The taxable equivalent yield table shows the comparison of tax exempt yields of municipal bonds to the taxable yields of other investments. To use this table first find the column that represents your individual or joint taxable income. The percentages in the column corresponding with your income level show the taxable yield that is equivalent to the tax-exempt yield shown on the left side of each row. This table does not take state tax into consideration.
For example, if an individual has an income of $100,000 per year he would fall into the 28% tax bracket. The column for this tax bracket shows that a 1.39% taxable yield is equivalent to a 1.0% tax-exempt yield, a 2.08% taxable yield is equivalent to a 1.5% tax-exempt yield, and so on.
Tax Rates & Tax Brackets
Here are the federal income tax rates for 2012 from the IRS:
In addition to the tax brackets below, you may owe tax under the alternative minimum tax. you can review the 2012 AMT exemption on irs.gov to see if it will apply to you.
| Individual Taxable Income |
Under $8,350 |
$8,350- $33,950 |
$33,950- $82,250 |
$82,250- $171,550 |
$171,550- $372,950 |
Over $372,950 |
| Joint Taxable Income |
Under $16,700 |
$16,700- $67,900 |
$67,900- $137,050 |
$137,050- $208,850 |
$208,850- $372,950 |
Over $372,950 |
| Tax Bracket | 10% | 15% | 25% | 28% | 33% | 35% |
| Tax-Exempt Yields | ||||||
| 1.00% | 1.11% | 1.18% | 1.33% | 1.39% | 1.49% | 1.54% |
| 1.50% | 1.67% | 1.76% | 2.00% | 2.08% | 2.24% | 2.31% |
| 2.00% | 2.22% | 2.35% | 2.67% | 2.78% | 2.99% | 3.08% |
| 2.50% | 2.78% | 2.94% | 3.33% | 3.47% | 3.73% | 3.85% |
| 3.00% | 3.33% | 3.53% | 4.00% | 4.17% | 4.48% | 4.62% |
| 3.50% | 3.89% | 4.12% | 4.67% | 4.86% | 5.22% | 5.38% |
| 4.00% | 4.44% | 4.71% | 5.33% | 5.56% | 5.97% | 6.15% |
| 4.50% | 5.00% | 5.29% | 6.00% | 6.25% | 6.72% | 6.92% |
| 5.00% | 5.56% | 5.88% | 6.67% | 6.94% | 7.46% | 7.69% |
| 5.50% | 6.11% | 6.47% | 7.33% | 7.64% | 8.21% | 8.46% |
| 6.00% | 6.67% | 7.06% | 8.00% | 8.33% | 8.96% | 9.23% |
| 6.50% | 7.22% | 7.65% | 8.67% | 9.03% | 9.70% | 10.00% |
| 7.00% | 7.78% | 8.24% | 9.33% | 9.72% | 10.45% | 10.77% |
| 7.50% | 8.33% | 8.82% | 10.00% | 10.42% | 11.19% | 11.54% |