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Tax-Free Investing Tax-Equivalent Yield Calculator
 
 

Taxable Equivalent Yield Calculator

The taxable equivalent yield measures what an investor would have to earn (yield) on a taxable investment in order to match the yield provided by a tax-exempt municipal bond.

Because an investor usually gets to keep the earnings on municipal bonds, the effect may be equivalent to that of a higher-paying taxable investment. Usually the higher an investor's tax bracket, the higher the taxable equivalent yield.


2009 Federal Rates and Brackets
 
  25% 28% 33% 35%
Single: $33,950 -
$82,250		 $82,251 -
$171,550		 $171,551 -
$372,950		 $372,951 and
higher
Married: $67,900 -
$137,050		 $137,051 -
$208,850		 $208,851 -
$372,950		 $372,951 and
higher

Taxable Equivalent Yield (TEY)
You can compare what a taxable investment would have to yield to match the tax-exempt returns offered by municipal bonds.

To Use the Calculator:
  • Enter Your Tax Free Yield
  • Select your tax bracket and the state in which you live
  • Press Calculate


Select Your Tax Free Yield:
 
Select Your Federal Tax Rate:
 
Select Your State Tax Rate:
 


 

 

Your Taxable Equivalent Yield is:
 


 
 
The Taxable Equivalent yield is only one factor to be considered when purchasing a security, and should only be used only as a general guideline when determining taxable equivalent yields for agency and treasury securities.

The state tax rates shown represent the maximum state income tax in each state. Some states have lower tax rates within each federal tax bracket in relation to income level and type of filing. If state tax rates are lower than posted, taxable equivalent yields may be lower than shown. The effective combined rate assumes the taxpayer itemizes his / her deductions. The factors do not adjust for: the phase-out of itemized deductions for certain high-income taxpayers; the yield to maturity factoring in market discount or market premium or the federal Alternative Minimum Tax (AMT).

2008 tax figures are derived from sources believed to be reliable. Tax information contained herein is from sources deemed reliable, but no guarantee is made as to its accuracy or completeness. Federal and state income tax rates can change without prior notification.
Neither MTB Group of Funds nor any affiliates, agents or representatives are authorized to give legal, tax, estate planning or accounting advice, and this general information is not intended to be considered legal, tax, estate planning or accounting advice. We suggest that you consult your attorney, accountant or tax advisor for such advice on specific points of interest to you.