A tax accountant should have extensive specialized knowledge of tax laws and regulations. They need to keep current with changes in legislation regarding credits, deductions, and other tax matters that could affect their clients. It is the responsibility of both the tax accountant and the client to ensure that the client stays in compliance with all tax laws, filing deadlines, and payment due dates. If the client runs into trouble with the IRS, the tax accountant should be able to represent the client before the IRS, and minimize any stress to the client.
The tax accountant also needs to be up to date with the state and local taxes for their area. They need to ensure compliance with any state and local reporting requirements. The state and local taxes will include income taxes, sales and use taxes, property taxes, and various other excise taxes.
A tax accountant also provides strategic tax planning recommendations for their clients. The idea is to maximize credits and deductions, while minimizing tax liability and payments, within legal limits. Sometimes the client will be advised to make an anticipated large purchase before year-end to offset revenue for the year. There are many tax planning ideas that a tax accountant should be able to provide guidance on when needed.
Tax accountants must also have expertise in accounting for estates and trusts. These are special situations that require specialized knowledge. The tax accountant can ensure that the related tax returns are filed correctly and on time.
There is a huge amount of information that a tax accountant needs to know for each type of tax. Just for federal income tax, they should be familiar with the entire Internal Revenue Code. There are different tax forms that need to be filed for individuals, partnerships, corporations, trusts, etc. Along with each form there are a variety of supplemental forms and schedules that may or may not be required to be filed. If they deal with sales taxes for more than one state or municipality, they need to know the regulations and requirements for each one in order to serve their clients. They need to know how the locality classifies different types of assets for personal property taxes, what type of documentation is required to be sent with the return, and the due date for filing the return.
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