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I saved more than four thousand dollars in taxes in 2025 by renting my home to my business, and it quickly became one of the simplest strategies I lean on as a business owner. The Augusta Rental Rule makes this possible. Permanent jewelry artists spend full days filming content, planning and scheduling out upcoming events, reviewing finances, and preparing training material, and those work days can create valid reasons for your business to rent your home.
When you follow the rule correctly, the rent your business pays becomes a real deduction while the income you receive is not taxable to you personally. It can potentially deduct more than ten thousand dollars of income when used correctly, which effectively lowers your income tax burden. The IRS allows up to fourteen rental days each year, and the savings grow right along with your business. This guide breaks everything down in a clear, approachable way and shows you how to document each step so you can use this rule with confidence.
To ensure accuracy, Ben Watson, my long-time CPA and a respected Virtual CFO and Business Coach at Fiscal Fluency, reviewed this article and approved the process described.
This guide is based on my personal experience and opinions only and is not professional tax advice. Every business is different, and tax laws can change, so it is important to speak with a qualified tax professional before making decisions about your own situation. We foster relationships with trustworthy brands. The testimonials on our site represent real experiences, but they don't guarantee you'll achieve similar results. When you make purchases through our links to our partners, we may earn a commission. Your support helps us continue this work. You can read our full disclosure here.
What the Augusta Rental Rule Is and How Much It Can Save You
The Augusta Rental Rule, formally known as IRS code 280A, allows you to rent out your primary residence for up to fourteen days each year, and the income you receive from those rentals is not taxable to you personally, which is rare in the tax world. When your permanent jewelry business pays you for those rental days, the business gets to deduct the expense and you get the income tax free. This creates a simple and legal way to reduce your business profits before tax time.
Augusta Rule Tax Savings Estimator
Move the sliders to estimate how much you could save in taxes by renting your home to your business for up to 14 days per year.
This estimate assumes your business properly qualifies under the Augusta Rule. Results vary by federal bracket, state taxes, and entity structure. This tool is for educational purposes only and is not tax advice.
Aside from your startup costs like your permanent jewelry welder, initial station setup, and even professional training, there is not a ton of overhead in this industry. Your income can rise quickly once appointments and events start picking up, which means finding legitimate ways to lower your taxable income becomes more important than many beginners realize. The Augusta Rental Rule fills that gap beautifully.
Most artists want to know how much this rule can save before they put in the time and effort to document it. The amount depends on your fair rental rate. You can look at local event venues, meeting spaces, or Airbnbs to estimate a reasonable daily rate. In many areas, that number falls between five hundred and one thousand dollars for a full day.
Fourteen rental days at five hundred dollars or more per day can reduce your taxable business income by a few thousand dollars each year. Keep in mind that “the Augusta Rule applies to federal taxes,” clarifies Ben Watson, CPA. “Check to see if your state allows the exclusion, as some do not.”
You do not need a large business to see the benefits of using the Augusta Rental Rule. Even a small studio or part time permanent jewelry business can use this strategy and keep more of what it earns. The savings grow each year as your business grows, which is why so many owners start using this rule early on.
Related: Your Easy Guide to Sales Tax for a Permanent Jewelry Business
Who Can Use This Rule
Most permanent jewelry artists are surprised to learn how flexible the Augusta Rental Rule really is. You do not need a complicated business structure to qualify. Sole Proprietorships, Single Member LLCs, S Corporations, C Corporations, and Partnerships can all use this strategy, however, it is often less risky for multi-member LLCs, Partnerships, S, and C corporations since there is an “arms-length” transaction between the homeowner and business. The key is that you have a real business with real activity, and your business is the one renting your home for a legitimate purpose.
“Consider talking with your tax professional about the risks involved based on your business structure,” says Watson. “While not officially disallowed, there are a few extra considerations for sole proprietorships or single-member LLCs.”
