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Do you realize that you may be paying as much as 30% to 40% of your investment income in Federal and state taxes? Paying that much in taxes significantly reduces what you get to keep. You can see from the chart that you would have to earn significantly more from a taxable investment to equal what you get to keep from a tax-free investment.
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This
chart assumes a 35% federal and 6% state tax-rate and is for illustrative
purposes only. It is not indicative of past or future performance of any
investment offered by Aquila. |
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To see how beneficial
a tax-free rate of return can be to you, check the chart below. It shows
what a taxable investment would have to yield to match the tax-free income
you might receive from an investment in Churchill Tax-Free Fund of Kentucky.
Find your taxable
income and tax bracket, and read across.
CHURCHILL TAX-FREE
FUND OF KENTUCKY TAXABLE EQUIVALENT YIELD TABLE - 2008 RATES
TAXPAYER
INCOME STATUS
|
FEDERAL
TAX
BRACKET |
KENTUCKY
STATE
TAX RATE |
COMBINED
EFFECTIVE
RATES |
TAX-FREE
YIELD |
3.00% |
3.50% |
4.00% |
4.50% |
5.00% |
SINGLE
RETURN |
JOINT
RETURN |
TAXABLE
EQUIVALENT YIELD |
| $8,026
- 31,550 |
$16,051
- 65,100 |
15.00% |
5.80% |
19.93% |
3.75% |
4.37% |
5.00% |
5.62% |
6.24% |
| $32,551
- 75,000 |
$65,101
- 75,000 |
25.00% |
5.80% |
29.35% |
4.25% |
4.95% |
5.66% |
6.37% |
7.08% |
| $75,001
- 78,850 |
$75,001
- 131450 |
25.00% |
6.00% |
29.50% |
4.26% |
4.96% |
5.67% |
6.38% |
7.09% |
| $78,851
- 164,550 |
$131,451
- 200,300 |
28.00% |
6.00% |
32.32% |
4.43% |
5.17% |
5.91% |
6.65% |
7.39% |
| $164,551
- 357,700 |
$200,301
- 357,700 |
33.00% |
6.00% |
37.02% |
4.76% |
5.56% |
6.35% |
7.15% |
7.94% |
| Over
$357,700 |
Over
$357,700 |
35.00% |
6.00% |
38.90% |
4.91% |
5.73% |
6.55% |
7.36% |
8.18% |
Note:
This table reflects the following: |
1. |
The
yields quoted in the taxable equivalent yield illustration are not
indicative of the Fund's current yield. |
2. |
Taxable
income, as reflected in the above table, equals Federal adjusted gross
income (AGI), less personal exemptions and itemized deductions. However,
certain itemized deductions are reduced by two-thirds of the lesser
of (i) three percent of the amount the taxpayer's AGI over $159,950,
or (ii) 80 percent of the amount of such itemized deductions otherwise
allowable. The effect of the three percent phase out on all itemized
deductions as well as the effect of the 80 percent cap on overall
itemized deductions is not reflected on this table. Federal income
tax rules also provide that personal exemptions are phased out at
a rate of two percent for each $2,500 (or fraction thereof) of AGI
in excess of $239,950 for married taxpayers filing a joint return
and $159,950 for single taxpayers. The effect of the phase out of
personal exemptions is not reflected in the above table. |
3. |
Interest
earned on municipal obligations may be subject to Federal alternative
minimum tax. This provision is not incorporated into the table. |
4. |
The
taxable equivalent yield table does not incorporate the effect of
graduated rate structures in determining yields. Instead, the tax
rates used are the highest marginal tax rates applicable to the income
levels indicated within each bracket. |
| 5. |
Interest
earned on all municipal obligations may cause certain investors to
be subject to tax on a portion of their Social Security and/or railroad
retirement benefits. The effect of this provision is not included
in the above table. |
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