Getting started

Your Augusta Rule, documented properly

What the rule is, what the IRS expects, and how to get your year documented in a few minutes.

01

What the Augusta Rule is

Your business rents your home for a real meeting and pays you the going local rate. The business writes that rent off as an expense. You take the rent into your personal account like any other landlord would, and you never report it as income.

Up to 14 days a year. Both halves of this sit in IRS Section 280A(g). What decides whether it holds up is the paperwork behind it.

How a business owner uses it

You already hold meetings. Hold some at home and take the tax free income. Team meetings, planning sessions, client events, annual reviews, and board meetings are all eligible examples.

The business pays you rent for the use of your home. That rent is a normal deductible business expense, so it reduces your business income and lowers your business taxes. On your personal 1040, up to 14 days of business rental income is not included at all. It is 100 percent tax free.

The part people get wrong

Not the idea. The documentation. A rate you guessed at, with no lease and no record of the meeting, is the version that does not hold up.

02

What the IRS expects

The rent has to be a fair market rate. Do not guess, and do not call every hotel in your area. We generate the reports for you with audit resistant proof of the hourly rate for your home and your neighborhood.

You also need good documentation and a lease contract. We provide the template lease agreement in all 50 states, so there is no third party site and no extra work needed. We walk you through a simple interview built to save your time and document each event. With good meeting notes, an entire year of event interviews can take 15 minutes or less.

  • A fair market rate. Comparable event space rates near your home, with the source of each one.
  • A written lease. Between you and your business, for each use of the home.
  • A record of each event. The date, the purpose, and who was there.
  • The 14 day limit. Counted across the whole tax year.

03

What you get

We provide the comps for your home with a low, high, and average value around your home, an easy interview that documents all your events in a single PDF, and the lease agreement between you and your business.

You get a clean set of documents to hand your accountant, and it includes everything. The comps, the events noted, and the lease agreement. There is no guessing about how you reached the final dollar amount.

What is in your report

  • The comparable rates we found near your address, with the source of each one
  • The low, average, and high of those rates
  • The daily rate your figure is based on
  • The dates your business used your home
  • The total tax free income for the year
  • A lease agreement between you and your business

04

How it goes, step by step

  • Tell us about your business and your home. Your business name, your address, and the tax year you are documenting.
  • We pull the comparable rates. Real event space rates near your address, with the low, average, and high, and the source of each one.
  • Answer the event interview. For each meeting: the date, what it was for, and who attended. With your notes handy this is the short part.
  • Sign the lease. We generate the lease agreement between you and your business, in your state. You sign it online.
  • Download the whole case. Your events, your signed lease, and the comps that back the rate, in one PDF you can hand to your accountant.

05

Before you start

None of this is hard to find, and having it ready is what turns the interview into a few minutes instead of an afternoon.

  • Your business legal name and entity type
  • The address of the home you are renting to the business
  • The tax year you are documenting
  • The dates you used the home for business, up to 14
  • What each meeting was for, and roughly who was there
  • Your meeting notes, if you kept any

Keep this with your tax records

Your finished case PDF is the record. Keep it with your return for the year, the same way you would keep any other supporting document.

When this does not cover it

Email us and a person reads it. Tell us your business type and what you are stuck on. We are not a tax advisor and this guide is not tax advice, so bring the documents to your own accountant and let them place it.

support@augustaforbusiness.com