Taxes are an integral part of any business operation. It is also a complicated process that requires strict compliance with federal, state, and local laws. To maintain an organization’s bottom line, a tax manager is crucial to monitor tax laws. Unexpected penalties and interest can be triggered by non-payments, which could lead to an audit that could cause additional problems. It can seem daunting to comply with changing laws and run a business.
What Does A Tax Manager Do?
A tax manager can play an important role in the organization’s longevity and success, although their contributions may not be immediately obvious as those of accountants or controllers. What is the role of a tax manager? The primary role of a tax manager is to ensure compliance with federal, state, and local tax laws. Tax managers have a range of tax-related responsibilities. They work to reduce their organization’s risk of audit. Businesses around the world would be unable to function without tax managers.
Tax Manager Job Description
Tax managers work all year to reduce audit risk for their organizations. This is done by creating and maintaining tax strategies, preparing tax returns, and keeping up-to-date on tax legislation. Tax managers can reduce audit risk by including the most recent tax laws in their tax strategies. They also help to identify every tax deduction available and avoid overpaying taxes. Tax managers ensure that their organization doesn’t underpay taxes due to tax law changes. This could result in penalties or worse.
Tax managers can also facilitate organizational expansions such as initial public offerings, mergers, and acquisitions. Tax managers assist in accurately documenting transactions from a tax standpoint and reviewing current tax laws to ensure the accuracy and completeness of the acquisition process. A lack of a tax manager during an acquisition could lead to record discrepancies, which could take time to resolve, and even tax fraud.
These are just some examples of the responsibilities that a tax manager has. Other responsibilities include overseeing the management of organizational audits by tax authorities, mentoring or supervising other accountant employees, and assuring the accuracy and leadership of internal tax initiatives such as investigations or audits into organizational issues that could lead to tax challenges. Tax managers are responsible for assigning tasks to their teams and reporting on the results to executives.
How to Become a Tax Manager
You will need to complete the required education and become certified before you can become a tax manager.
A bachelor’s degree is the first step to becoming a tax manager. This is the standard requirement for anyone working in accounting. An undergraduate degree in accounting or another related field like finance, economics, or business administration can be used. Graduates with a bachelor’s degree are able to acquire a foundational understanding of generally accepted accounting principles (GAAP), the industry standard for financial reporting.
After obtaining a bachelor’s degree, individuals must usually earn a master’s degree in accounting to be eligible for tax management positions. A master’s degree in accounting can help students understand fundamental concepts like cost accounting, corporate taxes, and accounting for government or non-profit organizations. The capstone project in a typical master’s degree program allows students to explore key concepts or theories in accounting.
To begin practice, graduates must also be certified public accountants (CPA) certified. This credential is required for most accounting positions but not for tax preparers.
Tax managers who are interested in becoming tax managers will likely start out as entry-level accountants. Most tax managers have at least three to six years of experience in accounting before they can move into management roles. Sometimes, education can be replaced by experience.
Tax Manager Skills
Tax managers should have strong math skills and be detail-oriented as mistakes can result in severe penalties.
These soft skills include communication, organization, time management, and problem-solving. These skills, taken together, can assist tax managers in their work and help them communicate important information in clear and easy-to-understand terms. This is especially important when explaining financial information to executives in the C-suite.
The following skills are also essential for tax managers:
Tax managers play a highly analytical role. Tax managers have a lot to do. They must be able to think and analyze complexly, as well as review tax returns that staff prepare. Tax managers also benefit from analytical skills that help them reduce audit risk. Tax managers review tax returns and look for errors to ensure income, deductions, and other items are correct and properly documented.
Tax managers need to have technical skills to analyze and interpret business transactions and the tax implications. They should have a deep understanding of complex tax laws at all levels (federal, state, and local) and be up-to-date on new and evolving tax policies. They must also have a good understanding of tax preparation software such as QuickBooks, which allows them to quickly create tax strategies, spot discrepancies, and complete tax-related tasks quickly.
Tax Manager salary
PayScale reported that the median tax manager’s annual salary was $98,800 in October 2021. The median annual salary for senior tax managers was $130,500. Higher salaries are often earned by individuals with more experience or higher education.
Salary variations can also be influenced by the company size and job location. Tax managers working in major cities like New York, Los Angeles, or San Francisco might earn as much as 17% more than those who work in smaller markets.