if you are in the 20 percent tax bracket, Five percent. For this reason, the after-tax yield is the same as the pre-tax yield since interest income from Muni is free from federal income tax. This is further explained below.
What is tax?
Generally, taxation is simply defined as a kind of mandatory public financing that is assessed on the purchase price of certain products and services as well as on the earnings of individuals and businesses.
In conclusion, there would be a 5% reduction if your tax bracket was 20%. Since interest income from Muni is exempt from federal income tax, the after-tax yield is identical to the pre-tax rate.
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