IRS Sees Millions of Tax Returns Last Days of Tax Filing Season

WASHINGTON — The Internal Revenue Service today announced that the agency has received 135.6 million returns this year following a late surge of filings last week.

During the week ending April 21, the IRS received more than 17 million tax returns. The vast majority, 13.6 million returns, were filed through IRS e-file.

Looking at the entire tax filing season, the IRS has received 135.6 million tax returns through April 21. With the influx of returns last week, the number of filings is now close to the number of returns from last year’s filing season.

With the mid-April filings, the number of refunds issued this year swelled to 97 million worth $268.3 billion. The average refund was $2,763, up slightly from last year’s average of $2,711.

Taxpayers have filed 11.6 million extension forms this filing season, up 0.9 percent compared to the same time last year. The vast majority of extensions were e-filed, 9.7 million, an increase of

11 percent from the same time last year.

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                   2017 FILING SEASON STATISTICS

Cumulative statistics comparing 04/22/2016 and 04/21/2017
Individual Income Tax Returns: 2016 2017 % Change
Total Returns Received 136,528,000 135,638,000 -0.7
Total Returns Processed 129,456,000 128,789,000 -0.5
E-filing Receipts:
TOTAL 122,546,000 122,164,000 -0.3
Tax Professionals 70,864,000 70,401,000 -0.7
Self-prepared 51,682,000 51,763,000 0.2
Web Usage:
Visits to IRS.gov 325,525,568 312,255,666 -4.1
Total Refunds:
Number 97,079,000 97,104,000 0.0
Amount $263.197 Billion $268.296 Billion 1.9
Average refund $2,711 $2,763 1.9
Direct Deposit Refunds:
Number 81,221,000 81,646,000 0.5
Amount $234.269 Billion $239.410 Billion 2.2
Average refund $2,884 $2,932 1.7

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IRS Addresses Top Tax Refund Myths As Tax Season Rolls On

 

Posted: 01 Feb 2017 11:27 AM PST

It’s tax season! Tax season opened on January 23, 2017, and according to the Internal Revenue Service (IRS), so far, so good.

Unfortunately, some taxpayers were caught off guard by a new rule that requires the IRS to hold tax refunds for taxpayers who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit. You can find out more about those credits and the delay here.

As taxpayers eagerly await their tax refunds, the IRS has acknowledged that there are a number of “misunderstandings and speculation about refunds.” To help sort out the truth from the confusion, the IRS has issued a list of refund-related myths:

Myth 1: All Refunds Are Delayed

Taxpayers who are affected by the new law those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). Those taxpayers should expect the IRS to hold their entire refund check since the IRS isn’t allowed to release the part of the refund that is not associated with the EITC and ACTC. Taxpayers who do not claim the EITC or the ACTC are not affected by the new law. However, while more than 90% of federal tax refunds are issued in less than 21 days, some tax returns may require additional review and may take longer.

 2: Calling the IRS or My Tax Professional Will Provide a Better Refund Date

According to IRS, many people mistakenly think that talking to the IRS or calling their tax professional is the best way to find out when they will get their refund. However, the best way to check the status of a refund is online through the “Where’s My Refund?” tool at IRS.gov or via the IRS2Go mobile app. The IRS updates the status of refunds once a day, usually overnight, so checking more than once a day will not produce new information. For an explanation of refund status announcements, check out this prior post.

Myth 3: Ordering a Tax Transcript a “Secret Way” to Get a Refund Date

Ordering a tax transcript will not help you find out exactly when you might get your refund. The information on a transcript does not necessarily reflect the amount or timing of a refund. While you can use a tax transcript to validate past income and tax filing status for mortgage, student, and small business loan applications and to help with tax preparation, you should use “Where’s My Refund?” to check the status of their refund. The codes that you’ll see on your tax transcripts do not offer additional information about when your refund will be issued.

