This is just one example of a myriad of tax planning techniques that can yield major tax benefits for both the owner and the company.
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The IRS only audits about 1 percent of tax returns each year, so the agency tries to pick returns that are most likely to yield additional tax money.
This is nontaxable, so 75% of its current 6.7% yield is tax free.
Town officials said they believe developing the island would cost more in service expenses that it would yield in tax revenues.
That is one of the ways in which increasing a tax rate can reduce the total tax yield, thereby defeating the whole supposed object of the tax-raising exercise.
Most students of economics are familiar with the Laffer curve, named by Dr. Art Laffer, which demonstrates how higher taxes do not necessarily mean a higher tax yield, with there being a point (the peak of his curve) after which total revenue falls when the tax rate increases.
The payoff for putting up with these hurdles is a potentially higher tax-adjusted yield. (Muni bonds offer tax advantages over other types of bonds and are most beneficial when held in a taxable account.) You may have to dig, but short-term fears can create opportunities for those who are astute and selective.
If the company pays a 6% dividend, a California resident would have to pay 1.4% of that 6% in taxes, reducing the after tax yield to 4.6%.
The interest on municipal bonds is exempt from income tax on the federal and sometimes state levels, giving them a higher after-tax yield than a corporate or Treasury with the same coupon and maturity.
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Following the House budget resolution would almost certainly shift more of the tax burden to low- and middle-income households and yield a less progressive tax system.
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For instance, while 10-year Treasuries currently yield 2%, you can find triple-A rated 10-year munis that yield 2.5%, which is a 3.85% tax equivalent yield for taxpayers in the 35% bracket and 3.47% for those in the 28% bracket.
For starters, repealing the tax would yield lower health costs for American patients.
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Not only does this combo yield the maximum possible tax benefit, but since the 401(k) contributions are optional each year, it will also give you the flexibility to cut back a bit on saving if you need to reinvest in that business or have an off year.
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Many fund companies, including Vanguard Group, offer online tax-equivalent yield calculators.
How higher tax rates can yield lower collections is a good question.
The yield for seven-day tax-free and municipal money-market funds slipped to 1% in the latest week from 2%, while the yield for 30-day funds held steady at 0.02%.
For example, a tax-free yield of 3% would be the equivalent of a 4.6% taxable yield for someone in the 35% bracket, and 4.97% for someone in the 39.6% bracket.
The new tax is even more reason to move income-generating investments such as high-yield bonds or high-turnover mutual funds into tax-sheltered accounts such as IRAs, says Eric Lewis, a principal at Bedrock Capital Management, a financial-planning firm in Los Altos, Calif.
This eases the cash flow of a strapped business, and the time value of money makes such investment yield a higher (after-tax) rate of return.
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Investors who want enhanced yield may be willing to forego some tax advantages, says a person familiar with the ETN.
This development is important for investors as REITs invest in real estate, get special tax considerations and offer high yield.
If Apple decides on 10 year or shorter debt than it will actually save cash since it will be retiring stock with a 3.0% yield and the debt interest payments are tax deductible.
As a result, in sports where the inherent demands limits its athletes to an infrequent competition schedule, there existed a very real possibility that unless a trip to the U.K. proved particularly fruitful, it could yield more in U.K. tax than it did in winnings.
Tax efficiency, expense ratios, yield and risk all should be considered when evaluating a fund.
However, insurance can be combined with existing estate, tax, and business planning to yield a respectable asset protection plan.
Maybe the tax on the insured deposits will yield 2 billion euros.
In the top federal tax bracket, that plum-looking yield shrinks to around 5%.
Of course, if you are investing through a tax-favored account, there is no state tax, and this component of your yield spread is gravy.
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