Tax Strategies for Homeowners

So make sure you explain to the IRS that you're deducting points from a prior year. Be sure to include a note to the back of your return showing how you calculated the amortized point deduction.

A Quick PMI Note for 2007

As a reminder, starting in 2007, you can now deduct your PMI or private mortgage insurance. When you put down less than 20% on the home you're purchasing, PMI is usually required to safeguard the bank that is loaning you the money. PMI is usually 0.5% of your loan balance each year, and you usually pay it monthly.

Well, starting in 2007, you can deduct that insurance amount along with your mortgage interest on Schedule A, says Scharin.

The PMI deduction phases out when the AGI of a married couple filing jointly hits $100,000 and then disappears when AGI hits $109,000. But still, for those who needed the insurance to get the mortgage in the first place, the deduction is a nice perk.

So take advantage of these housing perks, and enjoy your new home. Odds are good it'll become the money pit -- but hey, it's your money pit!

Next in the tax series: Deductions for Higher Education