How are bond funds taxed?

[UnrealizedPotential]

I know there are different bond funds. Some are taxed exempt at certain levels and some are not. What about bond funds that are not taxed exempt at either state nor federal level? Is there an option to have the tax taken out before the distribution? Do you have to pay the taxes after receiving the distributions for the whole year?

 

[pb4uski]

Similar to other mutual funds, there is no option to have taxes withheld from distributions. If your taxable bond interest is significant enough, you just do estimated tax payments just like you might for income from other types of mutual funds.

 

[MBSC]

Because of this, some prefer to keep fixed income in tax deferred accounts (401k, IRA, HSA) and tax efficient equities in taxable accounts to the extent possible for their AA.

Here is an E-R thread on making estimated payments you may find helpful:
http://www.early-retirement.org/forums/f28/paying-estimated-taxes-77055.html#post1587778