Unfortunately, there isn't a "one-size-fits-all" answer, Please read the following to better understand what may happen.
You
may be able to file Form 8379 (Injured Spouse Allocation),
which will allow you to get back your portion of a jointly-filed refund if it's
seized or offset to pay your spouse's debt.
Note: IRS special rules may apply if you live in a community state (Arizona,
California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and
Wisconsin) (continue reading information listed below FAQ).
Please
read the TurboTax FAQ below for more information about filing a Form 8379: https://ttlc.intuit.com/replies/3326788
“If
you live in a community property state that recognizes your marriage, special
rules will apply to the calculation of your injured spouse refund. Enter the
community property state(s) where, at any time during the year, you and your
spouse resided and intended to establish a permanent home. For more information
about the factors used to determine whether you are subject to community
property laws, see Pub. 555.
In
community property states, overpayments are considered joint property and are
generally applied (offset) to legally owed past-due obligations of either
spouse. However, there are exceptions. The IRS will use each state's rules to
determine the amount, if any, that would be refundable to the injured spouse.
Under state community property laws, 50% of a joint overpayment (except the
earned income credit) is applied to non-federal tax debts such as child or
spousal support, student loans, state unemployment compensation debts, or state
income tax. However, state laws differ on the amount of a joint overpayment
that can be applied to a federal tax debt. The earned income credit is
allocated to each spouse based on each spouse's earned income.”
1. Select
the correct person as the injured spouse (the one without any debt)
2. If
the injured spouse is the only one with income all of the refund will be
released after IRS review of the Form 8379.
3. If
you are not in a community property state, and both of you have income, you can
divide exemptions up any way you see fit. It is possible the IRS may make some
adjustments based on the income levels for each of you. Let them do that when they receive it.
4. If
you do live in a community property state, community income would be split
equally between the two spouses. With
respect to deductions, the deductions would be split depending on whether the
expenses related to community income or separate income.
5. The
standard deduction must be split between you so you can't change that
part. For itemized deductions you can
put those under the injured spouse.
Please note, this will cause your return to
take longer to process. Per the IRS, 11
weeks for an e-filed return and 14 weeks for a mailed return. (estimated)
