I expect to be in the 22% bracket this year, maybe 24%. I live in NYC and expect my state and city marginal tax rates to be 6% and 3.876%. 2025 fed tax bracket will be 22%.
Purchased shares of VNYUX (NY munis) and VMLUX (nat limited term tax exempt) in 2022-2023 when I was in 32% bracket. Trying to figure out if I should keep holding these investments, which amount to:
Brokerage VMLUX $88,524.71
Brokerage VNYUX $223,269.85
As of last week VNYUX has a 3.62% 30d SEC yield so I’d need a nominal bond fund paying 5.47% or more if my fed rate is 24% and 5.31% if my tax rate is 22%.
Math: X% x (1 - 24% - 6% - 3.876%) = 3.62%. X=5.47%
I checked the Vanguard site’s list of bond funds and VLTCX (Corp bond fund) is the only one with a 30 day yield this big (5.49%). So, am I correct that there isn’t a clearly better option than VNYUX?
As for VMLUX, since only a small percentage of my shares’ value is tax exempt at NY/NYC, I was going to sell all my VMLUX and either exchange it for VNYUX or put it into VTSAX and exchange shares of equities in my retirement accounts for Total Bond Market, to maintain my AA. Does it make sense to do this no matter if I’m in the 22% or 24% bracket this year? Cap gains rates are independent of tax rates and I shouldn’t have to pay NIIT since my income has dropped.
Purchased shares of VNYUX (NY munis) and VMLUX (nat limited term tax exempt) in 2022-2023 when I was in 32% bracket. Trying to figure out if I should keep holding these investments, which amount to:
Brokerage VMLUX $88,524.71
Brokerage VNYUX $223,269.85
As of last week VNYUX has a 3.62% 30d SEC yield so I’d need a nominal bond fund paying 5.47% or more if my fed rate is 24% and 5.31% if my tax rate is 22%.
Math: X% x (1 - 24% - 6% - 3.876%) = 3.62%. X=5.47%
I checked the Vanguard site’s list of bond funds and VLTCX (Corp bond fund) is the only one with a 30 day yield this big (5.49%). So, am I correct that there isn’t a clearly better option than VNYUX?
As for VMLUX, since only a small percentage of my shares’ value is tax exempt at NY/NYC, I was going to sell all my VMLUX and either exchange it for VNYUX or put it into VTSAX and exchange shares of equities in my retirement accounts for Total Bond Market, to maintain my AA. Does it make sense to do this no matter if I’m in the 22% or 24% bracket this year? Cap gains rates are independent of tax rates and I shouldn’t have to pay NIIT since my income has dropped.
Statistics: Posted by Aguilar — Fri Aug 09, 2024 8:30 pm — Replies 2 — Views 539