While putting money away in mutual funds for long-term savings is a good idea, this time of year you should look before you invest. The tax law requires mutual funds to distribute thier accumulated dividends from their portfolio, and their accumulated capital gains, annually. Many do so in December. If you're not careful, you could get a year's worth of tax liability on your 1099 for the privilege of owning fund shares for as little as one day.
Visit your favorite mutual fund's website and to find their tax dividend plans for December before you send them your money; you might be a lot happier next April if you wait a few days before making your next investment
Roth & Company CPAs