Would you like to help make your community better? Of course you would. But are you prepared to help pour the concrete foundation for a new area school? Probably not. How can you take an active part in improving your community without having to wear a hard hat? The answer is simple — bonds. Your investment in local municipal bonds provides the funding for community improvements
Municipal bonds are issued by cities and states to finance public projects like construction of schools, roads, hospitals, or bridges, When you buy a municipal bond. along with the satisfaction of knowing you helped make these improvements possible, you receive a fixed interest payment every six months. In addition, all the interest you receive from municipal bonds is free from federal income tax, and in some cases, state and local tax as well.

When you fill out your IRS form 1040 you can move the amount of your interest payment. from line 8a, the taxable interest line, to 8b, the tax-exempt line. The more income you can move, the more you keep.

Because Of the tax advantages they offer, municipal bonds provide significantly more after-tax income than comparable taxable investments paying higher interest rates. Be careful not to focus strictly On the pre-tax return of your investments.

So, go ahead and put that hard hat away. There’s an easier way to better the community and better your after-tax income at the same time. Tax-free municipal bonds may be the answer.

(Editor’s Note: Pam Piper is an investment representative with Edward Jones in Port Orchard. She may be reached at (360) 871-9707.).