If you’re a parent entrepreneur who owns a home, this might just be one of the most powerful tax strategies you’ve never heard of: The Augusta Rule.
Also known as IRS Section 280A(g), the Augusta Rule allows homeowners to rent out their residence for up to 14 days per year without having to report that rental income. And yes—this applies even when you’re renting your home to your own business.
Let’s break this down in plain English and show you exactly how to take advantage of it (the right way).
💡 What is the Augusta Rule?
The rule got its nickname from Augusta, Georgia—where homeowners would rent out their homes to attendees of the Masters golf tournament. The IRS created this exception to allow homeowners to earn short-term rental income without the hassle of filing rental income taxes—as long as it’s under 15 days per year.
But here’s the entrepreneurial twist: if you own a business, your company can be the one renting your home.
💼 How Business Owners Use It
Say you’re a coach, consultant, content creator, or small business owner. You sometimes hold:
- Team strategy sessions
- Client meetings
- Content planning days
- Workshops or VIP days
at your home.
You can have your business rent your home for these events, and as long as you meet the criteria, the payments are:
✅ A business expense for your company
✅ Tax-free personal income for you
Boom. Win-win.
✅ The Steps to Do It Right
Let’s keep this simple. Here’s what to do:
- Determine the Fair Market Rental Rate
Research local short-term rental rates for your home (Airbnb or Peerspace can help).
Example: $500/day for a similar setup in your area. - Document the Business Purpose
Keep a log of what the day was used for.
“Strategy meeting to map out next quarter’s content calendar” = gold. - Create an Invoice From Yourself to the Business
Yes, make it legit. Use a simple invoice template and keep it in your records. - Write the Check from the Business
Your biz writes the check to you (or to you and your spouse if co-owned). - Do Not Report That Income on Your Personal Taxes
As long as you stay under 15 days per year, it’s tax-free.
🛑 What NOT to Do
🚫 Don’t overinflate the daily rate. Be reasonable and research-based.
🚫 Don’t skip documentation—this is what protects you in an audit.
🚫 Don’t go over 14 days—day 15 makes all of it taxable.
🤔 Real-Life Example
Niya, a parent entrepreneur and coach, holds quarterly planning retreats in her home office. Each retreat day, her business rents her home at $400/day. She does 12 of these a year = $4,800.
→ Her biz deducts $4,800 as a rental expense
→ She pays zero tax on that income
→ And she’s using her already-owned space, legally and efficiently
🧠 Is This Right for You?
If you’re running your business from home, and you regularly host client or team events, this rule can be a game-changer.
Just be sure to:
- Keep clean documentation
- Use fair rates
- Stay under the 14-day rule
Talk to your tax pro (or me!) to set it up the right way.
📌 Final Thoughts
The Augusta Rule is one of those rare tax strategies that’s both powerful and simple. If you’re a parent entrepreneur looking for legal ways to keep more of your hard-earned money, don’t overlook this.
You’re already using your home—now make it work harder for you.
