Tax specialists would be the professionals with the most information about tax free municipal bonds. Financial planners, auditors and accounts may have information as well.
Municipal bonds vs. CDs as a investment is municipal is free but Cds earn more a an investment overt time. The better choice would be to have a bank CD account.
No it is not a good idea. Many people do not find Municipal bonds to be a great investment if you do not have extra money to apply to them. So I would go with another bond.
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Where you can purchase United States government bonds will depend on the type of bond you would like to purchase. Federal bonds are issued by the federal government, where as municipal bonds are issued by state government.
My advice would be to consult a mental health professional.
Low risk investments generally corresponds with low level returns. Two examples of low risk investments would be investment-grade corporate bonds and uninsured municipal bonds.
Both state and local government entities issue municipal bonds, and the interest is generally exempt from federal income tax. This is done because the funds from the bond issue will be used to fund necessary government services or infrastructure projects. In addition the agencies issuing the bonds are given lower interest rates when they invest in public services and projects. In most states, if you buy municipal bonds, the interest income you earn will also be exempt from state taxes. If you live in a metropolitan area with a local income tax and you invest in bonds issued by a local government agency, that interest income will be tax-free on the local, state, and federal level. Categories of municipal bonds include the following: ● Revenue bonds – project revenues, such as parking fees, are used for principal and interest payments. ● General obligation bonds – These are backed by the issuing agency, and they entail less risk because they are linked to the tax base, rather than some source of revenue. Other characteristics of municipal bonds Today, many governmental agencies insure their bonds as a guarantee that the principal will be repaid. In this case, the issuer feels that purchasing insurance is less costly than paying an interest rate that is based on their credit rating. When investors buy AAA municipal bonds that are insured, the risk they assume is minimal. Similar to corporate bonds, municipal bonds also have credit ratings, and certain municipal issues will pay a higher interest rate when there is additional risk. For example, if a revenue bond is used to finance a parking garage and the projected revenue fails to meet expectation, the bondholder will be at risk. Usually, a revenue bond will have a reserve fund, which allows the issue to cope with a temporary revenue shortfall. If you are subject to a federal or state alternative minimum tax (AMT), the interest income earned from municipal bonds that are categorized as “non-qualified private activity bonds” may entail payment of the AMT, and this would not be a wise investment in your case.
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To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you follow this simple formula: Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate) In this case you would solve for the Federal Tax Rate and get an answer of .25 or 25% http://luhman.org/Nts/Bond/140_Municipals.html
The answer is no. You would have to liquidate the IRA fund, pay possible taxes and penalties on it, and then put it into municipal bond. However, you may be able to add a municipal bond into your IRA. If not, you can open another IRA account somewhere else that does allow it.
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