@rahulk09 , from your latest post ( thank you for the clarifications ),
1. For federal purposes, you and your spouse can indeed file Married Filing jointly, as long as your spouse has a tax id ( she probably has an SSN, depending whether she is student/trainee or a researcher/teacher on J-1 ), and a resident for tax purposes. Your total world income will be taxed.
2. For State ( based on what I understand of your situation ) --- you lived / domiciled in different states ( One spouse in Maryland , the other in Virginia , you come under one of the exceptions where in you are allowed to file Married Filing Separate for the State of Maryland. Thus your wife would be allowed to file MFS for Maryland ( allocating only her income to be taxed by Maryland. By corollary and because these two states are reciprocal states , you would be bake to file VA return as MFS and paying taxes ONLY on your world income. VA has instructions on how to file MFS in VA with Federal status as MFJ. Please read through these -- it may or may not be worth it ( depending your exact facts & circumstances.
3. I would strongly recommend a consultation with a tax professional, just to be sure that you have the best tax outcome. Of course you have to weigh the benefits ( taxwise ) against the cost. Also you can run the TurboTax ( esp. if installed on your own machine -- CD / Download ) the three different scenarios and see the tax benefit ( if any ).
If you need more on this , I can page one of the other volunteers whom would be more familiar with MD & VA tax codes.
Is there more I can do for you ?
Namaste Rahul ji
pk