Myth 4: “Where’s My Refund” Must be Wrong Because There’s No Deposit Date Yet

The “Where’s My Refund?” tool will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after February 15. Those taxpayers claiming EITC or ACTC will not see a refund date until then. The IRS, tax preparers and tax software will not have any additional information on refund dates.

Myth 5: Delayed Refunds, those Claiming EITC and/or ACTC, will be Delivered on February 15

Remember that the new law will not allow the IRS to release tax refunds until after February 15. That does not mean that refunds will be available on that date. In addition to normal processing times for banks, remember that President’s Day weekend may impact when you get your refund. The IRS cautions that delayed refunds may not start arriving in bank accounts or on debit cards until the week of February 27, assuming that there are no processing issues with your tax return and you choose direct deposit.

That’s it. There are no magic codes, keys or other tricks to getting your tax refund faster this tax season. The IRS encourages taxpayers who are expecting tax refunds to file as early as possible, using e-file and direct deposit.

If You Owe Taxes To IRS, You Could Lose Your Passport And Your Ability To Fly

 

Posted: 26 Jan 2017 06:51 PM PST

If you’re like me, your calendar is already filling up – and it’s just January. If those plans include travel, you need to be aware of a new law which could affect your future plans.

On December 4, 2015, the Fixing America’s Surface Transportation Act, or “FAST Act,”  became law. The purpose of the law was to provide long-term funding for transportation projects, including new highways. However, the Act also included a significant new provision which allows the Department of State (sometimes just called “State Department”) to yank passports from delinquent taxpayers.

Here’s how it works. The Internal Revenue Service (IRS) doesn’t have control over passports: that’s the purview of the State Department. Tax debts are assessed by the IRS: the State Department doesn’t generally have access to taxpayer information because of privacy laws.

To bridge the two, the law now requires the IRS to advise the State Department about seriously delinquent taxpayers. The State Department may then refuse to issue or renew a passport for a seriously delinquent taxpayer; the Secretary of State is also permitted to revoke any passport previously issued to a seriously delinquent taxpayer.

For purposes of the new law, a “seriously delinquent” tax debt is defined as “an unpaid, legally enforceable federal tax liability” greater than $50,000, including interest and penalties. The $50,000 limit will be adjusted each year for inflation and cost of living. The limit is not per year but cumulative meaning that it’s the total tax debt that matters.

There are some exceptions under the law. Tax debt which is being paid on time as part of an installment agreement or under an Offer In Compromise doesn’t count. It also doesn’t include any tax debt for which a Collection Due Process hearing is timely requested in connection with a levy or a debt where the collection has been suspended due to an innocent spouse claim.

If you’re seriously delinquent under the new law, the IRS is required to notify you in writing at the time that it certifies the debt to the State Department. The State Department will then hold your passport application or renewal for 90 days to allow you to resolve any errors, make full payment, or enter into a satisfactory payment plan. There is no grace period for resolving your debt before the State Department revokes an existing passport.

To get off the list, you must prove that the debt is fully satisfied, is legally unenforceable or is not seriously delinquent tax debt under the statute (in case you’re wondering, that does not include debt that dips below $50,000 – once you’ve hit that threshold, you must either pay it down or meet one of the other criteria).

That feels like the end of the story. You might be thinking if you have some tax debt, maybe you’ll just decide not to vacation in Belize for a bit.

But what if just you want to go to Nashville? Or Boston? That’s where things get tricky. Under another law – this one from 2005, the REAL ID Act – federal agencies cannot accept driver’s licenses and identification cards issued by states that do not meet certain standards.

As of January 22, 2018, all travelers with a driver’s license or identification card issued by a state that does not meet those standards must present an alternative form of identification acceptable to the Transportation Security Administration (TSA) unless that state has an extension. The list of acceptable identification includes a passport.

You can check the status of your state for REAL ID Act purposes using our handy map:

Source: dhs.gov

Wooo HOOOO….Pennsylvania is NON compliant!!!

Those rebels….

