Tax Accountant Salary: What to Expect in 2024

Tax accountants are essential for managing tax responsibilities, preparing returns, and guaranteeing compliance with local, state, and federal tax regulations. They are in great demand across industries because businesses and people depend on these experts to help them negotiate the complexity of tax rules.

Knowing what a tax accountant makes is crucial for people starting in the industry or companies looking to hire talent. This article will examine the variables that affect tax accountant wages, the average compensation across locales and experience levels, and the industry's projected growth.

What Is the Work of a Tax Accountant?

It's critical to comprehend the function of a tax accountant before delving into specific compensation information. Tax planning, compliance, and filing for individuals, corporations, and other entities are the areas of expertise for tax accountants. Usually, their responsibilities consist of:

• Preparing tax forms: Ensure customers take advantage of credits and deductions and file timely returns.

• Tax planning: Tax planning gives clients financial planning advice to reduce their tax obligations.

• Compliance and audits: Making sure that organizations and people comply with tax regulations and defending customers in the event of an audit.

• Investigating tax laws: Keeping abreast of constantly evolving tax rules and policies to deliver precise guidance.

• Financial documentation: Keeping track of and organizing documents of tax liabilities.

Factors Affecting the Pay of a Tax Accountant

The experience, location, industry, education, and size of a tax accountant's company or organization are some variables that can impact their pay. The most important variables are listed below:

Experience: Like most occupations, experience is a key factor in determining pay. Experienced tax accountants with years of expertise, specialized knowledge, and maybe credentials usually make more money than entry-level accountants.

Where: Geographical location affects tax accountant salary variations. Accountants in major cities or high-cost living areas, like New York, California, or Washington, D.C., typically make more money than those in rural areas or low-cost locations.

Qualifications and Schooling: The minimal prerequisite is a bachelor's degree in accounting or a closely related discipline. Advanced certifications, on the other hand, can greatly increase earning potential. Examples include:

• Becoming a Certified Public Accountant (CPA).

• Certified Tax Advisor (CTA).

• Obtaining a Master's degree in Taxation.

Sector: Tax accountants can find employment in various sectors, such as retail, government, healthcare, and finance. Because of the intricacy of the tax planning involved, specialized industries like the financial services and legal sectors frequently offer higher salaries.

Organization's size: Salary is also impacted by the company's or firm's size. Due to the volume and complexity of the work, larger organizations and multinational firms usually pay more than individual practices or small businesses.

2024 Tax Accountant Salary Average

A tax accountant's compensation can vary greatly based on the previously listed characteristics. However, the following is a broad breakdown of average wages in 2024 for different degrees of experience:

1. Entry-Level Tax Accountant Salary: With 0–2 years of experience, entry-level tax accountants normally earn between $50,000 and $65,000 annually. This range may change depending on the accountant's location and whether they hold a CPA license.

2. Mid-Level Tax Accountant Salary: Tax accountants with three to five years of experience typically average between $65,000 and $85,000 a year. At this point, accountants frequently work with a wider range of clients and may take on more complicated situations.

3. Senior Tax Accountant Salary: Senior tax accountants who have worked for five years or more typically make much more each year, ranging from $85,000 to $120,000. In addition to managing teams, senior accountants may specialize in corporate tax, international tax, or tax advice services.

4. Tax Manager or Director Salary: Pay increases significantly at the management level. Directors or tax managers make between $100,000 and $160,000 annually. The higher end of this spectrum is frequently occupied by employees of large companies or firms, particularly if they are in charge of several divisions or locations.

5. Top-Level Executives: An executive's annual salary might range from $200,000 to $400,000 in large accounting firms. Examples of these individuals are Chief Financial Officers (CFOs) or tax partners. These individuals deal with well-known clientele, manage large tax departments, and make important financial choices.

Location-Based Salary for Tax Accountants

As was already said, location is a key determinant of a tax accountant's salary. The average salary breakdown for each U.S. region is provided below:

New York, NY: Between $85,000 and $110,000

• Due to its status as a financial center, New York City has increased demand for tax accountants, raising wages.

San Francisco, CA: $90,000 - $115,000

• The burgeoning technology sector and elevated cost of living in San Francisco lead to tax experts' wages being greater than usual.

Houston, TX: $75,000 - $100,000

• Houston has competitive pay, especially in the energy industry, which increases the need for qualified tax accountants.

Chicago, IL: $80,000 - $105,000

• Chicago, a significant Midwest economic hub, offers tax accountants many options and competitive pay.

Miami, FL: $70,000 - $95,000

• Miami may be a more desirable place for accountants to work, even though incomes here are marginally lower than in places like New York or San Francisco due to the state's absence of income tax.

  
  

Industry-specific Tax Accountant Salaries

Different industries have different tax requirements, and some have more complex taxes. Here is a breakdown of salary variations by sector:

Banking Services: $120,000 to $85,000

• The financial services industry typically pays more due to the complexity and specialized

• knowledge required for tax planning and compliance.

Medical costs: $75,000 to $100,000

• Healthcare tax accountants oversee complicated tax systems and compliance for major organizations and medical practices.

Retail: $65,000 to $85,000 at retail

• Although they often make a little less than other businesses, retail tax accountants concentrate on inventory, sales tax, and other regulatory matters.

Public sector: $55,000 to $75,000.

• Although tax accountants in the public or government sectors frequently make less money than their private sector counterparts, these positions are stable and come with perks.

Professional Development and Prospects

• Given the constantly changing tax laws and regulations, the demand for tax accountants is anticipated to either stay the same or perhaps rise in the upcoming years. Experienced tax accountants are expected to become more in demand as companies grow internationally and tax regulations become more intricate.

• The U.S. Bureau of Labour Statistics predicts that the employment of accountants and auditors will expand by 6% between 2022 and 2032, which aligns with the average growth rate for all occupations. Tax accountants with advanced degrees or specializations in highly sought-after fields like specialization, international tax or forensic accounting are most likely candidates for pay raises.

FAQs Regarding Pay for Tax Accountants

What is a tax accountant's beginning salary?

The average annual salary for entry-level tax accountants is between $50,000 and $65,000. However, this can change depending on the area, business size, and whether the accountant is certified as a CPA.

Does a tax accountant get paid more if they have a CPA certification?

Indeed, obtaining a Certified Public Accountant (CPA) credential considerably raises one's earning potential. Due to the extra trust and responsibility a CPA represents, tax accountants holding this certificate typically make between 10% and 20% more than those without it.

What is the salary gap between tax accountants and other accounting positions?

Tax accountant pay is usually comparable to that of other accounting positions, such as financial accountant or auditor. However, particularly at senior levels, tax accountants with expertise and specialized qualifications (such as CPA or CTA) can outearn regular accountants.

Which industry pays tax accountants the most?

Tax accountants often receive the greatest compensation from the financial services sector, with an average yearly salary ranging from $85,000 to $120,000. These specialists have to manage complicated financial regulations and tax legislation.

Summary

A career in tax accounting offers stable employment, opportunities for advancement, and competitive pay in a changing profession. Tax accountants are well-positioned for long-term success with the possibility of large pay rises based on experience, education, certifications, and specialization. Making wise career selections in this profitable field requires an awareness of the compensation landscape, regardless of your experience level or desire to progress.