Is Corporate Tax Accounting for You?

Any business formed in the United States as a corporation, excluding an S corporation, that conducts trade or business must pay corporate taxes. But a corporate "income" tax is not a tax on corporate income, it is a corporate "profit" tax. Corporate taxable income is the remaining income after most business expenses have been deducted. These taxes range from 15% to 39%.

Corporate tax accountants specialize in reading complex Internal Revenue Service documents and interpreting them for companies.

A corporate tax accountant specializes in this corporate tax, along with the remaining taxes such as state and local taxes, that a corporation owes. Tax accountants are tasked with:

  • Keeping up with changing tax requirements
  • Providing tax planning advice to keep pace with, and even help shape, a company's operations
  • Ensuring compliance with federal, state, and local tax laws
  • Prepare corporate tax returns

What does it take?

Corporate accounting, particularly corporate tax accounting, is a complex field, and involves a specific skill set to be successful in this area.

Comprehension Skills

Corporate tax accountants specialize in reading complex Internal Revenue Service documents and interpreting them for companies. They not only can read and understand the jargon and use it to benefit the corporation, but they are able to put it into laymen's terms to explain them to corporate management. First and foremost, corporate tax accountants must have excellent reading comprehension skills.

Communication Skills

Not only does a corporate tax accountant need to interpret tax laws, they need to be able to explain it either in writing or in person to management. Their communication skills and people skills must be top notch.

Research Skills

Tax laws are not always written in black and white, they can be convoluted and open to interpretation. A corporate tax accountant needs to be able to research these areas and make sound financial decisions based on their findings.

Accounting Skills

Of course, accounting skills are important for corporate tax accountants. Although being a CPA is beneficial for the career as well as increasing salary, holding the title of Certified Public Accountant is not required in this accounting field, but it sure does help. In fact, CPAs can expect to make up to 10% more than non-CPAs in most accounting areas.

Consulting vs. Employment

While larger corporations have a tax department within the company, smaller corporations hire consultants, either individuals or firms that specialize in the field of corporate taxes.

Consultants specializing in corporate tax accounting have the excitement of learning new businesses and industries for each client, but that learning curve can also present challenges.

Employment in the consulting field of accounting can offer a higher pay scale, but consulting firms in general do not offer the job security of working within a corporation.

Tax accountants who work in an in-house tax department within a corporation have the opportunity to learn all of the financial aspects of a business. Job security is a benefit to the trade off of a slightly lower pay scale – speaking in generalities, of course.

Bottom Line

If you think you would do well with taking intricate details and interpreting them and working them into planning the national and even international flow of transactions within a corporation and consider that to be an exciting challenge, corporate tax accounting may be the field for you!