Tax Accountant vs. CPA

A tax accountant is a CPA who works with businesses to develop a tax strategy to minimize their liabilities, while a CPA is a certified public accountant and may be a tax accountant. Tax accountants are certified public accountants. Their main focus is on the preparation and management of taxes for a company or individual. They may also provide guidance on financial planning and estate planning.

How to start a tax business

To start a tax business, you need to get the appropriate education and training, obtain your PTIN, and get an Electronic Filing Identification Number (EFIN). For details on each of these steps, reference this guide:

What are careers in tax accounting?

Payroll specialists, Auditors, and Tax preparers are all careers in tax accounting. They all require you to have a solid understanding of financial documents and the current tax requirements. However, there are different aspects involved in each of these careers that will interest many different people. Payroll Specialists Payroll specialists manage a company's payment process, including issuing paychecks and tracking employees' time. They have to ensure that they are meeting all federal and state guidelines in regard to tax regulations. It is important to have a solid understanding of tax regulations to be a successful payroll specialist. Most payroll specialists will hold bachelor's degrees in accounting. From there, they will often pivot away from traditional accounting and focus more on applied tax information for payroll. Payrolls must be able to keep track of employees' time as well as paychecks. Auditors Auditors inspect accounting records and other financial records to make sure that they are accurate. They often hold bachelor's degrees in accounting and can work for individual firms or for the IRS. A large part of an auditor's job is to make sure taxes are filed correctly and that businesses are following all state, federal, and local tax laws. Tax Preparers Tax preparers are generally what people think of when they think of an accountant. Their primary duty is managing an individual's or company's income tax returns. They hold bachelor's degrees in accounting and work a schedule that has busy seasons as well as calmer working conditions.

What is a tax accountant and how to become one

Updated January 8, 2025

4 min read

Quoted expert

Stephen Moehrle Ph.D.

A tax accountant provides accounting services related to tax preparation, planning, and compliance. They aim to help individuals and businesses minimize their tax liability while ensuring legal compliance. Tax accountants analyze financial data, prepare tax returns, provide tax advice, and represent clients in dealings with tax authorities. They may also help clients navigate complex tax laws and regulations to make informed financial decisions. Overall, tax accountants help individuals and businesses manage their taxes effectively.

What general advice would you give to a tax accountant?

Stephen Moehrle Ph.D.

Professor and Chairman of Accounting, University of Missouri - St. Louis

It was a great time to be entering the accounting industry, before the pandemic. Our students were serving in internships in huge numbers and our graduates were enjoying 100% placement, usually with multiple offers. The entry-level professionals were entering a profession marked by emerging and evolving technologies that made even the entry-level duties especially interesting. Further, our tech-comfortable young professionals were experiencing quick advancement because of their ability to employ the new technologies.

Most of the above remains true so the only open question is job availability. It would be unrealistic to say things are great. However, it seems that job prospects for accounting majors will be better than for those of virtually every other entry-level profession during difficult times. I have been speaking with firm leaders across the spectrum of firms and most do intend to be on campus in the fall recruiting season. Of course, they have a lot of time to learn more about the economy over the next few months, but we are cautiously optimistic. Again, I am confident that whatever the state of job availability for young CPAs-to-be, prospects will be better for accounting graduates than virtually any other profession.

They will be entering the profession at a fascinating moment in time. Of course, the technological advances assure this regardless of economic conditions. However, there are business disruption-related issues that will provide rich opportunities for making a difference. For example, audit staff will be working with clients to see them through these troubling times. Lamentably, I fear that these young professionals will learn more about the going concern determination than they desire to know. Tax staff will help clients to optimally use the tax loss carrybacks and carryforwards that are arising by the day. Entry level professionals in corporate accounting will get a day-to-day front row seat in business management through crisis. While lamentable times, these are times when young professionals can make a difference that saves jobs.

ScoreTax AccountantUS Average

Salary

4.9

Avg. Salary $62,142

Avg. Salary $59,228

Stability level

5.4

Growth rate 6%

Growth rate 0.3%

Diversity

6.2

Race

American Indian and Alaska Native 0.45%

Asian 15.47%

Black or African American 8.22%

Hispanic or Latino 10.54%

Unknown 3.94%

White 61.38%

Gender

female 52.68%

male 47.32%

Age - 43

Race

American Indian and Alaska Native 3.00%

Asian 7.00%

Black or African American 14.00%

Hispanic or Latino 19.00%

White 57.00%

Gender

female 47.00%

male 53.00%

Age - 43

Stress level

5.4

Stress level is manageable

7.1 - high

Complexity level

8.3

Complexity level is challenging

7 - challenging

Work life balance

6.7

Work life balance is good

6.4 - fair

What are the pros and cons of being a tax accountant?

Pros

High demand for tax accountants
Potential for high salary and bonuses
Job security and stability
Flexibility in work hours and work arrangements
Ability to work remotely or from home

Cons

Monotonous and repetitive tasks
Heavy reliance on software and technology
Possibility of dealing with difficult or uncooperative clients
Constant need to keep up with changing tax laws and regulations
Limited job growth opportunities in certain areas or firms

Key steps to become a tax accountant

Explore tax accountant education requirements

Most common tax accountant degrees

Bachelor's

72.0 %

Master's

15.9 %

Associate

8.8 %

Start to develop specific tax accountant skills

Skills	Percentages
CPA	8.70%
Tax Audits	4.44%
Income Tax Returns	3.93%
Tax Research	3.91%
Reconciliations	3.88%

Complete relevant tax accountant training and internships

Accountants spend an average of 1-3 months on post-employment, on-the-job training. New tax accountants learn the skills and techniques required for their job and employer during this time. The chart below shows how long it takes to gain competency as a tax accountant based on U.S. Bureau of Labor Statistics data and data from real tax accountant resumes.

Gain additional tax accountant certifications

Tax accountant certifications can show employers you have a baseline of knowledge expected for the position. Certifications can also make you a more competitive candidate. Even if employers don't require a specific tax accountant certification, having one may help you stand out relative to other applicants.

The most common certifications for tax accountants include Certified Public Accountant (CPA) and Certified Management Accountant (CMA).

More About Certifications

Research tax accountant duties and responsibilities

Utilize QuickBooks to manage client data and prepare necessary financial statements.
Manage and prepare sales and use tax account reconciliations and property tax liability accounts and prepare corresponding journal entries.
Prepared/Review financial statements according to GAAP and propose adjusting entries for clients.
Prepare tax returns for corporations, partnerships, non-profit organizations and individuals.

Prepare your tax accountant resume

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