Sorry to hear about the unfortunate timing of the lay off after getting married. It would never be best to file as Married Filing Separate due to the impact the Standard or Itemized Deductions may have on taxation. Unless your wife is not withholding any Federal or State tax on her unemployment benefits, which would not be prudent for the Federal return because it is taxable income, there usually isn't much you can do on the W-4 other than to file as Married Filing Joint, which may withhold less tax to some degree. It is not and exact science, since it was the Treasury Department's intent to not let the public withhold less Federal tax based on their tier of income. Her less income will automatically bring you down in your tax bracket and may be witholding less tax as a consequence.
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