Step-by-step · 3 min read
Augusta rule
If you rent your home for fewer than 15 days in a year, the rent is not taxable to you. When your business rents your home for genuine business use, the business may deduct the rent. Done properly, it moves income from the business to you tax-free.
The rule is named after homeowners near Augusta, Georgia, who rent their homes during the Masters golf tournament. The documentation is what makes it work.
- Who it fits
- Business owners who hold real meetings or events that could be held at home.
- Usually not a fit
- W-2 employees without a business, and owners who cannot show a real business use.
- Figures
- 2026 tax year
The key rule
Up to 14 days a year, at a fair market rate, for a real business purpose, with records to prove it.
6 steps
Plan real business uses
Board meetings, planning days, team off-sites, training or client events. Each needs an agenda, attendees and a reason to meet.
Document fair rent
Get two or three quotes for comparable local event space or meeting rooms for the same group size and length of time. Save screenshots with the date.
Write a rental agreement
A simple agreement between you and the business listing the dates, rate and space used.
Hold the meeting
Keep minutes or notes, the attendee list and photos.
Pay from the business account
The business pays you by check or transfer after an invoice, and books it as rent.
Keep a file per event
Agenda, attendee list, notes, photos, quotes and the invoice. That file is your support if the IRS asks.
Example
Quarterly planning days
Your S corp holds four quarterly planning days at your home with your team. Local meeting space for that group costs about $1,500 a day. The S corp pays $6,000 in rent and deducts it; you receive $6,000 tax-free.
Common mistakes
- Do not issue yourself a 1099 for the rent.
- Going over 14 days makes all the rent taxable.
- Using inflated rates, like a luxury venue price for a small meeting.
- Family dinners or holiday parties are not business meetings.
Questions we hear
Does this work for a sole proprietorship?
It is weaker, because you would be paying yourself. It works best with an S corp, C corp or partnership.
What to send us
- Rental agreement
- Rate quotes
- Agenda and notes for each day
Upload them to your client portal.
General education for TaxSquad clients, not advice for your situation. Rules and figures change. Talk to us before acting on this guide.