On which Treasury Securities do the interests of which become non taxable interest?

Question

I want to invest in Securities but I don't want my earnings therefrom to affect my tax bracket.

Answer 1

The interest on ALL Treasury securities is taxable at the federal level. (State can not tax the interest on Treasuries.)

The interest on municipal bonds is not taxable by the federal government and is not taxable in the state in which they were issued. Out of state municipal bond interest is taxed by the states (if they have a state income tax).

Generally buying municipal bonds only makes sense if your federal tax bracket is 25% or more. You can earn 5+% in US Treasuries, which after tax offers a 3.75+% yield. Many municipal bonds of the same maturity pay 3.75% or less.

Answer 2

All treasury securities are subject to Federal income tax but not state. Muni Bonds are exempt from Federal and may be exempt from state.

As a side note: Picking your investments based solely on the tax consequences is rather stupid. I would rather make 12% in a taxable account than 4% in a non-taxable one.

Answer 3

Municipal bonds will be tax free growth on the Federal.

If you live in an income-tax state, then it will only be tax free if the bonds are those issued by that state -- e.g. if you live in State A but buy bonds issued by State B, then it's federal tax-free but not for State A. Most people buy munis that are invested in their own state for this reason.

If you buy a managed-bond fund, then the fund will provide a schedule as to how much is invested in munis for each state.

Answer 4

You want to invest in Municipal Debt. It is federally tax-exempt and may be exempt from state and local taxes. If you are impacted by the Alternative Minimum Tax you may still be taxed on Municipal Debt. That describes what you are looking for.

Try this site for more info:
www.investinginbonds.com/