Content

• What Are Municipal Bonds?
• An Investment For Today's Tax-conscious Investor
• How Safe Are Municipal Bonds?
• The Advantages of Tax Exemption
• Understanding Yields
• Understanding Market Risk
• Understanding Calls
• Gains and Losses
• Types of Tax-exempt Municipal Bonds
• Bonds With Special Investment Features
• Taxable Municipal Bonds
• Other Basic Facts
• The Tax-exempt Municipal Bond Market-How Big and Who Buys?
• Tax-exempt/Taxable Yield Equivalents
• State Taxation of Municipal Bonds for Individuals
• State Taxation of Municipal Bonds for Corporations
• Glossary

The table below will help you determine the amount of income you require from a taxable investment to equal the yield on a tax-exempt bond. The table is for illustrative purposes only and is not intended to be representative of any specific security. To use the table most effectively, follow the directions in italics at the left side of the chart.

To view the tax-exempt/taxable yield equivalents and state taxation of municipal bonds for individuals and corporations charts in PDF* format, click here.

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		Taxable Income*
HOW TO USE THIS CHART 1. Find the appropriate return (single or joint). 2. Determine your tax bracket by locating the taxable income category that you fall into. Taxable income is income after appropriate exemptions and deductions are taken. (The table does not account for special provisions affecting federal tax rates, such as the Alternative Minimum Tax.) 3. The numbers in the column under your tax bracket give you the approximate taxable yield equivalent for each of the tax-exempt yields in the near left column. Example: If you are single and have a taxable income of $85,000 ($140,000 if married, you would fall into the 28% tax bracket. According to the table, you would need to earn 6.94% on a taxable security to match a 5% yield from a tax-exempt security.	SINGLE RETURN	$0- $8,375	$8,376- $34,000	$34,001- $82,400	$82,401- $171,850	$171,851- $373,650	$373,651- & over
	JOINT RETURN	$0- $16,750	$16,751- $68,000	$68,001- $137,300	$137,301- $209,250	$209,251- $373,650	$373,651- & over
	TAX BRACKET	10%	15%	25%	28%	33%	35%
	TAX-EXEMPT YIELDS(%)	TAXABLE YIELD EQUIVALENTS (%)
	1.0%	1.11%	1.18%	1.33%	1.39%	1.49%	1.54%
	1.5	1.67	1.76	2.00	2.08	2.24	2.31
	2.0	2.22	2.35	2.67	2.78	2.99	3.08
	2.5	2.78	2.94	3.33	3.47	3.73	3.85
	3.0	3.33	3.53	4.00	4.17	4.48	4.62
	3.5	3.89	4.12	4.67	4.86	5.22	5.38
	4.0	4.44	4.71	5.33	5.56	5.97	6.15
	4.5	5.00	5.29	6.00	6.25	6.72	6.92
	5.0	5.56	5.88	6.67	6.94	7.46	7.69
	5.5	6.11	6.47	7.33	7.64	8.21	8.46
	6.0	6.67	7.06	8.00	8.33	8.96	9.23
	6.5	7.22	7.65	8.67	9.03	9.70	10.00
	7.0	7.78	8.24	9.33	9.72	10.45	10.77
	7.5	8.33	8.82	10.00	10.42	11.19	11.54
* The income brackets to which the tax rates apply are adjusted annually for inflation. Those listed above are for 2010.