Comments on: Calculate Taxable Equivalent Yield

By: Clever Dude

Clever Dude — Wed, 17 Oct 2007 02:09:31 +0000

Just be aware that you can’t deduct any refund you get from the state because it means it was money the fed couldn’t tax you on. I had to deal with this last year and it came as a bit of a surprise until I understood it all. Since the state is taking out of your gross income, that money isn’t available for the fed to tax, but it should have been. You’ll owe taxes on it when you file though.

By: Free Money Finance

Free Money Finance — Fri, 12 Oct 2007 10:19:40 +0000

Star Money Articles for the Week of October 8

Here are some recent interesting posts from the MoneyBlogNetwork and beyond: MightyBargainHunter is alive! Five Cent Nickel got called by a collection agency. Blueprint for Financial Prosperity tells how to calculate the taxable equivalent yield. No Cr…

By: MoneyNing

MoneyNing — Wed, 10 Oct 2007 22:56:35 +0000

I didn’t know you can deduct your state taxes towards your federal taxes! You learn something every day!!!! I better do my itemized deductions this year and see if I will come out ahead.

By: Josh

Josh — Wed, 10 Oct 2007 15:09:28 +0000

Investopedia has a slightly different explanation of the calculation of the marginal tax rate.

R(te) = R(tf) / (1 – [tF + tS(1 – tF])

Where:
tF = the marginal federal tax rate of the investor;
tS = the marginal state tax rate of the investor

Say everything is still the same as the above example, except that the muni offers you double tax exemption and that you have also a 10% state income tax rate:

R(te) = 0.05 / (1 – [0.25 + 0.10(1 – 0.25])
R(te) = 0.074

From http://www.investopedia.com/articles/04/072804.asp

By: jim

jim — Tue, 09 Oct 2007 23:39:09 +0000

That is true if you itemize your deductions, I just took the easy route and assumed you couldn’t deduct it, but it’s an excellent point.

By: Kevin

Kevin — Tue, 09 Oct 2007 22:09:33 +0000

I live in a state without income taxes (thank Xenu!), but I always thought that states with income tax were able to deduct those taxes from federal income taxes. So wouldn’t you instead only use the federal income tax rate, or are you not able to deduct all of your state income tax from the federal income tax? Just curious.