Updated: February 26, 2024
If you’re like me, you’re starting to collect your tax documents with a certain sense of dread.
It’s understandable as another April draws nearer. But there is a ray of light in the tax-season gloom for us—it comes in the form of municipal bonds, which can boost our income and minimize our future tax burden, too.
“Muni” bonds offer big yields these days, thanks to the Fed’s interest-rate hikes over the last couple years. That’s doubly valuable now because these yields are federally tax-free for almost all American investors.
That means if you’re in the highest tax bracket, you could buy 5%-yielding muni bonds and end up with the equivalent of an 8.3% yield from taxable assets like stocks or corporate bonds.… Read more