TAX STRATEGIES & PLANNING
Update 2012: Hedge fund and investment manager tax
breaks survived in 2012, including carried-interest, the S-Corp SE tax
loophole, lower 60/40 tax rates on Section 1256 contracts and more - as
described in the 2011 update below.
One big tax changes starts on Jan. 1, 2013, the Medicare 3.8%
tax on unearned income, principally investment income. Read about
that new tax on our blog. Sep
05 12 - High-income traders are hit with ObamaCare’s 3.8% Medicare
tax on investment income.
Fiscal cliff negoations and tax reform: President Obama is exercising
his political capital gained in his reelection, and he is still bent on
repealing carried-interest tax breaks for investment managers. Repubicans
are being boxed into a corner to surrender tax rates on the upper-income,
so it's probably equally hard to defend tax breaks for investment managers.
Update 2011: After tense moments in the great tax debates of
2010, two important tax breaks for hedge funds and investment managers
survived repeal efforts from Congress and the White House. Although Democrats
tried hard to repeal “carried interest” tax breaks for investment
managers, along with a related repeal of the S-Corp self-employment (SE)
tax reduction breaks for professionals (including investment managers),
Republicans saved the day with a successful filibuster blocking cloture
on tax increases. We covered that drama on our blog and in our podcasts,
here and here.
Finally, in the year-end lame-duck session of Congress, after Republicans
won majority in the House in the midterm elections, Congress agreed to
extend all Bush-era tax cuts for two additional tax years (through Dec.
31, 2012), along with other important “tax extenders” too.
There was no time or votes to include repeal of carried-interest and the
S-Corp SE tax breaks. With a new Republican-controlled House in 2011 and
2012, it’s unlikely that carried interest or the S-Corp SE tax break
will be repealed during this session of Congress.
This translates to good news for investment advisers. Managers can continue
to start up new hedge funds and structure in a “profit allocation”
clause, so they receive performance income — it’s not compensation
or pay — based on their profit allocation share of each income tax-category
in the fund. The carried-interest tax break means the manager/partner
receives a special allocation (his share) of long-term capital gains and
qualifying dividends taxed at lower tax rates (currently up to 15 percent),
futures gains taxed at lower 60/40 tax rates (currently up to 23 percent),
and short-term capital gains taxed at ordinary income tax rates but not
subject to separate SE tax rates (currently up to 15.3 percent of the
base amount currently at $106,800, and 2.9 percent unlimited Medicare
tax portion thereafter). That’s meaningful tax savings too. Carried-interest
tax breaks can be good for investors as well, as explained below.
It’s different with separately managed accounts. Although investment
managers can’t use profit-allocation clauses on these accounts,
they can at least use the S-Corp SE tax reduction break, which becomes
even more important with incentive fees being classified as earned income
(rather than profit allocation of trading gains). Managed accounts pay
advisory fees which include management and incentive fees, whereas funds
using profit allocation clauses only pay management fees.
In an LLC filing a partnership tax return, earned income passes through
to the LLC owners subject to SE tax, unless an owner is not involved in
operations (which is beyond the scope of this content).
Investment managers can only use profit allocation with investment funds
and not on separately managed accounts, because only partners can share
special allocations of underlying income. Special allocations are permitted
and useful on fund partnership tax filings, but not with S-Corp tax returns,
since special allocations reverse (taint) S-Corp elections. The IRS only
allows S-Corps to have one class of stock and they insist on equal ownership
treatment, meaning no special allocations are allowed.
That makes S-Corp elections a wise choice for management companies focused
on reducing SE tax on underlying advisory fee earned income. Conversely,
partnership tax returns are a better choice for investment funds focused
on carried-interest tax breaks using special allocations, plus there is
generally no underlying income subjected to SE tax anyway.
Check with us about these strategies, as there are some states such as
California that have higher franchise taxes on S-Corps, but usually materially
less than the possible SE tax savings. New York City taxes S-Corps like
C-Corps and those tax rates are high.
An existing LLC or C-Corp can file an S-Corp election (Form 2553) by
March 15th of the current tax year. The IRS automatically grants late
relief under a special Revenue Procedure, up until the due date of the
tax return including extensions. Check with us about your home state too.
