Municipal bonds are debt securities issued by states, cities, and other local governments to fund public projects like schools, roads, and water systems. If you own these bonds or are considering buying them, you need to understand how they work, what tax benefits they may offer, and how to report them on your tax return. This section answers common questions about municipal bonds from a tax perspective.
The articles here explain what makes municipal bonds different from other investments, how the tax-exempt status works, which forms you use to report them, and what records you should keep. You'll also find information about situations where municipal bond interest becomes taxable and how to handle bonds you've sold or that have matured.