The Augusta Rule (IRC Section 280A): How S-Corp & LLC Owners Shift Up to 14 Days of Tax-Free Rental Income in 2026
Learn how IRC Section 280A(g) lets qualifying business owners rent their personal residence to their business for up to 14 days per year—creating a business deduction with tax-free personal income when documented properly.
Why it wins: LLC & S-Corp owners who want clean monthly books + proactive year-round tax reduction
On $180,000 Net Profit, an S-Corp Structure Saves ~$15,147/Year
By splitting $180,000 into a $81,000 W-2 salary and $99,000 distribution, you shield $99,000 from the 15.3% self-employment tax.
2026 Top Bookkeeping, Tax & Payroll Picks
RiverTaxes Done-For-You Bookkeeping + Proactive Tax Planning
Best For: LLC & S-Corp owners who want clean monthly books + proactive year-round tax reduction
- Combines monthly bookkeeping, S-Corp reasonable salary compliance, and tax filing under one roof
- Identifies $5,000–$18,000+ in legal annual tax savings
- Designed for active U.S. business owners and 1099 earners
Gusto S-Corp & Small Business Payroll
Best For: Running automated S-Corp owner W-2 payroll and W-2/1099 filings
- Automatic federal, state, and local payroll tax filings
- Requires separate bookkeeping & tax strategy (pairs seamlessly with RiverTaxes)
2026 IRS Compliance & Implementation Blueprint
Under Internal Revenue Code Section 280A(g)—popularly known as the Augusta Rule—if you rent out your home for 14 days or fewer during the year, the rental income is excluded from your personal gross income. When an S-Corp or partnership holds legitimate, documented monthly board or strategy meetings at the owner’s home and pays a substantiated fair-market daily rate (supported by comparable local hotel conference room quotes, corporate minutes, and separate bank transfers), the business deducts the expense while the owner receives the rent tax-free.
Run Your Numbers: S-Corp Tax Shield & Section 179 Vehicle Calculator
Frequently Asked Questions
Does RiverTaxes handle both monthly bookkeeping and year-end tax returns?
Yes. RiverTaxes provides done-for-you monthly bookkeeping, quarterly tax projections, S-Corp election & Accountable Plan documentation, and year-end business & personal tax preparation.
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