Tax bracket to choose corporate vs municipal bond for taxable act.

[DSM]

Filing status: Married jointly

Income: 220K

Pre tax 403/457 contribution: 36K

Itemized deduction: 25K

Exemption: 16 K

Taxable income: 220-36-25-16= 143 K

I am trying to calculate tax yield to decide between corporate vs muni.

Which tax bracket I need to choose from- gross income or taxable income?

 

 

[Peds]

Your marginal rate. Where the last dollar is taxed. Hint: you already calculated it.

[PhysicianOnFIRE]

That puts you in the 25% marginal federal income tax bracket + state if applicable. If the muni yields more than (25% + state tax) less than the normal fund, I guess you could use that math to guide you.

But I would take the guesswork out by keeping bonds in tax deferred account(s). [And yes, I know WCI says bonds go in taxable]

[DSM]

Thank you so much!

 

[Zaphod]

Nice little calculator here

 

https://funds.eatonvance.com/tax-equivalent-yield-calculator.php

[DSM]

@Zaphod: Super helpful!