If you are an investor in mutual funds outside of tax-deferred IRAs and 401(k)s and tax-free Roth IRAs, listen up!

This is the season when mutual funds pay out capital gains to shareholders resulting in taxes owed, even if you reinvest your gains in additional fund shares.

Now, if you're saying to yourself, "My fund is down 40% or more this year, so this warning couldn't apply to me," you're probably wrong. Assuming that you're safe from taxes could result in a big tax hit in April.

Next: How Can This Be?