Your marginal tax bracket determines how much of the earnings from savings and investments you get to keep after taxes. Below are the tax rate schedules for 2017:
| Marginal Tax Bracket Rate | Single Taxable Income |
Married Filing Jointly Taxable Income |
Married Filing Separately Taxable Income |
Head of Household Taxable Income |
|---|---|---|---|---|
| 10% | $0 to $9,325 | $0 to $18,650 | $ to $9,325 | $ to $13,350 |
| 15% | $9,326 to $37,950 | $18,651 to $75,900 | $9,326 to $37,950 | $13,231 to $50,800 |
| 25% | $37,951 to $91,900 | $75,901 to $153,100 | $37,951 to $76,550 | $50,801 to $130,200 |
| 28% | $90,901 to $191,650 | $153,101 to $233,350 | $76,551 to $116,675 | $130,201 to $212,500 |
| 33% | $191,651 to $416,700 | $233,351 to $416,700 | $116,676 to $208,350 | $212,501 to $416,700 |
| 35% | $416,701 to $418,400 | $416,701 to $470,700 | $208,351 to $235,350 | $416,701 to $444,550 |
| 39.6% | $418,401 and higher | $470,701 and higher | $235,350 and higher | $444,551 and higher |
You can compare yields by using the following formula:
Taxable equivalent yield = tax-free yield ÷ (100% – marginal tax bracket %) or see www.calcxml.com/calculators/inc11?skn, which includes both federal and state income tax rates.
Example: Assume you are in the 25% tax bracket, and have an account with a 4.0% tax-free yield. To get the equivalent taxable yield, divide 4.0% by 75% (100% – 25%). The taxable yield is 5.33%.