Tax season is upon us, and homeowners everywhere will reap the benefits of tax breaks and incentives. If you're currently renting, consider the tax advantages of homeownership. Now may be the time to buy. If you're an owner or seller, new incentives will help you survive this tough housing market. Know what expenses you can deduct and understand how new laws affect you. Remember to consult your tax advisor.

1. Deduct the interest you pay on your home loan on your tax return. That means the mortgage interest deduction reduces your tax liability. And because your mortgage payments for the first few years are almost entirely comprised of interest, they are almost entirely tax deductible.
   
   
2. Deduct property taxes and points you paid to lower your loan's interest rate. The IRS offsets the expense of your state/local property taxes by allowing you to deduct them from your itemized income tax return. And you get a tax benefit if you paid points to lower your mortgage interest rate.
   
   
3. Take advantage of new laws in a challenging market. New homebuyers can get an $8,000 tax credit, short sellers won't be penalized for forgiven mortgage debt, and homeowners can contest their property taxes in a declining market.
   
   
4. Request a property tax reassessment if your home's market value has declined. You don't need to pay for a special service to have your local tax assessor adjust your property taxes. If your property value is significantly lower now than when you bought it, show proof of your home's current market value and recent comparable sales in your neighborhood.
   
   
5. Research past and proposed assessments that may apply to your home. Understanding property taxes and assessments will give you a truer picture of the cost of homeownership and help you predict and control your monthly expenses.
   
   
6. Get a reliable estimate of your property tax bill. If you're buying a home, don't rely on the tax data in the property listing. Depending on the circumstances of the sale, your tax bill can differ from the previous owner's bill.
   
   
7. Wrap your property taxes into your monthly mortgage payment. If paying one huge tax bill once or twice a year seems daunting, consider getting an escrow account. Also called an impound account, it protects the lender and offers convenience for the homeowner.
   
   
8. Understand how capital gains tax is calculated. When you sell your home, you're taxed on any profit over $250,000 if you are single, $500,000 if married. But calculating your gains isn't as simple as "price you sold it for" minus "price you paid for it." The IRS takes into account the money you put into improving the home as well. So remember to save receipts for any repairs, maintenance and upgrades.
   
   
9. Know how your tax situation changes with every real estate move you make. Whether you're buying a home, refinancing or renting out an investment property, understand how you'll be affected tax-wise.
   
   
10. See if homeownership lowers your tax liability. Your tax situation varies depending on your stage in life. Examine your payroll withholdings and reduce them to account for the reduction in net tax liability. That means more money in your pocket every pay period.

WASHINGTON — Senate Democrats on Monday advanced the $838 billion economic stimulus bill, clearing a major procedural hurdle by a razor thin margin with the help of just three Republicans. A vote on final passage of the bill is expected on Tuesday.

The Senate vote, by 61 to 36, to close debate on the stimulus, symbolized the partisanship that still grips Congress despite President Obama’s call for new cooperation. It also highlighted the rising power of the centrist Republicans who cast the critical votes. Under Senate rules, it takes 60 votes to invoke cloture and usher a bill to a vote.

Those votes, by Senators Susan Collins and Olympia J. Snowe of Maine and Arlen Specter of Pennsylvania, along with the 56 Democrats and two Independents who regularly vote with them, followed a succession of floor speeches by Republicans criticizing the stimulus as a bloated, wasteful spending bill.

But supporters of the measure said that a good, bipartisan effort had been made at drafting a compromise bill.

“I am proud of the bipartisan work that we have done during the last 10 days,” said Ms. Collins, who supplied one of the three crucial Republican votes. “As with any major legislation, this bill is not perfect, but it can go a long way toward creating jobs and addressing the dire economic crisis facing our nation.”

The majority leader, Senator Harry Reid of Nevada, said: “The United States senators from both parties met the seriousness of the economic crisis with an earnest approach to solving this emergency.”

