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The start of the calendar year is a busy time for consumers and business owners alike, as they prepare to receive their W2 or related tax documentation and file a return. As this paperwork is developed and mailed out, many citizens and organizations will turn to the help of tax professionals to help them file.
However, the umbrella of “tax professionals” can encompass a number of different roles, including tax analysts, tax accountants, tax auditors and more. While there is some overlap within the duties for these roles, they are distinctly different.
The role and responsibilities of tax analysts
A typical tax analyst engages in work that revolves around the preparation, review and filing of tax forms and returns. They may work with individual citizens filing single or joint returns, as well as business owners that file taxes on the part of their organization.
Tax analyst jobs include duties like:
- Tax return preparation and filing, including gathering all necessary client documentation, preparing the correct return documents, and filing this paperwork on behalf of clients according to federal, state and local filing deadlines.
- Preparing and filing quarterly tax payments every three months for their clients. While this task is more common with tax analysts’ corporate clients, these professionals may also complete quarterly filings for individuals as well. These come in addition to the annual tax returns that tax analysts complete.
- Advise clients on tax returns, including advice to make them aware of applicable tax breaks and deductions to maximize clients’ refunds.
- Provide estimates of clients’ expected returns based on tax analysts’ computation of taxes owed, combined with available deductions and savings.
- Continually study updates to tax law, including federal, state and local statutes that impact clients’ tax filings, deductions and documentation.
Often, tax analysts work in an independent capacity. While some are employed by a tax preparation business, others operate out of their own offices as independent contractors, career search website JobHero explained. Most work full-time hours. They may even be required to work overtime, in the weeks leading up to state and federal tax filing deadlines.
Other tax professionals: What’s the difference?
As mentioned, tax analyst role isn’t the only one that falls under the tax professional category. There are also accountants that specifically deal with tax documentation and returns, as well as tax auditors. Each of these roles functions differently. While the work of a tax analyst may slightly overlap with that of a tax accountant, for example, these professional positions are not interchangeable.
As the Bureau of Labor Statistics explained, tax accountants and tax auditors help prepare clients’ financial documentation, and also examine existing accounting records. These are typically associated with clients’ bank accounts, investments and other financial activities.
Tax accountants are also known as managerial accountants, cost accountants, corporate or private accountants. They work internally within a business, as opposed to for a tax preparation service or independently, like tax analysts. Tax accountants will inspect internal accounting bookkeeping records and other accounting systems to help ensure accuracy and compliance with current tax law, which is not part of the responsibilities for tax analysts. Accountants will also assist with the business’s budget, help plan operating costs and advise on the company’s asset management practices. Again, these tasks are not activities that tax analysts engage in.
Tax auditors, on the other hand, can work internally within a business, or be employed by an outside organization. The Bureau of Labor Statistics noted that the main goal of auditors is to identify any issues or mismanagement with a client’s financial activity. Auditors will then work to resolve these problems and improve the client’s ability to manage their financial assets. External auditors also report fraud or other problems to government bodies and other authorities, and confirm when the problems are corrected.
Tax analyst salary
According to data from compensation research firm PayScale, the current average salary for tax analysts is $58,319. The highest 10% of earners in this category have an average salary of $76,000 annually, and the lowest 10% take home $45,000 each year.
Some employers may pay higher or lower salaries, though, depending on tax analysts’ experience, location and other factors. Ernst & Young provides a $38,000 tax analyst salary, whereas Intuit Inc. pays $64,000 as a national average salary for the tax analysts it employs.
Tax professionals that have advanced degrees and more experience in the field can expect to earn higher salaries. For instance, the BLS noted that the highest 10% of earners in this field with multiple years of experience take home an annual wage of up to $110,120.
Northeastern University’s D’Amore-McKim School of Business offers the Online Master of Science in Taxation, which can prepare students for a variety of roles in the field of taxation including tax accountant, tax attorney and tax analyst. The program curriculum introduces students to several key concepts including state and local taxation, income tax accounting, tax research, practice and ethics, and more.
To find out more about how this program can prepare you for a role as a tax professional, connect with one of our enrollment advisors today.