For the tax year 2016, me and my wife were residents of and earning income in different states (CA and IL). We filed a joint federal return to have larger deductions, but I am not sure if we should file separate or joint state returns.
Filing separate state returns would give up the deductions associated with being married, and has the additional complication of community property/income for the state of California. Filing joint state returns would be preferred, but has the complication of the residency. Both methods are allowed by California and Illinois for our case.
If we file separate state returns, do we have to file both for each state, i.e. CA-resident + CA-nonresident and IL-resident + IL-nonresident?
Also, what online method is better suited to file our state taxes? I found that TurboTax is badly designed to handle these cases, and does not provide adequate support.