Here is a silly question. I am planning on building a 12'x16' shed
with 1/2" OSB sheathing. When I build the frame, should the actual
dimensions be 12'x16' or should it be 1 inch less in each dimension to
account for the 1 inch of OSB? Thanks for the help.

You're in luck; this was a topic at last night's Habitat for Humanity
volunteer meeting.

The measurement is 12 (or 16) feet, outside to outside of the corner
studs.

Start with the edge of the sheathing even with the edge of the corner
stud. Measure over four feet. This is the _center_ of a stud. Now
measure over eight feet. That, again, is the _center_ of a stud.

The tendency is to put the _edge_ of a stud at the 4- and 8-foot marks,
because, after all, the studs go every 16 or 24 inches, right? If you
do that, you wind up with the edge of the sheathing floating right
*next to* the stud.

The important studs are the ones at 4- and 8-foot intervals. All the
rest just need to be spaced at 16 inches, more or less.

Note: The sheathing will not form a butt joint at the wall corners.
That's OK--it'll all be covered by siding and trim.

--
Steve Bell
New Life Home Improvement
Arlington, TX USA