This article is just a recap on the recent saga of two important tax
breaks for investment managers. There are plenty of other important matters
to consider too, including trader tax status and Section 475 MTM accounting,
lower 60/40 Section 1256g forex tax treatment breaks, international tax
planning including PFIC and QEF elections, mini-master feeders, good offshore
fund destinations, other tax and regulation changes and more.
Hedge funds are a popular investment tool, but many traders might not
know how easy it is for them to start their own. A loophole in the tax
code not only allows traders who manage a hedge fund or other trading
company to keep their trader tax status, it allows them to pass those
tax savings on to the investors in the fund. The article, Hedging Your
Bets, by Robert A. Green, CPA, appeared in the May 2003 issue of Active
Trader Magazine . Here is the original article as submitted,
before editing by the magazine:
GreenTrader Tax Strategies for trader/managers of
hedge funds and other types of “trading” partnerships.
Active trader/managers in hedge funds and other types of “trading” companies should use “ trader tax status ” and the “trading rule” (a tax loophole explained below) to deliver business tax breaks (including mark-to-market accounting , which is essentially tax loss insurance) to their investors .
On this page, we will explain our special GTT tax strategies that can give you an edge over your competitors. GTT is the leading firm for business traders around the country, and we wrote the book on “trader tax status.” We are now using this knowledge in the hedge fund marketplace and we have crafted special tax strategies to give our hedge fund clients a significant competitive edge over hedge funds that don't trade as much.
Investors need better opportunities with “tax loss insurance”
Investors face great difficulties these days in building their securities portfolios. Long-term price appreciation seems like a fleeting opportunity, and the average investor lacks the skill or ability to short stocks or trade short-term. Adding fuel to the fire for investors is that they lack tax-loss protection -- i.e., the ability to deduct their future trading losses. Most investors are already stuck with huge non-deductible capital losses and large “unrealized” capital losses. Click here to read more about why Investors want to tap into the success of short-term traders.
Our clients can cash in on this new hedge fund trend
Successful “at-home” day traders and swing traders have an excellent opportunity to structure an investment vehicle product that answers the above problems for investors.
Our company can form a hedge fund, or another type of “trading” partnership, that is structured with “trader tax status” and takes advantage of the “trading rule.” Your investors will have full “tax loss insurance,” and that will give you an excellent edge in marketing.
Overview the special tax benefits for your investors
The first key tax benefits are derived from the trader/manager trading enough on the entity-level to qualify for “ trader tax status ” (i.e., being in the business of trading). “Business” status converts a default “investment” company into a “trading” company.
Investors in “business” companies are normally subject to the passive activity loss rules, but the “trading rule” tax loophole exempts investors from passive activity rules in a “trading” company. The net result is your investors get full business expense treatment for all expenses in your entity, including but not limited to all trading expenses (supplies, services, chat rooms, seminars, travel, meals and entertainment, professional fees), your management fees (payments to you as manager), depreciation on computers and equipment, and more. The one exception is "investment interest expense" discussed below.
This is a huge edge. Your competitors in “investment” company hedge funds pass through “deductions from portfolio income” on their K-1s, and their investors are stuck with very limited “investment expenses.” The bottom line is that your investors can have a higher after-tax return, and this is a huge benefit in marketing.
The second key tax benefit is your ability (because you have the prerequisite “trader tax status”) to use mark-to-market accounting (MTM IRC 475) on the entity level. With MTM, if you lose money while trading, you can pass through those losses as ordinary losses to your investors, rather than loading them up with even more unusable capital losses – which your competition is doing.
Sure, you plan to have gains, but your investors will really value this “tax loss insurance” when evaluating your private placement memorandum against your “investment” company competition.
Don't worry if you have gains – MTM still comes in handy . We explain all the different tax outcome scenarios below.
Our GTT hedge fund business and tax strategies will show you how kill two birds with one stone. Investors get an opportunity to benefit the way rich people do (that is how the original mutual funds were sold) and they get full tax loss protection (with trader tax status and the trading rule loophole). These benefits are otherwise unavailable to them in “investment” company hedge funds (the majority of hedge funds).
“Trading” hedge funds are unique
There are thousands of new hedge funds that have sprung up the past few years, but the majority of their trading programs are not “short-term trading.”
Only short-term trading programs have a shot at qualifying for “trader tax status,” which unlocks the business tax breaks. Non-short-term trading funds are “investment” funds and they are stuck with the less tax-beneficial “ investment ” company rules.
