TAX-FREE INCOME WITH THE AUGUSTA RULE
BONUS: FANTASTIC WEALTH TRANSFER TOOL
- Tax Deduction for Your Business
- Tax-Free Rental Income Personally up to 14 Days
- Average Savings- $14,000 Plus
- The Deduction is Even Better In High Rental Rate Locations.
Determine If You Qualify for the Augusta Rule
The Augusta Rule is a tax strategy under IRS Section 280A that some business owners can use to save money for their business while getting a significant tax deduction. This rule allows someone to rent their home tax-free for 14 days or less a year. As with most tax strategies, you must meet the requirements and keep meticulous records.
The Augusta Rule can be applied in many scenarios and used anywhere in the U.S. The tax strategy comes from the original scenario, where residents of Augusta, Georgia, rented out their homes during the annual Masters Tournament. While not originally designed to allow a business owner to rent their home or other property to their business, it applies nonetheless.
Know The Rules
The first step in implementing this tax strategy is to know the rules. First, the rent must be a reasonable amount supported by market research. An online search for similar properties is sufficient. Second, the property must be in the U.S. So long as the home or vacation home you own is not your primary place of business, you can’t rent your vacation home in another country. Third, the total days rented for the year must be 14 or less per property.
Document The Payments
It’s not enough to follow the rules to qualify for this credit. You must also correctly document the rent payments. When you rent to your business, always have a formal rental agreement. The company must issue a 1099-MISC to you for the amount that was paid. The rent income must be claimed on your tax return and excluded under IRS Section 280A (the Augusta Rule). Follow the proper documentation for these payments to navigate an audit successfully.
Substantiate The Activity
In addition to knowing the rules and documenting the payments, you must be prepared to substantiate the business activity during the rental days, including meeting minutes, daily agenda(s), attendee list(s), pictures, etc. The more you can substantiate, the better. This is even more important for smaller businesses where retreats or board meetings are informal.
Beware Common Pitfalls
There are many ways the IRS can disallow this strategy in an audit. For example, if you also get paid rent for your home office, you’ll likely violate the 14-day rule. To overcome this, you must use an accountable plan to avoid generating more rental income. Other pitfalls include a lack of substantiating evidence or a deficiency in tracking and documenting the rental payments. Furthermore, you can’t use this strategy if your home is your primary place of business.
The Augusta Rule is a complex tax strategy with many rules and requirements. However, the setup for this tax strategy only needs to be done once, and then you can execute it perpetually. In addition to the tax savings, it’s also a nice way for your business to save money renting conference rooms and other accommodations for company events.
The Augusta Rule is just one of our tax planning tools.
Here’s how our in-depth tax planning process works.
Initial Consultation
We start with a one-on-one consultation to understand your financial goals and tax situation. This helps me get a clear picture of where you stand and sets the stage for building a tailored plan that aligns with your needs.
In-Depth Financial Review
I then conduct a thorough review of your finances, analyzing income, expenses, investments, and existing tax strategies. This step reveals opportunities for savings and improvement, forming the foundation for a successful tax plan.
Tailored Tax Strategy
Next, I design a personalized tax strategy that maximizes deductions, minimizes tax liabilities, and ensures compliance with the latest tax laws. My goal is to help you save as much as possible while reducing stress around tax planning.
Full Implementation
Once the strategy is crafted, I will take care of the entire implementation process. You can trust me to handle the complexities, allowing you to focus on what matters most while I execute your tax plan seamlessly
Quarterly Reviews
I provide quarterly reviews to track progress, make adjustments, and ensure that your strategy remains effective. This proactive approach keeps you ahead of any changes and ensures that your financial plan stays on track.
Ongoing Year-Round Support
My support doesn’t stop there! I offer year-round guidance, alerting you to any tax law changes and refining your strategy as needed. With my ongoing support, you’ll always be informed and ready for any tax challenges ahead.
WE REVIEW FOR APPROXIMATELY 1,500 TAX PLANNING OPPORTUNITIES
Below are Just a Few of the Broader Tax Planning Opportunities That We Review
Cost
Segregation
Below are Just a Few of the Broader Tax Recovery Opportunities That We Review
Entity Structuring Review
Entity structuring analysis is the process of evaluating how an organization or business is structured. The structure a business chooses at the beginning of its existence will determine its legal obligations, tax burdens, financial operations, strategic planning, and operational processes.
Overlooked or Underutilized Deductions
Our income tax professionals review past returns, looking for missed opportunities. We have a vast database of the typical deductions broken down by industry to determine if the client utilizing ALL available deductions.
Review Accounting Methods
Proper management and classification of fixed assets are critical to an organization’s tax management and compliance objectives. Improper capitalization of fixed assets can substantially negatively impact an organization’s balance sheet, resulting in missed tax savings and added compliance risks.
Our Fixed Asset Review Service provides a comprehensive analysis of fixed assets to determine current asset classifications, ascertain depreciation reported in prior tax returns, and identify potential asset reclassification to ensure every appropriate tax deduction available is claimed.
Fixed Asset vs. Repairs Review
Proper management and classification of fixed assets are critical to an organization’s tax management and compliance objectives. Improper capitalization of fixed assets can substantially negatively impact an organization’s balance sheet, resulting in missed tax savings and added compliance risks.
Our Fixed Asset Review Service provides a comprehensive analysis of fixed assets to determine current asset classifications, ascertain depreciation reported in prior tax returns, and identify potential asset reclassification to ensure every appropriate tax deduction available is claimed.
Tax Credits and Incentives Review
Our tax credit specialists will look for credits and incentives such as the Federal and State Research and Development Tax Credit (R&D), Work Opportunity Tax Credit (WOTC), Section 45L, Section 179D, Energy Investment Tax Credit, Disaster Zone Employment Retention Tax Credit, Federal and State Employment Zones Tax Credit, Differential Wages Tax Credit, FICA Tip Tax Credit, Small Employer Retirement Plans Startup Costs Tax Credit, and Small Employer Health Insurance Premiums Tax Credit. As opposed to deductions, tax credits are actual dollar-for-dollar federal and State credits available to businesses of any size. Many companies are unaware of the broad scope of activities that qualify for these credits. Evolving statutes, IRS regulations, and court cases continue to credit credit and incentive programs for an ever-widening range of qualified businesses.
Allow Us to Determine If You Are Substantially Overpaying On Taxes
AND STOP OVERPAYING
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