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Tax Accountant Interview Questions

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6 min read

Whether you are preparing to interview a candidate or applying for a job, review our list of top Tax Accountant interview questions and answers.

  1. Please explain the difference between forensic accounting, auditing and tax accounting. See answer
  2. Please explain to us why companies need to maintain tax records for a minimum of seven years. See answer
  3. What is alternative minimum tax (AMT) and what are its uses? See answer
  4. How do you deal with a situation where you have to finish multiple accounting projects on a tight deadline? See answer
  5. Please take us through the process you would use to forecast a company’s tax liabilities for the upcoming financial year.
  6. What is deferred tax liability and how can you account for it? 
  7. How can you help a client whose tax payments are overdue? 
  8. Which accounting platforms are you experienced with? 
  9. How have you used workflow streamlining or automation to enhance your accounting work at previous jobs? 
  10. What is inter-company reconciliation? 
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10 Tax Accountant Interview Questions and Answers

Please explain the difference between forensic accounting, auditing and tax accounting.

This question seeks to find out whether the candidate is familiar with a wide range of accounting jobs. If the candidate is well-informed, it shows that they understand the essential qualifications required for the job. When answering this question, the candidate should:

  • Be direct and succinct
  • Show that they are confident in their qualifications
  • Show that they are willing to learn and gain more skills

Example:

"Forensic accounting is mainly for legal and operational purposes and it involves a comprehensive review of an operation's books and other documentation to check for accounting errors. Auditing involves reviewing an organisation's policies, accounting records, operations and processes to ensure that they are compliant with applicable regulations. However, tax accounting only focuses on an organisation's financial records to ensure that they are ready for the tax season, and preparation of other essential financial documents like quarterly and annual reports."

Please take us through the process you would use to forecast a company's tax liabilities for the upcoming financial year.

This is an operational question that you can use to assess the candidate's knowledge and skills. They should draw their answers from their experience or expertise on tax matters to offer a proper response and show that they truly qualify. When answering this question, the candidate should:

  • Summarise the process they typically use
  • Cite any specific issues that can affect the process
  • Show that they can follow a systematic process towards achieving a goal

Example:

"I will begin by collecting historical data from the current year. Then, I will estimate the operational, cost, revenue and other financial changes that may arise in the course of the next fiscal year . I will also factor in accounting procedure and tax code changes before preparing the forecasts as a pro forma income statement."

What is deferred tax liability and how can you account for it? 

When asking this question, you can seek to establish if the candidate has the relevant technical accounting background required for the job. The candidate should:

  • Explain the implication of tax liability
  • Quote local tax code or UK GAAP or IFRS standards
  • Provide a technical answer to show their expertise

Example:

"A deferred tax liability is a tax that has not yet been recorded as paid but is already assessed for the current reporting period. It arises because of poor timing when recording the liability, and it is recorded as part of the owner's equity."

Please explain to us why companies need to maintain tax records for a minimum of seven years.

Most interviewers ask this operational question to assess the candidate's knowledge. Interviewees can use their answer to display their advanced expertise in accounting. The candidate should:

  • Offer a detailed answer
  • Recommend more steps that can help optimise retention of records
  • Show how they can help your company once offered the job

Example:

"It's considered financial best practice to keep records for a minimum of seven years in the event an audit is necessary. Although it's compulsory for businesses in the UK to produce tax records of up to seven years, I recommend keeping 10-year records. They can be used to offer maximum protection in the event of an audit and also for research purposes."

How can you help a client whose tax payments are overdue? 

This is a situational question that allows you to assess how the candidate can deal with difficult situations while also assessing their tax accounting expertise. They must differentiate between individual taxpayer and businesses overdue taxes. When answering, the candidate should:

  • Show how they can handle the situation head-on
  • Use their communication skills to negotiate reduced penalties for their client
  • Offer a legal solution for the client's company

Example:

"From my experience, the best way to address this sort of situation is to organise a meeting between my client and HMRC. The meeting will allow for discussions on the avoidance of additional costs and penalties, determining legal issues like tax liens and confirming liabilities. We will also set up a manageable payment plan for the client that satisfies HMRC."

Which accounting platforms are you experienced with? 

When asking this question, you may want to know if the candidates are familiar with enterprise resource planning systems or multiple accounting applications. These computer programmes can help them work faster and more efficiently. In their answers, the candidates should show:

  • Familiarity with major accounting programmes
  • Knowledge of basic functions
  • Openness to embracing new platforms

Example:

"Back when I worked at a small hometown company, I used QuickBooks and later on used Microsoft GP when I got a job at WorldRemit. I enjoy working with QuickBooks online and used it to assist my last employer track and sort their invoices and expenses."

How have you used workflow streamlining or automation to enhance your accounting work at previous jobs?

Experienced Accountants use several methods, like software programmes and advanced tools, to enhance their work. You may ask this question to assess if the candidate utilises these methods to help them work effectively. When answering the question, the candidate should:

  • Use creative thinking to explain themselves
  • Show that they understand accounting business operations
  • Show strong accounting skills

Example:

"I created a synchronised system comprising our corporate credit card statements, accounting solution and business bank accounts. This allowed me to have fewer manual inputs and use the extra time to check employee expense reports and sort out accounting discrepancies."

What is alternative minimum tax (AMT) and what are its uses?

This is a technical question that most interviewers ask to assess whether the candidate understands various accounting terms. The question assesses their qualifications and understanding of the work. When answering the question, the candidate should:

  • Provide a brief description or example
  • Be concise to avoid creating confusion
  • Use this question to explain their qualifications

Example:

"AMT applies to wealthy taxpayers who can avoid paying some taxes as their income has hefty deductions. The AMT offers a minimum tax liability to the high-income levels, especially if they make over £100,000."

What is inter-company reconciliation? 

This is a technical tax accounting question that most interviewers ask to see if the candidates have researched your company and industry. The question applies to your specific business as it relates to specific tax practices. When answering the question, the candidate should:

  • Offer a concise and direct answer
  • Give a general idea of how the tax practice could apply to your company
  • Show that they've researched what you do and offer

Example:

"Businesses only have to file a consolidated tax return for their parent companies. However, they have the option of considering sole subsidiaries. An inter-company subsidiary allows such businesses to assign a transaction to each subsidiary. This leads to a situation where the subsidiary's performance and financial position are accurately represented."

How do you deal with a situation where you have to finish multiple accounting projects on a tight deadline?

Candidates might need to work on several projects at a time, especially if there are many tasks available with a strict timeline. Most interviewers ask this question to see if the candidates can work in high-pressure situations and prioritise their tasks. As they answer, they should:

  • Talk about their time management skills
  • Explain how they can multitask and complete several projects or reports
  • Discuss their capacities to meet and beat deadlines

Example:

"I would start by working on and finishing the most time-sensitive tasks, and those that I have to forward to other people for them to ensure project continuation. I will ensure that I ask for any assistance or additional resources I need to keep me on schedule."

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