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Interest income from Treasury bonds is subject to federal income tax but exempt from state and local taxes. This exemption can be particularly beneficial for investors in high-tax states.
The interest you earn on everything from money market accounts to treasury bonds may be subject to ordinary income tax. Knowing how interest is taxed can help you understand how much of your cash ...
Treasury bonds issued by the U.S. government are tax-free at the state and local levels, though they remain taxable at the federal level. If you have to opt between Treasurys and munis, this ...
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
A bond purchased on or after January 1, 1990, is tax-free (subject to income limitations) if used to pay tuition and fees at an eligible institution. In 2002, the Treasury Department started changing the savings bond program by lowering interest rates and closing its marketing offices. [2]
The principal argument for investors to hold U.S. government bonds is that the bonds are exempt from state and local taxes. The bonds are sold through an auction system by the government. The bonds are buying and selling on the secondary market, the financial market in which financial instruments such as stock, bond, option and futures are traded.
The exception to this is if your income is in a tax-deferred account or if it is exempt from federal tax, such as with municipal bonds, then you don’t have to report the income. How Interest ...
Muni arb is a relative value strategy that seizes upon an inefficiency that is related to government tax policy; interest on municipal bonds is exempt from federal income tax. [1] [2] Because the source of this arbitrage is artificially imposed by government regulation, it has persisted (i.e., it has not been "arbed away") for decades. [3]