With Mr. Obama in Indiana Monday afternoon to kick off a heightened effort to sell the stimulus plan to the public, Senate Democrats responded with their own speeches describing the bill as desperately needed to create millions of jobs and halt the recession. But for all the recriminations, it was unclear if Congress, in reconciling the Senate and House version of the bill this week, would take steps to ensure that it provides the quickest, most effective lift for the economy, or if lawmakers would simply take the path of least political resistance in rushing to get the bill to the White House by Monday.

Senate Republicans leveled their grievances amid an outcry by some House Democrats and governors and mayors from around the country, who accused Senate Democrats of caving to Republican demands by reducing the aid to states in the bill.

If the Senate approves the measure, as expected, negotiations to resolve differences with the $820 billion bill passed by the House are expected to focus in part on the Senate’s decision to cut $40 billion from a state stabilization fund.

That money, while not providing a direct lift to the economy, would reduce pressure on states for layoffs and service cuts that economists say would undercut the efforts by the stimulus bill to create jobs and spur consumer spending and business investments.

As it stands now, the Senate bill focuses more on tax cuts, while the House bill provides more aid to state and local governments. The Senate bill does not include $19 billion for school construction included in the House bill, reduces health insurance subsidies for the unemployed, and scales back Mr. Obama’s proposed middle class tax cut.

The Senate bill also includes nearly $70 billion to prevent millions of middle class families in 2009 from having to pay the alternative minimum tax, originally designed to impose minimum tax payments by the wealthy. Because Congress has made such an adjustment for years now, economists say the provision offers no new help to the economy.

Just as the Senate was voting, the Congressional Budget Office released a new analysis showing the total cost of the Senate version of the stimulus bill to be $838.2 billion over 10 years, of which $292.5 billion or roughly 35 percent is in the form of tax cuts.

The cost of the bill fluctuated slightly throughout the weekend, as Senate Democrats finalized the legislative language to reflect their deal late Friday night with the three Republicans.

After a week of the most open floor debate since Democrats won control of the Senate in 2006, the Republicans complained that they had still been largely shut out of developing the huge package of spending programs and tax cuts to revive the economy.

Senator Charles E. Grassley, Republican of Iowa, for instance, said that he and other Republicans had been prevented from offering amendments, including one that would place restrictions on an increased in federal aid to states for rising Medicaid costs.

“I’m not convinced the majority wanted to have open debate and take votes on many of these amendments including mine,” he said. “It’s too bad because this bill still can be made a bipartisan bill and this bill can still be made a more effective states.”

Senator James Inhofe, Republican of Oklahoma, complained that for all the spending in the bill, it does not provide a sufficient number of public works projects. ,

“If we’re going to spend all this money, let’s at least get something for it, provide some jobs and get some roads and highways and bridges, things this country really needs,” he said.

“This is the largest spending in the history of mankind, the largest spending in the history of the world,” Mr. Inhofe added. “It’s something that we should not let happen, but it is going to happen right down party line.”

The Republican leader, Senator Mitch McConnell of Kentucky, said he appreciated the more open floor debate but that it had not led to a bill that he could support. “Just because we get amendments doesn’t necessarily mean we will win them,” he said at a news conference.

“This package, had it been developed in genuine consultation, could have had a different result,” Mr. McConnell said. “But at the end of the day, it was — the administration decided — let the package be developed in Congress by the majority, and old habits die hard. You know, there was no meaningful consultation in the early part of the process. So if you don’t have that on the takeoff, you don’t end up having it on the landing.”

WASHINGTON -- President Barack Obama conceded Friday that his administration and lawmakers disagree on some of the details of the $825 billion economic recovery package being crafted in Congress, but said the legislation is on track to be completed by next month's Presidents Day weekend.

"We are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly," Mr. Obama said in brief remarks to reporters before a meeting with Congressional leaders from both parties. "Frankly, the news has not been good. Each day brings, I think, greater focus on the problems we're having, not only in terms of job loss but also in terms of some of the instabilities in the financial system."

