The Homestead Exemption is just a break on local property taxes, and different states have different ways of doing it.
On your Federal income tax, you can either take standard deduction or itemize your deductions, whichever is greater. As a home owner, your mortgage interest (but not the part of the payment that goes to principal) and your local property taxes can be taken as itemized deductions, also state income tax (if any) or sales (but not both), charitable contributions, etc. There are categories for miscellaneous and medical deductions, but they have threshhold tests. You have to prepare a Schedule A, and you might want to download the instructions from the IRS site. Total all your deductions, and see if they exceed your standard. For homowners, they usually do.
9/11/2001 - You have awakened a sleeping giant, and filled him with a terrible resolve. - paraphrased from Yamamoto