We Are Married But Living In Different States, How Our Tax Return Will Be Affected?

If you file jointly, you will file one federal return that reports ALL income.

If you file separately, you file two separate returns, you reporting your income and your spouse reporting his/her income.

The states normally require you file the same way you file your federal return. For this reason, it may be advantageous to file separately.

I strongly recommend you get professional help when you file. A competent tax pro will prepare the returns every way, then recommend the best way to pay the least amount of taxes.