Tax-equivalent muni yield
What yield would a taxable bond need to match this municipal bond?
Tax-equivalent yield translates a municipal bond's tax-exempt yield into the taxable yield required to produce the same after-tax income. Enter the municipal bond yield, your tax bracket, and whether the bond was issued in your state.
Federal marginal rate: 32% — based on $500,000 of taxable income, married filing jointly, using the 2026 schedule. Marginal rate means the rate applied to the next dollar of taxable income. Assumes the comparison interest stays inside this bracket; bracket-spanning income is not modeled.
Taxable-equivalent yield
6.879%
A taxable bond would need to yield 6.879% to match this 4.000% municipal bond after tax. The effective marginal rate applied was 41.85%.
Want to compare multiple municipal bonds side-by-side, against your IPS allocation, and against the Treasury you already hold? That's what the full Ironlake fixed-income surface does.
Open IronlakeHow this is computed
Standard form: TEY = bond yield ÷ (1 − tax rate). The effective tax rate combines the federal marginal rate, your state marginal rate when applicable, and NIIT if selected.
In-state municipal bonds are treated as federal- and state-exempt except in states that tax their own municipal bond interest. Bonds issued outside your state are treated as federal-exempt only. The current state-profile rule flags IL, IA, OK, and WI as states where in-state municipal bond interest is still state-taxable.
This uses the 2026 federal bracket schedule and a single state marginal rate you provide. It does not model progressive state brackets, SALT-cap interaction, AMT-eligible private-activity bonds, IRMAA surcharges, capital-gains rate interactions, or income that spans multiple brackets.