{"id":336,"date":"2017-10-06T16:27:42","date_gmt":"2017-10-06T16:27:42","guid":{"rendered":"http:\/\/belbolcpa.com\/blog\/?p=336"},"modified":"2017-10-06T16:27:42","modified_gmt":"2017-10-06T16:27:42","slug":"muni-bonds-or-taxable-bonds","status":"publish","type":"post","link":"https:\/\/belbolcpa.com\/blog\/muni-bonds-or-taxable-bonds\/","title":{"rendered":"Muni Bonds or Taxable Bonds?"},"content":{"rendered":"<p><a href=\"https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-337\" src=\"https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846-300x199.jpg\" alt=\"\" width=\"300\" height=\"199\" srcset=\"https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846-300x199.jpg 300w, https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846-768x508.jpg 768w, https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846-1024x678.jpg 1024w, https:\/\/belbolcpa.com\/blog\/wp-content\/uploads\/2017\/10\/10-06-17-monetary-3d-2-1164534-1278x846.jpg 1278w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p>Investing in municipal bonds can be a benefit due to the fact that the interest income they provide is generally tax-exempt. In order to realize the full tax benefits of municipal bonds, you have to be careful not to make the following mistakes.<\/p>\n<p><em>Low Interest Rates:<\/em> Interest income from municipal bonds is usually much lower than corporate bonds, but since municipal bond interest is generally tax-exempt, your tax adjusted returns may be higher. The problem arises when you would have received a greater return by investing in corporate bonds than municipal bonds when adjusting your return for taxes. Generally, if you are in a low tax bracket, then municipal bonds may not make sense.<\/p>\n<p><em>Purchasing Out of State Bonds:<\/em> Municipal bonds are not subject to either Federal or state taxes if you purchase bonds from your home state. If you live in a high income tax state, such as California, New York, or New Jersey, then you should consider purchasing a bond from your state to reduce the overall tax exemption.<\/p>\n<p><em>Alternative Minimum Tax:<\/em> This dreaded tax, also known as the AMT, may make your tax-exempt municipal bonds taxable. If a bond is considered a private activity bond, then you may end up paying taxes on the bond interest.<\/p>\n<p>You must be careful when selecting municipal bonds by doing your research. Otherwise, in the quest for tax-exempt income, you may end up overpaying taxes or unnecessarily receive a low interest rate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Investing in municipal bonds can be a benefit due to the fact that the interest income they provide is generally tax-exempt. In order to realize the full tax benefits of municipal bonds, you have to be careful not to make the following mistakes. Low Interest Rates: Interest income from municipal bonds is usually much lower [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2,3,90,6,7,8,10,11,15,18],"tags":[153,152,55],"class_list":{"0":"post-336","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-budgeting","7":"category-business","8":"category-debt","9":"category-estate-planning","10":"category-expenses","11":"category-financial","12":"category-investments","13":"category-ira","14":"category-new-jersey-tax","15":"category-taxes","16":"tag-investing","17":"tag-tax-free","18":"tag-taxes","19":"entry"},"_links":{"self":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/comments?post=336"}],"version-history":[{"count":1,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/336\/revisions"}],"predecessor-version":[{"id":338,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/posts\/336\/revisions\/338"}],"wp:attachment":[{"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/media?parent=336"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/categories?post=336"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/belbolcpa.com\/blog\/wp-json\/wp\/v2\/tags?post=336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}