Safeguarding Taxpayer Data: Create Strong Passwords

U.S. Department of Homeland Security Seal

Passwords are often the key to the identification and authentication process for access to your computer, email and encrypted information, both received and transmitted. For this reason, it is critical to your business and the security of your client data that you have strong passwords and that you protect those passwords.

Here are some things you should consider in creating and protecting passwords:

  • Longer passwords are safe and more difficult to guess. A strong password should be a minimum of eight characters. It should include a combination of letters, numbers and symbols or special characters. Your password should include at least one uppercase letter, one lowercase letter, one number and one symbol or character.
  • Personal information should not be included in your passwords.  Names of siblings, children, pets, etc., are generally available on social media, which makes it easier for cybercriminals to figure out your password.
  • Avoid using the same password for all of your information systems, accounts or devices. If someone does guess one password, they will not have access to all your systems, devices or data.
  • Substitute numbers and symbols for letters in words or phrases to make it more difficult to guess a password.
  • Do not share your password and be careful of attempts to trick you into revealing your password.

 

Toolkit Materials by Cyber Topic

Attachment Size

 

Attachment Size
 Social Media Guide 180.59 KB
 Internet of Things Tip Card 146.25 KB
 Cybersecurity While Traveling Tip Card 149.32 KB
 Chatting with Kids about Being Online Booklet 4.89 MB
 Parents and Educators Tip Card 154.11 KB
 Mobile Security Tip Card 156.06 KB
 Seguridad Cibernética Para Los Niños 281.79 KB
 Best Practices for Creating a Password 262.54 KB
 Best Practices for Using Public WiFi 215.71 KB
 Identity Theft and Internet Scams 359.92 KB
 Mobile Banking and Payments 227.88 KB
 Online Gaming 301.16 KB
 Online Privacy 226.48 KB
 Reporting a Cybercrime Complaint 187.17 KB
 Insider Threat 447.96 KB
 Malware 354.77 KB
 Five Every Day Steps Towards Online Safety 235.9 KB
 Five Ways to be Cyber Secure at Work 232.38 KB
 How to Recognize and Prevent Cybercrime 245.29 KB
 Five Steps to Protecting Your Digital Home 202.05 KB
 Your Part in Protecting Critical Infrastructure 243.66 KB
 Phishing 253.68 KB

Bogus IRS Calls Topped List Of Most Reported Scams In 2016

Callers posing as agents from the Internal Revenue Service (IRS) attempting to collect bogus tax debts topped the list of the most reported scams of 2016, according to the Better Business Bureau. Those IRS phone scams accounted for 1 in 4 reported scams last year.

As part of the scam, callers dialed up potential victims while impersonating agents from the IRS or U.S. Citizenship and Immigration Services (USCIS). Calls were typically made using VoIP (voice over internet protocol) technology that allowed the scammers to “spoof” the phone numbers, making it appear that the calls were coming from the IRS or other government agency. After convincing numerous taxpayers that they needed to pay up or face punishment, thieves were able to make off with millions of dollars in stolen money. The U.S. Treasury Inspector General for Tax Administration J. Russell George reported that his agency alone had received over 2 million contacts from individuals who received these kinds of solicitations and approximately 10,000 people acknowledged that they were victims. The largest single amount paid as a result of the IRS impersonation scam as charged in the indictment is $136,000, paid by a victim in California.

The scam, which started making the rounds in 2013, topped the list in 2016, just as it did in 2015. However, there is some good news: according to the Better Business Bureau’s Scam Tracker, the numbers of IRS-related scam complaints have dropped dramatically since mid-December. That may be because of dozens of arrests made in late October as part of a multi-year, multi-agency investigation into the IRS-impersonation scams.

