Tax Law Salary: What You Can Earn with a Master of Science in Taxation

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Whether they are entry level or have decades of hands-on experience, attorneys by and large make a comfortable living. Their median annual salary in the United States is nearly $127,000, according to the most recent statistics available from the U.S. Bureau of Labor Statistics, though it varies based on the type of law. First-year associates at major law firms may earn well over the above figure, based on updated statistics from the National Association for Law Placement.

1040 forms underneath four $100 bills and a pen.

Much like the field itself — which encompasses everything from bankruptcy law to personal injury law — the salary ranges for lawyers are quite broad.

But what about tax lawyers? How much do they stand to earn? It just might be more than you expected. With an Online Master of Science in Taxation from the D’Amore-McKim School of Business at Northeastern University, you can obtain the skills and expertise tax lawyers need to enter this highly competitive, highly compensated profession. But as you’ll discover, the precise amount you earn depends on your location, job description, and years of experience.

How Much Does an Income Tax Lawyer Earn?

According to government statistics obtained by Accounting.com, the average salary for a tax attorney in the United States is $120,910 per year. That’s roughly in line with the median annual income level for lawyers overall.

Several factors can play a role in how much tax lawyers earn. For example, tax lawyers who are freshly out of law school with less than a year of practice experience make approximately $84,000, according to PayScale. As they gain more practical knowledge, however, their pay rises to $88,000 within a few years, and has the potential to top six figures within 10 years of completing the state bar.

Other reputable sources suggest that the income level for a tax attorney may start in the six-figure territory. According to the estimates from Salary.com, with between one and two years of experience on the job, the average tax law salary for attorneys is $187,222. The more years of experience, the more money tax lawyers typically earn. Location, certification, cost of living, and job responsibilities can all factor into income expectations. Whether attorneys are partners at law firms may also influence salary estimations.

Why Are Tax Lawyers Well Compensated?

While lawyer is not included among the BLS’ list of highest paid professions — the top 10 are all related to health care — attorneys’ annual pay is almost double the median household salary in the United States, which is around $68,700. This is true of tax lawyers as well. According to Money Inc., they’re among the five best-paid legal specialties.

Part of the reason for this is their level of education and expertise. Taxes are complex — and voluminous. The U.S. tax code itself is more than 2,600 pages, according to the Tax Foundation. And the Standard Federal Tax Reporter, which is a compilation of rulings on federal income tax information, is much larger — well over 70,000 pages long.

While tax attorneys may not be required to read through these documents from front to back, the ability to understand, digest, interpret, and evaluate tax laws, codes, and regulations is a rare but highly desirable skill set. Corporations, whose tax obligations may be substantial, are among the lead employers for tax attorneys. Because they traditionally sell products and services across state lines, they need to be aware of how state tax laws might affect them. Tax attorneys provide that guidance.

Here are some of the primary job duties and responsibilities associated with this role:

  • Guide clients through the particulars of tax law and explain it in a way that is easily understood.
  • Advise and recommend certain strategies that can help clients legally reduce their tax liabilities.
  • Participate in problem resolution in instances where clients have unpaid taxes.
  • Review, learn, and research any new tax regulations or laws passed at the local, state, or federal levels.
  • Interpret tax laws for represented clients, whether individuals or businesses.
  • Serve as in-house counsels for corporations.
  • Prepare legal documents pertaining to tax filings.

These are just some of the tasks that tax lawyers may have. More than anything else, their job is to be an advocate and problem-solver, addressing those problems with legal tax solutions. It’s a highly specialized occupation and the unique expertise associated with it is rewarded in kind.

While being a tax attorney is a specialty, tax lawyers may specialize in a specific variety of tax. As pointed out by the American Bar Association, these may include:

  • Corporate tax
  • Partnership tax
  • International tax
  • Individual income tax
  • Estate and gift tax
  • Tax-exempt organizations
  • Tax issues related to employee benefits and executive compensation
  • State and local tax

From one state, city, or municipality to the next, tax laws can vary significantly. Because they’re subject to change due to decisions made in government, it’s difficult to understand which rules will apply when or for how long.

The curriculum in the Online MS in Taxation program provides students with the background knowledge they can leverage to boost their comprehension and general understanding of tax law. From Federal Tax Issues and Analysis to State and Local Taxation, these three-credit courses provide graduates with the educational foundation they can build upon throughout their career.

What Is the Expected Employment Outlook for Tax Lawyers?

While the BLS does not have data on the ongoing employment situation for tax lawyers, it does for the profession as a whole. As of 2019, there are approximately 813,900 practicing attorneys in the United States. Employment of lawyers is anticipated to grow at a rate of 4% over the next decade, translating to an additional 32,300 jobs.

It often doesn’t take very long for attorneys — within tax law or otherwise — to land a job. According to the National Association for Law Placement, students who graduated from law school in 2019 experienced the highest employment rate since 2007. More than 90% of graduates were gainfully employed. At 96.3%, the overwhelming majority of these positions were full time. In terms of income, the national mean salary for the class of 2019 was $100,540, while the national median was $72,500. This also speaks to the tax law salary levels that are possible for attorneys shortly after completing their juris doctorate.

What Are the Top States for Tax Attorney Pay?

Much like most other occupations, tax lawyers are subject to the principle of supply and demand. There’s an inverse relationship between their desirability and their income. Generally speaking, tax lawyers in states with the highest populations tend to make the most money.

For instance, according to Zippia, the average salary for tax attorneys is greater in California than any other state. In San Francisco, the average tax attorney salary is $146,749. At 39.5 million, California is the most populous state in the country, and San Francisco is among the top five most populous cities in California.

