Tax-Free Income for All | Tax-Free Bond Funds
It’s been said that only death and taxes are certain. No investor can cheat death, but there are (legal) ways to avoid paying income taxes—and one is by owning municipal bonds. Fortunately for us, Vanguard’s municipal bond funds are among the best around.
Over the past month or so, I’ve covered a lot of ground on bonds and bonds funds. If you are just joining us or want to revisit one of the topics I’ve covered, the five installments from my Bonds 101 series are listed below:
I’ve also discussed Vanguard’s core and specialty bond funds in depth. And in Muni Bonds 101 I laid the groundwork to allow us to analyze Vanguard’s municipal bond funds.
From an investor’s viewpoint, taxes are a cost, reducing the amount of income and capital gains that you and I keep. And as with all costs, keeping them low is good practice. Municipal bonds are one way to do that; by letting you pay no taxes on investment income (or at least by reducing the amount of taxes you pay), they are a useful tool in investors’ toolkits. As Vanguard investors, you and I have some of the finest of these tools on the market at our disposal.
So, let’s open the toolbox.