There are several great advantages to owning your own home. One of the most valuable advantages is the set of tax breaks that home owners receive. These tax perks can help you save money every year that you have a mortgage.

Tax Tip #1 – Pay Your January 1st Mortgage Payment on December 31

Because mortgage payments are paid after the fact your January payment is actually for the principal and interest that accrued in December. This means that you can deduct the mortgage interest that you pay with your January mortgage payment if you simply mail off your mortgage payment early enough so that it will post to your account by December 31. This can create an additional two or three hundred dollar deduction on your income tax return.

Tax Tip #2 – Time Your Closing for Added Tax Savings

If you are planning on buying a home and you don't know if you should wait until after the New Year or if you should close at the end of the current year then you should examine your tax situation. If you think that you will be paying a lot of taxes this year, and you are currently a renter, then it is a good idea to close before the end of the year. This will allow you to deduct the interest, taxes and possibly a portion of your loan origination fee from your income taxes for this year.

Tax Tip #3 – Cash Out Your Home Equity

If you have a lot of credit card debt, a positive home equity balance and a large income tax bill for this year, then it is time to take out a home equity loan or a second mortgage. Use the proceeds from the second mortgage to pay off your credit card debt, and then deduct the interest from your second mortgage from your income tax bill. This is a great way to improve your short term and long term financial positions.

Tax Tip #4 – Plan for College Expenses

If your child will be attending college next year and you are trying to figure out a way to pay for their tuition and fees, (and you know that you will have a large income tax bill to pay this year), then you may want to take out a 2nd mortgage on your home this year and deposit the money into an education savings account. There are two advantages to this approach. First of all, you will be able to deduct the interest that you are paying on your second mortgage this year. Secondly, you may be able to deduct the amount of money that you deposit into the education savings account. You will also be earning interest on your deposit!

Tax Tip #5 – Plan for a Medical Expense

If you are planning on having an operation at the beginning of the year, and you think you will have a large income tax bill this year, then you may want to take out a second mortgage at the end of the current year. This will allow you to deduct your interest and prepaid taxes on this year's tax bill, and it will ensure that the money is available when you have your operation at the beginning of next year. You may also want to look into a medical savings account. This type of savings account can usually offer you additional tax savings.