Tax Exempt
Versus Taxable Income
The following charts allow you to compare the returns on tax-exempt investments,
such as tax-free MUNI bonds, to those which are taxable. First, determine
your marginal federal income tax bracket on the top chart.
|
Taxable
Income Up To:
|
|
Filing Status
|
15%
|
28%
|
31%
|
36%
|
39.6%
|
| Single
|
$25,750
|
$62,450
|
$130,250
|
$283,150
|
$283.150+
|
| Married/Joint
|
$43,050
|
$104,050
|
$158,550
|
$283,150
|
$283,150+
|
| Married/Separate
|
$21,525
|
$52,025
|
$79,275
|
$141,575
|
$141,575+
|
| Head
of Household |
$34,550
|
$89,150
|
$144,400
|
$283,150
|
$283,150
|
| Estates and Trusts
|
$1,750
|
$4,050
|
$6,200
|
$8,450
|
$8,450
|
|
Taxable Return Required
to Equal a Tax-Exempt Return at
Various Top Tax Brackets
(Tax Exempt Investments such as MUNI bonds)
|
|
Tax Exempt
Return
|
15%
|
28%
|
31%
|
36%
|
39.6%
|
|
3%
|
3.53%
|
4.17%
|
4.35%
|
4.69%
|
4.97%
|
|
4%
|
4.71%
|
5.56%
|
5.8%
|
6.25%
|
6.62%
|
|
5%
|
5.88%
|
6.94%
|
7.25%
|
7.81%
|
8.28%
|
|
6%
|
7.06%
|
8.33%
|
8.7%
|
9.38%
|
9.93%
|
|
7%
|
8.24%
|
9.72%
|
10.14%
|
10.94%
|
11.59%
|
|
8%
|
9.41%
|
11.11%
|
11.59%
|
12.50%
|
13.25%
|
|
9%
|
10.59%
|
12.5%
|
13.04%
|
14.06%
|
14.9%
|
|
10%
|
11.76%
|
13.89%
|
14.49%
|
15.63%
|
16.56.%
|
|
11%
|
12.94%
|
15.28%
|
15.94%
|
17.19%
|
18.21%
|
|
12%
|
14.12%
|
16.67%
|
17.39%
|
18.75%
|
19.87.%
|
|
13%
|
15.29%
|
18.06%
|
18.84%
|
20.31%
|
21.52%
|
|
Tax-Exempt Return Required
to Equal a Taxable Return at
Various Top Tax Brackets
(Tax Exempt Investments such as MUNI bonds)
|
|
Taxable
Return
|
15%
|
28%
|
31%
|
36%
|
39.6%
|
|
3%
|
2.55%
|
2.16%
|
2.07%
|
1.92%
|
1.81%
|
|
4%
|
3.4%
|
2.88%
|
2.76%
|
2.56%
|
2.42%
|
|
5%
|
4.25%
|
3.6%
|
3.45%
|
3.2%
|
3.02%
|
|
6%
|
5.10%
|
4.32%
|
4.14%
|
3.84%
|
3.62%
|
|
7%
|
5.95%
|
5.04%
|
4.83%
|
4.48%
|
4.23%
|
|
8%
|
6.8%
|
5.76%
|
5.52%
|
5.12%
|
4.83%
|
|
9%
|
7.65%
|
6.48%
|
6.21%
|
5.76%
|
5.44%
|
|
10%
|
8.5%
|
7.20%
|
6.9%
|
6.4%
|
6.04%
|
|
11%
|
9.35%
|
7.92%
|
7.59%
|
7.04%
|
6.64%
|
|
12%
|
10.2%
|
8.64%
|
8.28%
|
7.68%
|
7.25%
|
|
13%
|
11.05%
|
9.36%
|
8.97%
|
8.32%
|
7.85%
|
|
14%
|
11.9%
|
10.08%
|
9.66%
|
8.96%
|
8.46%
|
|
