For tax year 2013, the standard deduction is $6,100 for single Americans and $12,200 for those married and filing jointly.
That means unless you can claim more than those amounts, there's no reason to itemize.
One of the most common ways to get over the threshold, however, is to own a house and unlock the many deductions that come with homeownership.
But it's not as simply as simply mailing a mortgage bill to the IRS and reaping the rewards. There are a bunch of very specific deductions that require specific paperwork.
Here are six important tax tips to look for if you're a homeowner:
Claiming mortgage interest is the biggie, and one of the most common deductions among taxpayers.
"It's evolved over the last 10 years, but we now have a cap of $1.1 million in mortgage debt that we can deduct for tax purposes," said Monica Rebella, a certified public accountant in California. This includes first mortgages, as well as mortgages on second homes.
Rebella also points out that the deduction even covers multiple loans, so those with a primary residence in Ohio but winter home in Florida can claim the interest on both, so long as the total is under the $1.1 million cap.
Just be careful, she warns, of claiming a mortgage interest deduction on home equity loans that haven't been used to improve the property.
"If you refinanced your loan and decided, 'Hey, why don't we take another $50,000 out in equity,' but then you don't use that money to, say, build a pool, that's not fully deductible," Rebella said. "You have to use the money to improve the house, or you are not allowed a deduction for that."
Mortgage Insurance and Taxes Count, Too
In addition to mortgage interest, private mortgage insurance is also deductible.
Don't mistake private mortgage insurance, or PMI, for homeowner's insurance that protects against a fire or other loss. PMI comes into play with lower-income homeowners who often can't afford a big down payment, and instead pay a small monthly fee as insurance against default . The idea is to protect the lender against being stuck with a big loan with zero equity in the home, as well as to allow those without huge nest eggs to buy a property with minimal down payments.
If you make a private mortgage insurance payment, in most cases this is deductible.
Also worth noting is that local and state property taxes can also be itemized on federal tax returns. Particularly for lower-income Americans, there may be special property tax benefits available based on your community.
Unless Congress extends existing tax credits for residential energy efficiency, 2013 is your last chance to claim up to $500 in green energy credits.
"Insulation, energy efficient windows and doors, high efficiency air conditioner and heaters — we still have credits for those," Rebella said.
Still, the cap is small at just $500, and it's not applicable if you claimed it previously since the credit was passed in 2011.
A separate and more substantial credit is available for solar energy installations, so long as they are on your primary residence and not a rental property.
"The credit is for 30% of the cost, including installation, including wiring, including everything," Rebella said.
Cancellation of Debt
Cancellation of mortgage debt is a very important part of filing your tax return and shouldn't be overlooked. That's because if you fail to report the debt forgiveness, it could result in a big change to your overall tax liability and hefty penalties from the IRS.
Rebella said that while foreclosures are not as common as they were a few years ago, debt forgiveness is still very common.
"Interestingly, I'm seeing these 1099-Cs, which is the form for cancellation of debt, on people that can no longer make their second
In other words, some Americans who saw home prices rebound took out a home equity loan but are now having trouble making payments. Even if it's not the same as a foreclosure or a short-sale, if that second mortgage is written down by a lender then the borrower has to report that when filing their taxes.
Selling Your Home Unlocks Tax Breaks
Of course, for homeowners who have taken advantage of a resurgent housing market by selling their homes altogether, there are also tax implications.
If you sold a home in the past year, costs including title insurance, advertising and real estate broker fees can also be claimed on your return.
You can also claim certain repairs to reduce your capital gains on the sale, presuming they were made within 90 days of the sale and clearly for the intent of marketing the property.
And after the sale? If you had to find a new home because of a new job that is located more than 50 miles away from your old home, you may be able to deduct your reasonable moving expenses, too.
Especially given the very harsh winter weather we've seen recently, it's important to note that when disaster strikes you are able to claim a tax break for any significant losses.
"You have to have a loss more than 10% of your income," Rebella said. "So if you make $50,000, you have to pay $5,000 out-of-pocket before you get any deduction."
And for the record, that's an out-of-pocket loss. You won't get a deduction for losses that were covered by your insurer and that you were compensated for.
But Rebella notes that "some people don't update their insurance, or sometimes there's specific things [insurers] exclude so you can still have a casualty loss even with coverage."
Just make sure that before you claim a $3,000 flat screen was stolen by a burglar or that you had a fully finished basement damaged in a flood that you can prove the value.
"The biggest thing is documentation, documentation, documentation," Rebella said.
In this age of smartphones, it only takes a minute to snap a picture of valuable property — something good to have for both insurance claims as well as taxes, she said.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor's Guide to Finding Great Stocks.