Tax-Equivalent Yield Calculator

Compare a municipal bond’s tax-exempt yield to a taxable bond’s pre-tax yield. Adjust your tax rates and options to see the break-even taxable yield.

Municipal bond yield (tax-exempt)

Taxable bond yield (optional)

Federal marginal tax rate

State tax rate

Defaulted to 0% as most Sevey Wealth clients reside in Texas.

In-state municipal (state tax-exempt)

Include NIIT (3.8%) on taxable interest

Tax-Equivalent Yield (break-even taxable pre-tax yield)

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Taxable after-tax yield (if provided)

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Which is higher?

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TEY compares a tax-exempt municipal bond’s yield to the pre-tax yield a taxable bond would need to offer to be economically equivalent after taxes, given your federal/state rates and NIIT selection.

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