The nine kinds of scams that round out the top ten in 2016 – after those IRS-impersonation scams – were:

2. Debt Collections
3. Sweepstakes/Prizes/Gifts
4. Online Purchase
5. Employment
6. Government Grant
7. Tech Support
8. Advance Fee Loan
9. Fake Check/Money Order
10. Phishing

The government grant scam noted in the list sometimes has a tax component as well. According to a recent complaint filed with the Better Business Bureau, it works as follows: the consumer receives a notification that they have been awarded a government grant. To collect, the scammer advises that they need certain personal information from the consumer, which may include Social Security numbers and birth dates. In addition, to claim the money, the consumer is told they must pay a filing fee. After the scammers receive the fee, they demand more money from the consumer, insisting that the IRS has stopped the transfer of grant money because tax is due.

The federal government advises caution when responding to grant notifications. You should be aware that the government does not contact individuals to award grants for which there has been no application and the government does not charge a fee for applying for a federal grant. Additionally, federal grants are usually awarded for specific programs, research or projects, most often to local governments, organizations, institutions and universities, and not to individuals.

With all of the scams out there, how can you protect yourself? The Better Business Bureau offers the following ten tips:

1. Never send money to someone you have never met face-to-face.
2. Don’t click on links or open attachments in unsolicited email.
3. Don’t believe everything you see.
4. Don’t buy online unless the transaction is secure.
5. Be extremely cautious when dealing with anyone you’ve met online.
6. Never share personally identifiable information with someone who has contacted you unsolicited, whether it’s over the phone, by email, on social media, even at your front door.
7. Don’t be pressured to act immediately.
8. Use secure, traceable transactions when making payments for goods, services, taxes, and debts.
9. Whenever possible, work with local businesses that have proper identification, licensing, and insurance, especially contractors who will be coming into your home or anyone dealing with your money or sensitive information.
10. Be cautious about what you share on social media and consider only connecting with people you already know.

2017 Tax Filing Season Begins Jan. 23 for Nation’s Taxpayers, Tax Returns due April 18

April 18 is When Your Taxes are Due in 2017    

WASHINGTON ― The Internal Revenue Service announced today that the nation’s tax season will begin Monday, Jan. 23, 2017 and reminded taxpayers claiming certain tax credits to expect a longer wait for refunds. 

The IRS will begin accepting electronic tax returns that day, with more than 153 million individual tax returns expected to be filed in 2017. The IRS again expects more than four out of five tax returns will be prepared electronically using tax return preparation software.

 Many software companies and tax professionals will be accepting tax returns before Jan. 23 and then will submit the returns when IRS systems open. The IRS will begin processing paper tax returns at the same time. There is no advantage to filing tax returns on paper in early January instead of waiting for the IRS to begin accepting e-filed returns.

 The IRS reminds taxpayers that a new law requires the IRS to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until Feb. 15. In addition, the IRS wants taxpayers to be aware it will take several days for these refunds to be released and processed through financial institutions. Factoring in weekends and the President’s Day holiday, the IRS cautions that many affected taxpayers may not have actual access to their refunds until the week of Feb. 27.

 “For this tax season, it’s more important than ever for taxpayers to plan ahead,” IRS Commissioner John Koskinen said. “People should make sure they have their year-end tax statements in hand, and we encourage people to file as they normally would, including those claiming the credits affected by the refund delay. Even with these significant changes, IRS employees and the entire tax community will be working hard to make this a smooth filing season for taxpayers.”

 The IRS also reminds taxpayers that they should keep copies of their prior-year tax returns for at least three years. Taxpayers who are changing tax software products this filing season will need their adjusted gross income from their 2015 tax return in order to file electronically. The Electronic Filing Pin is no longer an option. Taxpayers can visit IRS.Gov/GetReady for more tips on preparing to file their 2016 tax return.

 April 18 Filing Deadline

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017, rather than the traditional April 15 date. In 2017, April 15 falls on a Saturday, and this would usually move the filing deadline to the following Monday – April 17. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 18, 2017. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

 “The opening of filing season reflects months and months of work by IRS employees,” Koskinen said. “This year, we had a number of important legislative changes to program into our systems, including the EITC refund date, as well as dealing with resource limitations. Our systems require extensive programming and testing beforehand to ensure we’re ready to accept and process more than 150 million returns.”