Note: If you don't qualify for trader tax status, GTT can still give you excellent tax advice and compliance services (preparation) as an “ investment ” company. We have some clever ideas in this area as well.
Learn the difference between “business” and “investment” treatment
First, all income and losses are broken down between “business” and “investment” treatment.
Business treatment is only for situations when you are involved in a “trade or business.” The IRS considers this a very serious effort and it allows you to deduct every type of expense and loss in connection with pursuing business income.
Investment treatment is for when a taxpayer pursues growth in their assets and is not doing this activity on a daily or full-time basis. All taxpayers focus their main efforts on making a living from a job or a business, and they try to grow their assets with investments.
The IRS has special tax rules for investment activities including, but not limited to, lower long-term capital gains tax rates, capital loss limitations, wash sale and straddle rules, investment interest expense limitations and investment expense limitations. Basically, the IRS gives taxpayers a break on long-term capital gains and then really makes you pay for that one special break with severe limitations on losses and expenses.
The problem for investors is that it takes money to make money. You need special tools and skills, and it costs money to acquire them. The IRS restricts investor's abilities to deduct those expenses. The markets are dangerous, and a puny $3,000 capital loss limitation is ridiculous. Congress has not increased that amount for decades.
Obviously, business treatment is far superior to investment treatment. A key point to remember is that “trading” companies with business status can also “segregate” investments to generate long-term capital gains. So, they can have the best of both worlds.
Investors in “businesses” often get stuck with “passive activity loss” rules
If you are an investor in a company with business treatment, unless you are active in management on a daily basis (and there are complex rules on this), then you are subject to the third type of tax treatment – the onerous “passive activity” treatment (see more below).
Don't worry, though. The “trading rule” tax loophole exempts your investors (in your “trading” company) from these passive activity loss rules.
Where's the beef in the “trading loophole” for “passive activity losses”
As explained above, investors are supposed to use “investment” treatment and not “business” treatment.
The “passive activity loss” rules are meant to prevent investors in businesses from getting business tax breaks. The passive activity rules are supposed to suspend those losses into the future. In some cases, this is even worse than getting “investment” treatment on the losses.
The “trading rule” exception basically gives investors in “trading” businesses a special break. Rather than force them into “ investment ” treatment, it allows “business” treatment for all income, losses and expenses, except one item: investment interest expenses (details below).
How did this special loophole come about and will it last?
The IRS created the “passive activity loss” rules to combat the proliferation of real estate and other tax shelters in the 1980s.
Promoters would set up “ business ” partnerships in real estate, movies and other activities, use non-recourse debt to shield the investors from risk and then pass through huge business losses to the investors.
The passive activity loss rules were very successful in killing off these tax shelters. What good were all those business losses if you could not deduct them on your tax return? The losses were “suspended” until the investor had sufficient “passive activity income” to offset them.
Promoters never take new tax laws lying down. They scurried to create reverse tax shelters that could generate “passive activity income.”
Their first idea was “trading” business partnerships to generate portfolio income. They figured that would be easy enough. A proven trader can generate income without much risk.
The IRS fought back with the “trading rule,” which says that “trading” partnerships are not subject to the passive activity rules.
The end result is that the IRS won their war on those types of tax shelters. The IRS may realize the “trading rule” gives a tax shelter of sorts to investors in “trading” companies, but we believe they think it's just for expenses. MTM only came into existence for traders and trading businesses in 1997, and the IRS may not yet realize that investors will be able to get huge MTM trading loss benefits on their tax returns and large refunds with net operating losses.
Here is the IRS' “state of the law,” which clearly explains these business benefits
Here is an excerpt from IRS “Field Service Advice” (FSA) 200111001 Vaughn. An FSA is not technically tax law, but it represents the IRS' own view of the “state of tax law.” In the Vaughn tax exam and case, the IRS summarized the issues and conclusions as follows:
1. Whether a partner in a “ trader ” partnership may claim as a trade or business expense the operating expenses of the partnership.
2. Whether a partner in a “trader” partnership should treat his ordinary income or losses from the partnership as arising from a passive activity for purposes of section 469 (the passive activity regulations).
3. Whether section 163(d) (limitation on investment interest) limits the deduction of any interest expense flowing through to a noncorporate partner from a “trader” partnership.
