As we crawl into a tech-savvy world, the business environments are becoming more complex. While entrepreneurs opt for automation, giant companies are crunching numbers to integrate artificial intelligence (AI). Indeed, bringing new initiatives is essential for success, but what about fulfilling the core business responsibilities? In all the hustle-bustle, most businesses fail to account for taxes. At times, they miss the deadlines, and some days, they struggle with tax calculations.
Unfortunately, these small mistakes can land the entire business into hot water with hefty penalties. In addition to causing financial distress, it impacts the smooth functioning of operations. So, how can you go about taxes? You can hire a tax accountant to ensure compliance with tax regulations. However, if you don’t want this additional expense on the financial statements, feel free to jump on this bandwagon yourself.
Besides legal knowledge, working as a tax professional requires robust quantitative reasoning and problem-solving skills. Likewise, you should be good with numbers and detailed oriented to eliminate chances of any miscalculations. If you wish to learn more about it, have a look below. Here is a list of required skills to work with taxes.
1. Legal Know-How
With evolving economic conditions, government regulations are also changing rapidly. Previously, companies had to pay 35% tax on their profits, but due to the tax cuts and job acts, it has reduced to 21%. Similarly, income tax has seven brackets ranging from 10%-37%, depending on the income levels. Thus, having this legal know-how is imperative to ensure accurate and error-free calculations for working with taxes.
Moreover, every business has a different tax requirement. Suppose you are working as a sole trader. In that case, you are only liable to pay income tax, whereas companies are subject to corporate tax. Likewise, if you own a non-profit organization, make sure to maintain their tax-exempt status as per federal and state law. Does this sound overwhelming? Undoubtedly, the job roles are quite challenging but equally rewarding. A master’s in taxation salary goes up to $60,000-$88790 a year, making it one of the most lucrative jobs.
2. Communication Skills
Usually, people think tax professionals have to work behind the scenes, but their job responsibilities go beyond that. You would need excellent interpersonal and communication skills to negotiate with state tax agencies on behalf of the clients. You also have to present information logically, highlighting complicated issues in layman terms. Besides this, tax professionals have to be excellent at written communication. After all, you would be drafting complaints and responses to lawsuits.
Additionally, as a tax expert, you should listen actively without interrupting but feel free to ask relevant questions. Practical and concise communication makes clients feel confident, builds trust and credibility. Above all, tax experts need persuasion and negotiation skills to help clients and companies secure the best deal.
3. Analyzing Data
For many years, tax experts had to understand the rules and then make businesses understand tax consequences. As we move towards digitalization, technological innovations are automating the tax collection process. The digital reporting systems offer real-time assessment, improving the accuracy of tax calculations. Therefore, the integration of real-time data requires tax professionals to equip themselves with analytical skills.
You should know how to extract, analyze, and validate data, ensuring compliance with all tax regulations. At the same time, you have to support the development of real-time tax dashboards and visualization techniques. In addition to improving your skillset, it offers game-changing opportunities to add value to the business.
4. Ability to Implement AI & Robotics
Usually, the tax roles involve standard processes, but things are changing in the 21st century. Nowadays, companies are investing in AI and robotics to automate repetitive and mundane tax work. It means businesses won’t be needing your traditional tax calculation skills. And if your company is also on the route to automation, brace yourself. Learn how to apply cutting edge technologies and develop new skills to keep pace with evolving business environments.
Firstly, understand how to extract data by categorizing documents. Secondly, decipher the machine learning algorithms to classify tax-sensitive information. In case of an incorrect record of an asset by the finance team, machine learning can fix the error while automatically adjusting taxes in the financial statements.
5. Attention to Detail
In the tax world, you can’t overlook terms that seem unimportant. Zero-tax rates and tax-exempt might sound the same but have different filing protocols. Similarly, it would help if you had a keen understanding of tax deductibles to save your company and clients from hefty tax expenses. Companies don’t account for depreciation in the financials, considering they have already bought the machinery. According to international standards, every company has to divide an asset’s cost over the years and treat it as tax-deductible. Thus, reducing the overall taxable income.
Besides this, you have to ensure the employees are not recording incorrect deductibles since it can lead to an IRS audit. Look for travel, lunch, and dinner expenses as they are not 100% deductible. In short, you should be able to distinguish tax deductibles accurately.
Unsurprisingly, the tax functions are rapidly changing, and so are the roles and responsibilities of tax professionals. More than problem-solving and critical thinking skills, they have to be tech-savvy to progress in the modern era. Likewise, they need excellent communication skills and an eye for detail to help companies take advantage of deductibles. In short, as a tax expert, you have to become more flexible and adaptable to keep pace with changes.