 The IRS also has been working with the tax industry and state revenue departments as part of the Security Summit initiative to continue strengthening processing systems to protect taxpayers from identity theft and refund fraud. A number of new provisions are being added in 2017 to expand progress made during the past year.

 Refunds in 2017

Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund.

The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind for taxpayers.

Beginning in 2017, a new law requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit until mid-February.

Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent fraud.

As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do – including returns claiming EITC and ACTC.

 

The IRS will begin releasing EITC and ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27 (assuming there are no processing issues with the tax return and the taxpayer chose direct deposit). This additional period is due to several factors, including banking and financial systems needing time to process deposits.

After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts and products. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing.

 

Where’s My Refund? ‎on IRS.gov and the IRS2Go phone app will be updated with projected deposit dates for early EITC and ACTC refund filers a few days after Feb. 15. Taxpayers will not see a refund date on Where’s My Refund? ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so Where’s My Refund? remains the best way to check the status of a refund.

 

The IRS also reminds taxpayers that a trusted tax professional can provide helpful information and advice about the ever-changing tax code. Tips for choosing a return preparer and details about national tax professional groups are available on IRS.gov.

 

Renewal Reminder for Individual Taxpayer Identification Numbers (ITINS) ITINs are used by people who have tax-filing or payment obligations under U.S. law but are not eligible for a Social Security number. Under a recent change in law, any ITIN not used on a tax return at least once in the past three years will expire on Jan. 1, 2017. In addition, any ITIN with middle digits of either 78 or 79 (9NN-78-NNNN or 9NN-79-NNNN) will also expire on that date.

 

This means that anyone with an expiring ITIN and a need to file a tax return in the upcoming filing season should file a renewal application in the next few weeks to avoid lengthy refund and processing delays. Failure to renew early could result in refund delays and denial of some tax benefits until the ITIN is renewed.

 

An ITIN renewal application filed now will be processed before one submitted at the height of tax season from mid-January to February. Currently, a complete and accurate renewal application can be processed in as little as seven weeks. But this timeframe is expected to expand to as much as 11 weeks during tax season, which runs from mid-January through April.

 

Several common errors are currently slowing down or holding up ITIN renewal applications. The mistakes generally center on missing information, and/or insufficient supporting documentation. ITIN renewal applicants should be sure to use the latest version of Form W-7, revised September 2016. The most current version of the form, along with its instructions, are posted on IRS.gov.

IRS Taxes. Security. Together.

 Tax Tip Number 8


IRS Strengthens Web Tool Access, Offers Tips for Use

As part of a wider effort to protect taxpayers, the Internal Revenue Service took steps this year to strengthen access to several IRS.gov applications, including adding requirements for the use of security codes texted to mobile phones to access certain tools.

This security code process is part of a two-factor or two-step authentication process that is becoming increasingly commonplace, especially in the social media, financial and tax areas. The two steps to access accounts are your credentials (username and password) plus a security code often sent as a text.

The IRS, state tax agencies and the nation’s tax industry – partners in combating identity theft – ask for your help in their efforts. Working in partnership with you, we can make a difference.

That’s why we launched a public awareness campaign that we call “Taxes. Security. Together.” We’ve also launched a series of security awareness tips that can help protect you from cyber-criminals.

To protect taxpayers, the IRS developed a new process it calls “Secure Access” following efforts by cyber-criminals to impersonate taxpayers. Criminals are amassing more and more taxpayer data stolen from sources outside the tax system. They use the data to file fraudulent tax returns or to attempt access to taxpayer accounts.

The more rigorous Secure Access process supports the IRS Get Transcript Online and Get an IP PIN tools.