1. A partner in a “trader” partnership may claim as a trade or business expense the section 162 (trade or business expenses) expenses of the partnership.
2. A partner must treat his ordinary income or losses from a “trader” partnership as not arising from a passive activity.
3. For noncorporate partners, section 163(d) will limit the deduction of interest expense that is not attributable to the partnership's trading activity. In addition, for those noncorporate partners who do not materially participate in the trading activity, section 163(d) also will limit the deduction of interest expense that is attributable to the partnership's trading activity.
GTT Observation and Summary: The investor receives complete business tax breaks on ordinary business expenses except for investment interest expenses. The structure helps the investor get maximum possible benefit from those investment interest expenses (see more below).
What hedge fund tax strategy is best for you?
Before you proceed, think about what tax strategy is best for you as the trader/manager of your “trading” company, and what is best for your investors. When you sign up for GTT's hedge fund services, we ask you many questions about your tax situation, your trading program and the tax needs of your investors. We factor all this into our advice.
If you will be trading hyperactively on a daily basis, you probably will qualify for “trader tax status.” That determination is not easy to make, but we can help you make it. We are the experts on “trader tax status.” To learn more about this subject, we suggest you purchase our 2003 GTT Guide: Trader Tax Status & Mark-to-Market Accounting. View it and buy it here .
If you qualify for trader tax status, that will always be more attractive tax-wise to both you as trader/manager and your investors . “Trader tax status” means you have “trading” company treatment, and you rise above the regular default “investment” company status (see above).
Your “trading” company, a business rather than an investment, is then subject to the passive activity loss rules, but it is exempt from those rules under the “trading rule.”
Therefore, you have accomplished the first major business tax break, and it is beneficial to you and the investors in all cases.
Your investors can deduct ordinary losses for all expenses, except margin interest, on Schedule E (non-passive column). These losses will offset any other type of income on their tax returns.
So far, your interests are the same as your investors – you both want trader tax status for ordinary loss treatment.
A “fee” may be better for investors, but a “profit allocation” might be better for you.
In the case of “trading” companies, here is where your interests may be different from your investors. We also can find ways to have your interests aligned.
A trader/manager in a hedge fund is entitled to an “incentive compensation payment” (usually 20 percent) for their efforts in managing money for the investors in the “trading” or “investment” company.
In the case of “investment” companies, the structure can either provide for a “fee” which is classified as a “deduction from portfolio income” (a restricted itemized deduction), or it can be structured as “ profit allocation,” which is a share of capital gains.
Most “investment” companies use “profit allocations” to prevent the investors from being stuck with non-deductible itemized deductions. “Deductions from portfolio income” are “investment expenses” reported on Schedule A as “miscellaneous deductions.” These are only deductible in excess of 2 percent of adjusted gross income. Investment expenses are an alternative minimum tax (AMT) tax preference item (not deductible for AMT). Many taxpayers are hit with the dreaded alternative minimum tax (AMT).
For an “investment” company example, rather than report on your investors' K-1s a $50,000 capital gain and a $10,000 investment expense (the incentive fee), it is beneficial to use a “profit allocation” and report on the K-1 a capital gain of $40,000 and no “deductions from portfolio income”. You will have to report the other expenses as deductions from portfolio income, unless you are a “trading” company. In that case, you pass through business expenses, without limitation for your investors.
In a “trading” company, the trader may want to use a “fee” structure in-lieu of a “profit allocation.” The investors may prefer an ordinary business loss for fees and a higher capital gain (that $50,000) to offset against their unutilized excess capital losses.
Consider the “earned income” issue for the trader/manager. Fees are considered earned income, whereas a share of capital gains (the profit allocation) are not earned income.
Many traders want earned income so they can deduct their health insurance premiums and have tax-deductible retirement plans. For more on these subjects see http://www.greencompany.com/EducationCenter/GTTRecStratRetirementPlans.shtml.
It may work out well for both the manager and the investors to use fees. If the manager wants to limit the earned income and related self-employment taxes due on earned income, we can use an S-Corp for the manager (as his managing member vehicle in the hedge fund LLC). S-Corps are not subject to self-employment taxes, whereas LLC income is. The S-Corp can pay a smaller salary to the manager to drive the retirement plan strategies.
