of course entering the other's income will decrease your refund until you enter any withholding or estimated tax payments they have, if any. as income goes up taxes go up and thus the refund goes down. you could even end up owing. however if they have withholding or estimated tax payments your taxes stay the same but since the amount paid goes up your refund goes up or the amount owed goes down. you are allowed to file as married filing separate but you may lose certain credits and both must use either the standard deduction or itemized deductions.
