Tax Equivalent Yield CalculatorBETA
A 3% muni and a 4% T-bill aren't really paying 3% and 4%. What matters is what you keep after taxes. Pick your brackets, plug in the yield you're looking at and see what it's actually worth next to Treasuries, CDs, munis and corporate bonds.
- Federal brackets
- 2026, IRS Rev. Proc. 2025-32
- State brackets
- 50 states + DC, Tax Foundation
- Bond types
- Treasuries, munis, CDs and more
Your tax brackets
The bond you're looking at
Compare them side by side
These yields are just examples. Type in the quotes you're actually seeing and the best after tax option gets flagged.
How it works
Every bond gets taxed differently. Treasuries skip state tax. Munis skip federal tax, and usually state tax too if you buy your own state's bonds. CDs and corporates get hit by everything. We strip out the taxes that apply and see what's left.
TEY = after tax yield ÷ (1 − full tax rate)Reading the result
The tax equivalent yield is what a fully taxable bond, like a CD or a corporate, would have to pay to leave you with the same money. If the CD you're quoted pays less than that, the bond you entered wins.
What it leaves out
It uses your marginal rates and assumes you hold to maturity. It ignores AMT on private activity munis, the de minimis rule on discount bonds, capital gains, credit risk and the fact that most states only pass through part of a Treasury fund's income. Taxes aren't the only thing that matters either. Duration and credit quality matter just as much.
The best bond isn't just the one with the highest after tax yield.
It's the one that matches when you'll actually need the money. We'll build your fixed income around your real spending needs and use the most tax efficient instruments for your situation. No pressure and no sales pitch.
Sources: federal brackets from IRS Revenue Procedure 2025-32 (tax year 2026). State brackets from the Tax Foundation, State Individual Income Tax Rates and Brackets, 2026, as of January 1, 2026.
This is a hypothetical illustration for educational purposes only and is not tax or investment advice. Results use marginal tax rates you select and simplified rules for how each type of bond is taxed. Actual state treatment varies by issuer, holding period and whether you own a bond directly or through a fund. The calculator does not model the alternative minimum tax, the de minimis rule, capital gains or losses, local tax rules, state phaseouts or surcharges, or the credit, liquidity and interest rate risk of any bond. Yields shown in the comparison are examples, not quotes or recommendations. Talk to a qualified tax professional before acting. Discipline Funds is an SEC-registered investment adviser.