It’s not what you earn, it’s what you keep. That adage applies to investment income as well as wages. Investors in tax-free bonds don’t have to worry about the federal tax implications of certain bond income, as it is tax free. While many federally tax-free bonds are subject to state and local taxes, there are tax-free bonds that are also free from state tax. Tax-free bonds are also known as tax-exempt bonds. Federally Tax-Free Bonds Issued by states, counties, cities and other governmental authorities, municipal bonds are the primary methods by which these entities raise capital for public project financing. Income from these bonds is from federal taxation. In fact,…

It’s not what you earn, it’s what you keep. That adage applies to investment income as well as wages. Investors in tax-free bonds don’t have to worry about the federal tax implications of certain bond income, as it is tax free. While many federally tax-free bonds are subject to state and local taxes, there are tax-free bonds that are also free from state tax. Tax-free bonds are also known as tax-exempt bonds. Federally Tax-Free Bonds Issued by states, counties, cities and other governmental authorities, municipal bonds are the primary methods by which these entities raise capital for public project financing. Income from these bonds is from federal taxation. In fact,…