Yes, there are times when filing separate is more beneficial, and two high income earners is one such case. See When Married Filing Separately Will Save You Taxes.
If you filed a joint state or local income tax return in an earlier year, any refund of a deduction claimed on that state or local income tax return must be allocated to the person that paid the expense. If both persons paid a portion of the expense, allocate the refund based on each individual portion.
For joint accounts, you have to divide the interest income between the two joint account holders based on your portion of ownership of the account throughout the year. You also need to alert the IRS that the person that received the 1099-INT isn’t reporting the full income on their return.
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