The average salary for tax lawyers in New York City is $130,350, according to Zippia. Salary ranges run between $63,000 and $206,000. At 19.4 million residents, New York is the most populated city in the U.S.

Another part of the country where tax attorneys are often paid well is Washington, D.C. The significant role the federal government plays in D.C., and tax attorneys’ proximity to it, helps explain why they’re in high demand. The average salary for tax lawyers in the U.S. capital city is $99,378, according to Zippia. Approximately 5% of lawyers overall are employed by the federal government, BLS data shows.

Rounding out the top five states or areas for tax attorney salaries are Massachusetts and Oregon, based on estimates from Zippia. However, among individual cities, fourth is Houston ($97,072), followed by Chicago ($92,449). Texas and Illinois have the second and sixth largest populations in America. The fact that these locations are highly populated — which often affects demand — provides context as to why the average tax attorney salary is greater than in other locations throughout the nation.

How Do Tax Attorneys Compare with Other Accounting Careers?

Given the subject matter of their work, tax attorneys and tax accountants have a lot in common. They deal with the tax code on a regular basis and provide guidance to their clients regarding tax management. However, the educational requirements of the respective specialties are different, due to the nature of their job functions, one being tax preparation (accountants) and the other focusing on tax law expertise. While accountants can pursue licensing and CPA certification, they can enter the job field with a bachelor’s degree.

The educational, licensing, and certification requirements for tax attorneys is more rigorous. In addition to four years of undergraduate study, they must also complete law school, which is usually a three-year commitment. A juris doctor degree is the reward, but they must also take the bar exam in the state they intend to practice.

The amount of training required to be a tax attorney may explain why this profession has a higher average salary than other accounting careers. According to the BLS, an accountant with a bachelor’s in 2020 earned a median annual income of $73,560. As previously noted, entry-level tax lawyers average more than this rate of pay.

This isn’t to suggest that traditional accounting degrees are low-paying. Experience, certification, job responsibilities, and many other variables enable accountants to earn more money. The upper tier of general accountants in 2020 earned nearly $128,700, the BLS reported.

Business person with hand on textbook.

What Other Reasons Make a Career as a Tax Lawyer a Worthwhile Pursuit?

Regardless of the role, salary is an obvious — and common — incentive for pursuing a given line of work. Some of the above material speaks to the potential earning capabilities that are available as a tax attorney.

But there is more to work than the paycheck. Here are a few other reasons this occupation may be for you, unrelated to tax law salary levels.

  1. Potential to Teach Accounting

    Can you see yourself in front of a classroom? There will always be a need for teachers, and according to the American Bar Association, tax attorneys may be able to lend their expertise to aspiring accountants. Based on estimates the ABA cited from the American Accounting Association, over the next decade, 500 or more accounting faculty will be needed to fill open positions due to the expected growth in current teachers deciding to retire.

    While proper training may be needed, depending on the academic program, the demand for more accounting teachers may allow tax attorneys to add to their job title. Having more professional opportunities is always a good thing.

  1. Enhanced Satisfaction

    An age-old adage says that if you do what you love for a living, you’ll never have to work a day in your life. This is a sentiment that many tax attorneys have. According to a Vault.com poll that involved 17,000 associates from dozens of mid-sized and large law firms around the country, tax attorneys are the most satisfied with their chosen careers. Tax lawyers averaged a higher satisfaction score than attorneys who worked in government contracts, trusts and estates, energy, oil and gas, and health law, which were the top five.

  1. Ability to Work Remotely

    Since much of the correspondence tax attorneys participate in often takes place online, much of their work can be done from the comfort of home. The ability to telecommute is something that more business owners as well as individuals are prioritizing since the pandemic and economic shutdown that resulted. Closed offices forced millions of people to work remotely, a change of scenery that many enjoyed. According to a survey by Robert Half, over one-third of respondents said they would consider looking for a new job if their employer implemented a policy requiring them to work solely in the office. Almost half of those questioned on this subject said their preference was a hybrid model, where they could decide to come into the office or telecommute.

    Whatever is best — in-office, hybrid, or fully remote — life as a tax attorney provides for all of these work environment options.

  1. Ongoing Job Stability

    While no industry is completely recession-proof, tax law comes close. Taxes are one of the few guarantees in life; everyone has to pay them. As a result, there will always be a need for tax lawyers to sort through the issues that invariably occur and who can help clients make sense of their tax obligations. And according to the BLS data mentioned earlier, the occupation is expected to grow in the coming decade.

From flexibility to job stability to competitive pay, a career as a tax attorney is compelling. It’s possible with an Online Master of Science in Taxation from Northeastern University. For more information on admission requirements and details about the courses, download the free brochure.

Recommended Reading:
What Are Tax Havens?
What Is Tax Compliance?

Sources:
Bureau of Labor Statistics — Accountants and Auditors
Bureau of Labor Statistics — Lawyers
Bureau of Labor Statistics — Highest Paying Occupations
Accounting.com — Tax Attorney Salary Guide
Salary.com — Tax Attorney Salary in the United States
PayScale.com — Tax Attorney Salary
Zippia — Tax Attorney Salary
Vault.com — Switch to Your Law Firm’s Tax Group ASAP
Census Bureau — Income and Poverty in the United States
MoneyInc — Here Are the Five Types of Lawyers that Make the Most Money
Robert Half — 1 in 3 Workers May Quit If Required to Return to the Office Full Time
American Bar Association — An Introduction to Tax Careers for J.D.s
American Bar Association — Academic Tracks? The Tax Attorney as Accounting Professor
Tax Foundation — How Many Words Are in the Tax Code?
National Association for Law Placement — Class of 2019 Attains Highest Employment Rate in 12 Years as Uncertainty Looms for Class of 2020