The Basics of Hedge Funds & Administration Services

As your local professionals in the Tri-State Area, Halpern & Associates discuss the basics of a hedge fund.

What is a Hedge Fund?

This is a non-legal term that was originally coined to describe a certain private and unregistered investment pool. It uses complicated hedging and techniques to trade in the corporate equity markets. Previously, they were limited to only wealthy investors ready to take risks. A hedge is one that averages out gain and loss, creating a trading position that is totally neutral.

At the moment, hedge funds aren’t described as just one thing. They are flexible as they might or might not use leverage. As the investor, you are allowed to make bets that are based on a global event or you might look at the technical aspects of a stock or security with the aim of sighting a mispricing in the trade market.

Hedge funds are similar to mutual funds. They are both polled investment tools. They work by getting money from investors and investing it afterward on a collective basis. They differ in one aspect though, hedge funds are not required by law to register to follow federal regulations laws. 

Due to the fact that they have no federal regulations binding them, hedge funds, unlike mutual funds, are able to partake in sophisticated investment techniques to a larger extent, even though there are some restrictions set by the anti-fraud unit.

Types of Hedge.

Direct Hedge.

This is a type of hedge that involves swapping one asset, e.g. a stock with another asset that has similar price movement. The two assets must have a similar trading pattern. A typical example of this is when you swap a common stock position with call options.

Cross Hedge.

This is a type of hedging that involves swapping an instrument with another one that is not similar. This usually involves purchasing some preferred stocks and hedging their position with some Treasury futures.

Dynamic Hedge.

This has to do with puts, with the investor changing the amounts of puts in a position with time, though it is highly dependent on the market environment. This type of hedge is very important as it protects you from any risk that is associated with long positions. 

Static Hedge.

Just like the dynamic hedge, the static hedge also tries to eliminate risks involved in a trade. Its working mechanism is simple. A target option is set, thus not much adjustment is required as it will just follow the value of the target option. It is sometimes called the static replicating portfolio. It has a fixed and unaltered hedge until maturity. 

The main objective of a hedge fund.

All hedge funds have one thing in common, they want absolute returns and to make money for the investors. This is the reason why every type of market strategy can be used to ensure that the hedge fund achieves its goals. 

Hedge fund administration services.

Hedge funds cannot be operated without a third-party hedge fund administration service, thus it is recommended to work with a group that has your best interest in the long run. Learn more about these services and other offerings from Halpern & Associates by contacting one of our professionals today.

The Importance of Bookkeeping for Businesses

Halpern & Associates provides essential bookkeeping services to allow business owners can focus on their business and what they do best. 

Accurate bookkeeping is one of the things that will help keep your business together and running smoothly especially if you run your own business. To so many people, it may seem like a chore but keeping track of your revenue and other events will go a long way in ensuring your business succeeds. Many businesses have failed because they failed to keep proper records of their revenues and expenses. Bookkeeping is basically an accounting process that involves you classifying, reporting and analyzing your data and keeping them organized and accurate.

The importance of bookkeeping to your business cannot be overestimated. The professionals at Halpern & Associates are here to assist you with all of your bookkeeping needs so that you are able to focus on other important aspects of your business. 

Below are some of the most important reasons why bookkeeping is so essential to the success of your business. 

You will fulfill your tax obligations.
With bookkeeping, you will never lose track of paying your taxes. Bookkeeping makes it possible for you to track any information or document regarding your tax issues. While others are trying to rush and get their bills in order, yours will be nice and organized. Once you have a balance sheet, Cash Flow, and Profit & Loss, then tax returns will become a very easy task for you. 

Accurate and easy report to the investors.

Your investors want to know what is happening with your business, thus the need to keep them informed at all times. It will be easier for you to report and provide accurate information to your investors if you have a balanced book. Crucial information on your revenue and expenses will be provided to your investors if you do your bookkeeping well. Other information like charts, graphs and lists can also be derived from organized and accurate bookkeeping. 

Easy to plan your business.

Bookkeeping basically means you are organizing your revenue and expenses sheets and ensuring that they are accurate. With every piece of information accurate and properly filed, it will be very easy for you to plan your business as you already know your annual revenue and expenditure. If your company is on the right track, then planning will be simple and easy. 

Proper records make it easy to audit.

With bookkeeping, all your revenue and expenditure records are properly kept and organized. This will be very helpful when it is time to audit. Bookkeeping will also ensure that the invoices are kept properly, making it easy for the auditors to do their job properly. 

Keep track of your expenses.

Expenses are taken from the company’s coffers, and in case it is not properly tracked or recorded, the business might be having more expenses than revenue, thus leading it to run at a loss. However, if bookkeeping is done properly, you will be able to monitor your expenses and know when to reduce them. Keeping track of your expenses also makes it easier for your accounting and tax purposes. 

Follow your profit and growth.

Accurate bookkeeping will make it easier for you to know if your business is making a profit or not. Most business owners neglect this but it is very important to keep track of so that you can know if your business is growing. 

