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Old 01-17-2016, 09:11 AM   #21
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Originally Posted by audreyh1 View Post
I can kind of understand not wanting to pay any tax on $6 at 0.01% from a muni MM, versus $600 at 1% for the same amount deposited in a savings account, but taxable at a very high marginal rate. But after all is said and done, don't you end up with quite a bit more money in your pocket in the second case even after taxes? Just curious.
If I had say $30k in cash that I didn't need for something then I would just buy an individual muni bond. That's were the tax free interest comes from. The rest of the money just rains in from dividends etc and I let it build up to invest when it reaches a threshold. I am unsure if I will do this while retired because that will mean I am not even spending portfolio growth.
I only have about $40k currently in cash that I want to build up to $80k to pay taxes in Apr.
I don't see how I get a better deal than buying a muni-bond. I can't buy one now as I need the cash.

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Old 01-17-2016, 09:26 AM   #22
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Join Date: Jan 2006
Location: Rio Grande Valley
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That's one of the things I use a high yield savings account paying 1% for - to hold funds for paying taxes and quarterly estimated taxes.

But most of my income is long-term capital gains and qualified dividends, so my marginal tax bracket is low. Although most of my ordinary income is subject to the 26% AMT rate. I guess that's really my tax bracket.

Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
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