Commodities traders may prefer the profit allocation over the fee in all cases, because the trader/manager also wants to benefit from the lower taxes on commodities capital gains (a 60/40 split – 60 percent of gains are taxed as long-term capital gains).
The different choices and strategies are complex, and we strongly recommend that all hedge fund managers engage GTT for at least a one-hour consultation to review the best strategy for them and their investors.
Should you elect MTM on the entity-level for tax loss insurance for your investors?
After we help you determine that your trading program will qualify for “trader tax status”, the next step is to see if MTM accounting is good for you and your investors.
New hedge funds (“new taxpayers”) may make the MTM election internally (as a resolution) within 75 days of inception. They don't need to file this election with the IRS.
Existing hedge funds must provide an MTM election statement to the IRS when they file their tax return or extension for the prior tax year by April 15 of the current tax year. For example with 2003 MTM elections made for the 2003 tax year, the taxpayer would attach the election statement to their 2002 partnership tax return or extension due April 15, 2003.
In general, we recommend MTM for securities trading businesses but not commodities trading business. For securities, business traders report capital gains and losses on Schedule D (default cash method) or Form 4797 Part II (if mark-to-market accounting is elected). Securities traders rarely hold positions for more than 12 months, so the bulk of their trading gains are short-term capital gains subject to the ordinary income tax rates. In effect, you get "tax loss insurance" on your trading activity (MTM ordinary loss treatment) without cost, since MTM ordinary gains are taxed the same as short-term capital gains (ordinary marginal tax rates).
For commodities, business traders report their capital gains and losses on Form 6781 (Section 1256 contracts). This allows them to split the gains and losses 60/40 on Schedule D: 60 percent long-term, 40 percent short-term. This 60/40 split gives commodities traders an advantage over securities traders . For this reason, most profitable commodities traders don't elect MTM IRC 475. With 475, commodities trader can have “tax-loss” insurance (ordinary loss treatment), but they are reluctant to give up their beneficial tax rates on gains (the 60/40 split). Form 6781 losses may also be carried back three years against Form 6781 gains. For more information on commodities vs. securities see http://www.greencompany.com/EducationCenter/GTTRecCommodities.shtml.
In most cases, we recommend that a securities trading business hedge fund elect MTM for the reasons stated below. One case when it may not be beneficial is if the investors have large unutilized capital loss carryovers and they prefer capital gains over MTM ordinary trading gains. The former can be used to offset their capital losses, the latter may not.
MTM ordinary trading gains do offset ordinary business expenses, and the K-1 passes-through to the investors' tax returns as either a net “non-passive” ordinary gain or loss reported on their Schedule E.
The key benefit of MTM is that if there are trading losses, these MTM ordinary securities losses are passed-through to the investors' Schedule E as ordinary “non-passive” losses. This is a huge benefit to your investors , as ordinary losses may offset any income on their tax return. If they have a negative taxable income, these Schedule E losses may also be included in a Net Operating Loss, which can be carried back against any type of income or carried forward. See more information on NOLS at http://www.greencompany.com/EducationCenter/GTTRecNOL.shtml.
Investment interest expenses are not part of the “trading rule” exception
The one exception to the “trading rule” tax loophole is that “investment interest expenses” are not considered “business interest expenses.” All the other expenses are business expenses rather than “investment expenses.”
Investors may deduct investment interest expenses only if they have investment income and pass other tests listed below. Investment interest deductions are also an AMT tax preference item.
A hedge fund with MTM trading losses rather than capital losses may help an investor increase their investment interest deduction, because the investor may choose to include capital gains and losses in their investment income formula for this deduction.
On the other hand, a hedge fund without MTM and trading gains may help this deduction. Everywhere you look there are nuances, and GTT is on top of them to help you and your investors.
Investment Interest Expense rules
The below is an excerpt from www.irs.gov on “investment interest expenses:”
The amount you can deduct as investment interest expense may be limited in two different ways. First, you may not deduct the interest on money you borrow to buy or carry shares in a mutual fund that distributes only exempt-interest dividends.
Second, your deduction for investment interest expense is limited to the amount of your net investment income .
Net investment income. This is figured by subtracting your investment expenses other than interest from your investment income. For this purpose, do not include any income or expenses taken into account to figure gain or loss from passive activities.
