Tax Benefits of Building Your Own Home
Tax Tip – Sales Tax Deduction
If you file a Form 1040, and itemize deductions on Schedule A, you have the option of claiming either state and local income taxes or state and local sales taxes. (You can’t claim both.) If you saved your receipts throughout the year, you can add up the total amount of sales taxes you actually paid and claim that amount. This information and more can be found here. Think of all you’ll have to buy and pay sales tax on for your new home!
Save every receipt from Home Depot, Lowes, building suppliers, etc. If your sub-contractor buys your wood for framing, make sure you get the receipt so you can deduct the tax. I was amazed at the amount of sales tax I paid while building my home and quite happy to add over $10,000 to my other deductions for the year. Just another reason to build your own home and another way for your family to keep more of their hard earned money.
If you are familiar with MS Excel, I provide a free template and instructional video that you may want to download and use to keep track of your sales taxes. At the end of the year it will come in handy. Happy building!!
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