If you file separately, the liability is kept separate.
HOWEVER, the inequities (if any) can be considered if you go to court for equitable distribution, so you may get the refund, but a smaller share of the marital property, for example.
Here is some of what I understand. If you are legally separated as of Dec.31st, you can file as separated. This isn’t always the best way to file because one of you might really take a hit.
Do you have kids? You can file head of household if you meet certain very narrowly defined criteria…like you paid for over 1/2 of the mortgage and utilities. Head of household has a much better tax break.
If you separated during the year then a portion of the taxes will be marital and a portion will be separate. For example, if you separated on June 30th then roughly half of the taxes will be marital and half of the refund will be marital. You will divide the marital portion of the refund equally. The same would be true for the tax debt. I have given you a simplified answer, but the question is complicated enough that you should consult with an account to determine your liabilities separate and together and decide which way would be best for you file.
Helena M. Nevicosi
Attorney with Rosen Law Firm
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Raleigh, North Carolina 27607
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My wife moved out to pursue her new life without signing a separation agreement. She is self employed(1099) while I have taxes withheld(W-2). I am entitled to a refund if I fill married/ separately while she is responsible for a sizeable tax burden if she files separarely. Is she entitled to 1/2 of my refund and am I responsible for 1/2 half of her tax liability??