Since it's that time of the year, an FYI (or, technically, an ICYMI)…
If:
- You're invested in any mutual funds that pay out short- and long-term capital gains at the end of each year;
and- Those payouts are usually small enough that they don't significantly affect your taxes;
and- You're set up to automatically reinvest those payouts so you might not even look at your statements anymore…
…then I strongly suggest you look at your statement this time. For whatever reason (I don't know, I'm not the fund manager), I received a payout of about 10% this time, and that appears to be on the low end compared to other funds. It will significantly affect my taxes, and if I hadn't noticed it now, I would've been hit later with penalties for underpayment.
If you find that you're in a similar situation, you have two options:
1) Make an estimated tax payment by January 18; or
2) File your taxes and pay the entire amount owed by January 31.
For more information, see
IRS Publication 505.
Of course none of this applies if you have only non-taxable retirement accounts. And if you're outside the U.S., do whatever is appropriate for your own country.