Tax consultation is a lucrative field in which you'll find you can play a critical role in the financial success of your clients and partners and can work with any firm, business, office, or person you like to help answer their questions as a general tax advisor and work on tax preparation issues. If you are in college, about to go to college for a degree in accounting, or at any point in your career path and thinking about making a change to tax consulting or working as a tax advisor, then you should know the requirements, experience needed, current salary projections, continuing education requirements, and career options. You'll find all of that here, and more.
What are tax consultants?
Tax consultants are experts in federal and state tax laws, rules, and regulations and are experienced with a variety of tax issues and tax-related issues. They manage annual tax filings for organizations, businesses, and individuals. They can work on preparing tax forms to help people save money or review already complete forms to approve each credit or find additional deductions. However, these consultants do far more than prepare tax returns; they are experts and advisors that can work with a client throughout the year at any time in the annual business cycle to minimize taxation, ensure compliance with tax rules and regulations, and maximize after-tax income. They come from a variety of fields with relevant work experience and having met specific education requirements. Tax professionals can be lawyers, certified public accountants, accountants, enrolled agents, or financial advisors.
Tax Consultant Job Duties and Typical Functions
There is a motto in the law that the power to tax is the power to destroy. A tax advisor or consultant can help determine the optimal level of taxation and they help devise plans or strategies to affect tax burdens. They engage in tax preparation, ensure tax compliance, help maximize deductions and credits, lower tax liability, and identify high tax bracket items that can move to lower brackets. They use tax planning to defer taxes and drive them to future years to make real, long-term changes within a company and improve their financial situation. And they make sure that anything you do in terms of lowering your tax burden is done well and is completely legal so you don't end up in court. They must have excellent communication skills in order to explain complex issues to those without specialized knowledge and non-tax professionals.
These consultants may specialize in particular areas of the law such as counseling businesses or working with non-profit organizations. Additionally, consultants may still work with an accounting firm so that they have the backing and support of a group of other legal or tax profesionals. Some major areas of consulting on taxes include the below-listed areas.
Trial and Evidence experts
Consultants in this field can serve as experts in court and administrative proceedings to defend their advice and to offer objective exert evidence on federal taxes, income tax returns, tax liability, or other similar subjects.
Engineering/Research Tax Consultation
The federal, state, and local laws contain many incentives to promote engineering and technological development and innovation in the market. These types of financial and tax incentives play an essential role in the ongoing growth and development of local, regional, and national economic growth initiatives but heir content can be difficult to understand. The core elements of the public incentives to private action involve taxes, tax credits, tax reductions, and tax-free loans, grants, and other types of income.
Sales and Use Taxes
For some classes of businesses, expenditures for purchases constitute a major economic activity. Tax specialists advise such clients on ways to reduce and avoid excess taxation on a number of goods, materials, equipment, and services that they get with purchases that may be subject to sales taxes or use fees.
Businesses and corporations must pay taxes on their earnings and tax consultants provide critical expertise to develop and carry out strategies to minimize taxation and maximize income. The laws on taxation have, at various times, levied higher rates in certain classes of income than on others, such as capital gains. These consultants provide specific and technical guidance on obtaining the best, permissible tax treatment of business and corporate income.
Estate Taxes and Planning
Consultants play a critical role in estate planning and they can advise on the use of trusts and other tax deferral and avoidance strategies. In this area, they must work with federal law as we as the laws of one or more states to provide comprehensive planning advice.
Average Tax Consultant Salary
In an administration, tax consultants can work with or for the federal, state, or local units of government that oversee or enforce the laws governing international tax, income taxes, etc. and the tax obligations of those under their purview. The range of titles and functions that these consultants occupy in public service is broad and extensive. Government functions involving tax assessments, collections, appeals, and litigation require their expertise. Consultants can serve as advisors, economic advisors, and counselors in government fictions like revenue, treasury, and fiscal management.
Legislation that interprets public policy needs tax expertise. New rules and regulations do not exist in a vacuum, and they require careful integration and avoidance of conflicts and confusion. Perhaps the most important contribution of tax experts in the legislative process is in communications. One must have a thorough understanding of past and present tax laws to provide clear and transparent presentations of a new policy or policy changes. Communication is a key role of the tax consultant, and this applies in the realm of public employment.
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- Salaries and Compensation
Tax consultants may be drawn into two salary category ranges of a lower- or entry-level and senior level. For the calendar year 2017, the estimated average salary for these consultants is about $65,000.00, and senior consultants in the field averaged about $10,000 more per year. The salary ranges varied by industry and location.
- Assess financial operations and make best-practices recommendations to management
- Suggest ways to reduce costs, enhance revenues, and improve profits
- How do you Qualify as a Tax Consultant?
The keys to successful tax consultation are knowledge and experience. You can gain knowledge through academic education and training. Career education is a great option for entering the tax consulting field. If your employer has a tax or related line of business, then they may wish to subsidize employee education. Some firms provide career education to develop talent from within their workforce.
