My wife lives and works in Washington, owns her home. I live and work in California. We have not been married a year yet, but would like to know what is the best way to file our taxes, state and federal?

On the CA tax return, you are resident and will report CA income. Your wife is non-resident and does not have any CA income. Your U.S. Tax Return: Working or Living in Two or More states

Your marriage status for tax purposes is determind by your status as of December 31, 2009 - so it doesn't matter how long you've been married, as long as your status is married as of Dec 31 you will file as either Married Filing Jointly (MFJ) or as Married Filing Single. In general, for the federal return you will almost always do better (pay less tax) by filing as MFJ, but it's a good idea to try the calculations both ways and see which works best for you. As for your CA return - if you file as MFJ on your federal return you must also file as MFJ on your CA return, UNLESS your wife was a non-resident of CA for the entire year and had no CA sources of income. If this fits your situation, you can file as Married filing separate on your CA return, and avoid having to report your spouse's income.