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Tax-Exempt/Taxable Yield Equivalents

2010 Tax Year

How To Use This Chart

  1. Find the appropriate return (single or joint).
  2. Determine your tax bracket by locating the taxable income category that you fall into. Taxable income is income after appropriate exemptions and deductions are taken. (The table does not account for special provisions affecting federal tax rates, such as the Alternative Minimum Tax.)
  3. The numbers in the column under your tax bracket give you the approximate taxable yield equivalent for each of the tax-exempt yields in the near left column.

Example: If you are single and have a taxable income of $85,000 ($140,000 if married), you would fall into the 28% tax bracket. According to the table, you would need to earn 6.94% on a taxable security to match a 5% yield from a tax-exempt security.

 
Taxable Income*
Single Return $0-
$8,375
$8,376-
$34,000
$34,001-
$82,400
$82,401-
$171,850
$171,851-
$373,650
$373,651 & Over
Joint Return $0-
16,750
$16,751-
$68,000
$68,001-
$137,300
$137,301-
$209,250
$209,251-
$373,650
$373,651 & Over
Tax Bracket 10% 15% 25% 28% 33% 35%
Tax-Exempt Yields (%) Taxable Yield Equivalents (%)
1.0% 1.11% 1.18% 1.33% 1.39% 1.49% 1.54%
1.5 1.67 1.76 2.00 2.08 2.24 2.31
2.0 2.22 2.35 2.67 2.78 2.99 3.08
2.5 2.78 2.94 3.33 3.47 3.73 3.85
3.0 3.33 3.53 4.00 4.17 4.48 4.62
3.5 3.89 4.12 4.67 4.86 5.22 5.38
4.0 4.44 4.71 5.33 5.56 5.97 6.15
4.5 5.00 5.29 6.00 6.25 6.72 6.92
5.0 5.56 5.88 6.67 6.94 7.46 7.69
5.5 6.11 6.47 7.33 7.64 8.21 8.46
6.0 6.67 7.06 8.00 8.33 8.96 9.23
6.5 7.22 7.65 8.67 9.03 9.70 10.00
7.0 7.78 8.24 9.33 9.72 10.45 10.77
7.5 8.33 8.82 10.00 10.42 11.19 11.54

* The income brackets to which the tax rates apply are adjusted annually for inflation. Those listed above are for 2010.

 

 

All information and opinions contained in this publication were produced by the Securities Industry and Financial Markets Association from our membership and other sources believed by the Association to be accurate and reliable. By providing this general information, the Securities Industry and Financial Markets Association makes neither a recommendation as to the appropriateness of investing in fixed-income securities nor is it providing any specific investment advice for any particular investor. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and sources may be required to make informed investment decisions.