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My son is trying to buy his first house (in San Francisco). He and his girlfriend have been living together for several years and are planning to get married. He was told it would be easier to buy a home if they weren't married. She is working and makes around $50,000. He has had a small coffee shop for about 5 years and it is just making a small profit. Would there be a tax benefit for them to marry before the end of the year - and how would that affect their home buying?

I feel so old when I find myself thinking, "What ever happened to 'what will the neighbors think?'?" I'd find it interesting to know who it was that said it would be easier to buy a home if they're not married. I doubt it was a mortgage broker. Not that he's evidently asked, but it can get terribly complicated for unmarried people to mingle their finances and investments. Not impossible, but those who think "what difference does a piece of paper make?" will find themselves facing a lot more pieces of paper than a marriage license if they want to protect themselves.

Because of the disparity in their incomes, they would probably pay less total tax on a joint return than they do as two single filers. This is the marriage "bonus" that you never hear about when the marriage "penalty" is being debated. Their bonus would be somewhat lessened, if not eliminated, by his self-employment tax.

The only way to figure it out for sure is to sit down and do the calculations. If they do marry before the end of the year, they will be considered married for the entire year in the eyes of the tax law.

Also, I make about $50,000 per year, and am collecting Social Security (am over 65) of about $17,000 per year. I have had no taxes taken out of than and am claiming 2 exemptions on my job. My thought was that I would put the extra money into stocks - however, right now my tech stocks are not doing well. I live in California. Does anyone have any idea approximately what I will owe State and Federal taxes for 2000?

Using 1999 rates, filing status single, and the standard deduction, I compute a Federal tax of $12,438. My experience in CA was that the state tax ran roughly 1/3 of Federal, so I'd estimate another $4,100 for the state, for a total tax of roughly $16,500. You can project your withholding through the end of the year and see where you stand.

Phil Marti
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