My wife and I are legally separated officially on 1/1/14. She has just been diagnosed with breast cancer and I'd like to not move out for a few months to help her.

However, I am paying her a huge amount of alimony, but I think I read where I can't deduct alimony from my taxes if I live in the same house.

Is there a way around this?

Also, how can the IRS know where i live if we file separately for 2014?

I assume I (effectively) have to pay her taxes (or I guess get taxed double) if there is no way around this correct?

#1;basically, correct; you and your former spouse may not live in the same household (there are certain exceptions). You may contact an attorney for sure; After you are divorced or legally separated (meaning after you are considered divorced for tax purposes), you and your ex-spouse cannot live in the same household or file a joint Form 1040.

#2;Even if you file your returns separately, you need to provide the same address wth the IRS unless YOU REPORT NEW ADDRESS ON YOUR SEPARATE RETURN.

#3; Your former spouse should report any taxable alimony received on Line 11 of IRS tax Form 1040 while you need to report alimony paid on line 31a.