You need to own the home you are renting to your business. The Augusta Rental Rule applies to a primary residence, vacation home, or property that you personally own. If you are renting your current home from a landlord, you cannot sublease it to your business for this purpose. The IRS requires ownership of the property for the rule to apply.
You also need clear separation between personal and business finances. Your business must pay you from a business bank account, and you must deposit that rent into your personal account. This creates the paper trail the IRS expects to see. If both sides of the transaction run through the same account, it becomes difficult to prove that a real rental agreement existed.
Outside of those requirements, the process is straightforward. Your business pays you for the rental days, and the purpose and fair rate are documented as part of your records. The space is then used for genuine business activity. Many permanent jewelry artists qualify without needing to change anything about how their business is already set up.
Important! You may only rent out the property for a maximum of 14 days in a single calendar year. Renting it out for 15+ negates the rule and disallows the entire transaction.
Ben Watson
This rule works best when your jewelry business produces consistent income, although you do not need to wait until you are earning six figures to start. The earlier you build good systems, the easier it becomes to save more through every stage of growth.
HOW TO GET STARTED: Copy the code ➡️ TRINITYTPAHP and enter it at checkout. For a limited time, you can save 5% on your welder, up to $200 off the tools that power your whole business.
Valid Reasons for Your Permanent Jewelry Business to Rent Your Home
Every rental day needs a clearly defined business purpose that goes beyond routine day-to-day home office work. This matters because the IRS does not allow you to count tasks you already have to complete as part of your routine. Client appointments and basic administrative work do not qualify. The goal is to document work that requires focused planning, creative development, or project based tasks that support the business in a meaningful way.
Permanent jewelry artists can potentially use the Augusta Rental Rule for full day work such as:
- Filming or photographing content for social media, websites, or product listings
- Recording online marketing material or equipment demonstrations
- Reviewing financials or preparing forecasts for the coming year
- Developing training materials for employees or contractors
- Mapping out marketing campaigns or long term business growth strategies
- Testing new tools or documenting product comparisons
- Hosting a strategy day with a business partner or co owner
The most obvious and realistic way I’ve used this rule as a permanent jewelry artist has been planning monthly brand shoots for my business, since those days require dedicated space, intentional setup, and hours of focused work that I cannot squeeze into everyday tasks. A brand shoot can include staged product photos, hands in frame welding clips, lifestyle shots for my website, behind the scenes footage for social media, overhead videos for tutorials, and updated images for marketing materials. It takes time to set up lighting, props, displays, and equipment, and I often work through a long shot list to refresh everything for the months ahead.
Step by Step Process for Applying the Augusta Rental Rule
Using the Augusta Rental Rule felt overwhelming the first time I learned all the steps, and I almost gave up before getting started. Once I walked through the process in 2025, everything became clear, simple, and easy to repeat. Now it is set up and only needs small adjustments going into 2026 and each future year. The amount of money I saved made every bit of effort worth it.
1. Choose Your Purpose
Establish the reason your permanent jewelry business needs to rent your home. This could be a monthly brand shoot, planning day, employee meeting event, or a financial conference with a co owner. Choose full days rather than short blocks of time so you can complete meaningful work that falls outside your normal routine. Then draft a simple letter of intent stating that you plan to rent your home to your business for these purposes. All homeowners should sign and date the letter so it is clear that everyone involved is aware of and agrees to the arrangement.
2. Set a Fair Rental Rate
Research local event venues, meeting rooms, or Airbnbs to find comparable daily rates. Save screenshots or notes that show how you arrived at your number. I personally chose to compare Airbnbs that closely matched the modern, clean style of my home because I needed the space for quiet recording sessions and aesthetic pictures and backdrops. This becomes part of your documentation and helps demonstrate that your rate is reasonable.
3. Create a Rental Agreement
Write a simple agreement between you and your business. Include the specific rental dates within the fiscal year, along with your home address, the daily rental rate, purpose statement, and any additional terms. This document shows that the rental arrangement was planned and legitimate. If more than one person owns the home, both homeowners should sign and date the agreement to confirm that they understand and approve the use of the property for this purpose.
