Investing in Municipal Bonds - Are tax-free muni bonds the right investment for you? скачать в хорошем качестве

Investing in Municipal Bonds - Are tax-free muni bonds the right investment for you?

September Webinar – Investing in Municipal Bonds Most investors are aware that municipal bonds can provide potential tax advantages, and even tax free income in retirement. But there’s more to these investments than meets the eye. This month we are looking at municipal bonds in detail to identify when they make sense to have in your retirement portfolio, how to invest in them, and when to avoid them. Specifically, in this webinar we’ll cover: Features and potential benefits of municipal bonds, How to invest in municipal bonds, When you should not invest in municipal bonds, and Why municipal bonds are commonly sold to investors by brokers. What to know about muni bonds - De Minimis Rule, and Tax Equivalent Yield What are Municipal Bonds? The primary feature of municipal bonds that causes them to be very popular with investors is the potential for all the interest of the bond to be tax free. This can mean free of federal taxes, along with state taxes and even local taxes is that applies to you. Municipal bonds may be exempt from federal income tax. I put maybe here just as a disclaimer really, because there are some municipal bonds that are still taxed federally. However, your custodian should make it very obvious to you. For all examples in this webinar, we're going to assume that the bonds are exempt from federal taxes just for simplicity. And then also the interest on these bonds might be exempt from state taxes as well. To qualify for this benefit, you usually have to purchase a municipal bond within your state. That means if you live in Iowa and want a municipal bond that will not be taxed in Iowa, you need to buy a municipal bond that was issued somewhere in Iowa. That may be one of the Iowa counties or cities, a school district, or state university to have their municipal bonds be tax free on the state level. And again as a disclaimer, there is some fine print here. Not every single municipal bond issued within a state is exempt from the state’s income taxes. So be sure your custodian is verifying that any bonds you purchase qualify for state tax exemption. Are municipal bonds tax free? Well income from municipal bonds is factored into several different calculations for your modified adjusted gross income that do impact: How your Social Security benefits are taxed, How much you pay for Medicare. (This is IRMAA, or monthly surcharge on your Medicare benefits that is based on your income), and It will impact the tax credits you qualify for if you get your health insurance on the government exchange. So, while these are not taxed at a federal income tax level these examples show you how the interest from these bonds can still significantly impact the net tax amount that you pay in any given year.