Here’s what you need to be successful:

  • A email address;
  • Your Social Security number;
  • Your filing status and address from your last filed tax return;
  • Your personal account number from a:
    • credit card, or
    • home mortgage loan, or
    • home equity (second mortgage) loan, or
    • home equity line of credit (HELOC), or
    • car loan
  • A readily available mobile phone. Only U.S-based mobile phones may be used. Your name must be associated with the mobile phone account to complete the process in one session. If you have a Google Voice or similar virtual phones or a pay-as-you-go plan, you can opt for an activation code by mail, which will take five to 10 days for delivery. Landlines and Skype may not be used.

Each time you access your IRS.gov accounts, you must have your username, password and your mobile phone handy to receive a security code.

You may be familiar with similar two-factor authentication options. Social media and financial institutions use this option to provide additional protection. For example, these sites may send a security code should they fail to recognize your computer device, there’s an attempt to change your password or there’s an attempt to transfer money.

The purpose of two-factor authentication is to ensure that you and only you are able to access your accounts.

The IRS, state tax agencies and the tax industry joined as the Security Summit to enact a series of initiatives to help protect you from tax-related identity theft. You can help by taking these basic steps.

To learn additional ways you can take to protect your personal and financial data, visit “Taxes. Security. Together.” Also read Publication 4524, Security Awareness for Taxpayers.

Year-End Tax Tips

Steps to take before the New Year for a better tax return in 2017

DECEMBER 3, 2016

With Dec. 31 just around the corner, it’s time to start thinking about next season – and to make any last-minute moves that might improve a client’s tax position.

With that in mind, here’s a list of tax tips for you and your clients to think about before the end of 2016, from the National Society of Accountants and others in the field. (A slideshow version of these tips is available here.)

1. First – what’s not changing:While President-elect Trump is in a strong position to enact his promise of lower tax brackets next year, it’s important to remember that the current income tax rates of 10, 15, 25, 33, 35 and 39.6 percent are still in effect for the tax returns being filed next mid-April. The standard deduction amounts remain $6,300 single/married filing separately, and $12,600 for married filing jointly. The standard deduction for heads of households, however, rises to $9,300.

 2. Deferring income: If the president-elect does manage to lower and simplify the individual tax brackets per his plan, that means rates next year will be lower, so it might be worth it for individuals to consider deferring some income into 2017. That may mean getting a bonus in January, instead of December, or waiting to redeem a savings bond, or putting off debt forgiveness income.

3. Keep an eye on AGI: Since some tax benefits — including itemized deductions. personal exemptions, and education and adoption credits — get phased out depending on a taxpayer’s adjusted gross income, deferring income may also make sense depending on their current AGI.

4. New permanent incentives for individuals: The PATH Act of 2015 made a number of tax incentives permanent. For individuals, these include:

  • The American Opportunity Tax Credit;
  • The teachers’ $250 classroom expense deduction;
  • The ability to deduct state and local sales tax instead of state income taxes; <
  • The exclusion for direct charitable donation of up to $100,000 from an IRA; and,
  • The 100 percent gain exclusion on qualified small-business stock.

5. New permanent incentives for businesses: The PATH Act of 2015 made a number of tax incentives permanent. For businesses, these include:

  • The reduced five year recognition period for S corp built-in gains tax;
  • 15-year straight-line cost recovery for qualified leasehold improvements, restaurant property and retail improvements; and,
  • Charitable deductions for the contribution of food inventory.

6. Max out retirement accounts: If a taxpayer’s employer offers matching, then maxing out contributions to a 401(k) is as close to a no-brainer as you can get – but even without matching, sequestering income in 401(ks), IRAs, Keoghs and the like is still a great deal.

7. Tax-loss harvesting: Even in the current bull market, a portfolio can contain some duds – but they can still be useful! Taxpayers with large amounts of taxable gains in 2016 may want to offset some of those by realizing losses on those duds to lower their overall capital gains exposure.

8. Be careful with mutual funds: Many mutual funds make capital gains distributions in December, so taxpayers will want to bear that in mind when buying or selling. That a fund is or isn’t planning a major distribution needn’t necessarily be a deal-breaker – but it may add to the eventual tax bill.