Unexpectedly Intriguing!
May 17, 2007

IRS Form 1040 - Top Corner Should you invest in a tax-free municipal bond this year? Or would a taxable investment make more sense for you?

It's a classic investing question, which is why we've updated our tool for helping you make your choice for 2007! Our tool will take your basic data regarding how much income you expect to earn and how much you'll have to pay in taxes, to determine if that tax-free investment you might be considering is actually worth it.

Along the way, our tool will provide a good first approximation of your marginal tax rate. This calculation is only a first approximation since things like the phase out of tax credits at higher income levels can affect what tax bracket you'll actually find yourself in when you file next year.

To use our tool, you'll need a copy of your tax return for 2006 (remember all that cussing and yelling you were doing back in April?!), since you'll already have done some of the math needed to use our tool - all you need to do now is plug in the numbers you found then. If you expect your numbers will be significantly different this year, then go with what you expect:

1040 Tax Return Data for 2006
Input Data Values
Line 63: Taxes You Owe ($USD)
Line 22: Your Total Income ($USD)
Line 8b: Income from Tax Exempt Bonds ($USD)
Your Filing Status
Line 37: Your Taxable Income ($USD)
Potential Investment Information
Taxable Investment Return (%)
Tax-Exempt Investment Return (%)

Tax Rates and Preferred Investment Choice
Calculated Results Values
Your Average Tax Rate (%)
Your Marginal Tax Rate (%)
Preferred Investment Type

The tool above is based upon math outlined by columnist Bruce Bartlett in his March 2005 column Tax Rates. Bruce just recently opened his own blog over at Townhall.com!

Labels: , ,

About Political Calculations

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts

Stock Charts and News

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links

Useful Election Data
Charities We Support
Shopping Guides
Recommended Reading
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.