Is one of your New Year's resolutions to pay off your bills? One way to move toward that goal is to work with a tax advisor to prepare a tax projection for the year and then adjust your withholding so you end up with a minimal refund on your return. You can then use what would have been your refund to pay your bills throughout the year.
Keep in mind that what you claim on your W-4 form has nothing to do with what you claim on your actual tax return. It is simply a way to let your employer know how much or how little you’d like withheld in taxes. Your employer doesn’t need to know about your financial situation, i.e. that you have mortgage interest and real estate taxes that will lower your tax bill. They simply need a way to protect themselves from later complaints that not enough was taken out in taxes and the W-4 form provides this.
The way the W-4 form works is that as you increase the number of exemptions claimed you lower the amount of tax withheld. You can claim up to 10 exemptions without your employer having to send the form into the IRS so most employers won’t balk at a W-4 with exemptions up to 10.
If you will be eligible for a large credit (such as the first-time homebuyer’s credit) on next year’s tax return or will be buying your first home and will be able to itemize your deductions for the first time, consider adjusting your withholding and taking advantage of the tax savings throughout the year instead of waiting until tax time to see the tax savings.