Although tax managers play a critical role in their organizations’ success and longevity, their contributions may not be as immediately recognizable as those of controllers or accountants. What is a tax manager, exactly? The tax manager’s role is primarily to ensure that an organization’s tax strategy complies with local, state and federal tax laws. Tax managers also hold a variety of tax-related responsibilities that work to minimize their organizations’ audit risk. Without tax managers, businesses worldwide would struggle to exist.
The Role of the Tax Manager
Tax managers work year-round to minimize their organizations’ audit risk. They do this by building and maintaining tax strategies, preparing and filing their organizations’ tax returns, and staying up-to-date on new tax legislation. Including the newest tax laws in their tax strategies helps tax managers minimize their organizations’ audit risk and helps their organizations not overpay taxes by identifying every available tax deduction.
Tax managers also help facilitate organizational expansions, including initial public offerings and mergers and acquisitions. They assist by accurately documenting all transactions from a tax perspective and researching and reviewing current tax laws to ensure that the acquisition process is accurate and complete. Not having a tax manager present during the acquisition process could result in tax fraud, accounting fraud and a future audit.
Those are just a few examples of what a tax manager does. Other responsibilities include overseeing and managing organizational audits by the respective tax authority, acting as mentors or general supervisors to other accounting employees; ensuring the accuracy of the tax team’s work; and leading internal tax initiatives, such as audits or investigations into organizational issues that might spur tax challenges. As leaders of the tax teams, tax managers also assign tasks and report findings to executives.
How to Become a Tax Manager
Students curious about what a tax manager does and what skills apply to the role will benefit from an accounting education. Typically, students must earn a master’s degree in accounting before being considered for tax manager positions. Graduates must also earn their certified public accountant (CPA) certificate to begin practicing; the credential is a mandatory prerequisite for the majority of accounting positions, although it is not required for tax preparers.
Aspiring tax managers will most likely enter the field as entry-level accountants before becoming tax managers. Tax managers commonly have three to six years of accounting experience before moving up into tax manager roles. In some cases, experience can substitute for education.
Following are additional skills aspiring tax managers and accountants should possess to excel in their roles.
The tax manager’s role is highly analytical. From reviewing tax returns prepared by staff to ensuring that their organizations are complying with tax laws, tax managers must be extremely detailed with both numbers and regulations. Analytical skills also help tax managers minimize their organizations’ audit risk: Tax managers check tax returns for errors, ensuring that income, deductions, and other items are accurate and properly documented.
Tax managers must have strong technical skills to analyze business transactions and their tax consequences. They must have an in-depth understanding of complex tax laws at the federal, state, and local levels and stay up-to-date with new and changing tax policies. Additionally, they must have advanced knowledge of preparation software programs like QuickBooks to build tax strategies, identify discrepancies and complete tax-related tasks quickly.
As leaders of the tax teams, tax managers must have excellent communication skills. Communication skills help tax managers lead tax projects, communicate potential audit risks and share possible ways to improve tax strategies. Communication skills also help tax managers assign tasks to their teams, communicate with outside vendors or parties, and make presentations to executives.
The Salary of a Tax Manager
According to PayScale, the average annual salary of tax managers is about $98,200. Senior tax managers can expect to make an average annual salary of about $129,400. Individuals with higher levels of education or more years of experience often earn higher salaries.
Job location and company size are also key contributors to salary variations. Tax managers in metropolitan cities such as New York, New York; Los Angeles, California; or Houston, Texas, may earn up to 19% more than tax managers in smaller markets.
Learn the Accounting Skills Required for a Tax Manager Role
Accountants and tax managers do far more than just create spreadsheets and calculate numbers. The modern business and financial environment is complex, with ever-changing requirements and regulations. A broad skill set is required to succeed in this challenging and important role.
With courses like Business Analysis Methods, Data Transformation and SQL, Individual Taxation, Taxation of Corporations and Other Business Entities, and Accounting Theory, the University of Nevada, Reno’s online Master of Accountancy program is designed to help you develop the skills that employers seek. Enroll today to learn essential skills for a successful accounting and tax management career.