A resource from Vance Wealth
The Augusta Rule in a Box
Your complete toolkit for implementing the Augusta Rule the right way — powered by simplify365®.
What’s in this box
Everything you need to implement the Augusta Rule the right way
If you read about the Augusta Rule in The Simplify Day, you already know the opportunity: the tax code (IRC Section 280A(g)) lets you rent your home to your business for up to 14 days a year — tax-free to you, deductible to the business. And you know the catch: it only holds up if it’s documented properly.
This kit is the documentation system. It’s the same framework we use with our own clients at Vance Wealth through our simplify365® program.
- 01 What Is the Augusta Rule The strategy, the savings, and the compliance risks to avoid
- 02 The simplify365® Planning Day How your monthly planning day creates the business purpose
- 03 7-Step Implementation Process From reserving your 14 days to claiming the income correctly
- 04 Fair Market Value Analysis How to set a defensible daily rate
- 05 Sample Planning Day Schedule A full-day structure you can follow
- 06 Sample Rental Agreement A starting template to adapt with your attorney
How to use this kit
Read it through once, then use the 7-step process as your checklist. Bring the rental agreement and fair market value analysis to your CPA or attorney before you file. The Augusta Rule rewards preparation — this kit is how you prepare.
The strategy
What is the Augusta Rule?
The Augusta Rule, also known as IRC Section 280A(g), allows homeowners to legally rent out their home to their business for up to 14 days per year, resulting in a sizable tax deduction.
By renting your home to your business, you can deduct the rental payments on the business tax return while avoiding tax on your personal return under Section 280A(g).
How the math works
Essentially, this is a tax-free distribution out of the company.
Potential compliance risks
The deduction only holds up when these three are handled properly — the rest of this kit shows you how.
- Not having a business purpose
- Not having documentation to support the business purpose
- Determining fair market value rent
You’ve earned it. Let’s make sure you keep it.
The business purpose
The simplify365® Planning Day
Many successful business owners take time to focus on their business, not just in their business. That’s why we recommend a simplify365® Planning Day once per month, away from your business, to gain clarity, review goals, and work on the most important issues to simplify your life.
Unfortunately, many business owners struggle to build this purposeful schedule into their lives — juggling work and family demands instead of being the best version of themselves.
John Wooden put it well: “Don’t mistake activity with achievement.” Use a simplify365® Planning Day to strategically plan for your business and Achieve More!
Your implementation checklist
The 7-step implementation process
Work through these seven steps in order — and bring this list to your CPA or attorney before you file.
-
1
Reserve your 14 days
Decide how your business will rent your home, block the days on your business calendar, and hold the meetings at your primary residence.
- simplify365® Planning Day / monthly business planning meetings = 12 days
- Annual officer’s / minutes meeting = 1 day
- Annual planning / staff appreciation day = 1 day
- Don’t use the house for clients, entertainment, or personal reasons on these days
- Consult your tax professional about all the limitations and requirements
- Do not exceed 14 days
-
2
Create an agenda and take detailed notes
Documentation is essential in establishing the business purpose. Keep an agenda plus thorough notes for each day showing the work accomplished.
-
3
Get comparables
Charge the business in line with comparable full-day options in your area — for example, ask a local hotel what it charges for a full-day suite rental. Use the Fair Market Value Analysis in this kit.
-
4
Put a rental agreement in place
It’s best practice to have a rental agreement equivalent to the daily rent charge. Start from the sample agreement in this kit, match the daily rate to your comparables, and update it annually.
-
5
Invoice the business
Personally invoice your business for the daily rental rate based on your comparables. We recommend the business pays rent on a regular basis.
-
6
Issue a 1099-MISC
At year-end, the business confirms all invoices have been paid, then issues you (the homeowner) a 1099-MISC.
-
7
Claim the income correctly
Report it on your individual return as “non-taxable income under IRC Section 280A(g).” This shows the IRS you’re following the guidelines. Leave no room for mistakes — confirm your tax professional doesn’t include it as taxable income.
Always consult your own qualified tax and legal professionals before implementing the Augusta Rule.
Sample structure
Your Planning Day
Effective leadership requires you to perform at your best with healthy personal habits such as rest, nutrition, exercise, and stress reduction. It means intentionally taking care of yourself; otherwise, the stress and chaos of everyday life may affect your ability to lead the way you want to.
Use this structure to gain clarity, review goals and work on the most important issues.
- Mental focus – meditation, mindfulness, positive affirmations
- Commit to continuous growth – read a book or listen to a podcast
- Review goals: personal & family, evaluate progress
- Review business goals
- Identify 3 important issues to work on for the day
- Set your agenda for the day
- Health – exercise, snack, movement
- Work through issue #1
- Lunch
- Work through issue #2
- Refresh – break, stretching, walk
- Work through issue #3
- Summary and follow-up commitment (30 minutes)
Toolkit components
Set your rate and paper the rental
Two worksheets in the PDF kit turn the strategy into documentation. Fill them in, then bring them to your CPA or attorney before you file.
Fair Market Value Analysis
Set a defensible daily rate by comparing hotel suite estimates with a home rental estimate, then record your decision as President/Owner. When choosing the location for your Planning Day, weigh:
- Hotel suite: needs adequate workspace and a conference table, a two-night stay for a full workday, drive time, and two evenings away from family
- Your home: work from the comfort of home, amenities readily available, no driving — start right away
- Your home: lets you implement IRC 280A(g)
Sample Rental Agreement
A starting lease between you (landlord) and your business (tenant) for the dwelling, adapted with your attorney for your situation and state. It covers:
- Term from January through December 31 at a set daily rate, for a total of fourteen days
- Appliances provided, insurance responsibility, and one-day written notice
- Acknowledgment plus landlord and tenant signature lines
When you’re ready
Want help putting this into practice?
The Augusta Rule is a great place to start — but it’s just the entry point. Most business owners are leaving far more on the table across their full tax picture.
- We look at your lifetime tax strategy, not just this year’s return
- We coordinate the whole team so nothing slips through the cracks
- See if you qualify for the simplify365® program
Book a consultation
See if you qualify — tell us a little about you and we’ll be in touch.
We’ll only use your details to respond to your request. We never sell or share your information.