Augusta Rule for S-corp

[moto_za]

---

Members don't see this ad.

Spoke with a tax strategist and said could save about 6k in taxes by doing the Augusta thing. Said schedule a monthly meeting on your google calendar for your business and each meeting is 1k as that is what it would cost to reserve a meeting room. 1k per meeting x12-14 per year and ends up saving you about 6k in taxes. Anyone else done this before and have any tips or advice about it? Thanks

 

[Porfirio]

I don’t do this. If you get audited, you have to show meeting documentation (minutes, etc). It could be a good way to save some money but it does require some work.

 

[JacobMcCandles]

It's a real thing but I'm going to guess it would be an incredibly gray area for you. So gray that you probably shouldn't do it unless you really like to gamble.

 

[Brigade4Radiant]

You can do this also risk getting audited but with the current administration the risk of getting auditted is going to be low. A lot of people do very shady tax things and never get audited so do at your own risk

 

[AlmostAnMD]

It sounds like it's basically fraud as is, just go the distance and don't pay taxes imo

In for a penny in for a pound

 

[TooMuchResearch]

It sounds like it's basically fraud as is, just go the distance and don't pay taxes imo

In for a penny in for a pound

Thanks for the medical advise

 

[Groove]

I wish I could find a shady accountant like that....mine is way too squeaky clean but then again, I never have to worry about audits.

 

[Jball43]

Spoke with a tax strategist and said could save about 6k in taxes by doing the Augusta thing. Said schedule a monthly meeting on your google calendar for your business and each meeting is 1k as that is what it would cost to reserve a meeting room. 1k per meeting x12-14 per year and ends up saving you about 6k in taxes. Anyone else done this before and have any tips or advice about it? Thanks

My understanding (don’t take this as financial advice) is your LLC-S corp is “renting” your home for the meeting, but it has to be a reasonable amount that is consistent with the going market. The rule is real (section 280 a g) and has an interesting history with people renting out their homes for The Masters golf tournament I think. I’d ask for more clarification from your accountant before going further.

I’d lay out a plan to an accountant like this. 1) Determine fair rental value by checking local rates for similar spaces. 2) Rent the home to the business for legitimate business purposes (like meetings or events), ensuring it is properly documented. 3) Have a written rental agreement and record meeting minutes or agendas to justify the rental. 4) Pay into personal from the business and document the transaction, but don’t deduct the expense on the personal return. This allows the business to deduct the cost while still able to receive the income tax-free.

If my accountant gave the green light then good for everyone involved. Also consider home office deductions.