6 Ways the Augusta Rule Saves Business Owners Money the IRS Actually Allows
Sam's List Editorial | 2026-06-23
6 Ways the Augusta Rule Saves Business Owners Money the IRS Actually Allows There's a tax break named after a golf tournament, and most business owners have never used it. The Augusta rule tax strategy comes from IRC Section 280A(g). It started with homeowners in Augusta, Georgia, who rented their houses to Masters spectators for a week and paid zero tax on the income. Congress wrote that exception into the code, and it applies to you too. Here's the part nobody mentions: you can be both sides of that rental. Your business rents your home. The business deducts the rent. You pocket the money tax-free. The catch is that almost everyone does it backwards and loses it in an audit. Here are six ways to use it the way the IRS actually allows. 1. Rent your home to your own business for up to 14 days, tax-free This is the whole engine. Section 280A(g) says if you rent a dwelling you also use as a residence for fewer than 15 days in the year, you don't report that rental income at all. No Schedule E. No 1099 to yourself. Nothing. Your business, meanwhile, deducts the rent as an ordinary business expense. So one payment does two jobs: it moves money out of a taxable entity and into your pocket without ever getting taxed on the way. Fourteen days is the ceiling. Day 15 and the entire year's rental income becomes taxable, so this is a strategy where you stop one short on purpose. 2. Use a defensible rate — and turn 14 days into a real $21,000 deduction The number that matters is the daily rate, and it can't be a guess. Consider a typical example. A founder gets a written quote from a local hotel or event venue: a private meeting room with catering and AV runs $1,500 a day . That's the comparable. Rent your home to your business for 14 board and planning days at that rate and the math is clean: 14 days × $1,500 = $21,000 deductible to the business, $0 of taxable income to the owner. For an S-corp owner in a combined 32% bracket, a $21,000 deduction is roughly $6,700 that stays in the household. The rent isn't a gift — it's payment for real space the business genuinely used. 3. Hold meetings the business would actually have anyway The IRS wants a real business purpose, not a paper one. The good news is that solo and small-business owners hold legitimate meetings constantly — they just hold them informally. Formalize them at home and they qualify: Quarterly board or strategy meetings — even a single-owner S-corp can hold an annual meeting of directors. Annual planning retreats — your own offsite, hosted onsite. Team or contractor work sessions — bringing your people...
