| My husband and I live in CA but we're looking to buy a house in TN. He's a 1099 employee for a CA company and will be working and living out of this house a large portion of the year while I remain in CA. (We currently rent an apartment in CA we do not own any property there).
We also want to rent out 2 of the rooms in the TN property as well. What does all of this mean for our taxes? =======>>UNLESS your husband is a full year resident of TN, both of you, as full year residents of CA, need to fiel return and report even rental income in TN and income earned while working in the house of TN to CA BOE and any tax paid to TN can be claim as tax credit on your CA return.
Will he be able to establish his business out of TN?=======>>Of course he can establish any biz in any part of the US in any state even outta TN as a foreign business.it is called foreign corp, a term used in the US for an existing corp registered to do business in a state or jurisdiction other than where it was originally incorporated. A foreign corp is one incorporated as a domestic corporation in one state of the US, authorized to do business in additional state(s).
Do we file married filing separately and file out of 2 separate states for our income taxes? =====>>it is up to you; you may jointly or separately file CA tax with CA BOE; however, unless your spouse is a part year or full year resident of TN, he must report all source of income to CA and can claim any tax paid to TN on his CA return.
Will the rental income be under TN or CA?====>>any rental income from the home in CA and homes in TN need to be reported to CA when you file CA return however, as said any tax paid on rental income in TN can be claimed as credit on your CA return to avoid double taxation in TN and CA.
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Moving to New State (kind of) - where to file? 
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