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TAX :Investing in municipal bonds to avoid paying tax on interest earned and to earn a...

TAX :Investing in municipal bonds to avoid paying tax on interest earned and to earn a higher after-tax yield is an example of what?

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Nobody likes to pay taxes. That's why many investors turn to municipal bonds, interest on which is free from federal taxes, and in many cases state and local taxes as well.

Municipal bonds (also known as "munis") are fixed-income investments that, depending on your tax bracket, may be able to provide higher after-tax returns than similar taxable corporate or government issues. In general, the interest paid on municipal issues is exempt from federal income taxes and sometimes state and local income taxes as well.

This method of Investing in tax free bonds to avoid paying taxes and to earn higher after tax yield is an example of tax savings and income shifting

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