Recruiter's Glossary

Examples: Segment Reporting • Purchase Cycle • Cash Basis

Deferred Tax

Term from Accounting industry explained for recruiters

Deferred Tax is an accounting concept that appears when there's a difference between how a company reports taxes in their financial statements versus how they file their actual tax returns. Think of it as a timing difference - it's like when you owe someone money but don't have to pay it right away, or when you've paid for something in advance but haven't used it yet. Accountants need to track these differences to ensure financial statements are accurate and comply with accounting standards (GAAP or IFRS). This term frequently appears in roles involving tax accounting, financial reporting, or corporate accounting positions.

Examples in Resumes

Prepared quarterly Deferred Tax calculations for a Fortune 500 company

Managed Deferred Tax Asset and Deferred Tax Liability accounts for multiple subsidiaries

Led team responsible for Deferred Tax analysis during annual audit process

Typical job title: "Tax Accountants"

Also try searching for:

Tax Accountant Financial Accountant Corporate Accountant Tax Manager Financial Reporting Accountant Senior Accountant Tax Analyst

Where to Find Tax Accountants

Professional Associations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you explain the impact of tax rate changes on deferred tax calculations?

Expected Answer: A senior accountant should explain how changes in tax rates affect existing deferred tax balances and the need to recalculate these balances using new rates, impacting the company's financial statements.

Q: Can you describe a complex deferred tax situation you've handled?

Expected Answer: Should demonstrate experience with challenging scenarios like international operations, multiple tax jurisdictions, or complex temporary differences, showing problem-solving abilities and deep technical knowledge.

Mid Level Questions

Q: What's the difference between a deferred tax asset and liability?

Expected Answer: Should explain that deferred tax assets are future tax savings (like carrying forward losses) while liabilities are future tax payments, using simple examples to illustrate.

Q: How do you ensure deferred tax calculations are accurate?

Expected Answer: Should discuss reconciliation processes, documentation requirements, and review procedures used to validate calculations and supporting evidence.

Junior Level Questions

Q: What causes deferred taxes to arise?

Expected Answer: Should explain basic timing differences between book and tax accounting using simple examples like depreciation or prepaid expenses.

Q: How do you record a basic deferred tax entry?

Expected Answer: Should demonstrate understanding of basic journal entries for recording deferred tax assets or liabilities and the corresponding tax expense or benefit.