Tax-exempt interest is interest income that is not taxed at the federal, state and/or local level.

Interest on a typical bank loan is added to monthly payments and is usually compounded monthly. In this example, you’d pay about $2,748.23 in interest over the life of the loan.

There are some exceptions: For example, interest payments from Treasury bonds and Treasury Inflation-Protected Securities are subject to federal tax but exempt from state and local income taxes.

For example, if your federal income tax rate is 22%, your interest income or dividends will also be taxed at 22%.

Discover how to earn tax-free interest income through investments. Understand the rules and benefits of tax-exempt interest and find suitable options for you.

How can Americans counter higher taxes and lower interest? First, Americans should consider taking advantage of current income tax rates before they potentially rise in 2026 by accelerating income ...

However, tax-exempt interest income can impact a student's financial aid eligibility. Interest earned from municipal bonds is an example of this type of income.

Learn how taxes on interest income work, how to report it on your taxes, and which interest income is taxable. Get the full guide on interest taxation.

For example, if a company has $9 million in earnings, $2 million in interest expenses and $1 million in income tax expenses, the company's EBIT equals $12 million.

Series I bonds are a popular investment that can help you save on taxes, but the federal income tax consequences can be complex.

You'll pay taxes on your CD interest regardless of whether you withdraw the money. For example, let's say you open a five-year CD right now and plan to leave it untouched until the term is up.