article delves into the role of a tax manager, elucidating their responsibilities and the steps to join their ranks. Additionally, it expounds upon the requisite skills, the average salary one can expect, the job prospects, and the typical work environment for tax managers.
Key Points to Remember:
- Tax managers oversee tax compliance, prepare and submit tax returns, communicate financial information, and dissect tax laws.
- To embark on a career as a tax manager, you'll need to acquire a bachelor's degree in accounting, pursue a master's degree in taxation, obtain certification as a certified public accountant (CPA), amass relevant work experience, and garner additional certifications as needed.
- Tax managers are equipped with technical proficiency in tax law, tax codes, and compliance regulations and essential soft skills encompassing effective communication, leadership, and problem-solving abilities.
What is a tax manager?
A tax manager is an accounting expert with specialized expertise in tax accounting. Their main responsibility is guaranteeing an organization adheres to local, state, and federal tax laws. Experienced tax managers often hold leadership positions, supporting individual clients or organizations. Typically, they supervise a team of accountants and other technical professionals.
What do tax managers do?
Tax managers are responsible for supervising the development and execution of tax-related protocols, ensuring clients adhere to tax laws, and minimizing the risk of audits or fraud. While specific duties may vary depending on the organization or client, their typical responsibilities encompass:
- Overseeing all aspects of organizational expansion, including company mergers, acquisitions, and initial public offerings.
- Staying informed about current tax legislation, deadlines, and requirements.
- Establishing internal systems to monitor compliance with tax regulations.
- Preparing and submitting local, state, and federal tax returns and relevant business filings.
- Communicating financial and strategic information to senior-level employees.
- Analyzing tax laws and policies to devise solutions and address client-specific needs.
Steps to Become a Tax Manager
Becoming a tax manager involves a combination of education, certification, and relevant work experience. Whether you're already in the field of public accounting or starting from scratch, you can follow these six steps to pursue a career as a tax manager:
- Earn a Bachelor's Degree: The foundational step towards becoming a tax manager is completing a bachelor's degree, ideally in accounting or a related finance field. Universities offer various options such as a Bachelor of Science, Bachelor of Business Administration, or Bachelor of Arts degree. In your coursework, expect to cover business management, economics, business law, and auditing. This education provides you with a strong understanding of generally accepted accounting principles (GAAP), which are fundamental to financial reporting in the industry.
- Pursue a Master's Degree: To enhance your career prospects in tax management, consider pursuing a master's degree specializing in taxation or international tax. Options include a master's degree in taxation or one focused on corporate taxation and international tax regulations. An advanced degree equips you with the knowledge and skills needed for leadership roles and tackling complex tax accounting practices. You can embark on this path after your bachelor's degree or while working in entry-level positions.
- Attain CPA Certification: Most employers require tax managers to hold certification as certified public accountants (CPAs) from a state accountancy board. The CPA license entails passing the Uniform CPA Examination, accumulating a specific number of college credit hours in accounting and related fields, and gaining relevant work experience in accounting. The exact requirements can vary by state, with experience ranging from one year to five years. It's advisable to research the specific requirements in the state where you plan to work.
- Gain Relevant Work Experience: The prerequisites for becoming a tax manager can vary depending on the hiring organization, with some valuing experience over education. You can begin building your experience through internships during your college years, even before completing your bachelor's degree. Once you secure employment, seek opportunities to learn and practice tax-related functions. Roles like certified public accountant or tax accountant can be instrumental in honing your knowledge and skills. Such positions can be found in public, private, and government sectors.
- Pursue Additional Certifications: To advance your career and enhance your employability, consider pursuing additional certifications such as certified management accountant (CMA) or chartered financial analyst (CFA). These certifications typically require you to hold a bachelor's degree, accumulate several years of relevant experience, pass rigorous examinations, and join professional organizations. Holders of these certifications can maintain their qualifications through ongoing education, showcasing expertise, and leadership capabilities in the industry.
- Craft a Targeted Resume and Apply for Positions: As you prepare for the tax manager role, create a well-crafted resume highlighting your pertinent skills and experiences. Include comprehensive details about your education, certifications, and employment history, focusing on recent and relevant experiences. Tailor your resume to align with the specific requirements outlined in job descriptions, incorporating keywords to help hiring managers evaluate your qualifications.
Skills for a tax manager
Tax managers use hard and soft skills to succeed in their roles. Some important skills for a tax manager include:
Tax managers use technical skills to analyze business transactions and their tax consequences. Understanding complex tax laws and staying updated with tax policies is essential. Advanced knowledge of software programs like QuickBooks can help you identify inconsistencies, complete tax-related tasks quickly, and create strategies.
This skill involves designing and implementing systems that work efficiently and thoroughly. As a tax manager, you can use organizational skills to establish efficient procedures for completing paperwork, tracking deadline progress, and assigning team tasks. You can also use organizational skills to lead a tax team and strategically allocate revenue and personnel resources to meet tax requirements.
Attention to detail
Attention to detail is an important skill that allows tax managers to produce consistent, high-quality work. This skill can help you understand tax laws better, analyze financial statements, and submit documents accurately and timely. Paying close attention to details, especially document filing deadlines, can ensure the organization properly adheres to government policies and procedures.
Time management involves being efficient and responsible about how you spend your time so that you produce quality work and meet established deadlines. You can use this skill to manage short- and long-term tax return filing deadlines, complete quarterly financial statements, and provide your team and clients adequate time. This skill is especially important during the tax season, during which you supervise preparing and submitting annual tax returns.
Communication skills involve clearly and concisely conveying information to company executives, government agents, and other interested parties. You can use a combination of written and verbal communication skills to submit required documents, share updates and policy information with organization leaders, and deliver instructions to accountants and other tax team members. Tax managers should explain tax legislation and strategy in simple language when communicating with clients.
Tax manager salary and job outlook
The average salary for a tax manager is $100,970 per year. The salaries for tax managers vary depending on their location, company size, and job type. For instance, the salary for tax managers working for the government differs significantly from those working for private firms. Education and experience can also affect a tax manager's salary since you can earn a higher income as you advance your career with additional certifications and more years of experience.
The United States Bureau of Labor Statistics projects the employment rate for financial managers to increase by 17% from 2021 to 2031, which is fast compared to the growth rate of all occupations during that period. Working as a financial manager also means many job opportunities, with about 71,300 openings yearly over the decade.
Tax manager work environment
Tax managers work full-time in an office environment during the week and sometimes on weekends. Work hours and demands may increase during the tax season or other busy times. Some tax managers also work as consultants for individual clients or groups of clients, which can allow for a more flexible schedule. Depending on the organization's size and accounting staff, tax managers may have varying responsibilities.