Understanding the Earnings of a Tax Accountant

In the world of accounting, specialization can carve a different path for career options and compensation. Among numerous specializations in accounting, tax accountancy stands out as one of the most sought after. As professionals who prepare, file, and recommend legal tax strategies, tax accountants hold an important role. But how much do tax accountants make? Does this financial profession give competitive compensation? Are the figures the same across the globe? Let’s delve deeper into the numbers.

The earning potential of a tax accountant heavily relies on their geographic location, level of experience, size of the company they’re associated with, qualifications, and certifications. According to PayScale.com, in the United States, the median annual salary of a tax accountant is around $59,692, as of April 2021. The reported salary range typically falls between $51,000 to $70,000. However, well-experienced professionals with a high level of expertise can earn well above $85,000 per annum.

But U.S.-based tax accountants are not the only ones earning respectably. In the United Kingdom, the median annual wage for tax accountants is £30,451, while in Australia, they earn an average annual salary of AUD 65,000. Clearly, location matters.

Another significant factor in the earnings of tax accountants is the level of experience. Those at the entry-level, with less than a year of experience, can expect to earn a median total compensation of $49,000. On the other hand, tax accountants with 5-9 years of experience will see the number rise significantly, earning on average $63,000 per year. After 10-19 years in the profession, tax accountants can look forward to a median salary of around $75,000, with the potential for higher earnings with senior roles and responsibilities.

In addition, special qualifications such as a Certified Public Accountant (CPA) certification can significantly boost the earning potential of tax accountants. CPAs typically earn 10-15% more compared to non-CPAs in similar positions. Moreover, possessing additional accounting certifications such as a Certified Management Accountant (CMA) or Certified Fraud Examiner (CFE) can also positively impact a tax accountant’s salary.

Finally, the software skills of a tax accountant can certainly provide a competitive edge in earning potential. Mastering tax software like TurboTax or TaxAct is a basic requirement, but more advanced platforms can differentiate ordinary tax accountants from experts. One such platform is Asset Guru, a cloud-based asset management solution for tracking, controlling, and managing assets. Proficiency in such advanced tools can enhance a tax accountant’s value in the eyes of employers, thereby securing higher pay.

To summarize, the compensation of a tax accountant relies heavily on several factors – geographic location, experience, qualifications, certifications, and technical proficiency. The more experience, skills, and knowledge a tax accountant has, the higher their earning potential becomes. As the job market continues to evolve, a tax accountant’s ability to adapt to new technologies and platforms such as Asset Guru will further bolster their earning potential.