Here are a few tax breaks for the homeowner. First, the mortgage interest you pay is deductible and is reported by your lender on Form 1098, which must be filed with your return. In the early years of a loan this can be very significant, since most of the payment is interest, not principal.

Second, if your mortgage requires you to pay Private Mortgage Insurance (this is required if your loan-to-value is above 80%), all or part of these payments may be deductible, depending on your adjusted gross income. The deductions are reduced if your AGI is above $100,000 and eliminated above $109,000.

Third, you can receive a tax credit for installing certain energy efficient windows, doors and skylights in your primary residence if they meet Energy Star Program requirements. A credit is better than a deduction, because it is a dollar-for-dollar reduction in your tax. Generally, you may take a credit of 10% of the cost of the doors, etc. but not the installation cost. There are also other green energy tax deductions available. I will discuss more tax breaks next week.