Income received from a mutual fund is generally taxable at the shareholder’s ordinary income tax rate, the notable exception being if the account is held within a tax-advantaged vehicle such an IRA or 401(k), where distributions are tax-deferred or tax-free. Dividend distributions are not, however, always straightforward. Understanding how they break down and how they’re taxed is important to not send too much to Uncle Sam at tax time.

Dividends paid out by mutual funds fall into two categories: qualified and ordinary.

Qualified dividends are ordinary dividends that qualify for a lower tax rate provided that certain criteria are met. Qualified dividends are dividends that come from stocks held by the fund for at least 60 days of the 121-day period that begins 60 days prior to the ex-dividend date. In addition, the dividend must be issued by an American or qualifying foreign company.

Ordinary dividends are those that do not meet the criteria for qualified dividends and get taxed at a higher rate. Ordinary dividends include not only non-qualified equity dividends but also the income generated from bonds, money market securities and bank products. Income from products such as real estate investment trusts (REITs) and master limited partnerships (MLPs) is considered ordinary income.

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Qualified dividends are taxed at the long-term capital gains rate, which is considered more favorable than the tax rate for ordinary dividends. Taxpayers in the 10% and 15% tax brackets pay no tax on qualified dividends. All other taxpayers pay a 15% tax rate on qualified dividends with the exception of those in the highest 39.6% tax bracket. They pay a 20% tax on qualified dividends.

Ordinary dividends are taxed at the taxpayer’s ordinary income tax rate. These rates range from 10% to 39.6%.

Bond and money-market funds normally make only ordinary dividend distributions. Stock mutual funds, however, can distribute ordinary dividends, qualified dividends or both. Here are five funds that have made dividend distributions in 2016. To get more data on the five mutual funds that pay out dividend distributions, click on their ticker symbol in the table.

Check out the top dividend ETFs at our sister site ETFdb.com.

Mutual fund dividend distributions can come from a multitude of sources, making them a bit complicated come tax time. Understanding the difference between ordinary and qualified dividends as well as how they’re taxed is important since it can mean the difference between hundreds of dollars or more in taxes that can be saved.

To learn more about mutual fund distributions, check out our What are Mutual Fund Distributions article.