Investing

Tax-equivalent yield

Compare a municipal bond, a Treasury, and a fully taxable bond or CD on an after-tax basis for a given tax profile. Marginal rates come from the bracket tables, not a typed-in rate.

Filing status

Taxable income (federal)

Line 15 of Form 1040. Sets the federal and state marginal rates. 0 to 20,000,000.

State

California only in this version.

Municipal bond yield

Yield to worst. 0 to 15.

Treasury yield

Defaults to the latest 10-year yield from the market snapshot when available.

Taxable bond or CD yield

Fully taxable at federal and state level, plus NIIT.

In-state municipal bond

Out-of-state muni interest is exempt federally but taxable in California.

Subject to the 3.8% net investment income tax

Interest is net investment income when modified AGI exceeds the threshold for the filing status.

State tax is deductible federally

Off by default: high earners under the SALT cap usually get no federal benefit from the last dollar of state tax. On, the state rate is reduced by (1 − federal rate).

Highest after-tax yield at these assumptions

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Assumptions and limits