what is your state of domicile?
Your domicile is the place where you maintain a permanent home. Your intent to remain in this place indefinitely makes it your domicile and makes you the place's domiciliary. Your domiciliary status subjects you to specific laws. Thus, domicile is a legal construct used to determine where you vote, file lawsuits, pay taxes, claim benefits, and oblige governmental authority.
if you both domicile in California you will pay taxes on all your income. Washington does not have a personal income tax.
what if each of you has domicile in a different state. then your spouse will file a California return reporting only her separate income. make sure that the w-2's issued show the proper home address. if you just use one address, say California, expect a notice challenging the exclusion of the "out of state income"
I assuming that your spouse is an employee in Washington. while it has no personal income tax, for people engaged in their own business it does have a business and occupation tax.
