The Augusta Rule: How to Pay Rent to Yourself Tax-Free

Johnathan Wood
Oct 10, 2025
3 min read

Updated: Oct 21, 2025

If you own a business generating $500K–$5M in revenue, you’re likely paying the IRS far more than you should.

One of the most overlooked strategies for high-income entrepreneurs is the Augusta Rule. This simple yet powerful tactic allows you to legally pay rent to yourself and deduct it from your business.

Here’s how it works.

What is the Augusta Rule?

The IRS permits you to rent out your personal residence for up to 14 days per year. You can exclude that rental income from your taxable income. This means your business can pay you rent, allowing your business to get the deduction while you personally receive the money tax-free. It’s one of the cleanest, most straightforward tax strategies available to business owners.

A Real Example: Kimberly’s Mastermind Events

Kimberly runs a successful business and regularly hosts mastermind networking events at her home. Before working with us, she never charged her business for the use of her property. That meant she was leaving money on the table every year.

We stepped in and applied the Augusta Rule. By having her corporation rent her home for 10–12 events annually, she was able to deduct $12,000+ from her business while collecting that same amount tax-free.

How Entrepreneurs Use It

The Augusta Rule works for:

Board meetings (hold them at your house instead of a rented venue)
Team retreats (host staff strategy sessions at your home)
Client events (think dinners, masterminds, workshops)

As long as it’s a legitimate business use and documented properly, you unlock a deduction and receive tax-free income.

Why Most CPAs Miss This

Most CPAs focus on compliance, not strategy. They file your returns correctly but often fail to ask:

👉 “How can we make the IRS code work for you?”

The Augusta Rule is written right into the law, yet it’s ignored by 9 out of 10 entrepreneurs simply because no one told them about it.

Quick Breakdown

| Business Pays | $1,000 per meeting (x12) |

|--------------------------------------------|-------------------------------|

| Deduction for Business | -$12,000 |

| Personal Taxable Income | $0 |

| Total Tax Savings | $3,000–$5,000+ (depending on your bracket) |

That’s money you can reinvest into marketing, growth, or wealth-building instead of handing it to the IRS.

The Bottom Line

The wealthy don’t just work harder—they work smarter with the tax code. The Augusta Rule is a perfect example of a legitimate, IRS-approved strategy that allows you to pay yourself rent tax-free.

If your business generates high income and you’re not using this strategy, you’re leaving thousands on the table every single year.

Ready to Start Using the Augusta Rule?

At TAX PREMIER, we help 6-7 figure business owners cut taxes, protect profits, and build wealth through proactive tax strategy.

👉 Book a Free Discovery Call

Let’s find out how much you’re currently overpaying and show you how to use the Augusta Rule this year.

Unlocking Your Wealth Potential

Understanding tax strategies like the Augusta Rule is crucial for maximizing your wealth. It’s not just about saving money; it’s about creating opportunities for growth.

Imagine what you could do with those extra funds. You could invest in new projects, expand your team, or even take that long-deserved vacation.

The Importance of Documentation

To take full advantage of the Augusta Rule, proper documentation is essential. Keep records of all events held at your home. This includes dates, attendees, and the purpose of each meeting.

Having this information readily available will make it easier to justify your deductions if the IRS ever questions them.

Consulting with Experts

Navigating the complexities of tax law can be daunting. That’s why consulting with tax professionals who understand the nuances of the Augusta Rule is vital.

They can help you implement this strategy effectively, ensuring you maximize your deductions while remaining compliant with IRS regulations.

Final Thoughts

The Augusta Rule is a game-changer for high-income entrepreneurs. Don’t let this opportunity pass you by.

Take control of your tax strategy today. With the right approach, you can significantly reduce your tax burden and keep more of your hard-earned money.