Being a homeowner for the first time comes with all kinds of responsibilities that normally don’t come with renting. There’s yard work, home repairs, picking paint colors, insurance and of course, figuring out your tax liability. American home ownership has long been subsidized by tax savings, and if your real estate agent didn’t tell you about them, an accountant or tax preparer will!

For many, the deductions available for being a homeowner will allow them to offset their personal exemptions on their paychecks, allowing them to receive more money in their paychecks throughout the year. That could be more money to pay a mortgage.

The biggest change new homeowners should know when filing their taxes is they’ll need to itemize deductions in Schedule A, which is more complicated than the standard deduction they may have taken on previous tax returns. Itemized deductions for new homeowners include mortgage interest, property taxes, points paid on a home loan, mortgage insurance and charitable contributions (such as cleaning out a garage and donating clothes to charity).

Homeowners who haven’t itemized deductions before may also be introduced to other Schedule A items such as personal property tax, state tax withholding and charitable contributions that can lead to a bigger overall tax deduction. The savings is based on your tax bracket. If your tax rate is 33%, then for each dollar of mortgage interest spent you save 33 cents.

Home improvements such as adding rooms, remodeling and landscaping won’t help on your taxes when they’re being done but they will help when the property is sold by increasing the cost basis and lowering the gains on the sale. Coupled with the tax exclusion, a home sale usually means most homeowners won’t pay capital gains taxes on the sale if it’s their primary residence, they’ve lived there for two of five years, and have a tax exclusion of $250,000 for a single person or $500,000 for married couples.

The American Taxpayer Relief Act of 2012, which President Obama signed on Jan. 1 to avoid the “fiscal cliff,” helps homeowners by restoring two tax breaks. The first is the deduction for mortgage insurance premiums. Lenders often require the insurance if the loan balance is for more than 78% of the home’s value.

The second reclaimed tax break is a credit of up to $500 for making certain improvements that increase a home’s energy efficiency. A credit is money taken off the amount owed to the IRS. The tax credit is typically 10%, up to $500 total, for buying and installing certain products such as a new water heater, central air conditioner, insulation, windows or roof.

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