It's not like I'm not getting compensated for taking on this risk. Let's run the numbers. Remember muni bonds are federal income tax-free, and Treasury bonds are state income tax-free. Mymarginal tax ratesare 37% federal and 5% state. Yields of the Vanguard intermediate tax-exempt and ...
Tax-Exempt Bonds A bond investor can opt formunicipal (muni) bondsovercorporate bonds, given that the former is exempt from taxes at the federal level. If the investor purchases a muni bond issued in their state of residency, the coupon payments made on the bond may also be exempt from st...
Municipal bonds tend to be good investments for high-taxed investors, and these days the supply is ample. For that we can thank profligate legislatures and the cyclical downturn in tax revenues. But out of a misplaced aversion to risk, all too many investors, particularly institutions, are ...
There are many ways to reduce taxes that are not only available to high-income earners but to all earners. These include contributing to retirement accounts, contributing to health savings accounts (HSAs), investing in stocks with qualified dividends, buying muni bonds, and planning where you liv...
Taxable bonds, especially high yield, are well suited for tax-deferred accounts because more of their return tends to come from recurring income than capital gains. Tax-deferred accounts are generally not taxed during the accumulation period; however, because they are funded with pre-tax dollars,...
Figure 5.2 Response to a Decrease in the Liquidity of Corporate Bonds For example, suppose you are in the 35% tax bracket. From a 10%-coupon Treasury bond, you only net $65 of the coupon payment because of taxes. However, from an 8%-coupon muni, you net the full $80. For the ...
Paulina LikosJan. 8, 2021 What Are the Four Factors of Production? The factors of production impact the financial markets and investment outcomes. Coryanne HicksDec. 21, 2020 How to Use the PEG Ratio for Stock Picks Know why the PEG ratio is important for your investment analysis. ...
Municipal bonds tend to be good investments for high-taxed investors, and these days the supply is ample. For that we can thank profligate legislatures and the cyclical downturn in tax revenues. But out of a misplaced aversion to risk, all too many investors, particularly institutions, are ...
mutual funds that invest in municipal bonds,U.S. Savings Bonds, or other tax-exempt securities can also receive tax-exempt status. Federal government bonds, namely the U.S. Savings Bond andTreasury Inflation Protected Securities(TIPS), are taxed at the federal level, but exempt from state and...