Everyone knows that owning a home is the American dream, but did you know that borrowing to pay for one is a taxpayer's dream? Home mortgage interest is deductible on your income taxes if you itemize. You can deduct the interest on up to one million dollars of home mortgage debt, whether it is used to purchase a first or a second home. You can also deduct the interest on up to $100,000 of home equity debt, even if you don't use the money for home improvements. Real estate taxes are deductible as well. With the availability of these tax deductions, you should consider whether borrowing on a home is right for you.

Check with your accountant on the feasibility of these deductions and others available to home owners.

Interest and Points
You can deduct the interest and points on some loans, but not all. (A point is a charge you pay in order to get a home mortgage; if you can deduct the interest on your mortgage, you can usually deduct the points, as well.)

Whether or not you can deduct the interest you pay on a loan depends on what the loan is for and sometimes how the loan is secured.