Do you want to build a custom home? There are different tax credits for new custom home building that could help alleviate some of the construction costs.
There are two kinds of tax breaks that are available for you. They are tax credits and tax deductions. A tax deduction will lower the amount of your annual taxable income while a tax credit will deduct a specific tax bill amount dollar for dollar.
As you can see, it’s more valuable to have a tax credit. Listed below are some of the tax breaks available for owners of custom homes Myrtle Beach.
Construction Loan Interest
During the first 24 months of your construction loan, you can take out the interest payments from the tax bill. But this will only apply if the finished custom home will be your main or secondary home. It will also apply to the first $1 million of the loan. In case you are married and you’re making separate filing, the amount will be lowered to $500,000.
State Sales Tax Deduction
Individual municipalities and states offer green tax breaks for homeowners who are qualified. They are provided in the form of tax deductions and tax credits. The most common of the tax breaks are savings for the installation of AC units, wall insulation, and solar panels. You have to remember that the qualifying requirements differ between locations. A few tax credits are applicable only to commercial buildings instead of custom homes in Myrtle Beach.
Check with your municipality or state to know more about what programs are available.
Tips For Claiming Tax Breaks
If you file taxes on the internet, it is easy to claim Federal tax deductions and tax credits. If you want to get these deductions, you will have to itemize, which will prevent you from getting the standard deduction. Be sure to calculate if it is worth itemizing since the standard deduction is more than $12,000. Lastly but not the least, if you are claiming any kind of IECC credit, you have to fill out the IRS Form 8908.