PRFT Strategies · theprft.com

The Tax-Free Advantage

Accountable Plan and the Augusta Rule under the PRFT Plan

Clarity; Margin; Multiplication.

Abstract

Two simple structures can add real margin this year. The Accountable Plan and the Augusta Rule align your personal resources with your business purpose in a way the law recognizes and rewards.

Reimburse what the business should pay. Rent what the business should use. Keep records clean. Keep taxes low. Keep stewardship high.

Introduction

Ancient households ran on order. Each tool had a purpose. Each exchange had a record. Nothing was wasted.

The PRFT Plan brings that order forward. Plan how money moves. Let revenue serve the mission. Use finance as stewardship. Use technology to keep it simple.

The Accountable Plan pays you back for business use you already carry. The Augusta Rule pays you tax-free rent for days your home truly serves the business.

Both are legal. Both are practical. Both protect margin.

Section 1. The Accountable Plan

When you buy business items personally, the business should bear the cost. The IRS agrees when structure exists.

Under Treas. Reg. 1.62-2, your company may reimburse you tax-free if three things are true.

The expense has a business purpose.
You substantiate it with records.
You return any excess reimbursement.

Results are simple. The business deducts the expense. You receive reimbursement tax-free. Your books stay credible.

Common reimbursements

Mileage or business travel.
Portion of internet and mobile phone.
Home office under the regular method.
Software or supplies paid personally.
Health insurance premiums when structured correctly.

Bottom line: do the work, keep the receipt, reimburse with an accountable plan. Clarity creates credibility.

Section 2. The Augusta Rule

Under IRC 280A(g), you may rent your home to your business for up to 14 days per year and exclude the rent from personal income.

The business gets a deduction. You receive tax-free rent. The event must be real and the rate must be fair.

Valid uses

Strategy meetings and planning sessions.
Client dinners, workshops, or training days.
Filming, recording, or photo production.
Annual team gatherings or offsites.

How to set a fair rate

Compare similar spaces via local venues or short-term rentals.
Document the comps and keep screenshots.
Invoice the business. Pay from business to personal account.

Bottom line: if your home serves the business for a day, treat it like any venue. Price fairly. Paper it well.

Section 3. Documentation and Technology

Paper beats memory. Systems beat paper. Use both.

For the Accountable Plan

Adopt a written accountable plan policy.
Submit expense reports monthly with receipts and purpose.
Reimburse through payroll or bill pay with clear memos.

For the Augusta Rule

Create a simple rental agreement for your home.
Keep agendas, attendee lists, and photos of setup.
Retain rate comps and the invoice for each date used.

PRFT tech rhythm

Accounting in QuickBooks with a clean chart of accounts.
Mileage and receipt capture via an app you will actually use.
Digital folder for Augusta documentation by year.

Tip: automate the boring parts. Name the rules. Let the system run.

Section 4. Compliance and Guardrails

Stewardship sets limits before pressure arrives.

Use reasonable rates and real business purposes.
Do not double dip by deducting personal items elsewhere.
Return excess reimbursements promptly.
Document same-day while details are fresh.
Review annually with your CPA for alignment.

When records match reality, audits become conversations, not crises.

Section 5. Practical Guide

In one week

Sign a one-page accountable plan policy.
Set up a monthly expense report template.
Create an Augusta home rental template and rate file.

In one month

Run your first accountable plan reimbursement.
Host one documented business day at home under Augusta.
File all docs in a single digital folder by year.

Each quarter

Reconcile reimbursements to GL accounts.
Review Augusta days used and remaining.
Tighten any gaps in receipts or agendas.

Remember: small structures, consistently applied, create large margin over time.

Conclusion

The PRFT Plan is not theory. It is order you can use this month.

The Accountable Plan pays you back rightly. The Augusta Rule pays you tax-free when your home serves the mission.

Put the structure in place. Work the rhythm. Let clarity multiply margin.

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Disclaimer

The concepts and examples in this article are for educational purposes only. They are not personalized financial, tax, or legal advice.

Numbers & Company LLC and The PRFT are not registered investment advisors, broker-dealers, or insurance agents. We do not sell securities or provide individualized recommendations.

Before implementing an accountable plan, the Augusta Rule, or any related strategy, consult a licensed CPA or attorney who understands your facts and objectives.

All financial decisions carry risk. Use these tools within a comprehensive plan designed for long-term sustainability and stewardship.