Tax Equivalent Yield Calculator
Calculate municipal bond yields
This tax equivalent yield calculator will estimate the tax-equivalent yield, or TEY, for a municipal bond. Income generated from municipal bond coupon payments are not subject to federal income tax. In addition, if the bond was issued in the state of residence, you can also avoid state income taxes. Use this tax equivalent yield calculator to determine the yield required by a fully taxable bond to earn the same after tax income as a municipal bond.
Calculators provided by Bankrate.com
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Definitions
- Bond yield
- This is the annual yield of your municipal bond or bond fund.
- Estimated taxable income
- This is your total income, after exemptions, adjustments, and deductions. We use this, along with your filing status, to determine your marginal income tax rate. You can use last year's tax return as a guide to what your taxable income will be for the current year. Your taxable income can be found on your income tax form 1040 or 1040A. Make sure to increase or decrease the amount to compensate for any changes to your current year's income.
- Federal tax filing status
- This is used, along with your taxable income, to determine your federal marginal income tax rate. The table below lists the federal income tax rates by income and filing status. We use this table to determine your marginal federal income tax rate. Use the table below to assist you in estimating your federal tax rate.
Filing Status and Income Tax Rates 2017* Tax Rate Married Filing Jointly or Qualified Widow(er) Single Head of Household Married Filing Separately 10% $0 - $18,650 $0 - $9,325 $0 - $13,350 $0 - $9,325 15% $18,650 - $75,900 $9,325 - $37,950 $13,350 - $50,800 $9,325 - $37,950 25% $75,900 - $153,100 $37,950 - $91,900 $50,800 - $131,200 $37,950 - $76,550 28% $153,100 - $233,350 $91,900 - $191,650 $131,200 - $212,500 $76,550 - $116,675 33% $233,350 - $416,700 $191,650 - $416,700 $212,500 - $416,700 $116,675 - $208,350 35% $416,700 - $470,700 $416,700 - $418,400 $416,700 - $444,550 $208,350 - $235,350 39.6% Over $470,700 Over $418,400 Over $444,550 Over $235,350 *Caution: Do not use these tax rate schedules to figure 2016 taxes. Use only to figure 2017 estimates. Source: Rev. Proc. 2016-55 - State income tax rate
- Your marginal state income tax rate, if any.