The other method is to work in the field as an intern, apprentice or another type of supervised or learner role. On the job experience is a very valuable commodity for entering the field. It can replace formal education when qualifying for licensing and certification examinations.
Education Requirements to Becoming a Tax Consultant
School and college education is a typical path to tax consultation. Most tax consultant careers begin with a college degree.
- Educational Requirements
There are no rigid educational requirements for tax consultants. You can use any of several courses of study to get the knowledge base that you will need. You can base your approach in accounting, law, or business.
- Formal Education and Training
The typical path is to select a four-year college and take a business based major course of studies such as accounting, tax, economics, pre-law, or business. You should develop a minor or a coursework focus on law, taxation, accounting, government, and business. You can enhance your employment prospects by adding an advanced degree such as a master's, a Juris Doctor, or certificate programs aimed at taxation or some specialized areas.
- Informal Education (work experience and apprenticeship)
While most tax accountants have at least one college degrees and most have advanced degrees, you can obtain the experience and knowledge needed for tax consultation from life and work experience. For example, people that work in the tax field for many years and at the right levels can acquire the knowledge and experience to perform tax consultation. Employees of the IRS or in a tax department of a major financial institution can get exposure, training, and knowledge to handle complex tax matters. They can pass required tests and get the needed certifications.
As a rule of thumb, many employers consider three years’ experience to be a significant level. The quality if the experience matters more than the length. Experience can matter more if it is at the cutting edge of change. For example, you may join a task force that prepares recommended amendments to the tax code. This type of experience matters more than handling routine matters particularly in times of legislative and rule changes.
Typical major fields of study for tax consultants include law, accounting, business, and economics. New areas emerge such as cryptocurrencies that require new policy, different skills, and specialized knowledge.
Certification, Credentials and Licensure
State laws govern the qualifications and licensure of Certified public accountants, attorneys, and financial advisors. You must meet the education and experience requirements to sit for qualifying examinations. Once you obtain your license or credential, then you must maintain good standing b completing the required coursework, continuing education, and refresher education.
- IRS Certifications
The Internal Revenue Service certifies persons to prepare and file tax returns, appear before their review and appeals functions, and defending enforcement actions.
- Tax Attorney - unlimited representation and appearance rights.
- CPA- Unlimited representation and appearance rights including defending returns, and proposals they have authored.
- Enrolled Agents- must pass suitability check and three-part IRS written examinations covering estates, business, and individual taxation. They must maintain continuing education requirements to keep good standing.
- Tax Preparers- must meet requirements for hours of experience, supervised
- State Licensing Requirements
CPA licenses require passing a national exam and a state exam in the state you will practice. These attorneys must be licensed attorneys in the states they practice and in good standing.
Possible Job Titles, Duties and Day in the Life
Tax consultants can hold C-suite titles in corporations like Chief Financial Officer. In the marketplace, tax consultants can be tax advisors, tax experts, auditors, tax accountants, and attorneys. The typical day of a tax consultant involves forming strategies and carrying out plans to stay within the law, reduce taxation, and increase benefits such as deduction, credits, and policy incentives. The key to all of these roles is communications.
You must be able to communicate ideas and strategies about taxation to clients, other professionals, administrative agencies like the IRS, and the Courts. The ability to write clearly and speak effectively is critical to the role of a tax consultant. The tax consultant may function as a member of an important corporate management group. In such roles, the consultant must communicate in the language of management or the technical aspects of a business or organizational activity. Consultants must learn quickly and adapt their advice to a wide variety of circumstances.
- Combination Careers
You can improve your career prospects by diversifying your education and subject matter knowledge. A Juris Doctor degree program in Taxation can set the stage for a career in government or the private sector as a tax attorney. This role can work with a tax consultant education to offer an attractive career option as an attorney that can work with corporate and individual clients in litigation, taxation, tax planning, and estates. In a similar vein, you can get a wide range of opportunities by combining a Juris Doctor degree, with an accounting education concentration, and CPA certification.
- Tax Consultants Alternative Careers
The US tax code creates sets of rights and privileges including reduced or no taxation. Many of these types of organizations exist for the broad purpose of promoting the public welfare. That ideal has grown to include a very wide definition of public benefit such as the political fundraising groups stands on the same footing as a group that houses the homeless or feeds the hungry.
The wide discretion exists, it requires expertise in the creation and maintenance of organizational structure and business methods that stay within the requirements of the law. For example, the Tax code [IRC section 501] as subdivision the establish special organizational tax-free status for contributions to a charitable organization, public bodies, and social organizations.
In the Internet Age
A tax consultant can be an employee, an independent contractor, or a global entrepreneurial opportunity. The Internet opens possibilities for nearly every business professional you can reach a global audience, and you can pursue opportunities anywhere in the world wide web. Online marketing is limited by imagination and effort. US tax laws affect every business or individual that conducts business in the US, the territories, or with US-based businesses and individuals.