How the Augusta Rule Can Save You Money on Taxes — Legally

Did you know there’s a tax rule that allows you to earn rental income without paying taxes on it? It’s called the Augusta Rule, and it’s one of the best-kept secrets in the tax code — especially for business owners.

Let’s break it down, Be Wealth style.

What Is the Augusta Rule?

The Augusta Rule is a nickname for Section 280A(g) of the IRS tax code. It allows homeowners to rent out their home for up to 14 days per year — and not report that income on their taxes.

That’s right: 100% tax-free income.

This rule was originally created for residents of Augusta, Georgia, who would rent out their homes to golf fans during the Masters Tournament. But the rule applies to any homeowner in the U.S., as long as the conditions are met.

How It Works

Here’s how you can legally use the Augusta Rule to your advantage:

1. You own a home (not just your primary residence — even vacation homes count).

2. You rent it out for 14 days or less during the year.

3. The rental rate must be reasonable and fair market value.

4. You don’t use it as a rental property the rest of the year.

As long as you meet these rules, you don’t have to pay taxes on that rental income, and you don’t have to report it to the IRS.

How Business Owners Use the Augusta Rule

Here’s where it gets smart.

If you own a business (LLC, S Corp, or C Corp), you can rent your home to your own business for things like:

• Team meetings

• Strategic planning sessions

• Training days

• Content creation sessions

The business gets a tax deduction for the rental expense. You get tax-free income — and the IRS is okay with it.

Let’s say your business pays you $1,000 per day to use your home for 10 days in the year. Your business deducts the $10,000 as a business expense. You, as the homeowner, don’t report that $10,000 as income.

Win-win.

Things to Keep in Mind

• Keep good documentation: Have a rental agreement, take meeting notes, and show proof the meeting actually happened.

• Don’t go over 14 days. Once you hit day 15, all the income becomes taxable.

• Get help from a tax professional to determine a fair rental rate based on local comps.

Why the Augusta Rule Matters

This rule is a great way to reduce your business’s taxable income while also putting money in your own pocket — tax-free. It’s one of those strategies that shows how the tax code rewards those who understand it.

At Be Wealth, we’re here to make sure you do.

Final Thought

The Augusta Rule isn’t a loophole — it’s a legal, IRS-approved strategy. Whether you’re a business owner or a homeowner, it’s worth looking into.

Remember: the more you know about how money and taxes work, the more wealth you can build — the smart way.

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The information shared here is for educational purposes only and should not be considered personalized tax or financial advice. Individual situations vary, and tax rules can change. Always consult with a qualified professional before taking action.