Where should I hold bonds across my accounts for the best tax outcome?

Bonds generally belong in tax-deferred accounts like a 401(k) or traditional IRA, because the interest they pay is taxed as ordinary income — at your full marginal rate — when held in a taxable brokerage. Shielding that interest inside a tax-deferred account means it isn't taxed each year as it accrues. Reserve your Roth and taxable accounts for stocks, which grow tax-free in a Roth and qualify for lower long-term capital-gains rates in taxable. If you have no room in tax-deferred space and must hold bonds in taxable, municipal bonds are an option since their interest is federally tax-free, which can make sense in higher brackets. This is asset location at work: same overall allocation, but each piece placed where the IRS takes the least. Decide your bond percentage first, then slot it into the most tax-friendly account you have.