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This site does not include all companies or products available within the market. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor. Why do low-income families use tax preparers? How does the earned income tax credit affect poor families? What are error rates for refundable credits and what causes them?
How do IRS audits affect low-income families? Taxes and Retirement Saving What kinds of tax-favored retirement arrangements are there? How large are the tax expenditures for retirement saving? What are defined benefit retirement plans? What are defined contribution retirement plans? What types of nonemployer-sponsored retirement savings accounts are available?
What are Roth individual retirement accounts? Who uses individual retirement accounts? How does the availability of tax-favored retirement saving affect national saving? What is an automatic k? How might low- and middle-income households be encouraged to save? Taxes and Charitable Giving What is the tax treatment of charitable contributions? What entities are tax-exempt? Who benefits from the deduction for charitable contributions? How would various proposals affect incentives for charitable giving?
How large are individual income tax incentives for charitable giving? How did the TCJA affect incentives for charitable giving? Taxes and Health Care How much does the federal government spend on health care?
Who has health insurance coverage? Which tax provisions subsidize the cost of health care? How does the tax exclusion for employer-sponsored health insurance work? What are premium tax credits? What tax changes did the Affordable Care Act make? How do health savings accounts work? How do flexible spending accounts for health care expenses work?
What are health reimbursement arrangements and how do they work? How might the tax exclusion for employer-sponsored health insurance ESI be reformed? Taxes and Homeownership What are the tax benefits of homeownership? Do existing tax incentives increase homeownership? Taxes and Education What tax incentives exist for higher education? What tax incentives exist to help families pay for college?
What tax incentives exist to help families save for education expenses? What is the tax treatment of college and university endowments? Tax Complexity Why are taxes so complicated? What are the benefits of simpler taxes? What policy reforms could simplify the tax code? Wealth Transfer Taxes How do the estate, gift, and generation-skipping transfer taxes work?
Who pays the estate tax? How many people pay the estate tax? What is the difference between carryover basis and a step-up in basis? How could we reform the estate tax? What are the options for taxing wealth transfers? What is an inheritance tax? Payroll Taxes What are the major federal payroll taxes, and how much money do they raise? What is the unemployment insurance trust fund, and how is it financed?
What are the Social Security trust funds, and how are they financed? Are the Social Security trust funds real? What is the Medicare trust fund, and how is it financed? Excise Taxes What are the major federal excise taxes, and how much money do they raise? What is the Highway Trust Fund, and how is it financed?
Energy and Environmental Taxes What tax incentives encourage energy production from fossil fuels? What tax incentives encourage alternatives to fossil fuels? What is a carbon tax?
Business Taxes How does the corporate income tax work? What are pass-through businesses? How are pass-through businesses taxed? Is corporate income double-taxed? Tax Incentives for Economic Development What is the new markets tax credit, and how does it work? What are Opportunity Zones and how do they work? Taxes and Multinational Corporations How does the current system of international taxation work?
What are the consequences of the new US international tax system? How does the tax system affect US competitiveness? How would formulary apportionment work? What are inversions, and how will TCJA affect them? What is a territorial tax and does the United States have one now? What is the TCJA repatriation tax and how does it work? What is the TCJA base erosion and anti-abuse tax and how does it work?
What is global intangible low-taxed income and how is it taxed under the TCJA? What is foreign-derived intangible income and how is it taxed under the TCJA? Comprehensive Tax Reform What is comprehensive tax reform? What are the major options for comprehensive tax reform? Broad-Based Income Tax What is a broad-based income tax? What would and would not be taxed under a broad-based income tax? What would the tax rate be under a broad-based income tax?
National Retail Sales Tax What is a national retail sales tax? What would and would not be taxed under a national retail sales tax? What would the tax rate be under a national retail sales tax? Develop and improve products. List of Partners vendors. A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures , including the construction of highways, bridges or schools. They can be thought of as loans that investors make to local governments.
Municipal bonds are exempt from federal taxes and most state and local taxes, making them especially attractive to people in high income tax brackets. Municipal bonds may also be known as "muni bonds" or "muni. A municipal bond is a debt obligation issued by a nonprofit organization , a private-sector corporation or another public entity using the loan for public projects such as constructing schools, hospitals and highways. A municipal bond is categorized based on the source of its interest payments and principal repayments.
A bond can be structured in different ways offering various benefits, risks and tax treatments. Income generated by a municipal bond may be taxable. For example, a municipality may issue a bond not qualified for federal tax exemption , resulting in the generated income being subject to federal taxes.
A general obligation bond GO is issued by governmental entities and not backed by revenue from a specific project, such as a toll road. Some GO bonds are backed by dedicated property taxes ; others are payable from general funds. A revenue bond secures principal and interest payments through the issuer or sales, fuel, hotel occupancy or other taxes.
When a municipality is a conduit issuer of bonds, a third party covers interest and principal payments. Default risk is low for municipal bonds when compared with corporate bonds. However, revenue bonds are more vulnerable to changes in consumer tastes or general economic downturns than GO bonds.
For example, a facility delivering water, treating sewage or providing other fundamental services has more dependable revenue than a park's rentable shelter area. As a fixed-income security , the market price of a municipal bond fluctuates with changes in interest rates: When interest rates rise, bond prices decline; when interest rates decline, bond prices rise.
Furthermore, the majority of municipal bonds are illiquid ; an investor needing immediate cash has to sell other securities instead. Many municipal bonds carry call provisions , allowing the issuer to redeem the bond prior to the maturity date.
An issuer typically calls a bond when interest rates drop and reissues municipal bonds at a lower interest rate. When a bond is called, investors lose income from interest payments and face reinvesting in a bond with a lower return. Accessed April 10, Municipal Bonds. Fixed Income Essentials. Your Privacy Rights.
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