The Augusta Rule: A Simple Tax Strategy for Healthcare Practice Owners

The Augusta Rule allows healthcare owners to legally rent their personal residence to their business for up to 14 days per year. The business gets a deduction. You receive the income tax-free. Yes, really.

This works well for practices that host staff training, planning days, or leadership meetings.

Step-by-Step Checklist

1. Confirm Eligibility

✔ The property is your personal residence

✔ You use it 14 days or fewer per year

✔ The meeting has a legitimate business purpose

Common healthcare uses:

• Staff training or CE-style meetings

• Annual planning or budgeting sessions

• Leadership or management meetings

2. Schedule a Real Business Meeting

The meeting should look like something you’d be comfortable explaining:

• Who attended

• Why it was held

• What was discussed

If it feels like a stretch, it probably is.

3. Set a Fair Daily Rental Rate

• Use local meeting space or short-term rental rates as a guide

• Choose a rate your practice would reasonably pay elsewhere

This doesn’t need to be perfect. It does need to be reasonable.

4. Document the Meeting

Create a simple record that includes:

• Date

• Location (your home)

• Purpose of the meeting

• Attendees

• Brief agenda

A one-page document is plenty. Use our template.

5. Have the Practice Pay You

• Payment must come from the business to you personally

• Check, ACH, or bank transfer

• Memo example: Facility rental – staff training

No cash. No “we’ll account for it later.”

6. Record It Properly

• Practice records the payment as rent or meeting expense

• You do not report the income personally if you stay under 14 days

7. Track Your Days

• Keep a simple list of days used

• Day 15 changes the tax treatment and ruins the opportunity

Common Mistakes to Avoid

• Using the rule for personal or social events

• Charging an inflated rental rate

• No agenda or documentation

• Forgetting to actually pay yourself

• Exceeding 14 days in a year

• Assuming “everyone does this” is documentation

• The IRS doesn’t mind this rule. They mind sloppy execution.

Why Healthcare Owners Use This

• Clean way to move money out of the practice

• No payroll taxes

• No personal income tax

• Ideal for practices that already hold team meetings or trainings

You can download a copy of our August Rule Documentation form on our Tools page.

If you have questions about this topic, speak with your CPA or accountant. And if you need guidance or a second opinion, you’re always welcome to contact us.