What Is a Tax Advisor? Skills, Qualifications, and Getting Started

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Learn about professional tax advisors and discover their skills, salary, and qualifications.

[Featured Image] A tax advisor wearing a striped shirt and glasses is sitting in front of his computer.

Tax advisors, also known as tax consultants, offer various tax consulting services to individuals and businesses. They may prepare tax returns, estimate taxes owed, and represent clients at audits. As a professional tax advisor, you will help people understand the tax laws and regulations that impact their finances.

This guide offers an overview of the duties and skills required of a tax advisor, salary information, where you might work, and how you can begin and continue your journey in this career.

What is a tax advisor?

While looking at tax advisor jobs, you’ll often see the role referred to as tax consultant. There are several roles where you’d offer tax advice, including a certified public accountant (CPA), tax attorney, and an enrolled agent.

As a tax advisor, you help businesses and individuals navigate the complex world of taxation. You minimize tax liabilities by using tax laws and effective planning. This role can vary and be challenging, and it may often encompass elements of accounting, auditing, finance, and tax law. 

To become a tax advisor, you need to have strong numeracy skills and be able to interpret complex data quickly. However, the competencies you require for this job are not purely technical and accountancy-based. The role also requires good communication skills and the ability to build relationships with a wide range of people.

What does a tax advisor do?

As a tax advisor, you strive to be an expert in taxation. Your job is to help clients by advising them on how to decrease their taxable income or increase their tax refunds. You may advise clients on dealing with audits, unpaid taxes, and other problems with the Internal Revenue Service (IRS) or state tax authority.

Your primary role is to make sure your clients are not paying more in taxes than they need to be based on their income level, investments, family situation, and other factors. Your role may include:

  • Researching tax issues and ensuring your clients are tax-compliant

  • Preparing and reviewing tax returns, corporate and personal income taxes, sales and use tax, property tax, franchise tax, and estimated taxes

  • Advising and consulting on taxation issues

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

  • Reviewing proposed legislation that would affect clients' taxes

Degree options for tax advisor roles

While a college degree is not necessarily required to become a tax advisor, you’ll find different degree options when considering this career path. The one you decide to study will depend on your goals and the time you want to invest.  Here are the following:

  • 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. This can help you specialize in a specific area of taxation advice. You might want to consider the Online Master's of Accounting (iMSA), offered by the University of Illinois Urbana-Champaign.

Do you need tax advisor qualifications and certifications?

The tax consulting career does not require formal education. However, about 54 percent of tax advisors have a degree [1]. You will typically qualify to become a tax advisor by becoming either an enrolled agent or a CPA.

  • 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).

You might also need the following for some roles:

  • 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.

Professional bodies for taxation professionals

Joining professional tax bodies can help enhance your resume and profile. They offer various professional training and continuing education opportunities. You can access web-based and live events and learn more about different aspects of the profession from the following organizations:

Tax advisor skills you’ll need

To become a tax advisor, you must have a strong knowledge of tax and accounting principles and be comfortable working with numbers. You will also need to have excellent communication skills to explain complex tax matters to clients. The following is a list of additional skills to build to be an effective tax advisor:

  • 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 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. 

Read more: What Are Job Skills and Why Do They Matter?

Steps to become a tax advisor

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

1. Earn a degree. Many tax advisors begin their career by earning a bachelor's degree in accounting, business, finance, or a related field, from an accredited college or university. Instead, you might consider an associate degree or advance to a master's degree.  However, you don’t need a degree to get into tax consultancy, but most employers prefer degree holders. 

2. Gain 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.

3. Get your credentials. There are several credentials that can increase your chances of getting work as a tax advisor. These include PTIN and ATA. You can also make yourself more attractive to employers by becoming an IRS-certified enrolled agent.

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. 

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4. Apply for state licensure in the state where you plan to work. If you want to be a CPA, you need to get 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. Not all tax advisors are CPAs, but if you take this route, apply for and obtain your CPA license.

5. Get an entry-level job. Apply for jobs, like junior tax advisor or tax administrator. You could also work in accountancy with a tax focus and then begin specializing in taxation as you build your experience. As a tax advisor, you have the opportunity to work in many different organizations. You could work for:

  • A public accounting firm

  • A tax consulting firm 

  • A law firm 

  • Government agencies at the local, state, or federal level 

  • A private corporation 

  • Your own tax consulting business

6. 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.

How long does it take to become a tax advisor?

The length of time it will take you to become a tax advisor varies depending on your educational path. Some aspiring tax advisors work in entry-level accounting positions to gain experience while obtaining the necessary educational requirements to become tax advisors. Others pursue an associate or bachelor's degree and then a master’s degree. 

Getting qualified usually takes around three to six years, depending on whether you take an accelerated learning route or do extra learning to specialize in a specific area of taxation.

What types of firms can you work for as a tax advisor?

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. You can work in different organizations after you become a certified tax advisor. 

Many tax advisors concentrate on specific areas of taxation, such as real estate, international, or business tax. As a certified tax advisor, you may work for the following types of firms:

  • Professional tax preparation companies

  • Corporations

  • Public accounting firms

  • Legal companies

  • Government agencies

  • Non-profit organizations

Average tax advisor salary

Tax advisors in the US earn an average annual salary of $63,992 per year [2]. Entry-level average salaries start at $50,958, and experienced tax advisors may earn as much as $121,000 per year. Earnings are dependent on years of experience, specialization, sector worked in, and location.

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 or tax analyst. A possible career path for a tax advisor could look like the following:

  • You apply for and complete an internship with an accounting firm or take a junior role.

  • After three to five years as a tax advisor, you’re promoted to senior tax advisor, perhaps leading a team. If you’ve passed the CPA exam, this may be shortened to one to three years. 

  • After five to eight years as a senior tax adviser, you’re promoted to a managerial role.

You may decide to remain in the capacity of tax manager or director until retirement or move between firms in senior roles. You could also move into more general accounting or finance management and controller jobs.

Start your tax advisor journey. 

Learning more can help you decide if being a tax advisor is the right career move. Consider taking the Federal Taxation I: Individuals, Employees, and Sole Proprietors course from the University of Illinois to learn how individuals are taxed and about tax strategies to improve their financial situation. 

If you're leaning more toward working with corporations, consider Taxation of Business Entities I: Corporations. This course provides an overview of corporate taxation in the US. You can use it to better understand the fundamentals of the corporate tax landscape. 

These courses are part of the US Federal Taxation Specialization, a five-course online Specialization that leads to a shareable Certificate.

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U.S. Federal Taxation

U.S. Federal Taxation of Individuals & Businesses. Learners will develop knowledge in U.S. federal taxation as applied to individuals and businesses.

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Articles sources

1.  Zippia. “How to Become a Tax Advisor, https://www.zippia.com/tax-advisor-jobs/.” Accessed May 27, 2022. 

2. Glassdoor. “How much does a tax advisor make?, https://www.glassdoor.com/Salaries/tax-advisor-salary-SRCH_KO0,11.htm” Accessed May 27, 2022.

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