Your income tax withholding — the amount deducted by your employer on your behalf to go toward your annual tax bill — isn't something that most Americans think about unless it's tax time. But adjusting your withholding amounts can make a big impact on your financial success. So if you want to make financial resolutions you can keep in the new year, here are a few ways that your withholding can help. 

1. Save More Money

One common resolution for many people is to save more money for the future or for emergencies. If you get a big tax refund back each spring, you could be sending too much money to the IRS or state agencies to hold. Instead, adjust your withholding downward to keep that money and put it in savings. 

2. Pay Off Debt

Did you spend more on the holidays than planned? Carrying 2022 debt into 2023? As with the resolution to boost savings, you might accelerate debt payoff by keeping more of your money each paycheck. If the problem is temporary, you might also adjust withholding for a specific period, then return it to normal levels. 

3. Save for Retirement

The good news about retirement savings is that it helps you in the future and today. Many retirement contributions, including to employer 401(k) plans and traditional IRAs, reduce income taxes in the current year. So you can keep your resolution and enjoy lower withholding. 

4. Buy a House

Those who want to buy a home in the near future can benefit from withholding adjustments in two directions. First, if you may buy a property mid-year, don't overpay the IRS throughout the year when you're unable to access that money for a down payment. However, you might increase down payment savings by withholding too much and getting a big check in January so you can buy property. 

5. Go Back to School

The IRS provides tax credits for higher education, so your tax bill will be lower. As with retirement savings, this means you can reduce withholding from your paychecks and use it to fund ineligible education expenses. However, some education credits are even more valuable than retirement contribution deductions, so you may see even larger benefits. 

Where to Start

Ready to see how you might use your withholding more strategically to help you reach a goal in the new year? Start by meeting with an accountant in your state that handles taxes.