@wsrsm2002 - I can't speak for the State tax return, but on federal, consider two things
1) that income is added to your income, so it is taxed at your marginal tax rate. So it is as if YOU made the $10K; it is not taxed at the lowest tax rate when you look at the tax bracket tables. So if you are in the 24% tax bracket, that $10k will cause an additional $2400 in federal income tax.
2) as a contractor, there was no social security or medicare withheld by the employer and that still has to be paid. So you will see "self employment tax" which is no more than the social security and medicare tax that would have been withheld if your spouse was a w-2 employee. On $10k, that is going to be around $1530 as you are responsible for both the employee half and the employer half of these taxes (you get a deduction for half of it - it's complicated)
placed correctly on Schedule C of your federal tax return will properly flow it to the California tax return. Both returns should then calculate the tax correctly.
