The #1 Tax Loophole for LLC and S-Corp Owners runs through Augusta Georgia
Here's how you can implement in your small business
(and save thousands this year)π
Here's how you can implement in your small business
(and save thousands this year)π
If you're a small business owner, you already know the tax code is written for you and investors.
But you may not be implementing a loophole that could save you thousands each year.
What you need for this:
β’ A primary residence
β’14 days of time
But you may not be implementing a loophole that could save you thousands each year.
What you need for this:
β’ A primary residence
β’14 days of time
Quick History:
In the 1970s, residents of Augusta Georgia we're renting out their home every April for the Masters golf tournament.
In the 3-7 days homes were rented, they generated significant income.
That income was taxable at the time and very costly on their tax filings.
In the 1970s, residents of Augusta Georgia we're renting out their home every April for the Masters golf tournament.
In the 3-7 days homes were rented, they generated significant income.
That income was taxable at the time and very costly on their tax filings.
The government came in to help Augusta residents by implementing IRC Section 280 (A).
IRC Section 280 (A): Homeowners can rent out their home up to 14 days/yr without reporting income.
Now called the AUGUSTA LOOPHOLE STRATEGY
IRC Section 280 (A): Homeowners can rent out their home up to 14 days/yr without reporting income.
Now called the AUGUSTA LOOPHOLE STRATEGY
Rules for Implementing the Augusta Loophole
#1 - Can only take the deduction on Primary Residence
#2 - 14 Day rule: any more is taxable
#3 - Have to take a reasonable amount in rent
#1 - Can only take the deduction on Primary Residence
#2 - 14 Day rule: any more is taxable
#3 - Have to take a reasonable amount in rent
Five Steps to Implement
Step #1: Find Comparables
When renting out your house, find comparables to know what to charge.
The gov wants to ensure you're charging at "reasonable scale".
Pro Tip: document the comparables you used in case it comes up in an audit.
Step #1: Find Comparables
When renting out your house, find comparables to know what to charge.
The gov wants to ensure you're charging at "reasonable scale".
Pro Tip: document the comparables you used in case it comes up in an audit.
Step #2: Take Your Minutes
Document the business meetings you're having in your house.
In the rare case of an audit, you'll have this to provide to show some type of business took place.
Doesn't have to be groundbreaking, just document it.
Document the business meetings you're having in your house.
In the rare case of an audit, you'll have this to provide to show some type of business took place.
Doesn't have to be groundbreaking, just document it.
Step #3: Create an Invoice
Super simple, but create an invoice that is sent from you to your business.
Use PayPal, stripe or any online invoice generator. Simply having the invoice will hold up under audit.
Super simple, but create an invoice that is sent from you to your business.
Use PayPal, stripe or any online invoice generator. Simply having the invoice will hold up under audit.
Step #4: Pay the Expense
You want to actually pay yourself from your business.
This helps in two ways:
1. Shows paper trail of transaction
2. Business receives a tax deduction against adjusted gross income (AGI) on annual return
You want to actually pay yourself from your business.
This helps in two ways:
1. Shows paper trail of transaction
2. Business receives a tax deduction against adjusted gross income (AGI) on annual return
Step #5: Issue 1099 to Yourself
This applies to LLC owners, but will not apply to S-Corps (as you're on payroll).
Make sure to issue the 1099 to yourself and not to your business.
This applies to LLC owners, but will not apply to S-Corps (as you're on payroll).
Make sure to issue the 1099 to yourself and not to your business.
And that my friends, is how you use the Augusta Loophole this year to save on your taxes!
Thanks for reading, if you enjoyed please:
1. RT the first tweet in the threadπ
2. Follow me @wishzen for more gems like this thisπ
Thanks for reading, if you enjoyed please:
1. RT the first tweet in the threadπ
2. Follow me @wishzen for more gems like this thisπ
And if you first need a business to start before worrying about taxes, here's a FREE eBook on how to launch your own Amazon FBA business.
These steps took me from CPA to full-time Amazon seller in under 1 yr.
michaelwishko.gumroad.com
These steps took me from CPA to full-time Amazon seller in under 1 yr.
michaelwishko.gumroad.com
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