Senate Minority Leader Mitch McConnell (R., Ky.) agreed that lawmakers should be able to get the stimulus legislation to Mr. Obama by mid-February, but told reporters that Congress will have to show "a good deal of restraint" to keep the bill "timely, temporary and targeted."

Friday's meeting at the White House comes amid mounting partisan division over the recovery package's components, with Republicans complaining that the plan is overloaded with unnecessary spending that will do little to break the economy out of its slump. Mr. Obama has pushed for bipartisan support of the package, but early indications suggest it could pass Congress with slim Republican support.

"I know that it is a heavy lift to do something as substantial as we're doing right now," Mr. Obama said. "I recognize that there are still some differences around the table and between the administration and the members of Congress about particular details on the plan."

GOP leaders presented their plans to Mr. Obama on Friday, though, saying that the situation is moving too rapidly to wait for next week.

Obama Says Stimulus Plan on Target

President Barack Obama, meeting with Congressional leaders at the White House, says an aggressive stimulus plan is on target for passage by mid-February. Video courtesy of Reuters.

The GOP plan, put together by House Republican Whip Eric Cantor of Virginia, includes proposals to reduce the lowest individual tax rates, allow small businesses to take a tax deduction equal to 20% of their income, and give home-buyers who can make a minimum down payment of 5% a credit of $7,500. House Republicans also said the bill should include a provision precluding any tax increases to pay for new spending.

"I'm concerned about the size of the package and I'm concerned about some of the spending that's in there. How do you spend hundreds of millions of dollars on contraceptives, how does that stimulate the economy?" House Republican Leader John Boehner of Ohio told reporters after the White House meeting.

The White House took issue with complaints that spending included in the legislation that passed the House Appropriations Committee on a party-line vote late Wednesday wouldn't stimulate the economy. Office of Management and Budget Director Peter Orszag told Senate Budget Committee Chairman Kent Conrad (D., N.D.) in a letter that 75% of the package would be spent over the next 18 months.

"There's no question that the president believes that the bill is stimulative," said White House spokesman Robert Gibbs. "Absolutely, it's stimulative."

According to a senior Republican congressional aide familiar with Friday's meeting, the president made it clear that the House bill is one that he supports. Republicans voiced their concerns generally about the level of spending in the stimulus plan, and in particular a provision that would in effect give a tax refund to lower-income Americans who don't currently pay any income taxes, the aide said. The president said he was committed to the refund remaining in the package.

The aide said Mr. Obama indicated he might be willing to consider including more financial assistance targeted at small-business owners than is currently included in the plan, and urged the Republican leaders to work with Lawrence Summers, who heads the National Economic Council.

Obama makes remarks on the economy during a bi-partisan meeting with members of Congress.

Mr. Obama will travel to Capitol Hill early next week to meet both Republican caucuses. Mr. Gibbs declined to predict how much GOP support the legislation would garner, or say whether the White House would be disappointed if few Republicans back the bill.

"The legislative process, as we all know, is a long and winding road," Mr. Gibbs said.

In addition to the stimulus package, the White House is hammering out its plan for the Treasury Department's rescue of the financial sector, which could exceed the $350 billion released by Congress last week. The administration has said it will devote $50 billion to $100 billion to addressing foreclosures. It is also considering ways to purchase banks' bad assets.

Mr. Obama also took aim at companies that receive government assistance from the Treasury, saying that accountability and transparency will be critical in his administration's approach to the financial crisis.

"Some of the reports that we've seen, over the last couple of days, about companies that have received taxpayer assistance, then going out and renovating bathrooms or offices or in other ways not managing those dollars appropriately, the lack of accountability and transparency in how we are managing some of these programs to stabilize the financial system, and a recent [Government Accountability Office] report that speaks to some of the problems of waste in our government -- those all have to be part and parcel of a reform package, if we're going to be responsible in dealing with this economic crisis," the president said.

Mr. Obama began receiving daily briefings on the state of the economy this week, a reflection of the recession's prominence in his agenda. He also plans to sit down with Treasury Secretary-designate Timothy Geithner on Friday, and hold another session on the economy at the White House on Saturday.