Investment income . Investment income generally includes gross income derived from property held for investment (such as interest, dividends, annuities and royalties). It generally does not include net capital gain derived from disposing of investment property, nor does it include capital gain distributions from mutual fund shares. However, you can choose to include part or all of your net capital gain in investment income.
Investment expenses. Investment expenses include all income-producing expenses relating to the investment property, other than interest expenses, that are allowable deductions after subtracting 2 percent of adjusted gross income. In figuring the amount over the 2 percent limit, miscellaneous expenses that are not investment expenses are disallowed before any investment expenses are disallowed.
Is a GTT hedge fund strategy right for you?
You won't be bothered with trading multiple investors' accounts; rather, all the investors are combined into one trading account – your hedge fund account. You can even add your capital to that hedge fund account and keep all your trader tax status benefits.
Forming your own hedge fund has never been easier, faster or lower in cost.
For as little as $5,000, GTT can: consult you on the best tax structure (addressing the “trading rule” and “trader tax status” strategies above); form your hedge fund; incorporate your hedge fund and managing member LLC companies; and handle all the offering documents, SEC and blue sky registrations. Click here to learn more http://www.greencompany.com/HedgeFunds/TypesofFunds.shtml.
Trading other people's money not only protects your own risk capital and gives you the opportunity to help others, it also allows you to make more money for yourself. You get to keep a specific amount of all the money you make for them, and all this takes is a small investment in your own business.
As a successful active trader, you have everything going for you in entering the hedge fund business: competitive tax benefits with the “trading rule” tax loophole, few competing attractive investment yields (mutual funds and bank interest rates), ease of entry, ease of operations, low costs (reimbursable from investors) and no interruptions to your current trading business. Best of all, you invest in yourself and grow in your own business.
GreenTraderTax.com has everything you need to know about hedge funds. We can help you develop a hedge fund, provide the back-office services and help in your tax preparation.
Visit our entire hedge fund services section and contact us soon. The best way to start may be a one-hour consultation where we can review your facts, circumstances, opportunities, RIA and tax issues, and more.
Ready for help?
If you have any questions, please email firstname.lastname@example.org
Investors want to tap into the success of short-term traders
Self-directed and broker-assisted accounts have left most investors with large capital losses far in excess of the puny $3,000 deductible capital loss limitation. Many investors are not investing their money until the markets seriously improve on the upside or Uncle Sam increases the capital loss limitation. Neither appears to be happening any time soon. The investment public is not savvy or skilled in short selling, and they don't know how to profit from market volatility.
Day traders and swing traders are in the business of catching quick swings in price, and they are skilled in shorting stocks. Unlike investors, business traders also have full tax loss protection; they can deduct their business expenses as ordinary tax deductions and they can elect mark-to-market accounting (MTM, IRC 475) to treat all trading losses as ordinary losses.
In summary, investors have their hands tied and have few opportunities to profit in these difficult markets. Plus, investing he their money with little tax benefit protection. On the other hand, traders have the skills and tools to make money on the up or down side of the markets, and they have full tax loss protection.
With a hedge fund or other type of “trading company”, business traders can raise money from investors who will benefit fully from trading programs (buying and shorting stocks quickly and frequently). And with the “trading rule,”“trader tax status” and our strategies, the hedge fund or “trading” company can deliver business tax loss protection to the investors (except for some restrictions on investment interest expenses; details above).
Hedge funds are the new craze on Wall Street. The leading brokerage firms and mutual fund companies are rushing to form their own hedge funds (some are a “fund of funds”). Everyone realizes the worsening market conditions for mutual funds (no short-selling opportunities and high expense ratios), and investors would rather hire a money manager than lose their own money trading their own self-directed accounts.
Minimum investment rules for hedge funds have dropped significantly, and the new types of hedge funds accept investors with $10,000 or $25,000, not the $100,000 minimums of years past.
The online trading revolution opened the door for “at-home” sole proprietor traders to make a living trading just like the professional proprietary traders in brokerage firms.
Recent advances in this same trading revolution have opened the door for successful “at-home” sole proprietor traders to form their own simple hedge funds to tap into this incredible market opportunity. An “at-home” day trader or swing trader can spend as little as $5,000 to form an “exempt” hedge fund (and it can be formed in less then one month) . Our company, GreenTraderTax.com, has everything you need to know about hedge funds. We can help you develop a hedge fund, provide the back-office services and help in your tax preparation.