Travelwanted
Recycles dryer sheets
Because of my income I have been 100% munis on the bond side of my portfolio. However, next year I will have no ordinary income for the first time.
I have been trying to calculate the best after-tax scenario. In other words, should I sell my munis and buy taxable bonds? So I plugged in the numbers into turbo tax (2017 edition).
Surprisingly, keeping the muni bonds even with no ordinary income was the best after tax result. I am questioning this result somewhat so I bring it for a second opinion.
Scenario 1 - 3,469,000 in a combo of tax-exempt high yield, intermediate(82%) and limited term
current weighted yield is 2.594%
Scenario 2 - above # in a combo of total bond fund and intermed term inv bond
current weighted yield is 3.24%
I reported the muni bond income in box 10 under dividends in scenario 1. In scenario 2 in entered the bond interest in the interest earned section. My inputs were the otherwise the same for ordinary div/qualified dividend as well as for the interest and capital gains.
This calculation also included my state income tax which is not exempt for the munis I own.
I was expecting the opposite so please feel free to point out any errors I may have made. TIA!
I have been trying to calculate the best after-tax scenario. In other words, should I sell my munis and buy taxable bonds? So I plugged in the numbers into turbo tax (2017 edition).
Surprisingly, keeping the muni bonds even with no ordinary income was the best after tax result. I am questioning this result somewhat so I bring it for a second opinion.
Scenario 1 - 3,469,000 in a combo of tax-exempt high yield, intermediate(82%) and limited term
current weighted yield is 2.594%
Scenario 2 - above # in a combo of total bond fund and intermed term inv bond
current weighted yield is 3.24%
I reported the muni bond income in box 10 under dividends in scenario 1. In scenario 2 in entered the bond interest in the interest earned section. My inputs were the otherwise the same for ordinary div/qualified dividend as well as for the interest and capital gains.
This calculation also included my state income tax which is not exempt for the munis I own.
I was expecting the opposite so please feel free to point out any errors I may have made. TIA!