I have a friend in New Jersey who, after more than a year of searching for a condo to buy, opted to rent.

She hasn't heard the end of it. "You idiot. You fool," her friends tell her. "How could you miss out on a great tax break?"

"You would have thought I committed a crime," she told me.

There's a Greek chorus out there that believes tax efficiency is an end unto itself. God forbid you miss out on a tax deduction. God forbid you generate a "tax consequence."

"There is a percentage of the population that would do anything to avoid taxes," said Julie A. Welch, director of tax services at Meara King & Co. in Kansas City, Mo., and co-author of the book "101 Tax Saving Ideas."

It's perfectly legitimate and advisable to take advantage of any and all tax breaks you can. But do you want tax strategies to run your life?

Take my friend, for example. She finally decided she'd rather not spend upward of $200,000 for the privilege of owning an apartment the size of a walk-in closet, which is the going rate for a decent condominium in her part of the state.

She also wanted the flexibility to move whenever she likes and she doesn't want the hassle of maintaining a home. And it seemed of little consequence to her critics that she decided not to tap her retirement savings to come up with the money to buy a home so she can reduce her tax bill.

"People feel they have to buy a house because of the tax break and often they forget about lifestyle issues, such as maintenance," said Kathy Burlison, manager of tax operations field training for H&R Block. "Sometimes people do make you seem irresponsible for not owning a home, but that might be the most responsible thing for you to do."

I even know couples who argue about tax strategies. One Maryland woman wrote to me complaining that her husband isn't pleased with her investment strategy because when she makes money, they have to pay taxes.

This stay-at-home mom buys and sells stocks to raise $2,000 every year to invest in an individual retirement account. But her husband doesn't like the capital gains tax that is generated by selling the stock.

Burlison, incidentally, says the wife is right.

"First, she's not losing. She's only paying taxes on what she's gained, and she's absolutely right in investing for the long haul in an IRA. She's probably only generating a small gain anyway. Her husband is wrong to be mad at her."

It's always arguable whether one tax strategy is better overall for your finances, but you shouldn't let a tax deduction trick you into an otherwise bad economic situation, according to Fred Grant, a certified public accountant and project manager for Intuit Inc., maker of the Turbo Tax software package.

For example, Grant cautions people against using a home equity loan to convert personal interest into deductible home mortgage interest.

"It's a boneheaded thing to buy a car using a home equity loan to get the tax break and then take 15 to 20 years to pay it off," Grant said. "Whatever tax benefit you get isn't enough to make up for the extra money you pay in interest on the home equity loan."

Some parents opt to save money in their kid's name to take advantage of the child's lower tax bracket. Saving in your child's name under the Uniform Gift to Minors Act (UGMA) may seem like a good idea.

But remember: When the child turns 18, the child owns the money. This tax break isn't worth the heartbreak I'll have if my children decide to take the money and buy a new Lexus or skip college for several years to "find themselves."

"People should remember the phase 'Don't let the tax tail wag the dog, " Welch said.

Grant recalls a client who hired him to determine how much money being married was costing him in taxes. Under current tax law, two single people generally pay less in taxes than two people who are married and filing jointly.

"This client wanted to see if the benefit of marriage was worth more than the benefit of the tax break," Grant said. "He was wondering if he and his wife should get divorced and just live together. My bet is he didn't tell his wife." I can understand the anger at the "marriage penalty." But surely there are some things more important than a tax break.

I happily married my hunka hunka burnin' love despite the marriage penalty. Maybe my tax bill would be lower if we had just lived together. But with marriage, I still get a pretty handsome return.

If you want to discuss this column or you have basic tax questions, join Michelle Singletary and a guest expert from H&R Block online Tuesday at 2 p.m. at www. washingtonpost.com.

Singletary will also discuss taxes Wednesday at 6:40 p.m. on the "Insight" program with Herman Washington on WHUR (96.3-FM). Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or by e-mail at singletarym@washpost.com.

The Varying Cost of Loans

Despite the lure of a tax deduction, consumers shouldn't use a home equity loan to save on taxes if they aren't going to pay it off as quickly as they might a traditional car loan. Here is a comparison of payments, costs and tax savings for a $20,000 loan:

Five-year Five-year 15-year

new auto loan home equity loan home equity loan

Interest rate 7.9% 8.5% 8.5%

Monthly payment $405 $410 $197

Total interest

paid $4,274 $4,620 $15,451

Tax savings* $0 $1,294 $4,326

Net cost of loan$4,274 $3,326 $11,125

*in the 28 percent tax bracket

SOURCE: Fred Grant, CPA