Although President Obama promises taxes will be lower for 95% of taxpayers, a question I get from time to time is, “Can I save taxes by getting a divorce and just living together?”

Many two-income family taxpayers pay more taxes as a married couple than they would by filing separate tax returns as single individuals.  That’s called the marriage penalty.

The answer is you might save a little bit on taxes, but how much will a divorce cost you, both in terms of dollars and the good will of your spouse?

First, Congress has eliminated the marriage penalty for married couples making less than $132,000 and roughly equal incomes.

If a married couple earns $150,000, with equal incomes and a standard deduction, the marriage penalty is $500.

If they earn $200,000 under the same circumstances, they will pay a marriage penalty of about $787.

And there are other financial benefits to staying married, including inheritance taxes, insurance and Social Security, that you would lose if you got a divorce.  Finally, if you divorce in one year and remarry in the next, the IRS may disregard the divorce and require you to file as married anyway.

Source:  Post by Sue Shellenbarger