Reuters Money

The following is a guest post from Nancy R. Mandell. She is the former Managing Editor of Wealth Manager and OnWallStreet magazines, as well as the newsletter Securities Week. For the past decade, she has specialized in stories concerning women in finance and women’s relationship to money and investing. The opinions expressed are her own.

Maybe the “D” word hasn’t come up yet, but somewhere in the back of your mind is a nagging concern that your marriage is on its last legs.

Now — before we move one day closer to tax filing deadline day, April 18 — may be a good time to consider an option that could help preserve your financial security if your marriage ends this year.

If you’re considering divorce, consider filing a separate federal income tax return for the year 2010. This readily available, but poorly understood, option for married couples may save neither spouse any money — and in fact, could cost a few thousand dollars more — but it can save days and months of heartache. More importantly, the procedure can absolve you of  financial liabilities incurred by a spouse who has been under reporting income or taking improper deductions.

Wait a minute! Isn’t filing a joint return and taking advantage of a double deduction one of the perks of married life? Yes and no. Actually, for most of the history of the income tax, marriage incurred a tax penalty on couples whose dual earnings were roughly equal, a situation that has become more common in recent years. In such cases, couples — catapulted into a higher tax bracket together than they occupied alone — found themselves paying higher taxes than they would have as single filers.

A “marriage penalty” fix was a major part of the original Bush tax cut, according to a study by the Washington, DC-based Tax Foundation, a non-partisan educational organization. But after estimating the substantial effect of the fix, they postponed marriage penalty relief until 2005 — even then scheduling a slow phase-in so the full effect wouldn’t have been felt until 2009.

When cynics began referring to the phenomenon as the “sin subsidy” rather than a marriage penalty, “Congress thought better of that long delay,” the study found, “and at the President’s suggestion, they ‘accelerated’ the marriage penalty relief, making the maximum benefit that would have occurred in 2009 effective in 2003 and 2004.”

So, yes, married couples usually save money when they file a joint return. But in a troubled marriage, saving money shouldn’t be the primary motivator. “The primary concern is not to save on taxes, but to avoid liability,” says Julian Block, an attorney and tax expert based in Larchmont, New York. (Block’s book on the subject, Marriage and Divorce: Savvy Ways for Couples to Trim Their Taxes, has recently been re-issued and is available on his website.)

Over many years, Block has conducted tax education courses for investment advisers and adult education courses, often on the subject of divorce and taxes. The classes are composed predominantly of women, he observed. “I’d mention problems involved with joint liability that come with filing a joint return, and that there is no obligation to file jointly,” he said. ”Routinely, continually, there was surprise on the part of many of the women.” To put it bluntly, Block says, “They were clueless!”

It’s a much misunderstood option that can be particularly valuable if you suspect your spouse is under reporting income or is taking improper deductions. In these cases, the wife, or possibly the husband, may be better off not filing jointly. Filing separately means that the wife (it’s usually, but not always, the woman) would avoid joint liability for any additional taxes caused by her husbands’ understatements of income or overstatements of deductions.

Unfortunately, many learn belatedly, and at considerable expense, that they should not have filed joint returns. Compounding the problem is the fact that once you file a joint return, you can’t  amend your return and switch to filing separately. However, if you file a separate return, the option to switch to joint filing remains open for three years from the return’s original due date.

There is a legal but complex way to avoid spousal liability on a joint return, and that is to qualify under the tax laws  as an “innocent spouse.” This relief provision assumes that the spouse — female or male — meets stringent IRS requirements establishing that he or she was  unaware that their spouse under reported  income or overstated deductions. Alas, proving such “innocence”  may require the expensive help of tax professionals.