Municipal Bonds: Single, Double or Triple Tax-Free

Municipal bonds are a popular type of investment because they provide you with returns that are potentially going to be tax-free. You could choose a municipal bond that is single, double or even triple tax-free. Here are the basics of each type of bond.

Single Tax-Free

This is a type of municipal bond offered on the federal level. With this type of municipal bond, you are not going to have to worry about paying federal taxes on the interest that you earn. 

Double Tax-Free

If you purchase a municipal bond that is issued on the state level, this means that it could be double tax-free. With this type of bond, you are going to avoid having to pay federal taxes and state income taxes.

Triple Tax-Free

Triple tax-free municipal bonds are issued on a city or county level. These bonds help city governments come up with money for large projects that they cannot afford otherwise. With municipal bonds at this level, you are going to be able to avoid paying city taxes, state taxes and federal income taxes.

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