In 2020, married taxpayers who file jointly can claim a $24,800 standard deduction. Withholding allowances reduce your taxable income by $4,300 for each one that you claim. You can use the TurboTax W-4 withholding calculator and try a few different scenarios to see if there is a difference in your bottom line.
Withholding is more of an important factor because you want to ensure that you don't owe anything next year. The tip income isn't relevant if you file MFJ because the total allowances that you are both entitled to are divided between you as a married couple. You would figure this based on both of your incomes on the W-4 worksheet, which you can find in TurboTax in the search box. Since your income fluctuates from month to month, the withholding calculator can help your spouse to ensure that her W-4 withholding is correct, but you will have to input information based on past averages. Since she has always withheld 0, she will need to fill out a new W-4 if that is needed, based on what the calculator tells you.
It is difficult to estimate exactly when income fluctuates, but don't worry. You can adjust your W-4's throughout the year if necessary.
