TAX STUFF

About one in three households had Individual Retirement Accounts (IRA) set up as of June 1999, according to the Investment Company Institute, (ICI), the trade association for the mutual fund industry.

One-quarter on those were the old-fashioned traditional IRAs, the kind folks often get a tax break on each year providing they've made a contribution and meet the guidelines; 7 percent were Roth IRAs in which the money invested is taxed before it's invested; 8 percent included any variety of employer-based IRAs, like SEP-IRAs for the self-employed; and 3 percent were Education IRAs.

Mutual funds are the product of choice when it comes to funding IRAs with the lion's share of investors selecting stock funds. Individual stocks, the second most popular choice.

Whatever type of IRA you prefer or investment product you choose to fund it with, the most important thing to remember is just to do it. There of plenty of ordinary people who have been chucking $2000 a year into their IRAs over the past 20 years and now have substantial 6-figure retirement nesteggs to show for it. So don't miss this long-term planning boat. It can serve you later in life.

If you're unfamiliar with how mutual funds are taxed or need some tips on IRA investing consider the following:

• You'll need the right tax forms. Own shares in any type of mutual fund held in a personal account and you'll need to fill out a 1099-DIV form each year. On it list all the taxable dividends and capital gains distributions the fund has kicked off whether you've taken them in cash or had them reinvested back into the fund. Don't concern yourself with the 1099-DIV, if your mutual funds are in qualified retirement accounts. Taxes on them are deferred.

  Form 1099-B is used to list redemptions. Every time you sell shares of a mutual fund it triggers a taxable event. Use this form for reporting the proceeds from share redemptions, including the total amount sold in dollars and shares and share price. Like the previous one, this is only for funds held in personal accounts, not retirement plans.

  If you can't get your hands on either forms, both are available on Vanguard's web site. Visit it at www.vanguard.com and print them out.

  Form 1099-R records retirement plan distributions and shareholders who have taken IRA or other retirement plan distributions need to fill it out.

• If you're looking for a handy guide, INVESCOs Taxes & Mutual Funds tax guide for 1999 is simple to read, full of information and will help you with most any tax concern you have. Everything from state tax considerations to understanding forms for foreign citizens and helpful IRS phone numbers are included in within its 25 pages.

  INVESCO's 1999 Taxes & Mutual Funds guide is free and maybe ordered by calling 1-800-525-8085. Or visit their web site at www.invesco.com.

• Don't forget to name a beneficiary on your IRA. Rod Steorts, from Banc One says that your beneficiary designation not only affects who gets the IRA assets after you die, but it also affects the minimum distribution calculation used when you turn age 70 and how soon your IRA will be taxed after you die.

  "If you have a spouse, it could be a simple matter of just naming him or her as your beneficiary," he says. "But if you have children from a previous marriage and want to ensure that they as well as your current spouse benefit from the IRA, do some planning with an estate specialist to make sure your beneficiary designations is set up just right."

• And never forget that tax planning is really a year-round event. Alleghany Funds is offering a guide titled The 2000 Tax Planning Guide that not only helps individuals with tax tips but also assists the small business owner with information on retirement plans and business decisions.

  "We realize that with changing laws and the many choices available to investors today, it's important for taxpayers to know their options and be able to understand the best path to take in managing and minimizing their taxes, " says Ken Anderson, president of the Alleghany Funds. "Taxes should be a consideration all year, not just on April 15."

  To obtain a free copy of Alleghany Fund's 2000 Tax Planning Guide, call 1-800-992-8151 or visit the Alleghany Funds on-line at www.alleghanyfunds.com.