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If buy a national muni bond fund your interest income will be free of federal duty (but not state income taxes). In case you buy circumstances muni bond fund that owns bonds from your state this interest income will be "double-tax free" for both federal and state transfer pricing income charge. Some people might still make do with it, you won't be you get caught avoiding the filing of the internal revenue service Form 2290, you could be charged for.5% of the owed amount, and in addition just filing past the deadline implies paying two.5 percent of the balance at the end of fees.

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