Augusta Rule Calculator

The math is short by design. Your daily rental rate times the number of meeting days gives the total rent your business pays you — that's the tax-free income line. Multiplying that income by your marginal federal bracket shows the income tax you avoid by receiving the money as excluded rent rather than as salary or distribution.

The third line — the business deduction — is the half of the strategy people miss. The same dollars that arrive tax-free in your personal account also leave the business as a deductible rent expense. You get both ends of the transaction working for you: a deduction on the entity side and an exclusion on the personal side.

What the calculator deliberately ignores: state income tax (some states follow the federal exclusion, some have quirks), payroll tax interactions, and whether your rate would survive an audit. The output is a ceiling on the opportunity, not a filing position. Read the sections below before you book 14 board meetings.

Under IRC Section 280A(g), if you rent your personal residence for 14 days or fewer during the tax year, the rental income is excluded from gross income. You do not report it anywhere on your tax return. This applies regardless of how much you charge.

The rule earned its nickname from Augusta, Georgia, where homeowners rent their houses for a week each year during the Masters and pocket the rent tax-free. Congress wrote the exclusion broadly, though — it applies to any personal residence, anywhere, rented to anyone, as long as you stay at or under 14 days.

The most common use of the rule for tax planning involves renting your home to your own business. Your business holds board meetings, planning sessions, or team retreats at your home and pays you a fair-market rental rate. The business deducts the payment. You receive it tax-free.

Notice the asymmetry that makes this work: the business gets an ordinary business expense deduction, but the corresponding income never lands on your personal return. With most owner compensation — salary, bonuses, distributions — the deduction on one side is matched by taxable income on the other. The Augusta Rule is one of the few places in the code where the income side simply disappears.

For the full strategy breakdown, see our Augusta Rule strategy guide and the Augusta Rule guide for real estate investors.

The daily rate is where this strategy is won or lost. The exclusion has no dollar cap, so the only brake on the number is "fair market value" — what an unrelated business would actually pay to use comparable space for the same purpose.

Research comparable event and meeting space in your area: hotel conference rooms, event venues, and listings on platforms like Peerspace or VRBO. Screenshot the comparables, date them, and keep them with your records. For a single-family home used for a business meeting, defensible rates typically land between $500 and $3,000 per day depending on location and property value.

When in doubt, set the rate conservatively. The difference between $1,500 and $2,500 a day is a few thousand dollars of annual benefit; the difference between a defensible rate and an aggressive one can be the entire deduction plus penalties.

The requirements are simple to list and easy to fumble:

Run the transaction like it's real, because it is. Sign a written rental agreement between yourself and the entity before the first meeting. Have the business pay from its own bank account — an actual check or transfer, not a year-end journal entry. Keep an agenda and minutes for every meeting day, with attendees and decisions noted. If your CPA prepares the entity return, make sure the rent expense is categorized consistently year over year.

The pattern in audits is consistent: taxpayers with contemporaneous documentation keep the benefit; taxpayers who reconstructed "14 board meetings" in March of the following year don't. Fifteen minutes of paperwork per meeting protects thousands of dollars.

The Augusta Rule is most valuable for S-Corp and C-Corp owners in high tax brackets. A physician with a medical practice, an attorney with a law firm, or a consultant with an S-Corp can easily justify 10-14 days of business meetings at home. At $1,000-$2,000 per day, that is $10,000-$28,000 in completely tax-free income.

The value scales directly with your marginal rate. In the 24% bracket, $18,000 of excluded rent saves about $4,320 of federal tax; in the 37% bracket, the same rent saves $6,660. Combine the rule with an S-Corp election (see our S-Corp election guide) and other entity-level strategies, and it becomes one piece of a coordinated plan rather than a one-off trick. Real estate investors often pair it with cost segregation as part of a broader business owner tax strategy.

Who should skip it: sole proprietors (the deduction and income offset within the same return, so there's nothing to gain), business owners who genuinely never meet — a solo freelancer with no advisors, partners, or team will struggle to justify even a handful of meeting days — and anyone unwilling to keep the paperwork. A strategy you won't document is a strategy you don't have.

Blowing past 14 days. The cliff is absolute. Day 15 doesn't just make day 15 taxable — it makes all of the rental income for the year reportable. If you also rent the home to third parties (an occasional Airbnb weekend, for instance), those days count toward the same limit.

No money actually moving. A rent expense booked at year-end with no corresponding payment is an invitation to disallowance. The business pays; you deposit. Every time.

Meetings with no substance. "Discussed business" is not an agenda. Annual planning, quarterly reviews, compensation decisions, hiring plans, marketing strategy — real topics, documented attendees, written outcomes.

Forgetting the state layer. Most states start from federal taxable income and so inherit the exclusion, but state conformity varies. Confirm your state's treatment before counting the state-tax savings in your projection.