Skip the standard home-office deduction, which triggers IRS red flags and saves little. Instead, use the Augusta Rule: have your business rent your home for occasional board meetings. The rental income stays tax-free, and your business gets a real deduction.
Let's talk about some tax deductions. One of the most common ones that we've heard get asked about is the home office deduction. We don't love this tax deduction because it has been known to increase the DIF score with the IRS. It also doesn't give you a very good actual tax deduction. So what we love is a strategy we call corporate rent, others in the world call the Augusta Rule. The way that works is your business can rent your house from you to have a company board meeting once a month, for example. Based on the tax rules, because you're not renting your house out for that many days, you actually find an area in the tax code that allows you to not have to claim that rental income. Remember, the IRS, not your friend. Don't— you're not inviting them to your birthday party. Stop giving them your free money. Let's keep more of it in your pocket.
