Let me tell you about the quietest $28,000 you can legally pull out of your business every year. Tax-free.
No offshore accounts. No crypto schemes. No “trust me, bro” advice from Instagram. Just a 40-year-old provision in the IRS code that most business owners have never heard of, and the ones who have are too nervous to use it.
It’s called the Augusta Rule. And if you run a business and own a home, you’re leaving money on the table every single year.
The Story That Makes It Click
Imagine this: You own a consulting business. Four times a year, you host strategy sessions with your team, your advisors, or your clients. You need a professional space. You need privacy. You need the right setup.
So you rent your home for the day.
Not to a stranger. To your business. You draft an agenda. You bring in catering. You set up whiteboards in the living room and run a full-day working session. At the end of the event, your business writes you a check for $2,000 (the fair market rate for renting a comparable space in your area).
Your business deducts the $2,000 as a legitimate rental expense. You? You don’t report a dime of that income. It’s completely tax-free.
Do that 14 times a year (the limit on the Augusta Rule), and you’ve just moved $28,000 from your business to your personal account, legally, cleanly, and without triggering a single red flag.
That’s the Augusta Rule.
What It Actually Is (And Why It Exists)
The Augusta Rule comes from IRC Section 280A(g), and it was designed around – you guessed it – the Masters Tournament in Augusta, Georgia.
Every April, homeowners near Augusta National rent their houses to golf fans for a week. The IRS recognized that these short-term rentals weren’t really a business. They were more like occasional windfalls. So they created a carve-out: if you rent your home for 14 days or fewer per year, you don’t have to report the income.
What most people miss is that this rule doesn’t just apply to strangers renting your house during a golf tournament. It applies to anyone renting your home. Including your own business.
Your LLC can rent your house for a board meeting. Your S-corp can rent your backyard for a client event. Your business can pay you fair market rent, take the tax deduction, and you pocket the cash without reporting it as income.
It’s not a loophole. It’s not aggressive. It’s literal IRS code, written in plain language, and it’s been on the books since 1976.
So why doesn’t everyone use it?
Because it sounds too good to be true. And in the world of taxes, people are conditioned to think that anything that feels like free money must be illegal.
How It Works (The Clean Execution)
Here’s the game plan, step by step:
1. Identify legitimate business reasons to use your home.
This isn’t about faking meetings. It’s about recognizing the real ones you’re already having and structuring them correctly. Board meetings. Strategic planning sessions. Client workshops. Executive retreats. Team offsites.
If you’re bringing people together to do real business work, that’s a rentable event.
2. Determine fair market rent.
You can’t just pull a number out of thin air. Go to Airbnb or VRBO and search for comparable properties in your area. What would it cost to rent a similar home for a day? That’s your baseline.
If comparable homes rent for $1,500-$2,500 per day, you’re in the safe zone. If you try to charge your business $10,000 for a half-day meeting in a 1,200 square-foot house, you’re asking for trouble.
3. Document everything.
This is where most people lose. They use the rule, but they don’t create the paper trail. Big mistake.
You need:
- A rental agreement between you and your business
- A meeting agenda for each event
- Photos of the setup (tables, whiteboards, catering, attendees)
- Invoices sent from you to the business
- Payment records showing the business paid you
- Board minutes or internal notes that reference the event
If the IRS ever asks, you want to hand them a file that makes it obvious this was a real business event, not a backyard BBQ you tried to write off.
4. Stay within the 14-day limit.
You get 14 rental days per year. Not 15. Not “well, technically it was only half a day, so does that count as 0.5?”
14 full days. Period. If you go over, you lose the tax-free treatment on all the income, and now you’re reporting it as rental income and dealing with depreciation recapture and a mess you didn’t need.
Stay disciplined. Track it. Don’t get greedy.
The Mistakes That Turn Gold Into Garbage
The Augusta Rule is clean when done right. But it falls apart fast when people get sloppy. Here’s what not to do:
Don’t skip the documentation. If you can’t prove the event happened, the deduction dies. Take this seriously.
Don’t charge a ridiculous rate. Your home isn’t the Ritz-Carlton. Price it like a reasonable short-term rental in your market, not like you’re funding a yacht.
Don’t use it for personal parties. Your kid’s birthday party isn’t a board meeting. Your anniversary dinner isn’t a client event. The IRS isn’t stupid, and AI is very good at spotting patterns that don’t make sense.
Don’t confuse this with home office deductions. The Augusta Rule is separate. You can still take a home office deduction if you qualify, but these are two different plays. Don’t mix them up.
Why This Matters Even More Right Now
Here’s the thing: the Augusta Rule has always been legal. But enforcement is about to get a lot more precise.
The IRS is deploying AI across 68 projects aimed at identifying inconsistencies, flagging unusual deductions, and automating audit selection. That doesn’t mean you should be scared. It means you should be prepared.
AI doesn’t care if you’re using the Augusta Rule. But it will care if your business writes off $28,000 in “consulting fees” with no backup, or if you’re deducting rental expenses that don’t match any documented events.
The future of tax strategy isn’t about hiding. It’s about playing clean at a higher level.
The Augusta Rule is a perfect example: it’s aggressive in results, conservative in execution, and completely defensible if you do it right.
When the IRS upgrades its instruments, the people who suffer are the ones playing sloppy. The people who win are the ones who are already playing with precision.
The Real Power Move
Most business owners think tax strategy is about minimizing what you owe. That’s part of it. But the real power is in legally moving money where it’s treated best.
The Augusta Rule lets you move cash from a taxed environment (your business) to a tax-free environment (your personal pocket) without changing anything about the substance of your work. You were already having these meetings. You were already using your home. You just weren’t structuring it correctly.
That’s not a hack. That’s mastery.
And here’s the beautiful part: once you see how this works, you start to see the entire tax code differently. It’s not a trap. It’s a blueprint. The rules are written to reward people who understand how to use them.
The Augusta Rule is one brick. But it’s a clean, solid, well-documented brick that shows you how the whole castle gets built.
The Bottom Line
You can pull up to $28,000 per year out of your business, completely tax-free, using a strategy that’s been IRS-approved for nearly 50 years.
Your business gets the deduction. You get the cash. The IRS gets nothing to complain about; as long as you document it properly and price it fairly.
This isn’t about hiding anything. It’s about playing the game right. And the Augusta Rule is one of the cleanest, clearest wins most business owners are missing.
So the question isn’t whether you can do this. The question is: why haven’t you started yet?