In general, bookkeeping makes it possible for business owners to better understand their business and to determine if they are growing or needing to make changes. Business owners will be able to track some activities in their business such as expenses, profits, cash flow and tax payment if the books are being kept organized and accurate at all times. 

Does Your Business Need to Hire a Business Consultant?

For a business to be successful, one must plan properly and know what to do and how to do it. An entrepreneur has to know a lot of things about the market, the consumers, the competition, the trends etc. so as to be able to run a successful business. At the same time, they also need to be involved and aware of the day to day happenings to keep things running smoothly and successfully.

With so much on their plate, this is why many business owners reach out to groups like Halpern & Associates for business consulting services.

It has been discovered that hiring consultants and outside experts can save time and money. It also can increase competitiveness and professionalism. Both well-established and new businesses that just enter the market have a lot to learn from consulting services. They may have vigorous knowledge about their own businesses and how to run things, but they have to know a lot more about the other aspects of the market in order to become completely successful. Inviting a third party to look into it without emotions tied into the business is always beneficial.

It’s important for all business professionals to learn new ways of marketing their product and selling it to customers and advertising it to gain even more customers. Halpern & Associates uses consulting strategies to analyze the market and come up with plans that will help with growth, particularly with fierce competition nowadays. For the business to be more efficient, it may be necessary to change or add in new goals.

Business consultants like Halpern & Associates have many different services they utilize depending on the unique needs of the client. These include:

• Firstly, they can help one to find out who the target market is. They help to investigate possible customers and find out what they want and what they would buy, so as to gain the most number of customers for your businesses.
• Analyzing a business well is also important. Knowing your strengths and weaknesses can help to increase your strengths while improving your weaknesses. As a business owner, you need to know what opportunities you have and which ones could be taken advantage of to further the business as a whole.
• Knowing the brand well enough is important so that your potential customers will find out more about you and figure out whether or not to do business with you. For this to be possible, one needs to market well and market in places that potential and current customers and clients would be able to see the advertisements. Marketing can be done online as well as in your local area to broaden your customers globally!
• The best businesses sometimes also need a consult in order to make them better and adapt with the times. A corporation that doesn’t adapt won’t be able to sell to the modern market, no matter how good their product is.

Hence, it is a good idea to find a business consulting firm you trust, if you have a business either old or new. To learn more about business consulting services and your different options, be sure to contact the professionals at Halpern & Associates today.

Tax Preparation Services for Non Profits: Explaining Form 990

As your local CPA and tax preparation services provider throughout the Tri-State area, Halpern & Associates works to ensure all clients are knowledgeable and well prepared come tax season.

Even though a lot of non profit organizations are exempt from paying federal tax (tax-exempted), they are required to file an informational return with the IRS. This report is filed annually and it is called the Form 990.

What is the IRS Form 990?

The Form 990 issued by the IRS is used to report returns for organizations that are exempt from paying federal taxes, such organizations include non profits. The form is filled and given to the IRS each year. The form fully evaluates the operations of the non profit organization. The activities of the non profit being monitored include their mission, programs, and finances.

There are different types of Form 990 and the one to be filed by the organization is dependent on the year and the gross receipts of that organization. The Forms that exist are Form 990, Form 990-EZ, and Form 990-N. Halpern & Associates is here to help clients determine which forms they need.

Who files the IRS Form 990? Which Form 990 do we file?

For organizations that are exempt from paying federal tax, they are required to file a 990. The only organizations not required to do so are churches and state institutions. All private institutions should file a 990.

The IRS is always available to provide you with adequate information that will help you determine which form you will file.

• For big and larger non profit organizations (those with a gross receipt larger than $50,000) should file a Form 990 or 990-EZ.
• The smaller non profit organizations (those with a gross that is less than $50,000) are required to file Form 990-N
• Private foundations should file Form 990-PF

What non profits are exempt from filing IRS Form 990s?

For non profit organizations, not all of them are required to file their annual returns. The following set of organizations are not required to file Form 990:

• Faith oriented organizations, missionary organizations, and religious schools.
• Subsections or groups that are under a non profit organization.
• Several government corporations.
• State institutions that are set up to provide essential services to the people.

However, it is very important that you check with the IRS to know if your organization is required to file any Form 990.

When is the IRS Form 990 due?

After filing the Form 990, it is required that you submit it on the 15th day of the 5th month after the end of the organization’s taxable year. That implies that you have to know your organization’s calendar and submit the form when it is due.

What happens if our non profit does not file IRS Form 990?

In a case whereby a non profit organization fails to file its Form 990, the IRS will be forced to revoke the tax-exempt status of the organization. This is a very serious scenario as it has happened to thousands of organizations over the past few years.

Once the tax-exempt status has been revoked, your organization cannot appeal the decision as the IRS has no appeal process for this. Without the tax-exempt status, your organization will be forced to pay income tax.

Can the IRS Form 990 be seen by the public?

The IRS Form 990 filed by a non profit organization should be made available to the public. The public can inspect the file during regular business hours. It is even better to make the form available to the public on your website. This will make it much easier for the public to inspect.

If you have any additional questions or concerns about this form or other tax related forms, do not hesitate to contact the professionals at Halpern & Associates today!