If you're confounded by minuscule type and mysterious abbreviations, you're not alone.

Though the Internal Revenue Service requires fund companies to send to shareholders 1099s that include certain information, the agency doesn't tell them how to do it.The format many fund families use shoehorns as many as 10 headings and numbers onto a form no bigger than the back of a business envelope.

On every 1099-DIV, "gross dividends" is enumerated as item 1a. That figure - the sum of ordinary dividends and capital gains paid out the preceding calendar year - is key because if you earn more than $400 in gross dividends from mutual funds and stock investments, you must itemize each payout on Schedule B of your Form 1040. Otherwise, you can simply report the total on your 1040.

The only number that finds its way directly onto your tax forms is item 1c, the capital-gains distribution, which is your share of the profits scored when fund managers sell stocks or bonds.

If you own shares of a mutual fund that earns dividend income from U.S. Treasuries or numicipal bonds, information that is often included with your 1099 can save you money at tax time.

The quesiton is, can you find it?

The treasure hunt here is for the percentage of dividencds paid by the fund that was derived from Treasuries or muni bonds issued within the boundaries of your state.

All too often, taxpayers simply carry dividend income figures from their federal to their state tax returns. But income derived from Treasuries is tax-free at the state level.

Knowing what part of your dividends came from Treasuries lets you report that much less income on your state return.

The information is often mailed to shareholders in the same envelope as the 1099-DIV, but some companies send it separately, increasing the likelihood that it will be overlooked.

A similar state-tax break may be available if you own shares of a municipal-bond fund.

In most cases, income derived from bonds issued in your own state is free of state income taxes and escapes the federal levy.

Most muni funds include in the 1099 mailing a listing of the percentage of income derived from every state.

If you are uncertain whether income from your fund might qualify for either state tax break, call the fund and ask.