Common question: Should I get the rental agreement notarized?
No. The IRS is focused on substance over form—meaning proof that the event actually occurred, that the rental rate was fair and reasonable, and that there is a clear paper trail showing money changed hands. Notarization only confirms when a signature was made; it does not validate the legitimacy of the transaction itself.
Ben Watson
4. Prepare an Agenda
Make a brief agenda for each rental day. A shot list, timeline, or checklist works well. This outlines how you plan to use the time and strengthens your paper trail. I found it easiest to create a reusable template that I could print for each day I planned to use my home for business. I wrote in the tasks for each time bracket, which kept the day structured and made it clear exactly how the space was used.
Related: Best All-Inclusive Permanent Jewelry Kits
5. Complete the Work and Keep Proof
Use the day for real business activity. Save photos, videos, screenshots, recordings, completed documents, or any output created during the rental period. These files show that you followed the plan you documented. I like to create a Google Drive folder for each year that I use the Augusta Rule and then add subfolders for each rental day so I can drop screenshots or pictures of what I accomplished. This keeps everything organized and easy to reference later.
6. Pay Yourself Properly
Create a simple invoice from you personally to your business for each day’s use. I added myself as an independent contractor in my payroll service, even though I am already an employee, because this is not employee income. All I do is run an extra payment through Gusto each time I invoice myself for a rental day. If you do not use a payroll service, you can simply write yourself a business check and deposit it into your personal checking account. These steps keep the transaction clean and clearly separated.
7. Issue a 1099-MISC at Year End
Total the rent your business paid during the year and issue a 1099-MISC to yourself, since this form is used to report payments made for rentals outside of wages. Your CPA will use this to reconcile the transaction and confirm that the income remains tax free under the Augusta Rule. Keep all agreements, agendas, screenshots, proof of work, rate comparisons, invoices, and payment records stored together so everything is ready when you file.
Printable Forms to Simplify and Streamline the Entire Process
Once you understand the Augusta Rental Rule, the next challenge is staying organized. That part becomes effortless when you have the right templates in place. I created a full set of printables that I personally use, and they walk you through every step from start to finish. These templates make it easy to plug in your own information and create an easy-to-follow paper trail that matches exactly what the IRS wants to see.
Important: These templates support documentation, but they do not replace guidance from a qualified tax professional.
The printable package includes everything you need. Rental rate research sheets, purpose statements, signed rental agreements, agenda templates, documentation checklists, and even the form you will use to issue your 1099-MISC at the end of the year. I even include instructions on how to use Google Drive to create a repeatable system and organize your documents. Each piece guides you through the process so nothing gets overlooked.
I want you to save both time and money while feeling confident that your system is solid. When you can grab your agenda template, write out your plans, and get right to work, the Augusta Rental Rule becomes one of the easiest tax saving tools in your permanent jewelry business.
Why Preparing Now Sets You Up for Bigger Savings Later
Even if you only plan a couple of rental days in your first year, this is the perfect time to build the habits that protect your income as your business grows. The Augusta Rental Rule is one of the rare strategies that becomes more valuable the more your business expands. A little preparation now can save you thousands of dollars when you reach the next stage of success.
It also helps to have a tax professional look over your plan before you put the time in. A quick review of your purpose, documentation, and rental rate can confirm that everything is on the right track. When tax season arrives, your CPA can file the final pieces for you and make sure each step is reported correctly.
Smart tax planning puts more money in your pocket as a business owner, and I felt extreme relief the first time I realized this process saved me more than four thousand dollars in taxes in a single year. Strong systems do more than keep you organized. They let you focus on growing your business instead of wondering if you missed something along the way. With the right process in place, the Augusta Rental Rule becomes an easy and dependable part of your yearly tax strategy.
