Eaton Vance Study Finds Most Americans are Unfamiliar with the Alternative Minimum Tax, Yet One-Third of all Taxpayers Will Pay the AMT by 2010.AMT-Free Municipal Bond Funds Municipal Bond Fund A mutual fund that invests in municipal bonds, operating either as an investment trust or as an open-end fund. Notes: Because the bonds are local government issues, they usually help to maximize tax-exempt income. Provide Tax Planning Tax planning Devising strategies throughout the year in order to minimize tax liability, for example, by choosing a tax filing status that is most beneficial to the taxpayer. Solution BOSTON -- Eaton Vance Eaton Vance is an American financial services company headquartered in Boston, MA. It is traded on the New York Stock Exchange under the symbol EV.[1] At the end of the second quarter of the 2006 fiscal year, the company had assets under management of $118.8 billion. Corp. announced today the findings of a nationwide mini study that shows limited knowledge of the Alternative Minimum Tax (AMT See vPro. ) among Americans. The study results reveal that only one in four (24%) is familiar with the tax, yet a growing number of Americans face the reality of the AMT.1 The Federal alternative minimum tax (AMT) now affects more than three million taxpayers annually, many of whom would consider themselves middle class. Because inflation was not factored into the AMT at its creation, over one-third of U.S. taxpayers will be subject to the AMT by the end of this decade, including nearly half of households earning between $75,000 and $100,000, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Tax Policy Center estimates. eIuThe AMT has earned a reputation as a stealth tax stealth tax Noun an indirect tax, such as a tax on fuel or pension plans, esp. one of which people are unaware or one that is felt to be unfair by capturing more people every year, many of whom doneIUt even realize it until they prepare their taxes in April,eIN says Robert MacIntosh, Eaton VanceeIUs chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the and co-director of municipal investments.E[sz]eIuAs year-end approaches, people should consult their tax advisor A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in about the timing of income and deductions to help minimize their chances of becoming subject to the AMT. If it is likely they will have to pay the AMT, iteIUs also an appropriate time to ensure they are making the most of any tax-exempt investments.eIN AMT-free municipal bonds and bond funds can help shield hard-earned dollars from the tax. Yet, according to the results of Eaton VanceeIUs study, only one in eight (13%) Americans says he or she is aware that most municipal bond funds pay dividends that are subject to the AMT. ThateIUs because most otherwise tax-free muni muni See municipal bond. funds invest in eIuprivate activityeIN bonds, which pay income that is not exempt from the AMT because their use (e.g. airports, housing agencies) is considered outside of government purposes. While these bonds typically provide higher income than similar AMT-free bonds, the AMT erases that yield advantage. eIuIn 2004, nearly 4.4 million U.S. tax returns listed tax-exempt interest Tax-Exempt Interest Interest income that is exempt from federal income tax. Although it is not directly taxed, this income may still be required to determine other tax calculations such as social security benefits. ,eIN said MacIntosh. eIuThis suggests there is already a wide audience for whom AMT-free municipal bond products should hold appeal. Municipal bond investors who are subject to the AMT or may become subject to it, should discuss with their advisor whether they should consider owning only municipal bond mutual funds Bond mutual fund A mutual fund which primarily or exclusively holds bonds. or closed-end funds which, by prospectus, are AMT-free.eIN Eaton Vance has led the industry in making such mutual fund products available to the investing public. Eaton Vance AMT-Free Municipal Bond Fund* was among the first AMT-free municipal bond funds. The fund is prohibited by prospectus from purchasing bonds whose interest is subject to the AMT.E[sz]All 12 of Eaton Vance's insured closed-end municipal funds are also AMT-Free (two national and 10 state-specific). Eaton Vance Corp. is a Boston-based investment management firm whose stock trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the symbol EV. Eaton Vance and its affiliates managed $124.1 billion in assets as of September 30, 2006, for more than 100 investment companies, as well as institutions and individual clients. This article is not intended to provide tax or legal advice and should not be relied upon as such. Any specific tax or legal questions concerning the matters described in this article should be discussed with your tax or legal advisor. Before investing, prospective investors should consider carefully a particular FundeIUs investment objective, risks, charges, and expenses. A FundeIUs currents prospectus contains this and other information about the Fund and is available through your financial advisor. Read the prospectus carefully before you invest or send money. The Funds are distributed by Eaton Vance Distributors, Inc. References to the closed-end funds are for informational purposes only, as closed-end funds are available for purchase through a securities exchange. About the Eaton Vance AMT Study This release highlights the findings of a mini-study conducted in August 2006 via telephone among 1010 people nationwide. The study was conducted by Penn, Schoen & Berland Associates, Inc. for Eaton Vance Corp. The overall margin of error for the mini-study was +/-3.08% at the 95% confidence level. Penn, Schoen & Berland Associates, Inc. is a Washington, D.C.-based full-service strategic polling and market research firm. *On May 1, 2006, the fund's name was changed from Eaton Vance Municipal Bond Fund. 1 Please see about the study on the second page. |
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