Was any income tax witheld from your wife's 1099? If not, then when you include her pay what you are seeing is that the income tax owed on it is around 30%. It's impossible to say whether this is correct or not - there are too many factors that come into play such as your income level, phase out of the deductions, etc.
As for whether there are more deductions to take - if you're taking the standard deduction (presumabluy because you do not own a home, correct?), then you're pretty much limited to additional deductions for contributions to a traditonal IRA, educational deduction, deduction for moving expenses, and a few credits such as education, and dependent care. Here's a pretty compreensive list - look it over and see if you qualify for any:
Tax Credits and Deductions