Micro-Business Tips for Clinicians (skip the MBA): The Augusta Rule—Tax-Free Rental Income for Physicians and Micro-Corporations

Today’s Micro-Business Tactic

Let me introduce you to one of the most underutilized tax planning tools for physician entrepreneurs: The Augusta Rule (IRS Section 280A(g)).

If you operate a micro-corporation (LLC, PC, or PLLC), you can legally rent your personal residence to your business for up to 14 days per year, charge fair market rent, and receive that income completely tax-free—while your business deducts the full expense.

Pro Tip: Sole Proprietors can’t use this loophole.

Yes, you read that right: your business gets a deduction, and you get tax-free income.

Why The Augusta Rule Matters for Doctors

You can benefit if you:

• Own a micro-corporation that you use for your primary job, or use it for job stacking with side jobs.

• Host strategy meetings, content planning, CME sessions, or marketing retreats

• Want to legally pull money out of your business without triggering payroll or self-employment tax

How It Works

• Rent your home to your corporation up to 14 days per year

• Must be for legitimate business activities (strategy sessions, board meetings, education events). It can’t just be family members, ideally an unrelated business party joins you for the meeting. For example, having a professional colleague over for dinner with their spouse (I guarantee you’ll talk about medicine and your professional life: ie; business)

• Charge fair market rent based on local comparisons

• Business deducts the expense

• You receive the rental income tax-free (no 1099 required)

How Physicians Can Use The Augusta Rule

1. Strategic Planning & Board Meetings Host quarterly meetings at your home instead of a rented venue.

2. Team Retreats & Business Coaching Plan annual retreats with your team to review progress and goals.

3. CME or Medical Training Use your space for masterminds, CME journal clubs, or internal workshops.

4. Marketing & Content Creation Film podcast episodes, plan social media, or write your e-book.

5. VIP Concierge Sessions Provide high-end patient strategy consultations in a curated space.

Compliance Essentials

1. Fair Market Value

• Use hotel conference rates, Airbnb pricing, or CPA guidance to determine price

2. Documentation Checklist

• Formal invoice from you (homeowner) to business

• Meeting agenda + minutes

• Photos or proof of setup, or a receipt from a door dash or catered meal

• Rental agreement

3. Keep Business and Personal Finances Separate

• Pay rental from business account

• Receive into personal account

4. Use Exclusively for Business Avoid blending the rental days with personal events.

5. Work with our CPA to make sure all areas of compliance are met.

💡 Example: Dr. Morales Strategy

Dr. Morales runs a telehealth S-Corp and a cash-based obesity program. She previously paid $1,500 per day for executive suite rental for strategic meetings (4 times/year).

This year, she:

• Hosts meetings at her home

• Charges her business $1,500/day x 4 = $6,000

• Business deducts $6,000

• She receives $6,000 tax-free

Result: no venue rental cost, lower business taxes, and more money in her pocket.

Lessons from the Field

"One of my coaching clients realized they were overpaying $7,500/year on venue rentals they could host at home—and now they’re receiving that money tax-free instead. After our meeting, she said:”Why has no one told me about this?”"

Tool of the Week

The Augusta Rule and Physician Micro-Businesses

📘 This downloadable guide walks you step-by-step through compliance, rent calculation, and documentation.

Download the Tool →

Scale with Coaching

Want personal guidance? Our 1:1 coaching and consultations help you execute faster and smarter.

• Book a Strategy Consultation Session →

• Get Started With 1:1 Business Coaching Today →

🧠 Bonus Tools to Maximize This Strategy:

• Design Your Career Around Your Life – Free eBook

• Doctor, You Are a Business – Course

• The Augusta Rule Rental Agreement Templates

If you want to pull money from your micro-corp without triggering extra taxes, The Augusta Rule might be your best-kept secret.

I have saved thousands in taxes every year by using this rule with my micro-corporation.

Talk to your CPA. Document it correctly. And let the IRS work in your favor for once.