Black taxpayers must time marriages and house-hunting against tax mechanics
Evidence
If you are a black two-income couple planning a wedding, plan it early in the year—if you get married on December 31, you’ll lose your student loan deduction for the entire previous year, whereas if you get married the next day, on January 1, you’ll be able to retain the deduction for that prior year’s taxes. If you’re buying a home, never spend your maximum housing budget in a predominantly black neighborhood—you simply won’t get a good return on your investment. (That also makes home equity loans riskier, so avoid those as much as possible in predominantly black or diverse neighborhoods.) Either spend less in a diverse neighborhood, making sure that you have disposable income remaining to invest in retirement, 529 plans, or stocks after your mortgage payments, or use your full budget to buy a smaller home in a white neighborhood. If you do this, your home value is likely to grow, though your day-to-day experience might involve more of the “racism triage” we’ve discussed. — Dorothy A. Brown, The Whiteness of Wealth, 531
Categorization
Category: Craft and Method
- SEED: The marriage-timing loophole (December 31 vs January 1 wedding losing a year’s student loan deduction) is a sharp, concrete anecdote for an essay on how tax law’s arbitrary mechanics penalize those without advisors.